This is Kristen O'Brien, Managing Editor at NFX, and this is the founder list. Audible versions of essays from technology's most important leaders selected by the founder community. In his final letter to shareholders, Amazon CEO, Jeff Bezos, on Thursday, laid out a broad vision for the future of the company. Committing to extend Amazon's famous obsession over its customers to ease shareholders fears about what a reimagined focus for the company might mean for Amazon's future.
He reiterated that it remains day 1 and highlighted continued growth in Amazon. Red by NFX. 2 are share owners. In Amazon's 1997 letter to shareholders, our first I talked about our hope to create an enduring franchise, one that would reinvent what it means to serve customers by unlocking the internet's power. I noted that Amazon had grown from having 158 employees to 614 and that we had surpassed 1,500,000 customer accounts.
We had just gone public at a split adjusted stock price of $1.5 per share. I wrote that it was day 1, We've come a long way since then, and we're working harder than ever to serve and delight customers. Last year, we hired 5 100,000 employees and now directly employ 1,300,000 people around the world. We have more than 200,000,000 Prime members worldwide, Morgan than 1,900,000 Morgan medium sized businesses sell in our store, and they make up close to 60% of our retail sales.
Customers have connected more than 100,000,000 smart home devices to Alexa. Amazon web services serves millions of customers and ended 2020 with a $50,000,000,000 annualized run rate. In 1997, we hadn't invented prime marketplace, Alexa, or AWS, They weren't even ideas back then, and none were preordained. We took great risk with each one and put sweat and ingenuity into each. Along the way, we've created $1,600,000,000,000 of wealth for share owners. Who are they?
Your chair is 1, and my Amazon shares have made me wealthy. But more than 7 eights of the shares representing $1,400,000,000,000 of wealth creation are owned by others. Who are they? Their pension funds, universities, and 401 ks. I am proud of the wealth we've created for share owners, It's significant and it improves their lives, but I also know something else. It's not the largest part of the value we've created. Create more than you consume.
If you want to be successful in business and life, actually, you have to create more than you consume. Your goal should be to create value for everyone you interact with. Any business that doesn't create value for those it touches, even if it appears successful on the surface, isn't long for this world. It's on the way out. Remember that stock prices are not about the past? They are a prediction of future cash flows discounted back to the present. The stock market anticipates.
I'm going to switch gears for a moment and talk about the past. How much value do we create for share owners in 2020? This is a relatively easy question to answer because accounting systems are set up to answer it. Our net income in 2020 was $21,300,000,000. If instead of being a publicly traded company with thousands of owners, Amazon were a sole proprietorship with a single owner That's how much the owner would have earned in 2020. How about employees?
This is also a reasonably easy value creation question to answer because we can look at compensation expense. What is an expense for a company is income for employees. In 2020, employees earned $80,000,000,000 plus another $11,000,000,000 to include benefits and various payroll taxes for a total of 91,000,000,000. How about 3rd party sellers? We have an internal team, the selling partner services team that works to answer that question.
They estimate that in 2020, 3rd party seller profits from selling on Amazon were between 25,000,000,000, 39,000,000,000. And to be conservative here, I'll go with 25,000,000,000. For customers, we have to break it down into consumer customers and AWS customers. We'll do consumers first. We offer low prices, fast selection, and fast delivery. But imagine we ignore all of that for the purpose of this estimate and value only one thing. We save customers time.
Customers complete 28 percent of their purchases on Amazon in 3 minutes or less, and half of all purchases are finished in less than 15 minutes. Compare that to the typical shopping trip to a physical store, driving, parking, searching store aisles, waiting in the checkout line, finding your car and driving Omri. Research suggests the typical physical store trip takes about an hour.
If you assume that a typical Amazon purchase takes 15 minutes and that saves you a couple of trips to a physical store a week, that's more than 75 hours a year saved. That's important. We're all busy in the early 21st century. So that we can get a dollar figure, let's value the time savings at $10 per hour, which is conservative. 75 hours multiply by $10 an hour and subtracting the cost of prime gives you a value creation for each prime member of about $630.
We have 200,000,000 Prime members for a total in 2020 of a $126,000,000,000 of value creation. AWS is challenging to estimate because each customer's workload is so different, but we'll do it anyway acknowledging Flint that the arrow bars are high. Direct cost improvements from operating in the cloud versus on premises vary, but a reasonable estimate is 30%. Across AWS's entire 2020 revenue of $45,000,000,000, that 30% would imply customer value creation of 19,000,000,000.
What would have cost them 64,000,000,000 on their own cost 45,000,000,000 from AWS. The difficult part of this estimation exercise is that the direct cost reduction is smallest portion of the customer benefit of moving to the cloud. The bigger benefit is the increased speed of software development, something that can significantly improve the customer's competitiveness and top Flint.
