What rings true for me in this article is the notion that, as a founder, it’s better to pick a problem space than it is to pick a solution. Amazon chose to live in the problem space of how to bring consumers more products, more conveniently, at a lower price. Geico chose a similar goal but in insurance.
Technical founders often focus on a particular cool way of solving a problem and burn lots of capital building that thing. Sometimes the thing is the right thing and everyone makes money. But sometimes it’s not. Yet if you stick with the same problem space for long enough, and aren’t too connected to your particular solution, I think you have a greater chance of succeeding.
Okay, go ahead and poke at my pontifications now. I’m ready.
I think maybe the fundamental hard thing about startups is that you can’t ignore the problem space or the solution space. It’s not like Bezos was passionate about selling cheap books for years before Amazon, he saw that this new Internet thing was going mainstream and building on top of this new tech was the premise of the business more than selling books cheaply and quickly was.
Most of the startup opportunities in the last couple decades were built off the back of several deeper tech breakthroughs like mass mobile phone adoption and virtualization. I think more founders have been successful just riding these tech waves than sticking to a problem space. Brian Chesky didn’t work in hotel management and Travis Kalanack didn’t work in transportation. They were just familiar with cutting edge consumer tech and applied it to problems they had no familiar with before they started.
Note that choice of starter product is important. Amazon started with books - you know exactly what you're getting, they always fit, they're hard to damage, they have pretty high markups and low shipping costs. People were willing to risk buying books online, back when online e-commerce basically consisted of the USENET misc.forsale groups.
Tesla and many other EV companies started with low-volume expensive sports cars, with high margins so they could be basically hand-crafted. (Tesla actually bought the chassis/body/interior from Lotus) If they had started with the Model 3, they'd have gone bankrupt long before they sold any.
I think Bezos also mentioned that he started with books because no single physical shop could have all the books, but Amazon could. It is a product with so many variations that Amazon had a clear competitive advantage.
Amazon's competitive advantage was not paying any tax. Amazon's selection in technical books was quite poor for quite a while.
However, the tax discount drove ALL the small, local technical booksellers out of business. It might have happened anyway since local sellers had to pay retail rent and so Amazon had a structural advantage. However, Amazon also gained a straight 8% advantage for not having to pay tax.
> Amazon's competitive advantage was not paying any tax.
I'm assuming you are saying "not paying sales tax". Amazon was operating like every other mail order bookseller that did not operate stores at the time. Retailers have complained for a century about mail order catalogs not collecting local sales tax. This was not new, or novel.
> the tax discount drove ALL the small, local technical booksellers out of business
Demand aggregation is a real thing. Localized, there's not a lot of demand for any specific niche technical book, and that leads to sub-optimal inventory. Why carry something you'll only turn once a year? You'd be better off putting that floor-plan money into gum, mints or batteries at the cash register. Quick access to product is why I shifted to buying technical documentation online. The local electronics store or bookshop could order books and it would often take 4-6 weeks for the book to arrive. Even early Amazon did 3-4 days. Demand aggregation is how Amazon won.
I remember at the time there was a lot of talk about how Amazon didn't have the costs of high street stores etc and was 'just' a web site.
That was never true - sure they didn't have high street stores, but they invested big time in warehousing. That's why you could get a book from Amazon in days, whereas a traditional seller it would take weeks if it needed to be ordered.
They also invested in the wider distribution network.
Another now-classic example of solving this chicken and egg problem, I think: Facebook starting with just Harvard, then ivy league colleges, then colleges, then colleges and high schools, and only finally the general public. At each stage the arena was small enough it was realistic to take the whole segment over, and then that became the seed for the next phase.
And their second product was CDs/DVDs, which have a lot of the same properties. Then they opened Amazon Marketplace, allowing other stores to sell through their site, and used the data of what was popular there to expand into other products – they were consistently very deliberate about what to sell next.
I think this also points out the timing aspect. The big "breakthrough" companies (breakthrough in terms of capitalistic successes) happened since people were in the proverbial right place and time with the right idea.
