
The Whale - madspindel
https://500ish.com/the-whale-38c3cfa2cc3e
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Upvoter33
I do agree Amazon is amazing and frightening all at once. However, I really
hate all of this analysis based on market cap instead of revenue/profit/etc.
It's just like so much fantasy.

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giarc
You've seen their numbers though right?

Revenue 2012 - $61B

Revenue 2016 - $136B

Income 2012 - $15B

Income 2016 - $48B

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callmeed
Good essay but I don't like it when people use market cap in these kinds of
comparisons.

Don't forget that Amazon has 2x the market cap of Wal-Mart–but only slightly
above 1/4 of their the annual revenue.

~~~
ska
Both parts of that statement are (about equally) interesting.

What they should really do is not rely on a single indicator.

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debacle
I'm intrigued by the coming future of the megacorp. Philip K Dick wrote many
stories where the giant corporation is the tribal, protect-our-own protagonist
against the faceless, authoritarian government. Paycheck being the most
memorable example. It's going to be interesting when companies don't even have
to pretend to be subservient to the government anymore.

~~~
coldtea
> _It 's going to be interesting when companies don't even have to pretend to
> be subservient to the government anymore._

There are many places where that has been happening for over a century...

[https://en.wikipedia.org/wiki/Banana_republic](https://en.wikipedia.org/wiki/Banana_republic)

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fela
The current stock price (and thus market cap) already assumes future growth.
The market cap would increase further only if growth exceeds the current
expectations of investors. (Or due to other factors unrelated to growth).

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woliveirajr
I'm curious on how Amazon will take the world. I can read and understand how
the America buys a lot of stuff from it, how good the delivery is, etc., but
in some countries they are barely beginning. And some local companies tried to
do the same model and couldn't. They haven't bankrupted, but simply don't have
the same size, same relevance as Amazon has in the US.

Will that model still be applied worldwide?

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nl
It's weird to see all the people here complaining about how the article is
about the market cap, when _that 's not only what the article is about_.

Sure, the market cap is interesting, but this is an interesting article
because it makes a compelling case that a $400B company is _cheap_ even when
Walmart outsells it and FedEx out delivers.

It was only a few years ago people complained about how Amazon didn't make any
profits because they would reinvest them all in growth, and how that was
impossible to sustain that.

They were right, but not in the way they thought. It does seem to be
impossible to keep investing _all_ the profits in growth - they are just
making too much!

So, it's the combination of this growth AND the market cap that is
unprecedented. No one can tell if it is overvalued, but complaining about
talking about the Cap is missing a pretty amazing story.

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EduardoBautista
In my experience, the quality of Amazon is average at best. The only reason
why they are winning is because they are cheap. The Walmart model basically:
Cheap wins over quality.

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oculusthrift
i don't think they are necessarily cheap. i buy from them because they are
convenient and have everything. I only want one online shopping identity and
even if toothpaste is more expensive there, i go ahead and get it over heading
to the store many times.

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ethbro
On everything that isn't backed by a highly optimized logistics chain (e.g.
groceries or appliances), they're always cheaper on any random item I've
compared to a physical store.

Which makes sense, because the price difference is essentially the ammortized
cost of a physical store.

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kolbe
The author regularly conflates Amazon's price and Amazon's value. I understand
articles like this getting traction on pump and dump finance forums, but I'm a
little disappointed to see it on the front page here.

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coldtea
> _The author regularly conflates Amazon 's price and Amazon's value._

That's because the price is also important, it's not some 1850's world, where
value is everything.

People can sell on the price and make billions.

~~~
kolbe
Hence my use of the word 'conflates'. Price isn't irrelevant. Price is
extraordinarily important, but it's not the same thing as value.

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untilHellbanned
Just my opinion, but Amazon, FB, Apple, and all these companies that these
thought leaders like MG Siegler, Stratchery, and Gruber write about aren't
interesting.

They won at the same game by outcompeting others at selling commodity junk.
Great. How? Same way. They had leaders whose business won the lottery and
simultaneously didn't care about other humans to the same infinitesimally
small way necessary to win that big (one can lose big with that give-no-f*cks
mindset too, hence the lottery).

Selling crap isn't interesting. Show me somebody that makes a similar-sized
dent in human health, the environment, or world peace then I think the fawning
Medium articles will be worth it.