We have no reasonable way of estimating that portion of customer value, except to say that it's almost certainly larger than the direct cost savings. To be conservative here and remembering we're really only trying to get ballpark estimates, I'll say it's the same and call AWS customer value $38,000,000,000 in 2020. Adding AWS and consumer together gives us total customer value creation in 2020 of a 164,000,000,000.
Combining that value with the previously mentioned shareholder, employee, and third party seller value creations, the total value creation of Amazon is around 301,000,000,000 in 2020. If each group had an income statement representing their interactions from Amazon, the numbers previously mentioned would be the bottom lines from those income statements. These numbers are part of the reason why people work for us, why sellers sell through us, and why customers buy from us.
We create value for them. And this value creation is not a 0 sum game. It is not just moving money from one pocket to another. Draw the box big around all of society, and you'll find that invention is the root of all real value creation. And value created is best thought of as a metric for innovation. Of course, our relationship with these constituencies and the value we create isn't exclusively dollars and cents. Money doesn't tell the whole story.
Our relationship with shareholders, for example, is relatively simple. They invest and hold shares Morgan duration of their choosing. We provide direction to share owners infrequently on matters such as annual meetings and the right process to vote their shares. And even then, they can ignore those directions and just skip voting. Our relationship with employees is a very different example. We have processes they follow and standards they meet. We require training in various certifications.
Employees have to show up at appointed times. Our interactions with employees are many, and they're fine grained. It's not just about the pay and the benefits, It's about all the other detailed aspects of the relationship too. Does your chair take comfort in the outcome of the recent union vote in Bessemer? No. He doesn't. I think we need to do a better job for our employees.
While the voting results were lopsided and our direct relationship with employees is strong, it's clear to me that we need a better vision for how we create value for our employees, a vision for their success. If you read some of the news reports you might think we have no care for employees. In those reports, our employees are sometimes accused of being desperate souls and treated as robots. That's not accurate. They're sophisticated and thoughtful people who have options for where to work.
When we survey fulfillment center employees, 94% say they would recommend Amazon to a friend as a place to work. Employees are able to take informal breaks throughout their shifts to stretch, Pete water, use the restroom, or talk to a manager, all without impacting their performance. These informal work breaks are in addition to the 30 minute lunch and 30 minute built into their normal schedule. We don't set unreasonable performance goals.
We set achievable performance goals that take into account tenure and actual employee performance data. Performance is evaluated over a long period of time as we know that a variety of things can impact performance in any given week, day, or hour. If employees are on track to miss a performance target over a period of time, their manager talks with them and provides coaching. Coaching is also to employees who are excelling and in line for increased responsibilities.
In fact, 82% of coaching is positive, provided to employees who are meeting or exceeding expectations. We terminate the employment of less than 2.6 percent of employees due to their inability to perform their jobs, and that number was even lower in 2020 because of operational impacts of COVID 19. Earth's best employer and earth's safest place to work.
The fact is the large team of thousands of people who lead operations at Amazon have always care deeply for create jobs for computer scientists and people with advanced degrees. We create jobs for people who never got that advantage. Pete what we've accomplished, it's clear to me that we need a better vision for our employees' success. We've always wanted to be Earth's most customer centric company. We won't change that. It's what got us here, but I am committing us to an addition.
We are going to be Earth's best employer and Earth's safest place to work. In my upcoming role as Executive Chair, I'm going to focus on new initiatives. I'm an inventor It's what I enjoy the most and what I do best. It's where I create the most value. I'm excited to work alongside the large team of passionate people we have in ops, and help invent in this arena of Earth's best employer and Earth's safest place to work.
On the details, we at Amazon are always flexible, but on matters of vision, we are stubborn and relentless. We have never failed when we set our minds to something, and we're not going to fail at this either. We dive deep into safety issues. For example, about 40% of work related injuries and Amazon are related to musculoskeletal disorders. MSDs, things like sprains or strains that can be caused by repetitive motions.
MSDs are common in the type of work that we do are more likely to occur during an employee's 1st 6 months. We need to invent solutions to reduce MSDs for new employees, many of whom might be working in a physical role for the first time. One such program is working well, which we launched to 859,000 employees at 350 sites across North America and Europe in 2020. Where we coach small groups of employees on body mechanics, proactive wellness, and safety.
In addition to reducing workplace injuries, These concepts have a positive impact on regular day to day activities outside work. We're developing new automated staffing schedules that use sophisticated algorithms to rotate employees among jobs that use different muscle tenant groups to decrease repetitive motion and help protect employees from MSD risks. This new technology is central to a job rotation program that we're rolling out throughout 2021.
