
Jeff Bezos’ letter to shareholders - adamsi
http://www.sec.gov/Archives/edgar/data/1018724/000119312516530910/d168744dex991.htm
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shuri
You have to love this sentence "We want Prime to be such a good value, you’d
be irresponsible not to be a member."

~~~
darkclarity
I like being that irresponsible one.

Though it is impressive that Amazon has turned a delivery fee - that most
people don't like paying - into an exclusive subscription service. A service
that customers fall over themselves to sign up for when it's offered at a
discount.

~~~
MichaelGG
I cancelled it because Amazon's abusing their position. Refusing to sell
Chromecast and Apple TV, then lying, repeatedly, about the reason when asked?

I've been an Amazon customer for 13 years. I was rather annoyed to see them go
with the anti-Wikileaks and try to be "sensitive" by banning certain cultural
items. But this shows they've zero commitment to selling products customers
want.

Edit: And it really hurts. Some times I buy stuff from Amazon every day of the
week. I've tried Jet.com, which is just a poor experience. I hate to cry
antitrust but Amazon really dominates in any usable online sales env, it
seems.

~~~
reustle
Wow, TIL Amazon doesn't sell Apple TV or Chromecast, but instead immediately
suggests their own competitors. For a company trying to replace all retail,
that's pretty lame.

~~~
appleflaxen
Great point. Doesn't this directly contradict his statement of "focus on the
customer, not the competition"?

~~~
alttab
It'd make more sense if they carried it - but advertised their own products
heavily around it. At least they would be honest about the "selection" game.

But let's be honest - Amazon devices push more people into Prime, Amazon
Instant Prime Video, and their other digital services. Maybe it had something
to do with Prime Video not yet being on those devices, but we'd need to see
them support Prime on Chromecast or AppleTV and then re-list those products on
Amazon.

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sabalaba
I see this letter as an attempt at vindication for the controversy sparked by
the NYT article on Amazon's corporate culture. Jeff Bezos was clearly affected
and I see this as a defense of their "distinctive culture". "For better or for
worse" that culture got them to $100 billion in annual sales faster than any
company in history.

~~~
sharkweek
I live in Seattle and am friends with a lot of Amazon folks. Most work very
hard and complain from time to time, but I only know one who left for another
job because most who are there now actually really like their jobs.

One friend put it best after he transitioned from a small department in the
ecommerce side of the business to one of AWS's early-ish hires, that most
young departments have the thrill of working at a startup but with some very
supportive corporate backing (as long as things are growing).

~~~
jacalata
I know a lot of people who have left Amazon, and are very bitter about how it
was to work there. I know some who are waiting out their signing bonus. I also
know a lot who've left Microsoft, but they definitely have a lower average
bitterness about the company.

~~~
HashThis
I know a ton of people like this. 70% of the people I know didn't stay at
Amazon past 4 years.

~~~
sokoloff
If you don't work at Amazon, there's a pretty big sampling bias in your data.
(You are wildly more likely to work with someone who has left Amazon than
someone who has happily stayed there, and in casual interactions, you're more
likely to hear from the strongly disgruntled than the happy. In the same way,
current Amazon workers are likely to know a higher than average percentage of
long-tenured and happy Amazon employees than is reality in overall
population.)

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preordained
I work at a small software company, and too often our CEO and company will
latch onto nuggets from material like this and use it to justify a "swing for
the fences", "nothing ventured nothing gained" sort of mindset. All well and
good, but they blithely overlook the "we fail all the time" parts, and
sometimes we take risks where the potential losses are not easy to absorb, or
we don't have the vast resources of a big company to attempt a thing without
impacting our mainline investment. Unfortunately, I've seen first hand that
interesting, inspiring ideas can turn cargo cult real quick without some
reality to temper them; namely, there are only two scenarios where you can
easily justify risk (that is, not sweat over it): 1. You have nothing to lose.
2. You have relatively little to lose.

