More than 23 years after betting on a small startup called Amazon.com, Tom Alberg, the company’s longest-standing board member, is stepping down.
Alberg, 79, was one of Amazon’s earliest investors and part of its first board of directors. He stayed on for more than two decades, as the company transformed itself from an online bookseller to a $900 billion global tech behemoth with more than 600,000 employees. Amazon disclosed in its annual proxy statement Thursday morning that Alberg doesn’t plan to stand for re-election at its upcoming annual meeting.
In an interview with GeekWire, Alberg said it was his decision to leave the board next month.
“It’s been a fascinating experience, but I’m also a believer that we need to make room for new directors and help provide space for that to happen,” he said.
“One of our goals is to keep the board reasonably small and not just keep adding people, so I volunteered to help create a rotation,” Alberg said. He’ll continue working as managing director at Madrona Venture Group, the Seattle-based venture capital firm he helped start in 1995.
Amazon reported today that Alberg owns 15,648 shares, including 3,450 shares held by a charitable trust of which he is a director. That’s about $29 million worth of Amazon stock, which was trading around $1,846 per share Thursday, and a small fraction of 1 percent of total Amazon stock.
Update: Bezos tweeted about Alberg this morning, calling him “a smart business person and an even better human.”
Been an honor & pleasure having Tom Alberg on Amazon’s Board. Tom joined in 1996 and has been with us ever since – over 22 years. I’ll miss his sound judgment, deep well of business & life experience, and his quick wit. He's a smart business person and even better human. Thx Tom!
— Jeff Bezos (@JeffBezos) April 11, 2019
Alberg, a past leader of the Perkins Coie law firm and former McCaw Cellular Communications executive, first met Bezos in 1995, just after the Amazon chief left his New York hedge fund job and launched the online bookseller out of his Bellevue, Wash. garage.
Bezos was looking to raise $1 million for his fledgling startup. While others balked at the $6 million valuation, Alberg saw promise in Bezos’ entrepreneurial acumen and the company’s early financials. Bezos and Alberg also shared a belief that the internet would transform business.
Alberg, along with Kleiner Perkins chairman John Doerr (who stepped down in 2010), would later join Bezos on Amazon’s new board after the company raised its only venture round before going public in 1997.
At the time, Alberg owned 195,000 shares, according to Business Insider, which would be worth billions today after stock splits and without dilution.
“When it started, I don’t think Jeff or any of us had any idea of what Amazon would grow to,” Alberg said. “We thought selling books on the internet had some real possibilities, but the focus was books. Maybe we could sell CDs, eventually.”
Alberg recalled a dinner in early 1997 with Bezos and executives from Barnes & Noble, the market-leading book company at the time that was preparing to launch its own website.
“We’re going to bury you — but we also admire you and we’d like to do a deal,” was the message from the Riggio brothers, who ran Barnes & Noble. They pitched a joint site, or even the possibility of acquiring Amazon.
“We decided to do it on our own,” recalled Alberg. “Even at that point, I think Jeff saw a real future and didn’t want to sell out prematurely.”
That turned out to be a smart decision. Two decades later, Amazon not only dominates the online book industry but also e-commerce more broadly and other industries such as cloud computing and voice technology. And now, in ironic fashion, Amazon is now the company rumored to acquire Barnes & Noble.
Alberg said he’s asked all the time about Amazon’s secret to success.
“There really isn’t a secret,” he said. “They talk about it all the time. It’s customer focus, innovation, and thinking about the long term.”
What makes Amazon special, he said, is its ability to live those principles every day.
“Jeff has had a really remarkable ability to create a management team that believes in these same principles and sticks to them,” said Alberg, who remains on the board of Seattle-based RFID-maker Impinj and the nonprofit Pacific Science Center.
Even during their first conversations back in 1995, Alberg remembers Bezos talking about focusing on the customer and about innovation. Those mantras have been key to Amazon’s success — and Alberg himself has learned from the company’s progress, too.
“We talk a lot about making sure our companies and their executives understand what the customer really wants,” he said of the startups within Madrona’s portfolio. Madrona has nearly $1.6 billion under management and raised a $300 million fund last year, its seventh.
Alberg, who grew up in Seattle and attended Ballard High School, said he plans on increasing his level of involvement with civic-related projects and initiatives. He said tech companies “can and should play a big role” in helping support their local community.
Amazon has been criticized for its limited engagement in local issues and philanthropy, though the company’s charitable activity in and around Seattle has increased in recent years. Alberg pointed out its involvement with organizations such as Mary’s Place and FareStart.
“I think sometimes Amazon and other tech companies don’t get enough credit for what they are already doing,” Alberg said.
Alberg expects Amazon to continue investing in Seattle, despite the company opening up an “HQ2” in the Washington D.C. area and relocating some employees to nearby Bellevue.
“I don’t think it means there won’t be any growth in Seattle,” he said. “It’s still HQ1.”