It's a falacy. Most of the time, what defines the "right time" is our post event bias. Apple launched the iPhone in 2007(?), so from our 2022 perspective, "they were just the first to do it but in 2007 everything that was needed to build an iPhone was already there". The fact that Apple succeded in creating an easy to use, touch screen based, infinitely expandable via software general purpose computing device is 100% their merit. Many companies had tried before, but noone were able to get it right. After you see it done, this concepr of " right time" arises, not before it. It's the same with the age of discoveries. Boats capable of crossing thr ocean had existed for centuries, but only around 1500 it became "the right time".
Well, except what you’re describing fundamentally leaves the hardest problem unsolved.
Where to start (concretely) and what you’re actually going to do, and if it will work for customers in a way they will pay you more for it than it costs to do.
Discovering that, and if it is going to work, is what a startup does.
You can’t do it without deciding on something concrete eventually to deliver, and pursuing it with enough vigor to get a workable product in someone’s hands.
Tech startups that build an entire product without understanding the space are leaning too heavily in one direction.
Sales led startups that get a customer base and start collecting money without a concrete product plan are leaning too hard in the other (and even more, add big red flags for scams and fraud).
Doing all the things and integrating it into a workable collection of customer needs they’ll pay to solve, along with an actual solution that works to solve it, while not going bankrupt in the process is why startups are hard.
Not being a scammer or committing fraud in the process? Harder still!
It’s the unknown unknowns and navigating all the bullshit on the way that also make the risk very high. Fundamentally, it’s impossible to know everything until you’ve already done it, and by then, it’s already changed under you.
I generally agree with your statement, but it depends on what your goal is. Ultimately, do you want to build a successful business or bring a (specific) new technology into the world?
I suspect the former is true more often and it can lead to innovations along the way, but there is nothing wrong with the latter.
I was once at a talk with several medical technology founders. One of them namechecked specific legislation that enabled their solution to come to market. And so I asked, "How do you survive if only 1 law is prying open the opportunity for your business?"
They replied that their business exists to solve a need -- a need that exists regardless of the specific regulations. Should the regulations shift, a company motivated beyond a specific solution will adapt to keep meeting its customers' needs.
Businesses are not built on things they sell, they are built on the customer problems they help solve.
If you build microprocessors, you better understand how your clients are using them to create electronic devices, and provide all the services and documentation they may need. A less potent microprocessor paired with a website that perfectly explains how to use it and what use cases it supports will win any day over a more powerful chip that no one understands.
Yes, but the investment in things can be so great that it becomes impossible to change according to customer preferences. The business then has to find new problem spaces for their things.
This article seems like a good reminder to know what your fundamentals are and to be deliberate about picking them.
But I'm not convinced that this advice can be used to pick your fundamentals, your core business model.
Amazon opted for more choices and lower prices.
Barnes & Noble stuck with faster solutions to problems (get your book today not after a week of shipping as was common when Amazon started), deeper human interactions (you can go into the store and ask someone for recommendations, meet authors, etc.), and increased confidence/trust (you know what you're getting because you can hold it in your hand and read it before you buy it).
Low-cost carriers have moved in on traditional airlines because while it's true that people will never stop caring about added comfort, it turns out they care about lower prices much more.
But Apple built a staggering market cap relying on the assumption that while people care about lower price, they care about great control of your time (just works) and higher social status more.
So it seems like this article provides a good framework for thinking about your business, but doesn't give any answers as to the actual strategy you should use.
For me this is a good example of the old adage that you should not confuse vision with strategy.
The vision is you realize the universal truth (in Amazon’s case people want things cheap and fast).
The strategy is how you deliver on making that visions reality. This is what you call (rightly so) your core business model.
Only experience people tend to get all caught up in the big ideas of the vision (especially middle managers) but spend far to little time on making the hard choices that come with deciding in strategy: it’s as much, if not more, about deciding what not to do as it is commitment to what you will do to realize your vision.
