Amazon.com today is approaching 40,000 employees. Seventeen years ago, Shel Kaphan was No. 1.
Long before Amazon turned into a multi-billion dollar online retailing powerhouse, and technology giant, it was just a few people working in a converted garage in Bellevue. Kaphan was its first employee. A computer industry veteran and former Whole Earth Catalog employee who moved to Seattle from Santa Cruz to take the job in 1994, he’s an important character from the region’s technology history whose story has never before been told.
In his first in-depth media interview since leaving Amazon.com in 1999, Kaphan talks extensively about his history with the company — including the technical challenges Amazon overcame in its early days; what it was really like to work for Amazon founder Jeff Bezos; how the company surpassed even the most optimistic expectations of the people who started it; and Kaphan’s feelings about the company’s runaway success.
“I mean, nobody at the beginning had any clue how big Amazon could become,” recalls Kaphan, now 58. “Nobody. Certainly not Jeff. I have spreadsheets of his projections from when he was trying to hire me. And I don’t remember the specific numbers, but it was a lot, lot smaller than it turned out to be.”
Soft-spoken and reserved, Kaphan is one of the most interesting characters I’ve met in my years covering the technology beat in Seattle. His story sheds new light on the company’s early days and the characteristics that continue to drive Amazon today. Continue reading for our conversation.
Part 1: The forgotten founder of Amazon.com?
You were the first employee at Amazon.com? “Well, you could either consider me the first employee or a co-founder depending upon how you want to think about it.”
So, you are kind of the forgotten founder? Most people think of Jeff Bezos as the creator of the company. “In fact, to be completely technically true about it, he is the founder. But I was talking to him about joining him on the venture before the company was incorporated. He basically was just arriving from the East Coast and setting up his house when I moved up from California. All that existed of Amazon was on paper at that point. Jeff was working on it full-time already, and his wife, Mackenzie, was writing checks every once in a while. But that was it. I didn’t get founder’s stock. It didn’t seem worth the argument at the time, although I kind of felt like, well, you know, I mean I was there at the beginning. And it was all going to work out the same way, one way or the other, regardless of the technicalities. And it just didn’t seem like something that I wanted to make a big deal about at the time.”
What were those early days like at the first Amazon headquarters in the converted garage in the Bellevue house? “I got there in October of 1994, and a month later we hired the second technical guy from the UW, Paul Davis was his name. It was an office in a house. There wasn’t any big deal about it. When I first got there, we didn’t have any computers yet, so the first job was to go shop for some computers and decide what database systems we were going to use and what software was available. I mean, nobody knew how to write Web sites at that point in time. I had never done it before. So, we had to figure out how were going to do that. So we just got down to business right away. And Paul and I were writing code furiously, and Jeff was working on the business plan and going off to (American Booksellers Association) meetings and things like that. Really, we all just were pretty much doing what we had to do. There wasn’t a lot of extraneous activity.”
Nothing unusual from those early days? “One thing I remember from very early on, within the first week or two that I was there, I had rented a house in Wedgwood here in Seattle, and I was commuting over the bridge. I just went over (to the Bellevue office) one day, and Jeff and Mackenzie said: ‘We are not working today. We are going to Mt. Rainier because this is probably one of the last days of the year that we are going to be able to do that.’ We were all new to the area, so we just got in the car and drove to Paradise, and hiked around a little bit, and blew that day off from working. But that was one of the only days when we did something like that.”
What was that era like just before you joined Amazon in 1994? “The previous job I had was with Kaleida Labs, which was an Apple-IBM joint venture that called itself a startup but really wasn’t. I left that in the Spring of 1994. I lived in Santa Cruz, California, and that was at the time when there was a huge amount of ferment in the air with Netscape hiring up all of the hot-shot programmers around…. There wasn’t really much else going on at that time, but there was quite a bit of buzz about the Web, so my friend and I were thinking that we should do something about this, it is a big opportunity. I had been working in computers since the mid-70s and had sort of seen the first wave of the PC revolution come, and I didn’t jump on that. At the time, I was more enamored of what we then thought of as bigger machines, the kind of machines that the universities had. I was interested in the type of software that could run on those. I watched as the first PC wave happened and got bigger and bigger and bigger, and at some point I realized: ‘Oh, I kind of missed getting on that wave.’ So, I always had in the back of mind, if I see something that I want to be participate in coming, next time, I am going to act on it. A lot of time went by before I had that feeling again.’
What about the Web caught your attention? “I had been playing around with the Internet since it was the ARPANET, back in the early 70s…. To the people that were into it, it really was something amazingly cool. But nobody else seemed to care about it or think much of it. When Mosaic came out, a light bulb went off in a lot of people’s heads that said: ‘Oh, OK, that was the missing piece.’ You have to have some UI for it that makes it easier for non nerdy people to access it and do different things with it. The first few Web sites started coming around. And there were a few interesting things. But it is still the case that people are trying to figure out how to do business on the Web, and in the early days it was even more of an open question. My friend Herb (Jellinek) and I were kicking around a lot of ideas … to do something on this new platform. One thing we knew we needed was a good business guy… We could do the technical part and somebody else could help fundraise, probably help figure out some business model or whatever. So, we just started shaking our networks, and talking to people.”