From an early age, Amazon founder Jeff Bezos had a passion for inventing.
In The Everything Store: Jeff Bezos and the Age of Amazon, journalist Brad Stone wrote that even as a child, “Bezos had dreams of becoming an inventor like Thomas Edison, so his mother patiently shuttled him back and forth and back again to a local Radio Shack to buy parts for a succession of gadgets: homemade robots, hovercrafts, a solar-powered cooker, and devices to keep his siblings out of his room.”
That passion continued to grow throughout Bezos’ childhood. Angela Duckworth wrote in Grit: The Power of Passion and Perseverance, “By high school, Jeff had turned the family garage into a laboratory for inventing and experimentation. One day, Jackie [his mother] got a call from Jeff’s high school saying he was skipping classes after lunch. When he got home, she asked him where he’d been going in the afternoons. Jeff told her he’d found a local professor who was letting him experiment with airplane wings and friction and drag.”
Flash forward to today. Amazon is not only one of the world’s most powerful and innovative companies, but one of the most secretive. Financial analysts have an extremely difficult time breaking through the corporate shields that Bezos has erected. (A former analyst recalled to us that on a trip to the company, she saw the World War II slogan “Loose Lips Sink Ships” on a bathroom wall.) So we wondered if there were a different way to x-ray into Amazon’s strategic imperatives.
The answer is yes. The founder’s early fascination with innovation proved key because he remains an active inventor with many patents to his name. Bezos has been known to view Amazon as “a technology company pioneering e-commerce, not a retailer.” We decided to test our hypothesis by examining Bezos’ patent activities at Amazon. To do so, we began by looking at Amazon’s patent history using the Derwent Innovation database for the years 1998-2018, which included more than 11,000 published patents in the United States.
We learned four surprising things from our analysis.
1. Jeff Bezos is an inventor
We were surprised to find that Bezos was named in 154 of Amazon’s published patents (see figure). Of those patents, he was named as first inventor in 35 and was the sole inventor of 11.
In the course of our research, we asked sell-side analysts to describe Bezos’ leadership characteristics. Most emphasized his business acumen and entrepreneurial qualities. For example, one analyst argued, “He is the Warren Buffett of our generation, period.” Another noted, “I think there is a reasonable case to be made that Jeff Bezos is the greatest entrepreneur of his generation.” But few mentioned Bezos’ role in innovation, and those who did underplayed the depth of that role. “Jeff Bezos is not coming up with every new product. He is probably not coming up with the vast, vast majority of them,” one analyst stated. However, our findings suggest that Bezos is actively involved in inventing products and services for Amazon.
2. Jeff Bezos is inventing more, not less
Most notably, Bezos’ patent activity increased dramatically post-2007, with 139 of his 154 patents published during that period. While this broadly correlates with Amazon’s own increase in patent activity, Bezos’ most active year was 2009, when he published 20 of Amazon's 72 patents. In that year, Bezos was directly involved in approximately 28 percent of all patents compared to only 0.7 percent of all patents in 2017. This increase in patenting activity surprised us.
As Amazon has grown in scale and complexity, we would have anticipated that Bezos found less and less time to directly contribute to patents. However, our findings suggest that Bezos has found more value in patenting over the years, leading to an increase in activity over time.
3. Jeff Bezos works on specific types of inventions
We were also interested in the types of inventions Bezos was personally involved in, so we broadly categorized his patents based on information in the patent abstract and description. We found that Bezos had the most patents in areas that related to Amazon’s core businesses, including e-commerce and logistics, followed by devices, digital content, and computing. However, he also participated in two patents tied to unmanned aerial vehicles and one related to advertising. One of the busiest CEOs in the world still spends a lot of his “innovation” time on Amazon’s core business (see figure).
Moreover, if we look at patents that named Bezos as the first inventor, 32 focused on e-commerce, two on financial transactions, and one on devices. For patents that listed Bezos as the sole inventor, eight focused on devices and three on e-commerce. Given his lead role in these inventions, we surmise that Bezos has developed expertise in e-commerce and devices, two of Amazon’s core business areas. This perhaps isn’t surprising, given Bezos’ long-standing focus on customers, a trait we documented previously in our analysis of his Amazon shareholder letters.
4. Jeff Bezos’ patents are customer-centric
For a more granular look at Bezos’ inventions, we performed a word frequency analysis using the abstracts of his patents. The top five words in Bezos’ patents were “users," “system,” “device,” “transaction,” and “information.” If we take “users” as a proxy for “customers,” we see that Bezos’ patenting activity reflects his customer-centric viewpoint.
Putting it together
Our analysis suggests that examining Bezos’ patenting activity has the potential to shed light on his company’s strategic priorities, which remain largely invisible outside the company.
Despite this secrecy, Bezos’ patents offer clues about the technologies the CEO considers important to the company's future. Previous studies have shown that CEO time is notoriously oversubscribed, so understanding Bezos’ patent interests could indicate the areas that are critical enough to merit his individual attention. For example, a cursory reading of most of Bezos’ patents shows that they focus on e-commerce, logistics, devices, and digital content—all core areas of Amazon’s business.
While that might not surprise those familiar with Amazon, what is surprising is that two of these patents involve unmanned aerial vehicles, a technology that Amazon has yet to exploit to its full potential commercially. Bezos’ involvement in these patents suggests that he considers this a critical technology for Amazon’s business in the near future.
One other surprising finding is that Bezos does not appear to have any patents obviously related to Amazon Web Services (AWS), a business line that analysts we talked to agreed has largely contributed to Amazon’s overall profitability in recent years. Granted, this may be an oversight attributed to our lack of in-depth understanding of each patent’s language. However, this may also indicate that Bezos feels there are more opportunities in other areas or that he has chosen to cede control of AWS’s growth to Andy Jassy, AWS’s CEO. In either case, we believe that the areas in which Bezos spends time patenting or not patenting reflects his interests.
More important, this analysis provides more depth to our earlier analysis, which suggested that the effectiveness of twenty-first century CEOs could be predicted by their direct participation in innovation. These activities helped CEOs expand their knowledge of core businesses and technologies, allowing them greater insight into new advances that could eventually drive their companies' success. In turn, by using publicly available data sources, researchers and analysts may be able to glean insight into the inner workings of secretive companies.
About the Authors
Boris Groysberg is the Richard P. Chapman Professor of Business Administration at Harvard Business School. Tricia Gregg is an independent researcher.
[Image: Chuck Bigger / Alamy Stock Photo]
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