~~~
zeemonkee3
I suspect a lot of the current griping over hiring practices is due to this.
Small companies cargo-cult hiring practices from Google/Amazon/Apple/Facebook,
but they forget that these companies have huge numbers of good applicants who
are willing to jump through hoops just for the opportunity to have $BIGNAME on
their resume.

~~~
timje1
A tangent, but when did 'cargo-cult' become a verb and not a noun?

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jjtheblunt
Wtf is cargo cult?

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hguant
From wikipedia:

"The name derives from the belief that various ritualistic acts will lead to a
bestowing of material wealth."

Basically, slavishly copying someone else's actions without actually
understanding the underlying principle behind those actions. The most famous
example is from WWII - Japanese and American armed forces built airstrips on
underdeveloped islands, and either abandoned or shared what seemed like
massive amounts of wealth with the islanders. When the war was over, islanders
replicated airstrips and military bases, some even dressing up as soldiers, in
order to bring back the flow of cargo.

~~~
cookiecaper
>Basically, slavishly copying someone else's actions without actually
understanding the underlying principle behind those actions.

And it should be noted that this works really well much of the time, which is
why humans often do it. A deep understanding _can_ be beneficial if you're
capable of grasping it, but if we're honest, most people aren't.

~~~
deanCommie
Yeah but the idea of the expression is to apply it in situations where it
clearly isn't working. If it works you don't call it a cargo cult anymore

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an_account_name
From the 1997 letter that's included at the bottom:

> We established long-term relationships with many important strategic
> partners, including America Online, Yahoo!, Excite, Netscape, GeoCities,
> AltaVista, @Home, and Prodigy.

That takes me back.

~~~
simonh
Looking at it that way, it's kind of impressive that Yahoo! is still around.

~~~
hinkley
I honestly don't have the slightest clue how yahoo stays in business. And I
don't mean that as rhetoric, either. Other than Bloomberg I don't get where
the money comes from. I hope it's not organized crime...

I'd probably read a biography of the company out of curiosity.

~~~
simonh
All I can do is guess, but if you go to their home page take a look at the
sidebar. That's a pretty impressive range of services. You can manage your
email, buy stuff, check the news, see what's on TV, check the weather. It's
AOL but on the web and for non-technical people having one place where you can
do everything is probably pretty attractive. Especially if it came set as
their web browser home page and they don't know how to change it or create
bookmarks.

That's not a long term sustainable business though, as the non-tech savvy
oldsters in the population get replaced by youngsters that mainly use mobile
devices and apps anyway. I think Cringeley has a point. Yahoo should slim down
and use it's remaining financial weight to turn itself into a tech industry
specialised version of Berkshire Hathaway. Copy Google's corporate structure
and hive off the portal into a subsidiary of a holding company that focuses on
managing investments.

~~~
lmm
I think they should do the opposite. Even as a young guy their product is very
valuable, or was, but they're destroying it piecemeal, closing the
unprofitable services and not realizing that the value came from having all
those services in one place.

They need to massively cut costs and write down a lot of their value. Their
portal with all their services could easily be a cashflow-positive sustainable
business. But because they were once big they're not willing to do what it
takes to be sustainable now that they're small; instead they're selling off
all the good bits to fund wasteful moonshots.

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kopos
His point about Type 1 and Type 2 decisions - so telling. Been there, seen it
in action. Every line of the letter was so well thought out.

And he is big on India! Flipkart has a lot to worry about.

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holri
Stallmans letter to Amazon customers:

[https://stallman.org/amazon.html](https://stallman.org/amazon.html)

~~~
lmm
I'm not going to take a letter that uses silly names seriously. That's grade-
school rhetoric.

~~~
holri
What silly names?

~~~
lmm
"Swindle"

~~~
holri
That is not a silly but a precise name.

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jlubawy
Not 100% sure how the Amazon/Zappos relationship is setup but I think it's odd
that Zappos isn't mentioned anywhere in this or AFAIK anywhere in there
investor documents. Does anyone now how Zappos is performing since being
acquired? Especially with all of the controversy with their management styles?
To be fair I'm sure Zappos is probably a small part of Amazon's revenue, but
as a Las Vegas native I'm interested.

~~~
tim333
Seems to be doing ok [http://www.reviewjournal.com/business/zappos-predicts-
massiv...](http://www.reviewjournal.com/business/zappos-predicts-massive-
profit-growth-2015)

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okyup
He knows the importance of image and says all the right things to tug at your
heart strings... they're fighting global warming, they're helping single moms,
and they're running a startup-like environment unlike the other big evil
corporations.

~~~
jkaunisv1
It blew my mind that his example of helping a single mom of EIGHT was her
getting trained as a long haul truck driver. Who's taking care of that many
kids while she's gone? Truck driving is not that well-paid, and the length of
absences is right there in the job title.

