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What I Learned from Reading Every Amazon Shareholders Letter (medium.com)
228 points by vinnyglennon on Oct 15, 2017 | hide | past | web | favorite | 72 comments

>> If you’re offered a seat on a rocket ship, don’t ask what seat. Just get on.

I believe this is from Eric Schmidt. It's probably the single most important principle that you have to follow if you want to have a successful career. Especially if you're an engineer.

Most fast growing tech companies are founded by random dumb kids in their garages. Don't try to build the rocket yourself (that's a gamble that practically never ends well); let someone else do it and try to hitch a ride. That is the safest way by far.

It's much easier to identify a good rocket ship than to build it yourself.

> Don't try to build the rocket yourself (that's a gamble that practically never ends well); let someone else do it and try to hitch a ride.

But what if everyone’s building shitty rocket ships, that have all sorts of practical (not technical) limitations, and no one’s trying to build what I have in mind, which I’ve identified as a superior rocket ship?

If you, yourself, can convince investors that it’s a good idea, is there an advantage to hitching a ride instead?

OP says that hitching a ride is the SAFEST by far. Maybe starting something is not for everyone and I think most people on HN would encourage someone to 'go for it' if they think they have it in them.

But the reason that I wanted to respond is to point out the difference between convincing investors to invest and building a rocketship yourself. These are completely different things. Convincing an investor buys a little time for a company to form and a product to develop. The company needs to prove, prove, prove to get to a rocketship stage.

My observation, at least at my level, is that the engineers who do best get seats on rocket ships that have already made it to orbit. Established companies give out bonuses on good years that look like the payouts I've seen engineers get during realistic exits.

I mean, sure, if you shoot the moon in your selection of startups, that's going to go pretty well for you, but I think on average you are best off, assuming you are an engineer, getting a very well compensated job at a top company and then putting the resulting money in a whole-market index fund.

> Most fast growing tech companies are founded by random dumb kids in their garages.

Most fast growing tech companies were in fact founded by people between the ages of ~28 and ~50 (and not in a garage), not by kids in garages. The kid in the garage founding a major tech company is a very rare exception. I can add a lot more names to this list:

Paul Graham (31, Viaweb), Jan Koum (33, WhatsApp), Brian Acton (37, WhatsApp), Ev Williams (34, Twitter), Jack Dorsey (33, Square), Elon Musk (32, Tesla), Garrett Camp (30, Uber), Travis Kalanick (32, Uber), Brian Chesky (27, Airbnb), Adam Neumann (31, WeWork), Reed Hastings (37, Netflix), Reid Hoffman (36, LinkedIn), Jack Ma (35, Alibaba), Jeff Bezos (30, Amazon), Jerry Sanders (33, AMD), Marc Benioff (35, Salesforce), Ross Perot (32, EDS), Peter Norton (39, Norton), Larry Ellison (33, Oracle), Mitch Kapor (32, Lotus), Leonard Bosack (32, Cisco), Sandy Lerner (29, Cisco), Gordon Moore (39, Intel), Mark Cuban (37, Broadcast.com), Scott Cook (31, Intuit), Nolan Bushnell (29, Atari), Paul Galvin (33, Motorola), Irwin Jacobs (52, Qualcomm), David Duffield (46, PeopleSoft; 64 Workday), Aneel Bhusri (39, Workday), Thomas Siebel (41, Siebel Systems), John McAfee (42, McAfee), Gary Hendrix (32, Symantec), Scott McNealy (28, Sun), Pierre Omidyar (28, eBay), Rich Barton (29 for Expedia, 38 for Zillow), Jim Clark (38 for SGI, and 49 for Netscape), Charles Wang (32, CA), David Packard (27, HP), John Warnock (42, Adobe), Robert Noyce (30 at Fairchild, 41 for Intel), Rod Canion (37, Compaq), Jen-Hsun Huang (30, nVidia), Eli Harari (41, SanDisk), Sanjay Mehrotra (28, SanDisk), Al Shugart (48, Seagate), Finis Conner (34, Seagate), Henry Samueli (37, Broadcom), Henry Nicholas (32, Broadcom), Charles Brewer (36, Mindspring), William Shockley (45, Shockley), Ron Rivest (35, RSA), Adi Shamir (30, RSA), John Walker (32, Autodesk), Halsey Minor (30, CNet), David Filo (28, Yahoo), Jeremy Stoppelman (27, Yelp), Eric Lefkofsky (39, Groupon), Andrew Mason (29, Groupon), David Hitz (28, NetApp), Brian Lee (28, Legalzoom), Demis Hassabis (34, DeepMind), Tim Westergren (35, Pandora), Martin Lorentzon (37, Spotify), Ashar Aziz (44, FireEye), Kevin O'Connor (36, DoubleClick), Ben Silbermann (28, Pinterest), Evan Sharp (28, Pinterest), Steve Kirsch (38, Infoseek), Stephen Kaufer (36, TripAdvisor), Michael McNeilly (28, Applied Materials), Eugene McDermott (52, Texas Instruments), Richard Egan (43, EMC), Gary Kildall (32, Digital Research), Hasso Plattner (28, SAP), Robert Glaser (32, Real Networks), Patrick Byrne (37, Overstock.com), Marc Lore (33, Diapers.com), Ed Iacobucci (36, Citrix Systems), Ray Noorda (55, Novell), Tom Leighton (42, Akamai), Daniel Lewin (28, Akamai), Michael Mauldin (35, Lycos), Tom Anderson (33, MySpace), Chris DeWolfe (37, MySpace), Mark Pincus (41, Zynga), Nir Zuk (30, Palo Alto Networks), Caterina Fake (34, Flickr), Stewart Butterfield (31, Flickr), Kevin Systrom (27, Instagram), Adi Tatarko (37, Houzz), Brian Armstrong (29, Coinbase), Pradeep Sindhu (43, Juniper), Peter Thiel (31, PayPal; 37, Palantir), Jay Walker (42, priceline.com), Pony Ma (27, Tencent), Robin Li (32, Baidu), Liu Qiangdong (29, JD.com), Lei Jun (40, Xiaomi), Ren Zhengfei (38, Huawei), Arkady Volozh (36, Yandex), Hiroshi Mikitani (34, Rakuten), Morris Chang (56, Taiwan Semi), Cheng Wei (29, Didi Chuxing), James Liang (29, Ctrip)

