Tragedy: Amazon’s First CFO and Internet Pioneer Joy Covey Dies in Bike Accident
I met Joy Covey in the mid-1990s, which is a very long time ago in Internet terms, on a trip I made to Seattle to visit the then-fledgling online bookseller Amazon.
Later, after the company had gone public, I decided to write a profile of Covey for The Wall Street Journal, for lots of reasons: Amazon was on a tear after its 1997 IPO, she was one of the few women who were top leaders in the very small Web industry and, most of all, she was a force of nature.
Actually, Joy was a force of numbers and of Wall Street and, well, of a lot of things. She left Amazon in 2000, but should be credited with being a key reason for its initial success, and also for leaving in place a structure that allowed it to soar.
Sadly, Joy, an avid athlete, died in a tragic bike accident yesterday at 50 years old, on one of the windy roads she loved in Silicon Valley. Joy had moved here in recent years after living in Park City, Utah.
Joy was tough, but fair, and she always had an interesting insight to the Internet scene, cutting right through the awful and endless logrolling and posturing in the tech world to get to the actual point. She was also a wonderful mother, and a good friend to many in the tech community, including myself.
Recently, she had been working relentlessly for the National Resources Defense Council as its treasurer, as well as dipping in and out of tech advising.
Mostly, she was a person of substance, of heart, of grit and of much-needed humor. Joy did not just tell it like it was — she lived it like it was, too.
She died too soon, and leaves behind a young son, Tyler, whom she loved dearly. In 2005, when he was just seven months old, she wrote to me about him on the occasion of the birth of our second son: “As mobile as imaginable for a baby who doesn’t crawl or walk yet. Two little teeth, lots of smiles, a happy little soul. I never knew how wonderful this could be and are so happy that you two have your little boys too.” As someone who lost a parent at a young age, I hope we can all let him know how wonderful Joy actually was, and always will be for him.
More than a class act, she was a memorable one.
Here’s the entire profile I did of Joy for the Journal in early 1999, which should give you a small glimpse into the too-short life of an extraordinary woman:
Amazon.com CFO Sells Investors
On the Merits of Losses for Years
By KARA SWISHER
Staff Reporter of THE WALL STREET JOURNAL
Crowded into a tiny, windowless room in a posh San Francisco hotel, stock analysts are pestering Joy Covey, the chief financial officer of Amazon.com Inc., the Internet’s leading retailer.
After its success selling books, music and movies, they want to know the company’s next big move. But Ms. Covey isn’t talking. Finally, one frustrated analyst asks her what Amazon won’t sell.
“Cement,” she says. “It costs too much to ship.”
The quip gets a laugh — and the crowd off her back. But at this meeting and many others, Ms. Covey has one of the toughest jobs in electronic commerce. She must persuade investors and shareholders to accept hundreds of millions of dollars in losses for the next several years while the company tries to build itself into the dominant retailer on the Internet. And she must convince them they needn’t worry about the kamikaze newcomers who are slashing the profit margins in one online segment after another.
So far, so good. Despite a loss of $124.5 million on revenue of $610 million in 1998, Amazon’s stock has been rocketing for the past nine months. Even after a pullback to Tuesday’s composite price of $123.6875 in Nasdaq Stock Market trading from a peak of $200 a share, the company’s market capitalization stands at $22 billion, bigger than that of Sears Roebuck & Co. It’s all an act of faith in Amazon’s future, and Ms. Covey pulled off another coup in January, completing a $1.25 billion convertible bond offering, more than twice the $500 million originally planned.
Analysts give her credit for salesmanship. “Since their business model today doesn’t work if you compare it to their huge valuation, you have to suspend normal metrics and simply believe that they are right in playing for their share of profits in the future,” says Andrea Williams, an analyst for Volpe Brown Whelan & Co. in San Francisco. “What Joy has been saying is that you basically have to trust them.”
Amazon itself has placed a lot of trust in the 35-year-old California native. While the public countenance of Amazon has largely been that of Jeff Bezos, the company’s impish founder, other executives at the secretive Seattle-based company — and especially Ms. Covey — have been moving to center stage in recent months.
“Except on an occasional basis when it is critical for me to deal with Wall Street, she makes it possible for me to spend a lot more of my time on the customer experience,” says Mr. Bezos. “But her job is not only in the CFO capacity, but somewhat broader and deeper in communicating our message to investors, which is so important to our future.”