I read TFA’s take on fundamentals as neutral on the examples given. There was mention that Amazon survived where Beenz did not because they picked the right mix of changing and unchanging. On the other hand, the juxtaposition of Andreeson and Buffett says that you can find business success with seemingly opposite fundamentals.
That's a good point. I also suspect that companies can manipulate these value preferences a fair amount through marketing, e.g. lower price vs higher status.
> customers want low prices, and I know that’s going to be true 10 years from now. They want fast delivery; they want vast selection. It’s impossible to imagine a future 10 years from now where a customer comes up and says, “Jeff I love Amazon, I just wish the prices were a little higher.”
Actually there is one thing people are starting to desire -- less choice. I think some kind of curated content for anything has a lot of potential because mostly I do not care if I get the 100% perfect thing, I care about it being 80% right and not a headache. The time investment is not really worth the trouble to find the perfect thing.
Exactly why Costco is more and more popular. They essentially do curation of goods available on the market and they sell them at a good price. When I go to Costco I know I might not get the best item on the market, but I know I will get a decent product that fits my needs at a decent price. It is all about saving mental energy for other things.
Well said. I just ordered a 4k monitor for my home office from Costco - it was basically the only model they sell. My normal mode of operation is to spend hours trying to research the specs that matter, find a good price, etc. Instead, I assumed I was getting something reasonable and bought it without any research.
Given that today’s sellers make it nearly impossible for a consumer to compare items (store exclusive SKUs, component swaps in same SKUs, astroturfed reviews, and even inventory co-mingling), a curated marketplace is worth so much.
>Actually there is one thing people are starting to desire -- less choice.
Maybe not less but easier choices. It's hard to tell which frying pan is the best when there's 100 nearly identical listings all with 5000+ 5 star ratings which may or may not have been gamed. There's not a great way to tell the objective quality of a product before you buy it.
This is why I've begun prioritizing returns and exchanges and good customer service. Even with a high-quality product it's possible to get a lemon. Doesn't matter if I can just return or exchange within a reasonable time-frame.
I think it's partially true and I definitely fall under the category that hates to sink hours into searching for the best YYY where YYY is a random $30 item.
But I don't necessarily want less choice, I just want something/someone I can trust. If I could just believe that the "amazon choice" was actually tested thoroughly and matched a quality standard I can get behind, then I'd happily get the "amazon choice" of most things.
I think that's true for fungible goods - it's a pain when you search for something generic like dish soap on Amazon and get 10000 kinds - but not for non-fungible goods. When it comes to books, I want Amazon to have as wide a selection as possible.
I think this maps to some of the alternate "bets" at the bottom of the post:
- Faster solutions to problems ("buy the best widget for me" button > two hours of amazon + google + reddit research)
- Increased confidence/trust (trusting that "buy the best widget for me" really is the best widget for me, not the one with the highest affiliate-link returns)
I've been thinking that I would be willing to actually pay somebody commission to buy me the best, well researched, widget from vague description. Surely it has to be more efficient to have product research as one's job than to have to do it once every couple years and then choose something you're not very satisfied with afterwards anyway. But there are multiple levels of perverse incentives that I just have no clue how they could be solved.
I don’t think you mean 80% right. You mean 100% right on the things you care about. If I need a widget that fits some size, is child-safe, doesn’t quickly break and costs less than $300 I can’t accept 80% right. Sure I don’t care about the color or brand but they weren’t criteria of mine to begin with.
People are definitely different and that people want choice has definitely been correct for a long time. But I'm noticing it not only in me, but with people around me -- they're just tired from dealing with choosing from 100 different things when they only need 3. Especially because most of them are the same. The internet has made this worse than ever. Companies like Apple have shown this is possible - they basically tell the user "this is what you need" and people accept it and it's worked.
Do those solve it? I don't really trust either. When everything is made in China anyway, sometimes those garbage-looking Chinese brands are just as good as or better than the name brand stuff, and sometimes they aren't.
Some brands build a lot of reputation on quality, and then cash it in for higher profits by suddenly switching to low quality (American appliance brands were notorious for this, with a sort of round robin selection on which brand had actual quality behind it for any given year).
