“What the hell happened?”

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It is a cold day in early December in Midtown Manhattan, and Amazon CEO Jeff Bezos has barely taken his seat on stage when his interviewer throws out that brusque query. It’s the question on the lips of every one of the 400 attendees of this tech conference, but it’s still a jarring moment. Bezos tries to hem and haw his way out of the issue, but his interrogator, Business Insider editor-in-chief Henry Blodget, won’t let up, asking again, “So, Jeff, what happened with the Fire Phone?” Introduced with grand ambitions last summer, the Fire Phone is widely seen as a fiasco. Originally priced at $199 (with contract) and intended as an iPhone competitor, it now sells for 99 cents, and Amazon has taken a $170 million write-down largely attributable to unsold Fire Phone inventory. Yet Bezos finally answers the question with the kind of reasoning that investors, customers, and pundits have come to expect from him: Amazon is going to pour more resources into its phone. Defending the Fire Phone as a “bold bet,” Bezos argues that it’s “going to take many iterations” and “some number of years” to get it right. In other words, just as it did when it expanded beyond books in the late 1990s, and when it introduced the Kindle and started its cloud-computing wing, Amazon Web Services (AWS), in the mid-2000s, Amazon is going to invest in its future, short-term shareholders be damned. It’s the kind of answer that has served Bezos well over the years, that has helped justify the fact that the company has produced so little profit even as it has grown into the behemoth of e-commerce. But lately it’s not an answer that Wall Street has liked. In October, Amazon shocked shareholders when it reported a $437 million net loss for the quarter, its biggest in 14 years. Quarterly revenue hit $20.58 billion, but the company’s growth rate, once a bright spot for those leery of Amazon’s lackluster profits, is slowing. And prospects for the fourth quarter, which closed after this story went to press, were not much better: Over the past five years, Amazon’s fourth-quarter growth rate has steadily declined, from 42% in 2009 to 20% in 2013—and the company was projecting between 7% to 18% for 2014. “For years, the story has been that Amazon isn’t profitable because it is growing so fast,” wrote hedge-fund manager David Einhorn, in a letter to his Greenlight Capital investors. “Now growth is slowing, but rather than unleashing higher profits, the slower growth is leading to even greater losses. One of the principal bullish assumptions supporting many bubble stocks is, ‘The company is growing too fast to be very profitable.’ We think Amazon is just one of many stocks for which this narrative will ultimately prove false.” Those are some seriously harsh words, especially toward an icon of the Internet age. But Bezos has made a habit of forcing naysayers like Einhorn to eat their words. Every time that this sort of complaint has been raised about Amazon in the past—and this moment is hardly an aberration in Amazon’s history—the company has roared back to prove its doubters wrong. Dubbing Amazon just another “bubble stock” can seem shortsighted, even foolhardy. Betting against Bezos has never turned out well. The Fire Phone plan was particularly ambitious, insiders say, with a set of objectives that seemed unrealistic even then. Yet is there something new going on with Amazon, something dangerous on a whole new level? Or is this the latest installment in what Bezos has always been selling about his company: that it is so different in its outlook, its operations, and its potential that it should be judged differently, too? The criticism this time goes beyond the fact that the CEO prefers to invest heavily in what might drive business tomorrow rather than reap profits today. This time, say the critics, Bezos has lost his focus. This time, they say, he is pursuing global domination at the expense of his historic drive to improve the customer experience. “Kindle, Prime, AWS, they made absolute sense with the assets Amazon had,” says Amazon analyst Scott Devitt of research firm Stifel Financial. “But are they still doing things that have a high probability of success, a high long-term return on capital like the old days? That’s where there are more questions today than there have been in a while, where you start to scratch your head. Growth is slowing, and these other initiatives just aren’t taking off. As an investor you have to ask yourself, Is this company doing too many things?” Far from merely trying to dominate online retail, this is a business that now does grocery delivery in San Francisco and Los Angeles; that produces TV shows starring John Goodman and Gael García Bernal; that counts NASA and Netflix as customers of Amazon Web Services; that recently acquired Twitch, a live-streaming service for video games, for around $1 billion; that has launched an all-out offensive against e-commerce rival Alibaba on its home turf in China; and that, as of December, offers its own branded line of eco-friendly diapers. It might soon even be launching a hotel-booking service. How do these increasingly fragmented parts of Amazon fit together? What is Bezos’s strategy? These are the questions that people are now flinging at a company famous for its laserlike focus and outrageous efficiency.