Of your list of 91 founders (double-counting those with two companies listed), only 7 were 45 or older, and none were older than 56.

19 were in their 20s

55 were in their 30s

14 were in their 40s

3 were in their 50s

The median age of an American is currently about 37.8. 24 founders on your list were older than that, while 67 were younger. (Some on the list perhaps not Americans, but the median is just for illustration.)

So while it's hyperbolic to say it's all about "kids in their garages," it's also clear there's some truth to the "young founder" meme.

Can I get a link to where you're getting this data? I'm interested.

...I'm guessing you're not compiling it yourself.

It's all manually compiled/researched. The companies I draw from memory, then I check the founders & ages (if possible). Some of the founders I knew an approximation to start. I also started compiling a young (or youngish) list as I went:

Bill Gates (20, Microsoft), Paul Allen (22, Microsoft), Mark Zuckerberg (20, Facebook), Dustin Moskovitz (20, Facebook), Steve Jobs (21, Apple), Patrick Collison (22, Stripe), John Collison (20, Stripe), Michael Dell (19, Dell), Marc Ewing (23/24 Red Hat), Ted Waitt (22, Gateway), Evan Spiegel (21, Snapchat), Bobby Murphy (23, Snapchat), Marc Andreessen (23, Netscape), Tobias Lütke (24, Shopify), Aaron Levie (20, Box), Drew Houston (24, Dropbox), David Karp (21, Tumblr), Palmer Luckey (20, Oculus), John Carmack (21, id Software), Helen Greiner (23, iRobot), Sky Dayton (23, Earthlink), Sean Parker (20, Napster), Shawn Fanning (19, Napster)

Some of the possible additions are questionable. For example, Stephan Paternot from TheGlobe.com. He was only 20 when it was founded in 1994, but was it meaningful enough to warrant inclusion? The dotcom bubble had several of those, most even weaker than TheGlobe's case.

Then there are the straddlers (not super young, not very old) like: Jason Olim (24/25, CDNow), Larry Page (25, Google), Sergey Brin (25, Google), Doug Burgum (25, Great Plains Software), Tony Hsieh (26, Zappos), Sachin Bansal (26, Flipkart) and so on.

A chart of age over date would show if age is decreasing over time.