> There are already things that solve choice, e.g. brands and reviews.
Agreed with this, which is essentially why Amazon's e-commerce is probably doomed. Reviews have become unreliable and brands lack consistency on their site (is it fake? is this an officially branded product? who is actually selling me this?)
"Doomed" seems a strong take, but I totally agree that Amazon is leaving e-commerce ripe for disruption if they don't address the trustworthiness of their reviews.
The paradox of choice would be mitigated by better trust, and better user interface. These aren't necessarily easy problems to solve, but Amazon should have the resources to solve them, if it only had the will.
> I very frequently get the question: “What’s going to change in the next 10 years?” That’s a very interesting question. I almost never get the question: “What’s not going to change in the next 10 years?” And I submit to you that that second question is actually the more important of the two. You can build a business strategy around the things that are stable in time. In our retail business, we know that customers want low prices, and I know that’s going to be true 10 years from now. They want fast delivery; they want vast selection.
Also Bezos (paraphrased): "While working at D.E. Shaw, I heard that the internet was growing at 2,300% per year. And I asked myself: 'what kind of business makes sense to start in the context of that kind of growth?'"
The Holy Grail is when a big change allows you to get a foothold in solving a fundamental, unchanging problem better than it has been solved before - and then leveraging that foothold with rapid iteration and growth.
I wonder if back in 1990s people were as skeptical of the internet as they are of the metaverse/web3/crypto/autonomous driving today. All of the big money bets seem to be in these areas, and I wonder if there were a similar group of 4-5 industries that all of the money was going to in the 90s only for the internet to win out in the end as the best returns for investors.
"It's tough to make predictions, especially about the future." ― Yogi Berra
For every ten IT trends/fads, roughly only one has staying power in my observation. The others often move into niches or fade.
If anyone was that good at predicting the diamonds from the duds, they'd be golfing with Warren Buffett instead of poking around Hacker News.
Note that I thought the internet had big potential in the late 90's, as I was getting hooked on Compuserve (a precursor to webbish things). I just didn't think it would ruin biz CRUD/GUI's, rather staying in the consumer lane.
I remember that time, and no, it was nothing like crypto. A better analogy would be electric vehicles today.
Yes, a loose analogy can be made in that there was a hyped technology that some people thought might become huge, others thought might merely become large or medium sized, and most others were pretty unaware or didn't care.
Unlike with crypto, during the late 90s internet/PC/web usage explosion, though, there were decades of successful smaller scale use (BBSes, academic use of the internet, etc). It was just a matter of scaling it up. The future was already here, just unevenly distributed.
Unlike crypto, a lot of the usages were not just emotionally exciting, but actually practical. You could look up a stock quote right away instead of looking at an outdated quote in the paper, or calling a broker on the phone, or having a dedicated fancy service just for that. You could email a friend half way around the world. You could read the full text of a book for free, if it was from before 1923. In general, you could transmit information freely and cheaply across the world -- as long as both recipient and sender were on the internet somehow.
All of those things previously were not possible that easily. There were faxes and landline phones already, but they had their obvious limitations.
Crypto is totally different. It's been hyped for two decades and, except for illegal activities, still hasn't enabled anything that could not be done more efficiently with SQL database to track who owns what, and a system of courts and law enforcement to enforce property rights and enforce contracts.
If you think they are similar you probably don't remember just how different it was to not have a single simple easy way to get and receive information. You had to actually go specific places or talk to specific people. You would do stuff like check movie times in the newspaper, and make specific plans to meet people at specific times.
I still remember when Tell Me came out. It was a phone number interface to some basic internet applications like weather, news, sports, movie times. You called 1-800-TELL-ME and followed the prompts. It was massively popular.
Where is crypto's TellMe moment? Nowhere. The only useful thing I've ever been able to do with crypto is accidentally profit $8000 because I forgot I had owned some I had bought as a joke... which came directly out of someone else's pocket later when it crashed.