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Bezos has said that his job is to encourage more “bold bets” and to embrace failure inside the company in pursuit of the big successes that “compensate for dozens and dozens of things that [don’t] work.” That drive and willingness to experiment has made Amazon a formidable competitor; Google chairman Eric Schmidt, for one, has said he considers Amazon to be the search giant’s most dangerous rival. For Apple, too, its ambitions with e-commerce, iCloud, and now, even devices, all run headlong into Amazon’s initiatives. But will all of Bezos’s risk-taking ultimately pay off? “They make no money!” former Microsoft CEO Steve Ballmer exclaimed in a recent TV interview. “In my world, [that’s] not a real business. I get it if you don’t make money for two or three years, but Amazon is, what, 21 years old?” In many ways, the Fire Phone is the perfect symbol of these opposing perceptions of Amazon. It represents everything proponents love about the company—the wild experimentation, the appetite for risk-taking—as well as everything that critics now deride: its huge expenditures, its blithe embrace of an imagined future where the big bets pay off, and its inability to create anything with real style. Understanding Amazon’s journey to create a smartphone, and why it failed, is perhaps the best way to understand the company’s evolving mission and values as it struggles to unearth its next gusher of revenue. Because the Fire Phone, as with most big innovations inside Amazon, came straight from Bezos’s brain. As one founding team leader of the project puts it, “This was Jeff’s baby.” Like every product created at Amazon, the Fire Phone began on a piece of paper. Or rather, several typed, single-spaced pieces of paper that contained a mock-up of a press release for the product that the company hoped to launch some day. Bezos requires employees to write these pretend press releases before work begins on a new initiative. The point is to help them refine their ideas and distill their goals with the customer in mind. The Fire Phone plan was particularly ambitious, insiders say, with a set of objectives that seemed unrealistic even then. Related Reading Following Fire Phone Flop, Big Changes For Amazon’s Lab126

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Read more >> The project, code-named “Tyto” for a genus of owl, got rolling in 2010, roughly around the time Apple launched the iPhone 4. There were cogent reasons for Amazon to want a phone of its own. As the world goes mobile, an Amazon phone would provide a more direct link to its users. Today, customers often come to Amazon via iPhones or Android devices. Not controlling the hardware can create problems. For instance, you can’t buy e-books through the Kindle app on your iPhone because Apple takes 30% of app-driven sales—a cut that would hurt Amazon’s already razor-thin margin. Bezos knew that any Amazon phone would be immediately greeted with one question: Why should anyone buy an Amazon device instead of an iPhone? That’s why his mandate to the team was simple and bold from the very start: Let’s wow customers with something big and distinctive. ‘In essence, we were not building the phone for the customer—we were building it for Jeff,’ says one source. With Bezos managing every critical decision, teams began second-guessing themselves trying to anticipate how he would react. This wasn’t some vague guideline from an executive busy running other parts of the business; based on interviews with more than three dozen current and former employees, most of whom were deeply involved with the project, the CEO drove every aspect of the phone’s creation from the outset. (Amazon declined to make Bezos or other executives available for this story.)