It's easier to start a company now, and a changing environment e.g. internet changing benefits the young because there's less to learn and they have less to unlearn.

Notwithstanding YC age being much younger than your three lists being explained by giving them time to fail and them having lower opportunity cost, the average age of founding might still be falling.

Is 28 not considered an extremely young age to start a world-changing company?

Perhaps, but Y Combinator has previously indicated that's more or less the median age of their accepted founders. And beyond YC, the hype is most often for youth, people under 30.

This isn't just the situation in tech, but it's interesting to see the industry's mythology isn't supported by data, when it claims to be a data/results-driven industry.

One reason Y Combinator starts so young is to give repeated founders the early failures (and successes) they need to learn how to do things right.

Also, the young ones have less opportunity costs. Failure is comparatively cheaper for them.

>Also, the young ones have less opportunity costs. Failure is comparatively cheaper for them.

People keep saying this, and it's simply not true.

I spent about a decade on my company, give or take, getting serious-ish when I was 25 or so.

If I had taken 10% of the cash and opportunity cost I spent on that failed venture and stuck it in a whole market index fund? or in some real-estate? or really any other conventional investment, I would be pretty well off now. If I invested 30%? I would be able to retire now.

Compound interest is an incredible force, a force that is strongest when you are young. As a young engineer with a good starting salary? you are uniquely positioned to win through passive investing.

Depends on when you started investing. Compounding interest is only a powerful force in your favour when (implied) interest rates are above zero.

And still: every working hour of older people is on average more expensive to give up on some startup.

>Depends on when you started investing. Compounding interest is only a powerful force in your favour when (implied) interest rates are above zero.

There's no point in my life at which I could have started investing wherein I would be underwater now. No point in my parent's lives, either. if you take a 'buy and hold' approach with broad low-cost indices, you are going to have a hard time finding a date where if you bought and then sold ten years later you wouldn't have beaten inflation by a reasonable margin.

>And still: every working hour of older people is on average more expensive to give up on some startup.

This bites both ways. I can point out several mistakes I made running a business in my 20s, mistakes largely due to inexperience that had I not made those mistakes, my business would have been opportunity cost profitable and then some. Yes, I get paid more now than when I was 25, but I also produce a lot more value, and a lot of that extra value, the "wisdom" as the old people like to call it, is outside of my abilities as a unix tech or a programmer (though I'm better at those things, too.) I am worlds better socially, and have a dramatically deeper understanding of business.

(you can argue that the business skills are because I spent my 20s running a business... and you wouldn't be wrong, but I would have learned some of that working for other people, and my social skills? those are just me getting better at life, in fact I think my social skills would be better still had I kept an office job during that time, and having better social skills will help you dramatically in business.)

I personally think that my increased pay does not nearly capture my increased value. I am dramatically better than my first coding job... and I only make like 4x what I did then, and that's not counting two decades of inflation. Running a business is one way to capitalize on both your technical and your social skills.

Thanks for the write-up!

(As an aside for what it's worth, I'm on track for around ten times my first salary from my early twenties these days. I'm in my early thirties now. All as an employee. I keep meaning to start a business, but life is cushy.)

How did your wife and kids take it when you lost your house and you all had in move in with your mother?

you can start a family at 19, and you can start a family at 35. Either way, yes, it's going to change your entrepreneurial options. I personally see the question of how you have a business with children to be largely orthogonal to the question of what age it is optimal to have a business.

Also, if I owned my home and had a million in stock (I'm 37 and got my first coding gig at 17, so a million in the bank is totally reasonable if I was frugal and invested in low-cost broad index funds, and there have been several points during that time where a bay-area abode could be had for very reasonable money.) Then maybe, I mean if the corporation was setup correctly so that liability didn't fall through to me, then maybe I wouldn't have to move back in mom's basement when my business fails.

I chose not to have children, and I don't regret that choice, but let me tell you, if I did want children? it would be a lot easier to do had I used my 20s to build up resources rather than trying to compete outside of my field of expertise, outside the fields where my innate abilities help me.

28 substantially disqualifies you as being a kid, imo.

If you look at the list, you'll find the 30s is the largest age group for founding those companies. Which makes sense: the number of people capable of building a Salesforce.com or Netflix at the age of 19 or 22, would obviously be extraordinarily slim (whether due to lack of skill, reputation & capital access, experience, or all of the above).

