

The Secrets of Bezos: How Amazon Became the Everything Store - kineticfocus
http://www.businessweek.com/articles/2013-10-10/jeff-bezos-and-the-age-of-amazon-excerpt-from-the-everything-store-by-brad-stone

======
nswanberg
This profile of Bezos sounds a lot like the Bezos Steve Yegge wrote about here
[https://plus.google.com/112678702228711889851/posts/eVeouesv...](https://plus.google.com/112678702228711889851/posts/eVeouesvaVX)
and here
[https://plus.google.com/110981030061712822816/posts/AaygmbzV...](https://plus.google.com/110981030061712822816/posts/AaygmbzVeRq)

From the article:

 _“He had no background in control theory, no background in operating
systems,” Jones says. “He only had minimum experience in the distribution
centers and never spent weeks and months out on the line.” But Bezos laid out
his argument on the whiteboard, and “every stinking thing he put down was
correct and true,” Jones says. “It would be easier to stomach if we could
prove he was wrong, but we couldn’t. That was a typical interaction with Jeff.
He had this unbelievable ability to be incredibly intelligent about things he
had nothing to do with, and he was totally ruthless about communicating it.”_

And from Steve's second post:

 _Trust me folks, I saw this happen time and again, for years. Jeff Bezos has
all these incredibly intelligent, experienced domain experts surrounding him
at huge meetings, and on a daily basis he thinks of shit that they never saw
coming. It’s a guaranteed facepalm fest._

Steve's posts give a much better account, though, since the control theory guy
doesn't say what the argument was about, and why Jeff was right. Steve goes on
to desribe his presentation to Jeff on what an engineer should know, how he
hacked the presentation to make it intersesting for Jeff by removing enough
from the presentation that Jeff had to mentally fill in the gaps, and what
Jeff pointed out that Steve didn't add (machine learning or data mining).

A CEO that appears to know everything is a common theme in large founder-
controlled companies:

Steve Jobs: [http://www.businessweek.com/magazine/eric-schmidt-on-
steve-j...](http://www.businessweek.com/magazine/eric-schmidt-on-steve-
jobs-10062011.html)

Bill Gates:
[http://www.joelonsoftware.com/items/2006/06/16.html](http://www.joelonsoftware.com/items/2006/06/16.html)

Stephen Wolfram: [http://www.stephenwolfram.com/publications/starting-long-
ter...](http://www.stephenwolfram.com/publications/starting-long-term-
company/) Start at "I insist on really understanding everything." (Wolfram
Research isn't a large company but that appears to be partially by choice)

James J. Hill (railroad magnate):
[http://books.google.com/books?id=1itXgy8gAHYC&lpg=PP1&dq=jam...](http://books.google.com/books?id=1itXgy8gAHYC&lpg=PP1&dq=james%20hill%20detail&pg=PP1#v=onepage&q=detail&f=false)

------
forgingahead
Am I the only one that felt uncomfortable at how this journalist felt the need
to make his biological dad aware that his long-lost son is Jeff Bezos? Not
appropriate at all, and completely unnecessary involvement in their private
lives.

~~~
theorique
The public needs to know! /s

(But seriously, if we as a culture are going to insist upon a look into
celebrities' lives, I'd rather it be someone of value, who made something
real, that benefited humankind, instead of Snooki or Honey Boo Boo.)

------
swalsh
If i'm buying something online, chances are regardless if the price is the
same (usually its cheaper), i'll get it through Amazon. Partly because I have
prime, but also because I know these guys will guarantee every part of the
transaction is quick, and flawless.

But if they start making mistakes, moving to someone else is pretty easy. I
think they realize there's no lock in (well right now...)

~~~
rubberband
I signed up for Prime the day it was introduced, and a sizable portion of my
income gets dumped onto Amazon. I would think that there are a sizable number
of people like us who pay a small premium for the convenience, quality and
selection. I don't think they've ever stated publicly if they make money on
Prime customers (ie I buy a ton, but they have to take a bath when I two-day
ship mouthwash).

Prime, until recently, was a fun way to have very large items next-day aired
to you (lawnmowers, sheds, etc) for $3.99. They recently wised up to that, but
I always wondered why they let that slip in the first place.

~~~
lightbritefight
I don't have the source handy, but I recall they said that that something like
99% of direct prime fee goes to paying for the video content.

Where they make there money is in the shift in purchasing habits. Prime users
spend something like eight times as much money as non prime users. They make
their money back because of the large increase of purchase. Overall, the net
something like $3/year/prime user.