Our increased attention to early MSD prevention is already achieving results. From 2019 to 2020, overall MSDs decreased by 32% and MSDs resulting in time away from work decreased by more than half. We employ 62100 safety professionals at Amazon. They use the science of safety to solve complex problems and establish new industry best practices.
In 2021, we'll invest more than $300,000,000 in the safety projects, including an additional $66,000,000 create technology that will help prevent collisions of forklifts and other types of industrial vehicles. When we lead others follow, two and a half years ago, when we set a $15 minimum wage for our hourly employees, we did so because we wanted to lead on wages, not just run with the pack, and because we believed it was the right thing to do.
A recent paper by economists at the University of California, Berkeley, and Brandy's University analyze the impact of our decision to raise our minimum starting pay to $15 per hour. Their assessment reflects what we've heard from employees, their families, and the communities they live in. Our increase in starting wage boosted local economies across the country by benefiting not only our own employees, but also other workers in the same community.
The study showed that our pay raise resulted in a 4.7% increase in the average hourly wage among other employers in the same labor Morgan, and we're not done leading. If we wanna be Earth's best employer, we shouldn't settle for 94% of employees saying they would recommend Amazon to a friend as a place to work. We have to aim for a 100%. And we'll do that by continuing to lead on wages, on benefits, on upskilling opportunities, and in other ways that we will figure out over time.
If any share owners are concerned that earth's best employer and earth's safest place to work might dilute our focus on Earth's most customer centric company, let me set your mind at ease. Think of it this way. If we can operate 2 businesses as different as consumer ecommerce and AWS and do both at the highest level, we can certainly do the same with these 2 vision statements. In fact, I'm confident they will reinforce each other. The climate pledge.
In an earlier draft of this letter, I started section with arguments and examples designed to demonstrate the human induced climate change is real. But bluntly, I think we can stop saying that now. You don't have to say that photosynthesis is real or make the case that gravity is real or that water boils at a 100 degrees Celsius at sea level. These things are simply true as is the reality of climate change.
Not long ago, most people Beller that it would be good to address climate change, but they also thought it would cost a lot and would threaten jobs, competitiveness, and economic growth. We now know better.
Smart action on climate change will not only stop bad things from happening, it will also make our economy more efficient, help drive technological changes, and reduce risks, Combined, these can lead to more and better jobs, healthier and happier children, more productive workers, and a more prosperous future. This doesn't mean it'll be easy. It won't be. The coming decade will be decisive.
The economy in 2030 will need to be vastly different from what it is today, and Amazon plans to be at the heart of the change. We launched the climate pledge together with global optimism in September of 2019, because we wanted to help drive this positive revolution. We need to be part of a growing team of corporations that understand the imperatives and the opportunities of the 21st century.
Now less than 2 years later, 53 companies representing almost every sector of the economy have signed the climate pledge. Signatories such as Best Buy, IBM, Infosys, Mercedes Benz, Microsoft, Siemens, and Verizon have committed to achieve net 0 carbon in their worldwide businesses by 2040, 10 years ahead of the Paris agreement. The pledge also requires them to measure and report greenhouse gas emissions on a regular basis.
Implement decarbonization strategies through real business changes and innovations. And neutralize any remaining emissions with additional, quantifiable, real, permanent, and socially beneficial offsets. Credible, quality offsets are precious, and we should reserve them to compensate for economic activities where low carbon alternatives just don't exist. The Climate pledge signatories are making meaningful, tangible, and ambitious commitments.
Uber has a goal of operating as a 0 emission platform in Canada Europe and the US by 2030, and Henkel plans to source a 100% of the electricity it uses for production from renewable sources. Amazon is making progress toward our own goal of a 100 percent renewable energy by 2025, 5 years ahead of our initial 2030 target. Amazon is the largest corporate buyer of renewable energy in the world.
We have 62 utility scale wind and solar projects, and a 125 solar rooftops on fulfillment and sort centers around the globe. These projects have the capacity to generate over 6.9 gigawatts, and deliver more than 20,000,000 megawatt hours of energy annually. Transportation is a major component of Amazon's business operations and the toughest part of our plan to meet net 0 carbon by 2040.
To help rapidly accelerate the market for electric vehicle technology and to help all companies transitioned to greener Technologies, we invested more than $1,000,000,000 in Rivian and ordered a 100,000 electric delivery vans from the company. We've also partnered with Mahindra in India and Mercedes Benz in Europe.
These custom electric delivery vehicles from Rivian are already operational and they first hit the road in LA this past February, 10,000 new vehicles will be on the road as early as next year, and a 100,000 vehicles will be on the road by 2030 saving millions of metric tons of carbon. The big reason we want companies to join the climate pledge is to signal to the marketplace that business should start inventing and developing new technologies that signatories need to make good on the pledge.