If you're looking for a historical analogy, tulipmania is a good one. So is the boom in joint stock companies in the 1600s. So is the plank road boom of the late 1800s.
Nobody had as strong opinions about the internet being a horrifying scam, like many do about crypto. Because it wasn't, and there was no reason to think it was. The main "issue" was, would it catch on? Was it too nerdy? I mean, it's not like now, where the internet is almost slightly cool to some young people. Buying a modem was extremely uncool. And it cost a lot of money. So it was more of a question of "Is it really ready for prime time yet or does it need to become easier to use and cheaper?" much like EVs today. And, again, like EVs today, the problem was solved gradually but exponentially... each succeessive cost decrease or simplicity increase lead to another wave of converts, which made the whole thing more useful, solving the chicken and egg problem gradually
> You could look up a stock quote right away instead of looking at an outdated quote in the paper, or calling a broker on the phone, or having a dedicated fancy service just for that. You could email a friend half way around the world. You could read the full text of a book for free, if it was from before 1923. In general, you could transmit information freely and cheaply across the world -- as long as both recipient and sender were on the internet somehow.
I'm skeptical of crypto as well...but when reading your post about the internet it actually reminded me more of crypto than not.
Although the internet looks revolutionary in retrospect, it may have felt incremental at the time -- because the telephone already existed. Sending an email vs. making a phone call. Driving 30 mins to the library vs. using an internet browser.
What about sending money to a friend in Germany today? Sure, it can be done. But it's going to take several days, involve currency conversions, fees, and likely some phone calls. With crypto they just need to message you an Ethereum address and it's done.
What about sending $20k from one US bank account to another? It still takes 3 days. Isn't the crypto speedup as significant as emailing a friend vs. making a phone call?
Actually, I can Venmo or Paypal people instantly, not in 3 days... and everyone I would want to send money to (people I know IRL in my country, or businesses worldwide who are legally able to sell to me in my country) is able to use it.
You make a fair point in theory, but this kind of superficial thinking is what crypto shills count on (no offense, I see this kind of argument a lot).
Here's the difference: With crypto, that speed comes at a huge and disturbing cost-- the inability to reverse a fraudulent transaction and appeal to the court system to fix other misunderstandings. Sorry, but it turns out that's essential to everyday business, not "silly" friction. There have been many cases demonstrating this by now, not to mention the huge enablement of ransomware, etc.
Crypto is never going to be able to solve that problem because if they do, they stop being crypto, by definition. The friction exists for legal and regulatory reasons. If the legal regime wants to make instant transfers possible, well they can, which is why you can now Venmo or PayPal people instantly. With the right treaties and such, it would be possible internationally too. The technology is there, but the political will isn't.
Crypto gets around needing that, which seems nice, but the cost is too great for anyone but hobbyists, criminals, and speculators. It's no different from a car company being able to undercut all other manufacturers by not including seat belts, air bags, or brakes. Cool proof of concept, but of limited utility except for niche applications like NASCAR.
If I actually need to send money to my friend in Germany, I will use Western Union (or whatever the modern cheaper quicker equivalent is -- a lot of movement in this space lately!). It will be same day, it will cost a small fee, and the small fee will probably be worth it to avoid the risk of scam, theft, and crypto volatility.
Idk about that. Some of the more mass appeal stuff of those days (you can look up stock quotes and movie times, etc blah blah) like I mentioned, was definitely more incremental.
But having access to such huge volumes of information that could not necessarily be found anywhere else was a big deal. You could download a long text file explaining how to hack the phone system. That would not be in any library or bookstore, at any price. Not to mention communities of people. You could discuss things that were very niche, something people take for granted today.
Crypto hasn't done anything qualitatively different like that. It just lets you send money instantly, and with no recourse if you made a mistake or got tricked or your counterparty fails to perform and isn't in your jurisdiction.
PS: Sorry for the double reply, not sure if that's a faux pas, but they were about very different aspects
Whenever someone claims that it took a long time for the internet to find its killer app, I point them to this[1] 1993 ATT ad campaign, where they predict everything from Netflix, IoT, to wearables.