~~~
srt146
His example is a subtle jab at working class. He thinks people are such trash
that truck driver is aspirational for them. The education benefits for blue
collar workers at Amazon take years to kick in and don't cover a single year
at most community colleges. Workers are frequently fired before 90 days to
prevent benefits from starting. Workers would do far better to do a small
education loan and start training early.

~~~
simonh
>He thinks people are such trash that truck driver is aspirational for them

What planet are you on? Truck driver is an excellent working class job. It's
skilled labour (yes, really), you need to be trustworthy and able to operate
independently, work long hours and take responsibility for a very expensive
asset. As a result it pays a significant premium compared to a lot of manual
labour and service jobs.

~~~
amarka
At best it's an ok working class job; for Amazon, it's more of a stop-gap
until delivery vehicles with auto-pilot are more widely available.

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julianpye
AWS and Prime are winners. So is marketplace, he says. Maybe financially for
Amazon, but from a customer standpoint I think marketplace is a real failure.
It's the reason I tell relatives not to buy on Amazon, because several got
burned so many times by accidentally buying from dodgy sellers, thinking it
was from Amazon.

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tpae
"To invent you have to experiment, and if you know in advance that it’s going
to work, it’s not an experiment."

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peteretep
Help me understand how:

"We learned from our failures and stayed stubborn on the vision"

isn't mutually exclusive

~~~
davidrusu
They are convinced of the vision and have an unwavering belief that they will
achieve this vision, but there are many paths one can take. So to act
rationally when encountering a failed attempt, given their belief, is to learn
and try something else. :)

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yoyomamayo
I think there is a fair bit of misunderstanding about Jeff's letter on this
thread. For those who have not read all of his shareholder letters from the
past 20 years, I would really recommend you to do so. What Jeff is saying in
this years letter is nothing new. He's literally been saying the same things
for 20 years now.

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DrNuke
Occasional customer here buying only discounted goods from Amazon logistics
only and always at the total minimum I need not to pay shippage. Quality is
overall worsening year after year but Amazon has always been a bonanza, the
day it ends thank you and good riddance, going local again.

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danblick
Am I the only one who read "Type I and II decisions" and thought "System I and
II decisions" (from Thinking, Fast and Slow?). I like the idea of
distinguishing reversible from irreversible decisions, I just wish he'd come
up with better names...

~~~
SilasX
1 vs 2 is a bad, non-mnemonic naming convention to use, for either of those
cases. Sadly, it also appears in "type I vs type II" errors. Even "false
positive vs false negative" isn't helpful, since the decision of what counts
as "positive" is arbitrary. Better to refer to the category directly: eg,
"false ham vs false spam", "false acceptance vs false rejection".

While we're on the topic Amazon and bad naming, what's with AWS EC2 instances?
They have "spot" vs "on demand" instances, which have very different
properties, ideal for different use cases ... and yet, in the context of
economics and markets, the terms are basically synonyms!

~~~
bonzini
I'm not sure about "false acceptance vs false rejection" being better than
"false positive vs false negative". False positive pretty much always means
you give incorrect bad news; false negative means you give incorrect good
news. "Acceptance" may mean either "ham" or "spam" depending on the context.

~~~
rwjwjuwjudf
Positive means you found the special thing you are looking for; negative means
you just found an ordinary thing. False positive means you thought you found
the special thing but you didn't, it was just ordinary; false negative means
you thought you found an ordinary thing but actually it was special.

False positives mean you throw away ham as spam (terrible), false negatives
mean you let some spam into your mailbox (not a big deal). But false positives
also mean you diagnose benign as malignant (annoying), and false negatives
also mean you diagnose malignant as benign (fatal).

So depending on what you are looking for, it varies whether false negatives or
false positives are worse. Or maybe they can be equally bad.

I don't think you need to rename positive and negative as long as positive is
understood as unusual and negative is understood as normal.

~~~
SilasX
But spam is more "usual" than ham, so ...