~~~
rubberband
That makes sense. It's funny because their Prime VOD selection still isn't
comparable to Netflix, so I never use it.

Their likely too busy making money hand over fist on EC2.

------
mathattack
_When Bezos’s lieutenants learned of Wal-Mart’s counterbid, they ratcheted up
the pressure, telling the Quidsi founders that “sensei” was such a furious
competitor that he would drive diaper prices to zero if they sold to
Bentonville._

That's a heavy level of competitiveness!

------
BashiBazouk
I've soured a bit on Amazon. The algorithmic price fluctuations are my number
one complaint. I used to love them because it was a no brainer. Sure I could
surf around and find a slightly cheaper price, but Amazon has my card info,
ships quick and back up their products. Now with the price fluctuations I feel
obligated to check the price history on camelcamelcamel, surf around to see if
it a good price. Basically now I have to think about it. I've also waffled on
buying something for a while, make the decision only to find the price has
gone up. I end up not buying or buying from someone else even though the price
might be slightly higher just out of pure annoyance.

Then there is prime. Prime is great as long as you are a member. If not you
are second class citizen. It used to be that the cheapest shipping option and
now free shipping has an unspoken social contract. Give me a great rate (or
free) and I accept the gamble that it might show up in two days or take the
listed maximum of 9 days. The last few orders through Amazon I have watched
the order sit there for three of four days at the fulfillment center to make
sure it arrives in the five to nine day range for free shipping.

Then there are the merchants. There is sleaze all over the place here,
especially in used books, but the fulfilled by amazon merchants are the worst.
I can buy the same item from amazon or from a merchant with prices that are
slightly cheaper, the same price, slightly more expensive, or an order of
magnitude more expensive (literally, check the highest price next time you are
shopping on amazon) from the same fulfillment center? WTF.

I still use Amazon but I would really like good competition here. I have had
good luck with some of the big box stores online shopping. Similar prices and
5 to 9 day free shipping that shows up in three.

~~~
rubberband
I would love to see someone compete with Amazon, but who on Earth can? I think
most of their strength comes from their ridiculously good infrastructure; both
technological and the $14bn they just spent on new warehouses.

Who the heck can compete with that? The only one in a position to (that I can
think of) is Walmart, and I don't think their track record is very good thus
far.

Although I can't find the source, I remember Amazon being referred to as the
"world's largest charity" or some-such, because Bezos could give a heck about
short term profits, and always push for the long-term gain. They're slowly
taking over the world @.@.

Apologies. Just musing.

------
hobbes78
Above all, the brand credibility goes a long way... In a far-west like the Web
is, where rip-offs happen all the time, people tend to choose those few
services that prove them selves worthy of their trust... JustFab was discussed
here just a few days ago...

------
exo_duz
Even though Bezos changed the environment for online shopping he has yet to be
profitable at Amazon. Which is a shame really. I think he deserves more
especially with the contribution he's made to the online scape.

------
coldcode
I still wonder if they can ever become a profitable everything store.

~~~
rafcavallaro
It's been estimated that their entire lifetime profit is about equal to their
tax discount (lower price due to not having to collect and pay state and local
tax) - makes one wonder what Bezos's genius is other than taking advantage of
a tax loophole - and one which may very well go away in the future.

~~~
sokoloff
There's an argument that Bezos is forgoing short-term profits by re-investing
those into growing the business (expanding into AWS, marketplaces, Zappos,
Kindle, streaming media, etc, etc) and into aggressively competing on price to
not leave much excess oxygen in the room for competitors.

That's very different from the potential profit profile if Amazon were seeking
to maximize near-term profit as opposed to maximizing near-term growth, with
the expectation that that maximizes long-term profit.

~~~
rafcavallaro
If Amazon loses it's tax exempt status in all jurisdictions it may well also
lose profitability - the long term plan of cornering an unprofitable market is
still unprofitable.

~~~
sokoloff
Amazon has no tax exempt status.

It merely has no obligation in most jurisdictions to collect sales tax on
behalf of the local taxing jurisdiction. Those purchases aren't tax-exempt;
it's just that it's the buyer's problem to comply, not Amazon's problem to
comply. That many buyers "forget" to comply does not make them exempt. (And
Amazon is not exempt, rather they never had an obligation in the first place.)

~~~
rafcavallaro
This could easily change if laws are passed requiring a online retailers like
a Amazon to collect such taxes. The absence of such a requirement now gives
Amazon a de facto tax exempt status.

