Episode 28: The Amazon IPO with original Amazon Board Member Tom Alberg

**Ben Gilbert** (0:00)
This is a great time to tell you about one of our very favorite companies, Crusoe.

**David Rosenthal** (0:05)
So Crusoe, as listeners know by now, is a clean compute cloud provider specifically built for AI workloads. NVIDIA is one of their major partners, and literally Crusoe's data centers are nothing but racks and racks of A100s and H100s. And because Crusoe's cloud is purpose-built for AI and run on wasted, stranded, or clean energy, they can provide significantly better performance per dollar than traditional cloud providers.

**Ben Gilbert** (0:30)
Yes, we talked about that on our ACQ2 episode with Crusoe's CEO, Chase Lockmiller.

**David Rosenthal** (0:36)
The other element that makes Crusoe special is the environmental angle. Crusoe, of course, locates their data centers at stranded energy sites. So think oil flares, wind farms that can't use all the energy they generate, etc. And uses that power that would otherwise be wasted to run your AI workloads instead.

**Ben Gilbert** (0:55)
Obviously, it's a huge benefit for the environment and for customers on cost since Crusoe doesn't rely on the energy grid. Energy is the second largest cost of running AI after, of course, the price you pay NVIDIA for the chips. And these lower energy costs get passed on to customers.

**David Rosenthal** (1:10)
It's super cool that they can put their data centers out there in these remote locations where quote-unquote energy happens, as opposed to the other hyperscalers such as AWS and Google and Azure, who need to build their data centers close to major traffic hubs where the Internet happens because they are doing everything in their clouds.

**Ben Gilbert** (1:27)
Yep. If you, your company, or your portfolio companies would like to use the lower cost and more performant infrastructure for your AI workloads, go to crusocloud.com/acquired, that's C-R-U-S-O-E cloud.com/acquired, or click the link in the show notes.

**David Rosenthal** (1:47)
Is it you? Is it you?

**Ben Gilbert** (2:00)
Welcome to episode 28 of Acquired, the podcast where we talk about technology acquisitions and IPOs. I'm Ben Gilbert.

**David Rosenthal** (2:07)
I'm David Rosenthal.

**Ben Gilbert** (2:08)
And we are your hosts. Today's episode is on the Amazon IPO, and we have an incredibly special guest with us today, Tom Alberg.

**David Rosenthal** (2:16)
So, Tom, we know very well because he was one of the co-founders of Madrona, which actually brought Ben and me together. And none of us would be here if it weren't for Tom. But in addition to being a co-founder of Madrona, he has had another very special role over the last 20 plus years, which is board member of amazon.com. And Tom was the first investor and the first and, I guess, other than Jeff, longest serving board member of Amazon. Right. So, we thought it would be fun. We will get through the whole IPO story here, but to read Tom's bio from the S1 that Amazon filed in advance of going public. So, Mr. Alberg has been a director of the company, Amazon, since June 1996
Mr. Alberg has been a principal in Madrona Investment Group, LLC, a, quote, private merchant banking firm, since January 1996 From April 91 to October 95, he was president and director of Linn Broadcasting Corporation, and from July 1990 to October 1995, he was executive vice president of McCaw Cellular Communications. Both companies were providers of cellular telephone services and are now part of AT&T Corp. Prior to 1990, Mr. Alberg was a partner at the law firm of Perkins-Cooey, where he also served as chairman of the firm's executive committee. He is also a director of Active Voice Corporation, Emeritus Corporation, Mosaics Inc., Teledesic Corporation, and Vizio Corporation. Mr. Alberg received his BA from Harvard University and his JD from Columbia Law School. So are any of those other companies still in business except for Amazon?

**Tom Alberg** (4:03)
No, I think, well, Vizio was acquired for a good price by Microsoft, I think over a billion dollars. But you also left out, for example, that I learned the multiplication tables in third grade and probably was class president in fifth grade. I mean, how can you miss these things?

**David Rosenthal** (4:20)
At Ballard High School, right?

**Tom Alberg** (4:22)
Right, Ballard High School, eventually, right.

**David Rosenthal** (4:24)
Once again, thanks to Tom for joining us. We're super honored to have him on the show. Let's start with the Amazon story. So, I expect most listeners are familiar with the lore of how Amazon came to be, but we'll retell it briefly here leading up to the IPO and ask Tom some fun questions along the way. So, Amazon was founded in the summer of 1994, but actually started the idea a little bit before that when Jeff Bezos was a vice president at the hedge fund DE. Shaw and Company in New York. And David Shaw, the founder of DE. Shaw, assigned Jeff to think about business opportunities enabled by this new thing called the Internet. And Jeff went off and did a bunch of research. And as legend has it, he came across this one report about the growth of the Internet that projected that it would grow 2300 percent annually for the next decade or so. And he kind of read that and decided, that's it, I got to be a part of this. I don't want to miss this boat. So he and his wife, Mackenzie, who he also worked with at DE. Shaw, they quit their jobs and they road tripped across country to the West Coast with no particular destination in mind other than starting a company at the end of it. Jeff writes the business plan for what would become Amazon along the way and they end up here in Seattle where they start Amazon on July 5th, 1994 in a garage in Bellevue.