As usual, I find myself nodding in agreement whenever I read anything written by Morgan Housel on this blog. It is evident he has thought deeply about the topic of each post, and wants to share his hard-earned insights with the rest of the world.
Long-term compounding of wealth indeed comes from betting on things that won't change over the course of a lifetime.
I thought the article is about change is the only constant yada yada hence we should embrace change. How wrong was I.
> which is that an insurance company selling directly would have a cost and convenience advantage over those paying brokers.
Put it into software, to me it is about eliminating abstraction/boundary/communication. Frontend and backend is an invented boundary. Product and Dev is an invented boundary, CS/QA/Documentation and dev is also an invented boundary. Whoever break the most of the imaginary boundaries is going to make software building so much faster
It's easy to chase the newest technology, the newest features, the newest markets. But unless you pay attention to the boring things too, you've set your feet on sand instead of stone.
> It’s impossible to imagine a future 10 years from now where a customer comes up and says, “Jeff I love Amazon, I just wish the prices were a little higher.” Or, “I love Amazon, I just wish you’d deliver a little slower.” Impossible.
Interestingly that is kind of what people have started saying. Perhaps not in those exact words, but in the form of “Jeff, don’t outcompete all the Mom & Pops” and “Jeff, treat your workers better”.
Exactly the quote that caught my guard. I don't really shop with amazon, because two things:
1) the rune goldberg machine of suffering of amazon laborers
and, more selfishly:
2) everything is so cheap, that it's useless. I would rather have the choice between two or three premium options rather than having thousands of cheap knock offs.
Only if the premium options are worth it. More and more brands seem a hollow shell that charges a premium price worth nothing to show for us. It feels increasingly difficult to find quality products.
I'd grant that Amazon has a large selection and that's an advantage over competitors.
As for pricing, I wouldn't say Amazon is expensive but it is not consistently low cost and it is not unusual to see something on the shelves at Target for $50 that is selling for $70 on AMZN. I think after all these years, and particularly with Prime, AMZN has gotten people in the habit of looking to AMZN first and you'd expect them to cash in on it.
The better selection than other retailers is a durable advantage. I'd call out Best Buy for having a poor selection in comparison, particularly being overly wide (they sell washing machines, grilles, and mirrorless cameras and parts to build PCs) but not sufficiently deep (no selection of lenses for those cameras, no quality tripods, a very limited supply of PC parts.) It begs the question of "Why am I going to drive to Best Buy where they might have some of the things I need when I can order them all online from Amazon or a specialist retailer?"
The flip side is that the marketplace puts a lot of junk products in the AMZN catalog. I'd never buy anything that is likely to be counterfeit on AMZN (Nike only from the Nike store) and I learned the hard way not to buy a thermal printer that is marketed with a size in mm instead of inches.
I wrote about this and other things (viz. 'you can't fight gravity', 'start with the customer and invent on their behalf', 'one way doors / two way doors' etc) about Amazon's culture here: https://news.ycombinator.com/item?id=26180074
Andy Jassy's 2020 re:Invent opening keynote goes a bit deeper into these ideas, which makes for a fascinating watch: https://youtube.com/watch?v=xZ3k7Fd6_eU
It seems to me that at the implementation stage, the things that never change and the things that do change are the same. For example, customers will always want low prices and fast delivery. Internet ordering and robots in warehouses are things that change. But the changes are better ways to fulfill the unchanging needs. So Bezos sees investments in internet ordering and robots as investments in what does not change. Whereas Andreessen sees the same investments as betting on change. So what difference does their point of view make if both entrepreneurs end up making the same investments?
There is something of a campaign going on now and it is not 'cool' to compliment some billionaires. Apart from this, there are valid real reasons to dislike to former Amazon's CEO.
That said, reading his early interviews it hard not be impressed by the foresight and insight. I personally do think he got some things wrong ("if you can't measure it, you can't manage it" mantra being one of them ) or at least got others to misunderstand it, but it is hard to deny the results he helped manifest.