Ev Williams was a big part of blogger, right? I vaguely recall Elon Musk being part PayPal as well.

Well, for example Jack Dorsey was obviously integral to Twitter (as was Ev), and he was roughly 30 when it was founded. I attached him to Square because it was particularly his company. Twitter was by far and away Ev's big hit.

Musk was X.com which was merged with Thiel's company Confinity. He was around 28 years old at the time (and 31 when he founded SpaceX).

There are a few more adjustments that could be made. I probably should have listed Slack with Stewart Butterfield, he was 40 when it was released. I left that off for no particular reason.

Garage doesn't literally mean garage in this context. Another way to put it is: Most fast growing tech companies are started by young people barely into adulthood on a laptop.

I see a lot of late 20's in your list, and a lot of companies that started with one person writing some code on a computer.

The parent said dumb kids in a garage. I think I extrapolated the correct meaning from that. It's referring to the myth about very young founders.

Like I said, even 28 is not a kid or young adult (eg 16-22). You're spitting distance from 30, and most of those companies I listed were founded by 30 somethings (~35 is not barely into adulthood). It's reaching. Founders like Jobs, Zuckerberg and Gates fall onto that very young list, few others do. Add up the average age of the people I've listed.

> and a lot of companies that started with one person writing some code on a computer.

That describes few of those companies in fact.

For every famous very young founder, there's a lot more counter examples:

Markus Persson (30, Mojang), Craig Newmark (43, Craigslist), James Goodnight (33, SAS), John Sall (28, SAS), Diane Greene (43, VMWare), Mendel Rosenblum (36, VMWare), Bill Coleman (48, BEA Systems), Evan Goldberg (35, NetSuite), David Sacks (36, Yammer), Jack Smith (28, Hotmail), Sabeer Bhatia (28, Hotmail), Chad Hurley (28, YouTube), Andy Rubin (37, Danger; 41, Android), Rodney Brooks (36, iRobot), Jeff Hawkins (35, Palm), Niklas Zennström (37, Skype), Janus Friis (27, Skype), David Bohnett (38, Geocities), Bill Gross (40, GoTo.com/Overture), Subrah Iyar (38, WebEx), Min Zhu (47, WebEx), Wilfred Corrigan (43, LSI), Joe Parkinson (33, Micron), Aart J. de Geus (32, Synopsys), John Moores (36, BMC Software), Vivek Ranadivé (40, Tibco)

Late 20ties is miles different than early 20ties, especially for those who went to college. Very very different. Anything over 22 does not count as "barely into adulthood". 23 years old are adults in all meanings of the word.

In my experience men only reach adulthood at 30, (women at 25). And I'd like to hear the opinion of others (who are passed this age).

Please elaborate on how you define adulthood, and why it’s so different between men and women.

Women have to worry about settling down earlier.

Still, what does adulthood means for you?

26 year old dudes are adults, full stop. And in my experience, they don't think nor act like teenagers whether they settled down or not, whether they married or not, whether they kept old hobbies or not.

I am 52.

People "reach adulthood" (to use your words) when they take on real responsibility. Some people never do this. Some do it at an early age.

Some things that often cause people to grow up fast include having children or serving in the military.

(Those are opinions. Source: Me.)

Late 20s is not a kid and not what the parent post was suggesting.

Wow. Great list!

It's also a bit of nice self serving advice for rocket ship captains who are trying to hire lots of cheap labor. People like Eric Schmidt do the exact opposite of this advice and carefully calculate every move they make.

It’s funny. I’ve heard the “Disagree but commit” from a lot of managers lately; usually used to shut peons up. Ironic that it’s original usage (at least where these managers heard it from) speaks to the opposite direction: leadership should trust their teams.

Even internally to Amazon, it's misunderstood.

The point is to gather all the facts, make a decision as a team or group, then have everyone commit to the decision and not whine about how they should have done what I said we should do. You disagree, but you commit to the decision of the group for cohesion and productivity.

It's also a means to prevent groupthink. No one should be thought poorly of for disagreeing, so everyone should be giving all their thoughts, even ones that contradict what the group is thinking. Just so long as they get those points out before the decision is made, of course.

Exactly. No matter how good an idea is, if people in the team are sabotaging it because they don't like it you'll have a bad time. A variation on Patton's quote: A mediocre plan executed well is better than a great plan executed poorly.