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Bezos’s guiding principle for Amazon has always been to start with the needs and desires of the customer and work backward. But when it came to the Fire Phone, that customer apparently became Jeff Bezos. He envisioned a list of whiz-bang features, and the Tyto team started experimenting with a slew of promising technologies: near-field communication for contactless payments, hands-free interactions to allow users to navigate the interface through mid-air gestures, and a force-sensitive grip that could respond in different ways to various degrees of physical pressure. Perhaps most compelling was Dynamic Perspective, which uses cameras to track a user’s head and adjust the display to his or her vantage point, making the on-screen image appear three-dimensional. The Tyto project called heavily upon Lab126, Amazon’s R&D unit with offices in Sunnyvale, California, and Cupertino, the latter just a short walk down the street from Apple headquarters. Lab126 is run by Gregg Zehr, a former Apple VP with a mellow vibe who plays guitar and has a flair for classic style. “He’d wear a tweed jacket and a scarf at the lab, and it never looked weird,” an ex-colleague says. Former Lab126 VP Mark Randall recalls, “When I walked into his house for the first time, I said, ‘Jesus Christ, Gregg, this looks like an Apple store.'” (Zehr declined to comment for this piece.) Advertisement Inside Lab126’s industrial design studio, employees sit at tables dotted with Apple Cinema Display monitors and Dell laptops. Streamed in through a Sonos speaker, music fills the open space where the team brainstorms new ideas, reviews 3-D models, and pins up mood boards on the wall. “It’s a fun, lighthearted, and collaborative group,” says one source familiar with the culture. Few employees have access to this studio, which is hidden on the top floor of one of Lab126’s Sunnyvale buildings, with offices fronted by partially frosted glass. “If you really wanted to peek in, you could crouch down and look through the bottom of the window,” jokes one source. Bezos would generally visit for a day or two on his trips from Seattle, casually popping in to say hello to his design team and to meet with Zehr. Closer to the launch of the Fire Phone, his visits became more frequent: At one point, he spent a month basically working out of Lab126. The group’s hardware and design expertise have become more sophisticated since it released the first Kindle e-reader in 2007. That Kindle was a clunky, ugly slab of machinery, but the idea behind it was so original, and Amazon’s development of subsequent versions so relentless, that it became a massive hit. Unique as it was, however, the Kindle was a relatively simple device, especially compared to a smartphone. Lab126 specializes in the kind of bold bets Bezos loves. Each “science experiment,” as those inside the lab describe their projects, is labeled with a letter of the alphabet. (Indeed, Lab126’s name itself is a play on A to Z, with 1 representing the first letter of the alphabet and 26 the last.) These experiments evolved over years of development into a hardware portfolio that now includes Amazon’s Fire TV set-top box and the new Echo, a sort of Siri-in-a-tube that’s engineered to answer any spoken question. Many other projects will likely never come to market, such as Project C, imagined as an experimental device for the home that would project a display screen onto any surface and allow users to interact with it through gestures. Tyto was considered Project B. Photo: David Ryder, Getty Images On stage, Bezos gushed about the phone’s design and showed off how it could recognize paintings. Bezos, insiders say, was “the product manager” on the Fire Phone. (One research scientist refers to him as the “super product manager.”) “Even the very smallest decisions needed to go through him,” says a former senior member of the team that developed the Fire Phone’s cameras, recalling how Bezos personally chose to include a 13-megapixel camera rather than an 8-megapixel one.

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Bezos was closely involved with developing both the hardware and the software. “I would see him brainstorming wild ideas with the industrial design team, or discussing font sizes and interaction flows with the UI team,” recalls a former topflight designer at Lab126, who describes a demanding pace. “And I thought, This is a CEO who cares about design; what a wonderful place to be.” Eventually, however, this designer grew frustrated, as did others. “In essence, we were not building the phone for the customer—we were building it for Jeff,” this source says. With Bezos managing every critical decision, teams began second-guessing themselves trying to anticipate how he would react. Some designers bristled at Bezos’s presence and privately questioned his taste, while others who were wowed by his wide-ranging insights loved his approach. Regardless, Bezos’s heavy hand certainly took getting used to, even for Chris Green, Lab126’s VP of industrial design. “In the beginning, Chris would take Jeff’s feedback a bit literally,” says Randall, the former Lab126 VP, “and there was many an evening spent over beers and sushi counseling him, saying, ‘Calm down, it’s going to get better.'” Bezos drove the team hard on one particular feature: Dynamic Perspective, the 3-D effects engine that is perhaps most representative of what went wrong with the Fire Phone. Dynamic Perspective presented the team with a challenge: Create a 3-D display that requires no glasses and is visible from multiple angles. The key would be facial recognition, which would allow the phone’s cameras to track a user’s gaze and adjust the 3-D effect accordingly. After a first set of leaders assigned to the project failed to deliver, their replacements went on a hiring spree. One team even set up a room that they essentially turned into a costume store, filling it with wigs, sunglasses, fake moustaches, and earrings that they donned for the cameras in order to improve facial recognition. “I want this feature,” Bezos said, telling the team he didn’t care how long it took or how much it cost. Eventually, a solution was discovered: Four cameras had to be mounted at the corners of the phone, each capable of identifying facial features, whether in total darkness or obscured by sunglasses. But adding that to the phone created a serious battery drain. When it came to the Fire Phone, says one former product lead, ‘Yes, there was heated debate about whether it was heading in the right direction. But at a certain point, you just think, Well, this guy has been right so many times before.’ And team members simply could not imagine truly useful applications for Dynamic Perspective. As far as anyone could tell, Bezos was in search of the Fire Phone’s version of Siri, a signature feature that could make the device a blockbuster. But what was the point, they wondered, beyond some fun gaming interactions and flashy 3-D lock screens. “In meetings, all Jeff talked about was, ‘3-D, 3-D, 3-D!’ He had this childlike excitement about the feature and no one could understand why,” recalls a former engineering head who worked solely on Dynamic Perspective for years. “We poured surreal amounts of money into it, yet we all thought it had no value for the customer, which was the biggest irony. Whenever anyone asked why we were doing this, the answer was, ‘Because Jeff wants it.’ No one thought the feature justified the cost to the project. No one. Absolutely no one.” Even so, this top engineer adds, “Jeff is immensely successful; he’s taken huge gambles in the past, so he has shitloads of respect from the team members.” When Bezos insisted that the original 2007 Kindle include a cellular connection so customers could download and access e-books from anywhere, people thought the idea was an exorbitant flourish that would eat into profits. But his prescience was part of what made the Kindle a smash hit. When Bezos encouraged a free-shipping initiative, executives pushed back, nervous about its impact on earnings. But Bezos prevailed and later bundled free two-day shipping into Prime’s immensely popular subscription service, which now boasts tens of millions of customers. Even Amazon Web Services was reportedly greeted with resistance by critics who believed Amazon should focus on expanding its retail business rather than pursuing projects seemingly outside its core competency. AWS is now a multibillion-dollar business, according to estimates. So when it came to the Fire Phone, says one former product lead, “Yes, there was heated debate about whether it was heading in the right direction. But at a certain point, you just think, ‘Well, this guy has been right so many times before.'” With progress on the phone slow, and its prototypes barely functional, the company decided leading into 2013 to scrap most of the Tyto work and start over. The target launch date was pushed back a year, and Tyto was given the new code name “Duke.” As a backup plan, Bezos also ordered the development of a stripped-down, low-cost alternative to Duke, dubbed “Otus.” Some inside Amazon hoped the company would first launch Otus (which was also known as the “Prime Phone,” because the company was considering giving it away free or selling it extra-cheap to its members), believing that such a low-cost phone was more in keeping with Amazon’s value-conscious brand. Amazon’s victories had always come on the back of aggressive pricing: It was willing to sell products and offer services, such as Prime and its range of Kindle products, at cost—or even at a loss—to win customers and get them buying and consuming more Amazon goods and media. The strategy had enabled Amazon to swallow up entire industries and squash competitors, from Circuit City to Barnes & Noble.

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Photo: Jason Pietra, Prop styling: Edward Scott, Anyway Reps Amazon is not an aspirational brand,” says one Silicon Valley veteran. “I’ve never heard anyone say, ‘Wow, Amazon is cool.’ But pricing a smartphone was complicated. Bezos didn’t want a me-too device, and the margins a low-cost phone could garner would be minimal, even if it did manage to stand out in an ocean of cheap devices. The only solution, some inside the organization argued, was to differentiate the hardware enough to justify a higher price point and hope to go after some of Apple’s profits. But Apple is a ferocious competitor as well, whose dominance in high-end products was made possible by decades of rigorous R&D, a world-class design team, and its unrivaled approach to hardware and software. The idea that Amazon, a neophyte hardware maker whose CEO has shown no special affinity for design, could successfully attack Apple might seem quixotic. Yet Bezos had profound reasons for preferring a top-of-the-line smartphone. Multiple sources indicate that the premium phone represented a “repositioning of the brand away from being so utilitarian and toward becoming more of a lifestyle brand like Apple,” as the high-ranking Lab126 designer phrases it. Bezos expressed some of these sentiments himself in a memo he wrote years ago, entitled “Amazon.love.” In the memo, first revealed by journalist Brad Stone in The Everything Store, Bezos describes his vision to transform Amazon into a brand such as Apple, Nike, or Disney, which are “widely loved by their customers, and are even perceived as cool.” Brands like Walmart and Microsoft, he noted, are “unloved” and suffer as a result. He then listed the attributes that distinguished each set of companies: “Risk taking is cool. Thinking big is cool. The unexpected is cool. Close-following is not cool.” Bezos’s memo helps put the phone project into perspective. Amazon is one of the world’s most admired brands, a constant presence atop surveys of customer satisfaction. But it’s also a company that hundreds of millions of people depend on for good deals on boring products—low-cost paper towels, not a $199 smartphone. The high-end phone would be big, risky, different, and unexpected—not the cheap, unexciting device everyone would anticipate from Amazon. That helps explain why, for example, Bezos ordered the team to gussy up the phone’s Firefly feature, a service that can identify many types of products and media with the click of a button. Hover the phone over a physical book cover, for example, and Firefly can instantly dial it up on amazon.com or in the Kindle store. But Firefly can also be used to determine the name of a song in a bar, or to scan in contact information from a business card. And just one month before launching the phone, Bezos ordered the team to find a way for Firefly to recognize paintings and other works of art. Bezos unveiled the Fire Phone on June 18, 2014, at Seattle’s Fremont Studios. On stage, he gushed over the phone’s design and Dynamic Perspective, and showed off not only how Firefly could recognize a jar of Nutella but also a painting by Renaissance artist Vittore Carpaccio. Advertisement In late July, the Fire Phone finally went on sale, and it didn’t take long for the company to discover that consumers considered its smartphone effort utterly misguided. Reviewers knocked the device for its gimmicky features, especially Dynamic Perspective, which most found worthless and distracting. They also took issue with the Fire Phone’s bland industrial design and disappointing ecosystem; Amazon simply doesn’t offer the same library of apps or cohesion of services as Apple. But what Amazon got most wrong, they said, was the cost: The Fire Phone was too expensive for its customers. According to three sources familiar with the company’s numbers, the Fire Phone sold just tens of thousands of units in the weeks that preceded the company’s radical price cuts. The $170 million write-down confirmed that the launch has been a dud. Clearly, Amazon isn’t yet on the same side of the “loved” spectrum as the brands Bezos named in his memo. Devoted fans of Apple, Nike, and Disney will spend any amount of money just for a small taste of their products and culture. Amazon certainly isn’t in the same camp as supposedly “unloved” brands like Walmart—far from it. But Amazon just isn’t as cool or beloved as Bezos might hope. Anyone worried about the direction Amazon is headed, and whether the company has abandoned its value-brand intensity in pursuit of some kind of high-class chimera, would have shuddered the night of December 2. A stream of New Yorkers, resplendent in their winter uniform of long black overcoats and plaid scarves, filed into Lincoln Center’s Alice Tully Hall. A live orchestra welcomed the guests. When the lights went down, the actor Jason Schwartzman accompanied Academy Award–nominated screenwriters Roman Coppola and Paul Weitz to the stage, where they thanked—of all people—Jeff Bezos.

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What makes the Fire Phone a particularly troubling adventure is that Amazon’s CEO seemingly lost track of the essential driver of his company’s brand. ‘We can’t compete head to head with Apple,’ says a high-level source at Lab126. ‘There is a branding issue: Apple is premium, while our customers want a great product at a great price.’ The occasion? The premiere of Mozart in the Jungle, a comedy series set behind the scenes of a symphony orchestra. The show was produced by Amazon Studios, the company’s original-content arm, which has developed some three dozen pilots in the four years since the company created its video-streaming service. It offers a growing library of Netflix-style content, including original shows available exclusively to Amazon Prime members. “We’re trying to break the mold of how TV has been made for the last 75 years,” Amazon Studios content chief Joe Lewis explained, before dropping a familiar Bezos trope: “It’s still Day One.” On this particular evening at Alice Tully Hall, it was actually day 7,080 (since Amazon’s site launched). In the past year, the company had introduced the Fire Phone, Fire TV, Echo, a