If you purchase a toy at Amazon and it is contaminated with lead or cadmium paint, you would not notice. And even if you would, there is no one legally responsible. That outfit in China that sold it doesn’t care. And Amazon is just a marketplace and is not responsible.
Toy stores (Toys”R”Us) used to be a thing. They were legally on the hook, if they’d sell contaminated toys. Now no one is. And unfiltered toys from China are shipped directly.
Recently I relisted a simple 3d printed attachment for Nerf gun on Amazon. It got assigned to toys category. Listing never went live because they wanted all kinds of documentation about kids safety. Obviously it was not worth it for me and I dropped the idea.
I did sell it in the past without all these issues. So things do change in terms of safety, and likely because there is at least some liability on Amazon
Are you in China? It is likely prohibitively difficult to obtain the required documentation in the US, because very few manufacturers make toys here. For comrades in China, the link to documentation forms, pre-filled is likely available to anyone who needs it. There is probably a tutorial/package how to sell toys on Amazon.
From my perspective: there are some things you fundamentally can't measure.
One of the teams I manage is technical support (B2B SaaS). Support's core functionality in an organization is to prevent churn. If a customer reaches out to support, they have some issue that is blocking them from using your product effectively. If you are unable to unblock them, then you risk them switching to a competitor. The problem is that not every support ticket/interaction will result in churn so we can't really directly measure how effective we are at our core function. So instead we measure the number of tickets raised, customer satisfaction, adherence to SLAs, etc, which is as good of an approximation as we can get with the resources we have available to us.
In my case, those numbers all look reasonably good, so I'm treated as an effective manager, even though we don't (and maybe can't) really know how much churn we've prevented. I wish we could though - it would make my arguments to executives on behalf of the support team that much easier to say, hey we retained $XXXXXX in revenue over this period.
Sure. Some context may be needed. I suppose my views are formed in this way partially, because I became an MBA after having soul crushing jobs, which does tend to change your perspective a little bit ( and give you an insight into what is going on in a head of the front line drone that is forced to implement orders the best way he/she can ).
<< "if you can't measure it, you can't manage it"
1. It is wrong in a literal sense. You obviously can. Maybe you should not ( which is a valid question to ask ), but you absolutely can manage things and not measure everything.
2. It is wrong when taken metaphorically to a logical conclusion. The mantra seems to encourage ( and did encourage based on some of the things managers tried to measure -- lines of code come to mind ) measuring everything. In accounting, there is a concept similar law's 'de minimis' ( I kinda don't want to use that name, because I worry people wills start questioning that from tax perspective, which is its own animal I don't want to touch, but in practical terms, the name matches the concept exactly - basically 'too small to matter'), where accounting for some items in some processes is borderline pointless ( say a screw ). Every so often, people in accounting classes go 'but what if', 'but we can track it'. And the answer is invariably: 'You can, but is it worth it?'
Naturally, you could counter it with: 'Well, you don't know if you don't measure it.', but there has to be a point at which the tracking of atoms get too crazy.
So that is my basic thought on the matter. I can expand a little more, but I think that covers it. Note, I am not saying it is not worth it to measure stuff. I am saying it is important to be discriminating over what you pick to measure, because, people being people, will optimize for it.
> There is something of a campaign going on now and it is not 'cool' to compliment some billionaires.
I've seen this when HN shifted from YC applicants, ie startup founders, to tech workers in general. There is quite a paucity of startup news that's not necessarily related to the wider tech ecosystem.
This reminds me of Oracle Forms: It was by today's standards simple, cheap (overall), facilitated compact code that mirrored close to biz logic, and easy to deploy. It used a kind of "GUI browser" so you didn't have to install executables to use and update apps, just one "browser". But Oracle rewrote the client into Java, and Java's deployment flaws dogged it, so co's had to gradually abandon it. They should have kept it in C. (The developer's side stayed mostly the same, it was deployment's side that got the headaches.)