That particular phrasing may be specific to Amazon, but I've heard the same concept used in other management training classes. "If you agree 80%, then commit 100%" was another way I've heard it said.

I thought it was more along the lines of “if you’re in the minority and you aren’t convincing people then don’t invest energy into it and go with the flow”.

It’s that too; the advantage of a 3 word maxim: it means what you want it to mean. My managers want the peons to follow the directions from on high. Bezos wanted to trust the people he hired to do the right thing, even if he disagreed. I, an employee, tend to go with your interpretation.

You’re right, I like your breakdown of the issue.

The “mantra” should be a reminder of the cultural value. ie: you learn the value by seeing it in interactions between people first. The mantra then orients you toward the cultural value.

Instead some people are taking the mantra and twisting it to create a culture that is useful to them.

Haha, it kind of reminds me of religion. :S

When leadership trusts their teams, they're trusting the manager. Combining these uses means that the manager has support from above and below to execute their projects.

Ugh, that phrase is so grim. I kinda wish people in this industry would just tell each other to “shut up and deal with it” if that’s what they effectively mean.

What I thought was interesting, while I haven't read the shareholder's letters, is that the OP says Bezos applies this to himself when evaluating ideas from his own teams

He does. He specifically mentions at least one example where he didn't want to do something (I think make a new TV show) but everyone on the team thought it was a good idea so he committed to it despite not agreeing it was a good idea.

Is it safe in this thread to bring up the human cost of Amazon's (and likely by extension Bezo's) almost sociopathic pursuit of success? I wouldn't deny Amazon is a successful company, but how many horror stories from employees being ground to dust under their management have crossed HN's front page? How many companies are now refusing to do business with Amazon because of the iron-fisted requirements enforcement on their suppliers? How many sales on Amazon are of shit quality, ripoff products no better than you'd find on the streets of Hong Kong?

I mean eschewing any and all corporate, social, and ethical responsibility will definitely make you a truck load of money, but I wouldn't call it exactly a net gain for all involved.

I had a roommate who worked in the Amazon warehouse. He said it was very chill and easy work. Mind that he was someone who was a day-laborer, worked in filthy factories, and so on, so it's possible contrast principals are at play here.

As for the quality of the products, there are many 3rd party sellers on Amazon who are selling garbage. This is unfortunate, but that's a tough battle for Amazon or the competing sellers to lock down.

I'm not sure why you'd defend the suppliers who refuse to sell due to iron fisted policies, yet complain about the quality of the products sold. Amazon had / has to do something to clean up the mess. Hopefully it will be beneficial to the buying experience on Amazon.

In my experience working in an Amazon warehouse (albeit only one,) it depends. I could barely walk for two months after I started, just because I wasn't physically prepared to stand or do repetitive movements for ten hours a day - and I work in one of the biggest FC's in the network so it was a six or seven minute struggle across the building and down two flights of stairs to get to the car sometimes. I don't blame Amazon for that, though. I do blame them for complaining about the cost of providing us with aspirin, then simply deciding not to provide it anymore.

The work is tedious and exploitative, and it's very apparent working there that Amazon considers you little more than a meat machine there to run an algorithm, despite the lip service otherwise, and often your job depends on metrics you're not even allowed to see, and the pay is terrible. But, some people don't mind it. Some people actually like it. Others have to be carted off in an ambulance because they worked themselves into heat exhaustion.

> I had a roommate who worked in the Amazon warehouse. He said it was very chill and easy work. Mind that he was someone who was a day-laborer, worked in filthy factories, and so on, so it's possible contrast principals are at play here.

Having worked at a Fedex hub for a number of years, I can tell you numerous things I've heard about Amazon's warehouses sounded familiar. It's awful work and it destroys your body, and it sounds like they don't even pay as much as Fedex did.

> As for the quality of the products, there are many 3rd party sellers on Amazon who are selling garbage. This is unfortunate, but that's a tough battle for Amazon or the competing sellers to lock down.

There are many ways that Amazon could lock itself down that would hinder the speed at which they are attempting to operate. It's obvious looking at their current methods that they don't see it as enough of a problem to change their core business, and that's the issue. They're ok with selling shite on the side likely because many don't bother to return and because traffic is traffic when it comes to getting people on the site.