new Kindle, a food-delivery service, a Square-like point-of-sale register for local merchants, and that line of ecologically minded baby products. It had green-lighted at least six new shows. And despite the lack of profits, its CEO remained committed to the strategy of nonstop innovation that he had followed from the beginning. “There are many ways of thinking about this, but the reality is that Amazon is a collection of several businesses and initiatives,” Bezos said during the Business Insider conference. “It’s kind of like we built this lemonade stand 20 years ago, and the lemonade stand has become very profitable over time, but we also decided to use our skills and the assets we’ve acquired to open a hamburger stand, a hot dog stand—we’re investing in new initiatives.” Just 17 months ago, in September 2013, this magazine put the Amazon CEO on its cover alongside the headline “King Bezos.” Comparing the initiatives we highlighted then and the list of new ventures in the paragraph above gets to the heart of why so many observers are nervous about Amazon. Back then, Bezos’s focus seemed to be on faster delivery, greater automation in the company’s warehouses, and keeping prices low. His new grocery business seemed to be yet another of those low-margin endeavors at which Amazon has excelled. The intensity and innovation applied to these mundane functions was awe-inspiring. True, the original-content business was harder to grasp, but it was an outlier rather than one of a slew of projects that now beg for explication. Photo: Jason Pietra, Prop styling: Edward Scott, Anyway Reps “With most of Amazon’s products, I usually get it: I can somehow use these things to buy more shit,” explains a high-profile innovator in the Valley with strong ties to Amazon. “But when Amazon starts to move into selling [high-end consumer electronics] like the Fire Phone, how does the brand do? Amazon is not an aspirational brand. I’ve never heard anyone say, ‘Wow, Amazon is really cool.’ They’re known for notorious e-commerce efficiency, which is about as diametrically opposed to fashionable as you can get.” What does Jeff Bezos really gain by stretching so far? A great streaming-content library to hook people into Prime makes sense, but should the company really be producing its own original shows? Buying Zappos and Quidsi, with its lineup of e-retail websites like Soap.com and Diapers.com, fits right in, but why does Amazon have to make its own nappies? Even a phone might make sense—but a 3-D phone? Why? Ben Thompson, a widely respected independent technology analyst, has spent much time trying to grasp Amazon’s larger strategy. Recently, he concluded that its big investments in devices and video streaming are increasingly disconnected from its retail business. After Amazon’s acquisition of Twitch, a sort of video-game-centric YouTube, Thompson wrote that it no longer makes sense to view Amazon as an e-commerce company. One theory for Bezos’s apparent strategic shift? “Amazon wants to rule the world,” he wrote in an August 2014 blog post, only half in jest.

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Read more >> Bezos has always liked to think of himself as an explorer. “Explorers are cool,” he wrote in that Amazon.love memo. Every so often, Bezos takes his company on a daring expedition. These can be expensive and time-consuming, since they are pursued with the vigor Bezos brings to everything he does. And they have often brought home profits, lessons, and ideas that fund previously unimagined sources of future growth. His explorations have led to AWS, which some observers think will be a $25-billion-a-year business by the end of the decade, to warehouse robots, and to a host of smaller innovations that have further strengthened the link between Amazon and its customers. Even Prime Air, the drone delivery project that has been mocked from the outset as an outrageous fantasy that ignored regulatory issues—Bezos painted a picture of a sky full of unmanned aerial vehicles zipping packages to customers in under 30 minutes—has unexpected potential. In the near term, drones, which can operate on a three-dimensional plane, could add yet another layer of efficiency to Amazon’s fulfillment centers (where the FAA has no jurisdiction), augmenting the robots already rolling around the floor transporting goods. Amazon Fire Phone The first round of Amazon’s Fire Phone exploration failed, but Bezos will launch more forays, and those may lead to a significant discovery. Some of the existing hardware initiatives have features with considerable promise. The voice recognition in Echo, for example, will likely come to future iterations of the Amazon phone. Imagine that Alexa, as Amazon calls its Siri competitor, finds her way into a slew of devices. She is, really, a voice-powered search engine; if customers like the way she helps them find and order products, Amazon could start to circumvent Google and perhaps even develop a robust advertising business of its own, sitting on top of a powerhouse product-oriented search engine. What makes the Fire Phone a particularly troubling adventure, however, is that Amazon’s CEO seemingly lost track of the essential driver of his company’s brand. It’s understandable that Bezos would want to give Amazon a premium shine, but to focus on a high-end product, instead of the kind