It wasn't esthetic, but got most CRUD jobs done quick and simple. I've never coded in it myself for production, but observed amazing productivity at multiple orgs. There's something magic about it.
Oracle originally had to cater to many OS's, so were parsimonious with GUI features. Thus, it has just enough to do typical CRUD jobs but not enough to distract, confuse, and over-complicate the tool. They didn't get feature-happy over time. Once you learned how to milk existing features, you realized you really didn't need boatloads of pluggins.
Current web stacks are bloated nightmares and business money sinks in comparison. I'm not saying bring back Oracle Forms as-is, but at least borrow its best lessons. We'd have more practical GUI web standards by now. (Most CRUD productivity don't need mobile UI's. Also, it may not do well for big "enterprise" apps, but for small and niche it groves.)
> It’s impossible to imagine a future 10 years from now where a customer comes up and says, “Jeff I love Amazon, I just wish the prices were a little higher.”
Except that many consumers these days do look for business that are more socially responsible and pay their fair share downstream.
Personally I am seeking out business that pay good wages and are responsible to the environment. Obviously that'll lead to higher prices so in some way I am wishing for higher prices.
The irony of comparing Andreeson and Buffet and claiming they have completely opposing investment theses is pretty hilarious.
They both have the exact same approach, which is to seek companies that have or will create monopoly effects in their markets, using dominance of a market segment to raise prices and extract rents.
Same investment strategy that’s made basically every vast fortune since we invented the cotton gin.
So they have the same strategy in the sense that absolutely everyone who ever made money had one strategy and they have a different strategy in a way that is useful and informative? I’d label that different rather than same.
Most people have a different strategy, which involves producing a product or service of value.
Megalomaniacal monopolists such as these two seek to extract monopoly rents by cornering markets.
Their differences with each other are trivial, and the contrast between them and nearly everyone else in the normal business world is stark.
They are robber barons, it’s not some new and exciting story, it’s a tiny class of humans, there’s only a few dozen at any given time.
> the term was typically applied to businessmen who purportedly used exploitative practices to amass their wealth.[2] These practices included exerting control over natural resources, influencing high levels of government, paying subsistence wages, squashing competition by acquiring their competitors to create monopolies and raise prices, and schemes to sell stock at inflated prices to unsuspecting investors.
Amazon is mostly driven by AWS which is a very new paradigm for building business services. Insurance has been revolutionized by new methods for collecting and analyzing data in order to estimate risk. Monsanto's latest growth play is farmland and crop insurance. The examples used in this piece appear to demonstrate the opposite of what was intended.
Amazon has never paid dividends to investors. Its only value is to invest against interest rates or inflation. In fact, if investors wanted dividends it might upset the ability of Amazon to provide its objective. It's stable, but only philosophical. This isn't a land investment or something. It's an extension of a long term trend of consumerism.
Yup, that is similar to what my grandma used to say and that will always work: “buy cheap and try to sell as expensive as you can” and sometimes adding “it does not matter if clients need it as long as you can convince them they do”.
She was an entrepreneur of 1950’s that started a small retail business.
The best is rapid growth, high profit margins, but also dominance. Hence, Google, Facebook and Amazon's success. I think you need at least two of those.
I also hate a lot of companies that are too expensive, trying to sell you status but not backing it up with quality. So I would love it if you could sell me high quality products that are repairable and doesn't unnecessarily tax neither our planet nor the humans involved in creating them. What are you selling?
A good article but feels more table stakes than secret sauce stuff. The advise crosses to non startups too. It is a why you have a bunch of different X targeting market segments for all X. For example Pizza, flights, cars.
Ad infinitum: Fire, or equivalently burning something, is an unchanging idea which is the only way humans have and used over and over to get where we are.
Technical founders often focus on a particular cool way of solving a problem and burn lots of capital building that thing. Sometimes the thing is the right thing and everyone makes money. But sometimes it’s not. Yet if you stick with the same problem space for long enough, and aren’t too connected to your particular solution, I think you have a greater chance of succeeding.
Okay, go ahead and poke at my pontifications now. I’m ready.