> I'm not sure why you'd defend the suppliers who refuse to sell due to iron fisted policies, yet complain about the quality of the products sold. Amazon had / has to do something to clean up the mess. Hopefully it will be beneficial to the buying experience on Amazon.

I'm referring to small businesses and individual operators, not Shenzhen factory castoff resellers. There's a difference between a seller who has a hard time meeting Amazon's policy which largely boils down to "Ship it, right f*ing now" and a seller who is just incompetent or whatever the case may be who can't get packages out in a timely fashion. And more to the point, it's about Amazon's total lack of any flexibility regarding ship times; they expect small business to react with the same sort of frantic pace as they do, with a massive warehouse and drop-shipment infrastructure, and its dumb.

It's a very interesting read, and I can't help the feeling that lately Jeff Bezos is taking the place of Steve Jobs as the superhuman CEO (deservedly, it seems!).

Then you haven't been an Amazon supplier dangling at the end of a rope as Bezos tries to wring blood from a stone.

That sounds a bit familiar to how Apple dealt with their suppliers.

Any big company, apple, wallmart, ford.. and on and on.

To give a contrast, Aldi has an excellent reputation with suppliers. That German hard discounter pays like clockwork.

I gotta admit that I can forgive a multiple of sins when I'm paid on time.

So true... the universe of selling on Amazon and buying on Amazon couldn't be more separate.

The universe of buying and selling clothing at the mall, food at the grocery store, goods at Walmart have the same level of separation in most cases.

Not quite what I mean. The difference between the costomer-facing section of Amazon and the seller-facing section is worlds apart.

Selling on Walmart, eBay, etc., are very different platforms with their own unique rules. Amazon is an entirely different level.

And the common denominator with all of these is majority of customers are ignorant to all of this. They are more concerned with the price tag and their wallet than they are about the supply chain.

Would that contradict the point?

Well, yeah, Amazon is more the new WalMart than the new Apple.

Tell us more. I am not familiar with this side of Amazon.

I used to work for a publishing company. No other platform or vendor made us bend over backwards like Amazon. We had to give them the usual non-competitive list pricing that other vendors demand, but we also had to give them a massive, absolutely disproportional cut of the sale price, regardless of profit margin. There were launch date rights they demanded, massive periods of exclusivity for audiobooks in order not to be a second class citizen, total refusal to negotiate terms, etc.

We were not a small publishing house, top 10% by volume nationwide, and (mostly) not paperback trash either. You've probably seen our cookbooks. Didn't matter. They treated us exactly the same as they would an amateur author writing unedited self-pub romance novels. No regard for quality, rating, volume, or any other metric, all must bow before Bezos. Amazon takes such a chunk out of the publishing industry, it actually has a bit of a chilling effect, because you can't afford risk a flop with the tight margins Amazon affords, and you probably need Amazon.

Amazon shareholder letters seem to be becoming the new Berkshire shareholder letters [0]. They are friendly, engaging, and most importantly, written by an author who steadfastly holds by principles that haven't changed in decades.

If you haven't read any of the berkshire letters you really should.


It's still amazing to me that an online book store is now the #1 seller of server infrastructure.

Many people were selling things online when Amazon was just a book store. Amazon was the best of them all.

To me, it doesn't sound so strange that the #1 online store grew to be a strong competitor in other online businesses as well.

My recollection is that he started with books because that would be easiest, but the goal was to be all-encompassing from the start.

Too abstract. Amazon businesses outside of North America get steamrolled by Alibaba one after another, yet people laud their "innovative business model," when it isn't (sell web hosting, and stuff over internet, something a gazillion other companies do)

That's nonsense. It's only true for China (for obvious reasons). Amazon is more successful in India, UK, Germany, France, Japan, and the list goes on.

See, they are in the business of selling fancy trinkets from China as it is what 9 out of 10 consumer goods are. No mater what they do, a Chinese company will be having an edge over them no matter what they will do.

Sell web hosting, ha. You mean the one that is 10x bigger than its next 14 competitors combined? (2015)

If the profit margin is so high, be prepared for hungry competitors.

Your margin my opportunity sort of thing :)

My current org builds all infrastructure to run in multiple cloud providers, and we spend over a million a month on cloud services.

The services will be the lock-in. and sucsessful software businesses usually have high margins, that's the nature of the beast.

Links or examples for those of us who arent familiar and to back you your statement.

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