of service that has always distinguished the company, proved misguided. “We can’t compete head to head with Apple,” says a high-level source at Lab126. “There is a branding issue: Apple is premium, while our customers want a great product at a great price.” What investors and Amazon fans want to see is a return to the kind of explorations that better gibe with the company’s historic focus. Amazon must deliver on the promise that at some point it will generate significant profits. If it doesn’t, investors will eventually pull away from the stock—that was the message they sent after the third-quarter earnings report. And if that happens, Amazon will have less money for new initiatives, and its recruiting and retention efforts could suffer as well, because the company has historically relied on stock options, not high salaries, to incentivize employees. That’s why Bezos’s happy embrace of failure, and his insistence on funding even bolder initiatives ahead, has always been risky. There’s one other thing to keep in mind, however. Bezos’s penchant for exploration has almost always been balanced by a deep respect for the fundamental mission of the company. He has recovered from every failure Amazon has experienced in the past, and even after a failure as grand as this one, he has earned the benefit of the doubt, as the majority of my sources told me during interviews. Is the Fire fiasco a dead-set indicator that Amazon is in trouble? Not at all. Toward the end of my reporting for this story, I ventured out to an unassuming building on the Upper East Side in New York, not far from the Central Park Zoo, where a small sign on the exterior marks the Explorers Club. Inside the Wes Anderson–ish space is a museum’s worth of artifacts and gems from the private club’s storied 111-year-old history, such as gloves from the first moon landing. It’s long been an exclusive meeting place for the world’s most daring explorers, scientists, and thinkers—club director Will Roseman matter-of-factly tells me no less than three religions have been founded here—and over the years, its elite roster of members has grown to include Sir Edmund Hillary, Buzz Aldrin, Charles Lindbergh, James Cameron, Elon Musk, and, yes, Jeff Bezos.

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If you ever get a chance to visit the Explorers Club, and you manage to get past the massive stuffed polar bear, take a gander at the wall featuring photos of some members that the club has honored. Bezos was commended in 2014 after his company Bezos Expeditions used its technology to retrieve jettisoned Apollo 11 F-1 engines from the depths of the Mariana Trench. You’ll know you’re getting close to Bezos’s picture when you see the triumphant photo of Musk, hands folded on his chest beneath that bold stare of his. Just to Musk’s left is a picture with dozens of small figures. Those are the members of Bezos’s crew, standing on the deck of a ship, and if you squint hard, you can see the boss over to the right, wearing work boots, a windbreaker, and a baseball cap. There’s nothing remotely heroic about his pose. Bezos told the club’s directors that he wouldn’t accept an award for the Apollo effort unless each of his Bezos Expeditions colleagues also received a citation, highly unusual for this elite organization. The picture is the only one featuring a group of people. This is the Jeff Bezos people want to see again. The guy in work boots, who always seemed willing to go anywhere and work harder than anyone at the jobs no one else really wanted to do. Amazon is admired by customers for what it does, rather than loved for some iteration of itself that Bezos has clearly desired. The world doesn’t need another Steve Jobs. They just want Jeff Bezos, the way he used to be. Amazon Plugs In: How The e-retailer’s Hardware Efforts Stack Up. By Harry McCracken

<div class="inline-carousel" data-title=" Amazon Plugs In How The e-retailer’s Hardware Efforts Stack Up. By Harry McCracken”> Kindle Voyage ($199)Like its predecessors, dating back to the original in 2007, Amazon’s newest Kindle is purely for reading. With its thin case, high-resolution screen, and six-week battery, it’s the most refined e-reader ever built. Fire HDX 8.9 ($379) Amazon’s tablet strategy is simple: Sell ’em cheap and make money when owners buy content. The HDX 8.9 is particularly impressive, but Amazon’s Appstore isn’t nearly as stocked as the iOS App Store and Google Play.

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Fire TV ($99)A slick device, but way late to a category dominated by Roku and Apple TV. It lets you search by speaking and is surprisingly serious about gaming. Still, it’s no match for Roku’s 1,800-channel content smorgasbord. Fire TV Stick ($39) An impulse-item nub of a gizmo vaguely akin to Google’s Chromecast but bundled with a remote control. Basically the Fire TV box minus the higher-end games, and voice search requires a smartphone app. Fire Phone ($.99 with contract) Amazon’s first smartphone is hardly a me-too product. However, its interface is gimmicky and garish, making it a quirky outlier rather than a true rival to Apple and Samsung. Echo ($199) An always-listening, Siri-esque assistant named Alexa lets you speak commands to create playlists, set alarms, or check the weather. Amazon is rolling out Echo via a low-key, invite-only program.