~~~
coldtea
> _Just my opinion, but Amazon, FB, Apple, and all these companies that these
> thought leaders like MG Siegler, Stratchery, and Gruber write about aren 't
> interesting. They won at the same game by outcompeting others at selling
> commodity junk._

First of all, all 3 companies have very different business models.

Second, Apple never sold "commodity junk". The company sold (and sells) on the
high end of the market, they take a different approach to design than
competitors, use more expensive materials, machining, etc., design lots of
their own internals (from logic board part to processors, even their own OS
and programming languages, and create their products end to end (hardware to
software), and come to market with lots of firsts (e.g. from small stuff like
magsafe or the best trackpad in PC-land, to hi-dpi etc). And of course have
won all kinds of design, quality awards.

Third, Facebook doesn't sell anything (except ads). What's the "commodity
junk" they sell? Their service is junk? Compared to what? MySpace and similar
competitors, whose websites were crap even at the time? What's the better
social network people aren't on?

Fourth, Amazon? Has a first tier store, a first tier web service business.
What's the commodity junk they sell? If you mean actual products on their
store, then they sell everything, from expensive high end stuff to mass market
cheap products. And of course, for ages, they started with books -- where
there's nothing "commodity crap" about them, books are books, whether a high
end bookstore sells them or Amazon does.

> _Same way. They had leaders whose business won the lottery_

If your explanation of 3 of the biggest companies on earth is "won the
lottery" then you're missing a lot. Might a well invoke God.

> _Selling crap isn 't interesting. Show me somebody that makes a similar-
> sized dent in human health, the environment, or world peace then I think the
> fawning Medium articles will be worth it._

You conflate businesses with NGOs or revolutionary parties.

Which is a valid comparison for some aspects, but not one that can conclude
that "businesses are not interesting" when speaking about business.

~~~
untilHellbanned
Think less literal please. High-end stuff is still junk on an absolute scale.

The marketcap and "I want it all"-scale don't make businesses interesting.
What's interesting are things that can't be quantified well and therefore
can't be competed on by hard work and assholery.

~~~
coldtea
> _Think less literal please. High-end stuff is still junk on an absolute
> scale._

If you think "less literal" everything is "junk" compared to personal health
and/or love.

> _The marketcap and "I want it all"-scale don't make businesses interesting.
> What's interesting are things that can't be quantified well and therefore
> can't be competed on by hard work and assholery._

For your own definition of "interesting".

But Amazon, FP, Apple (and tons of other subjects) are still interesting if we
use the common, agreed upon, dictionary, traditional definition of the term
interesting: "arousing curiosity or interest; holding or catching the
attention.".

And there's few things about Apple, FB, and Amazon's success stories that can
be "quantified well", as their story and success goes beyond their financial
status. How about why and how they succeeded?

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bsder
Except that suddenly there are lots of people _NOT_ buying at Amazon anymore.

In fact, most of my purchases go into 3 buckets:

1) Standard but I don't want crap--probably I'm going to a retailer website
and picking it up (Target, Frys, etc. -- NewEgg is my exception to actually
having brick and mortar). If I can pick it up, it's probably at least a notch
or two above crap.

2) Total crap--probably ordering from Alibaba--not Amazon.

3) Something I need to go to a store for

To me, Amazon is being used decreasingly by everybody around me.

~~~
mastazi
I'm not American so I was wondering: do Target and Frys sell higher quality
products than Amazon? Where I live (Australia) those large stores sell
absolute crap, and I have to rely on online sources for quality items
(example: it's almost impossible to find a good mechanical keyboard at a
physical, big-chain store).

~~~
debacle
It really depends on the industry.

* Just a few months ago, I was able to buy something at Best Buy for only 10% more (~$30) than it would have cost to order from Amazon.

* On the other hand, I purchased a part for my clothes drier at 400% markup because I needed the part right away.

* I bought a personal hygiene item on Overstock because it was 260% of the cost at Macy's.

* We just started buying shampoo from Amazon because it's far cheaper (33%) than from Walgreens.

* My wife buys all of our socks, underwear, and most of my children's clothes online for ~50% of the in-store price.

~~~
coldtea
> _Just a few months ago, I was able to buy something at Best Buy for only 10%
> more (~$30) than it would have cost to order from Amazon._

Being "able" to buy 10% MORE doesn't sound like any kind of a deal. In fact,
it sounds like the opposite...

~~~
debacle
Paying a 10% surcharge to get something today vs in two days isn't terrible. I
wouldn't have been shocked if Best Buy was 2x the cost.