Our purchase of a 100,000 Rivian electric vans is a perfect example. To further accelerate investment in new technologies needed to build a 0 carbon economy, we introduced the climate pledge fund last June. The investment program started with $2,000,000,000 to invest in visionary companies that aim to facilitate the transition to a low carbon economy.
Amazon has already announced investments in Carbon Currier Technologies, PachAMA, Redwood Materials, Rivian, Turn Thai Technologies, 0 Avia, and Infinium, And these are just some of the innovative companies we hope will build the 0 carbon economy of the future. We have also personally allocated $10,000,000,000 to provide grants to help catalyze the system change we will need in the coming decade.
We'll be supporting leading scientists, activists, NGOs, environmental justice Morgan, and others working to fight climate change and protect the natural world. Late last year, I made my first round of grants to 16 organizations working on innovative and needle moving solutions. It's going to take collective action from big companies, small companies, nation states, global Morgan, and individuals.
And I'm excited to be part of this journey and optimistic that humanity can come together to solve this challenge. Differentiation is survival, and the universe wants you to be typical. This is my last annual shareholder letter as the CEO of Amazon. And I have one last thing of utmost importance I feel compelled to teach. I hope all Amazonians take it to heart. Here's a passage from Richard Dawkins Morgan, The Blind Watchmaker.
It's about a basic fact of biology, quote, staving off death is a thing that you have to work at, left to itself, and that is what it is when it dies, The body tends to revert to a state of equilibrium with its environment. If you measure some quantities such as the temperature, the acidity, the water content or the electrical potential in a living body, you will typically find that it is markedly different from the corresponding measure in the surroundings.
Our bodies Morgan instance are usually hotter than our surroundings. And in cold climates, they have to work hard to maintain differential. When we die, the work stops, the temperature differential starts to disappear, and we end up the same temperature as our surroundings. Not all animals work so hard to avoid coming into equilibrium with their surrounding temperature, but all animals do some comparable work.
For instance, in a dry country, Animals and plants work to maintain the fluid content of their cells work against a natural tendency for water to flow from them into the dry outside world. If they fail, they die. More generally, if living things didn't work actively to prevent it, they would eventually merge into their surroundings. And cease to exist as autonomous beings. That is what happens when they die.
Unquote, While the passage is not intended as a metaphor, it's nevertheless a fantastic one and very relevant to Amazon. I would argue that it's relevant to all companies and all institutions and to each of our individual lives too. In what ways does the world pull at you in an attempt to make you Morgan. How much work does it take to maintain your distinctiveness to keep alive the thing or things that make you special?
I know a happily married couple who have a running joke in their relationship. Not infrequently, the husband looks at the wife with full distress and says, where can't you just be normal? They both smile and laugh, and of course, the deep truth is that her distinctiveness is something he loves about her. But at the same time, it's also that things would often be Currier, take less energy if we were a little more normal. This phenomenon happens at all scale levels. Democracies are not normal.
Tyranny is the historical norm. If we stop doing all the continuous hard work that is needed to maintain our distinctiveness in that regard, we would quickly come into equilibrium with tyranny. We all know that distinctiveness, originality, is valuable. We're all taught to be yourself. What I'm really asking you to do is to embrace and be realistic about how much energy it takes to maintain that distinctiveness. The world wants you to be typical. In a thousand ways, it pulls at you.
Don't let it happen. You have to pay a price for your distinctiveness and it's worth it. The fairy tale version of Be yourself is that all the pain stops as soon as you allow your distinctiveness to shine. That version is misleading. Being yourself is worth it, but don't expect it to be easy or free. You'll have to put energy into it continuously. The world will always try to make Amazon more typical to bring us into equilibrium with our environment.
It'll take continuous effort, but we can and must be better than that. As always, I reference our 1997 shareholder letter. It concluded with this, quote, We at amazon.com are grateful to our customers for their business and trust to each other for our hard work and to our shareholders for their support and encouragement. Unquote. That hasn't changed a bit. I want to especially thank Andy Jassy for agreeing to take on the CEO role. It's a hard job with a lot of responsibility.
Andy is brilliant and has the highest of high standards. I agree that Andy won't let the universe make us typical. He will muster the energy needed to keep alive in us what makes us special. That won't be easy, but it is critical. I also predict it will be satisfying and oftentimes fun Thank you, Andy. To all of you, be kind, be original, create more than you consume and never, never, never Pete the universe smooth you into your surroundings.
It remains day 1. Sincerely, jeffrey Pete Bezos, founder and chief executive officer, Amazon.com, Incorporated. For more audio essays from the people who've built companies like Instacart, Facebook, Trello, HubSpot, and Dropbox, visit the founder Flint. Atnfx.com, or subscribe to the NFX podcast at podcast.nfx.com, or wherever you get your podcasts. I'm Kristen O'Brien, and this is the founder list.