For a rising star on the Internet stage, Ms. Covey had relatively humble beginnings. She is a 1982 graduate of California State University in Fresno, Calif., and she began her career as an accountant at Arthur Young LLP. Her first assignment: counting beans at Denny’s restaurants. She soon decided to get a joint law and business degree from Harvard University, a move designed to get her closer to the deal-making engines of Wall Street. Then, after a short stint at the investment firm of Wasserstein Perella & Co., she helped take a small Silicon Valley software company public, sold it and moved to the buyer in Massachusetts.
But soon she was back out West, looking for more action. It was while interviewing with a range of hot Silicon Valley companies such as Excite Inc. and Marimba Inc. that Ms. Covey was approached about Amazon. She was intrigued by the involvement of venture-capitalist John Doerr, but when she learned the company was located in rainy Seattle, she turned the idea down. She agreed to have lunch with Mr. Bezos only as a favor to Amazon’s headhunter, and she spent the first 10 minutes of their meeting telling him she wasn’t interested.
“She said there was no way she was leaving the Bay area and wanted me to understand that it was a waste of time to try to get her to,” he recalls. “But after that, we had an incredible lunch, since the pressure was off to impress each other.” Mr. Bezos was surprised the next day when he received a call from Ms. Covey asking if he would consider a commuting arrangement.
‘Maybe You Should Take It’
“After I got home, I kept talking about it, so my fiance said, ‘I hate to say this, but maybe you should take it,’” she says. “I think he knew it was important for me to work somewhere I believed in.”
Even in late 1996, Amazon was a small operation with only 150 people, so Ms. Covey was soon plunged into plans to take the company public. Most brutal of all was the road show, she recalls, where she and Mr. Bezos were pummeled by dubious investors who questioned the company’s viability. Among the complaints were many that are still relevant today: bruising competition from bigger companies, the lack of profits and the reluctance of Amazon to disclose details of its strategies.
That skepticism prevailed for much of 1997, and the stock lagged. But as popular interest in the Internet began to catch fire in mid-1998, so did Amazon’s stock. Its current lofty valuation has made Ms. Covey and other top Amazon executives fabulously wealthy. Recent public filings show that she holds at least $125 million in stock, not including options that haven’t been reported that probably boost her net worth to at least $200 million.
The vast riches don’t seem to have made Ms. Covey’s life any easier, though. Her reputation both inside and outside the company is that of a relentless worker. Morgan Stanley Dean Witter analyst Mary Meeker, who has worked closely with Ms. Covey, says she fits right into the ambitious culture of a company made up of “driven braniacs.”
“When Joy skis she goes right over bumps and moguls on the hardest slopes, and then when she gets to the bottom, rushes right back up to the top to do it again,” says Ms. Meeker. “It’s the kind of attitude she has needed to have in her work, too.”
‘A Little Intense’
The relentless pace means Ms. Covey hasn’t had much chance to be bothered by Seattle’s rainy weather. “I look at the four walls of my office mostly,” says Ms. Covey, once an avid windsurfer and hiker as well as a skier. “It’s been a little intense.”
Indeed, while her primary job is managing Amazon’s bottom line, Ms. Covey’s role is more wide-ranging than a typical CFO’s. Logging in 16-hour days isn’t unusual, as she meets with Wall Street analysts, travels to conferences for face time with investors, approves spending plans for the company and — in an unusual twist for someone who is charged with watching where all the pennies go — urges other executives to think bigger.
“I am always telling them to spend more if they think the investment will translate to profits eventually,” she says. “Our plan is basically to be growing into profitability.”
When that will happen is still a mystery. Amazon warns in its regulatory filings that it may not make money for years. But Ms. Covey’s crowning achievement, the $1.25 billion bond offering, gives Amazon breathing room. While she remains tight-lipped about how the cash will be used, she says Amazon will invest aggressively in areas that allow the company to cut costs, such as more efficient warehouse operations and other behind-the-scenes improvements.
Amazon may also make acquisitions or strategic investments in other companies. So far, it has disclosed only one small investment, of $30 million to $40 million in cash for a 40% stake in Drugstore.com. But rumors abound that the company has bigger acquisition plans in mind, such as buying everything from online travel companies to software concerns to auto retailers to greeting-card companies.
Whatever Amazon does is for the long-term, not short-term profits, Ms. Covey says. “I learned that it does no good to tell people what they want to hear in order to get them to buy the stock,” she says. “So I have repeated again and again that this is for the long term and we are building an enduring company. I don’t think you can get more clear than that.”