~~~
rwjwjuwjudf
Hmmm, good point. Ok, if you count individual messages, there is more spam,
but if you look at the kinds of spam messages, they are way less diverse. So
spam goes into one of ~10 buckets (419, pharmacy, fake conferences, view my
profile, etc.), but the rest goes into 1000 different buckets. But you still
have a good point.

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ww520
It's very telling that he devoted a large portion of the letter on AWS.

~~~
vonklaus
Amazon had a $7B biz in 2015[0]. I am on mobile but I believe they have more
servers than google. obviously, it fits with my personal narrative/is self
serving, to say that the war for search is coming, but it is.

Microsoft basically modeled azure as a more user friendly AWS, and is courting
devs with the release today of integrated code search with hacker rank, as
well as the push to open source a ton of tooling (similar to googledocs
enterprise strategy) to get developers on the platform.

msft also is pushing blockchain on azure, likely because it is interesting to
developers and they have failed miserably to get payments done like apple &
google.

Search is going to be big as ecosystems narrow, however outside of this, and
to your point, AWS is a very valuable part of AMazons strategy.

Never in the world (maybe robber baron era but quite dif) has anyone owned the
entire channel. Amazon:

1\. Retailer of physical things.

2\. marketmaker for physical things.

3\. producer, market maker, and retail distribution for dogital goods.

4\. last-mile delivery of physical goods.

5\. backbone provider for phys goods (registered shipping broker)

6\. owner of infrastructure of most of the conpetitors. in the christensen
innovators dillemma sense, they don't have it. if someone does sonethong
better than them and scale, they are hedged by getting paid for theyre
infrastructure.

so interesting stuff. as search becomes less of a monopoly and continues to be
edged out by ancilliary products, google is going to invest heavily in
infrastruct. you can see them doing this now as they get cash together,
tighten focus and embrace this meta stricture.

Short Term, AMZN is likely to be richest company in the world. excepting maybe
Apple as they continue to build product & transition into an o2o Bank &
Finance institution. they already are quite large, having users with accounts,
they're own quasi credit card & payment system, and capital reserves. this
lesves aside their lending activities (at tje supply chain level) snd
affiliate marketing with barclaycard ect

0\. [http://www.businessinsider.com/why-amazon-is-so-hard-to-
topp...](http://www.businessinsider.com/why-amazon-is-so-hard-to-topple-in-
the-cloud-and-where-everybody-else-falls-2015-10)

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awinter-py
I must have the breakfast octopus

[http://www.dmagazine.com/publications/d-magazine/2014/july/m...](http://www.dmagazine.com/publications/d-magazine/2014/july/matt-
rutledge-woot-has-a-new-deal-mediocre-corporation?single=1)

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kumarski
Still very relevant: [http://ben-evans.com/benedictevans/2014/9/4/why-amazon-
has-n...](http://ben-evans.com/benedictevans/2014/9/4/why-amazon-has-no-
profits-and-why-it-works)

------
kylehotchkiss
I'm trying to do some math. What is the total economic value of the actual
Amazon river, and how many Amazon rivers economies did Amazon.com make last
year.

Anybody?

~~~
hartator
I guess you can now say Brazil has the 2nd most valuable Amazon.

~~~
MusaTheRedGuard
Stealing that

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kahwooi
Amazon isn't making any money yet. Maybe in future they will make some. I
don't like using AWS (I just don't know why), I prefer Microsoft Azure and
Digital Ocean.

~~~
msandford
> Amazon isn't making any money yet.

Amazon makes TONS of money. They aren't currently returning any of it to
shareholders as profits, they're continuously reinvesting it in the company.

The difference between gross profit and net profit is how much Amazon is
spending on building new businesses that after a few years start grossing $10b
a year in sales like AWS. That got funded out of the gross profits from
regular Amazon retail operations.

~~~
ProAm
How long should an investor wait to get any ROI on a 20 year old company?
(honest question)

~~~
TheSpiceIsLife
1st July 2006 Amazon shares traded for $26, they're currently bouncing around
$600.

See here:
[http://finance.yahoo.com/echarts?s=AMZN+Interactive#{"range"...](http://finance.yahoo.com/echarts?s=AMZN+Interactive#{"range":"10y","allowChartStacking":true})

