Amazon met with startups about investing, then launched competing products

https://www.wsj.com/articles/amazon-tech-startup-echo-bezos-alexa-investment-fund-11595520249

by mgav • 6 years ago

1125 351 6 years ago

bigpumpkin• 6 years ago

"In 2016, a group of investors led by the Alexa Fund bought a stake in Nucleus, a small company that made a home-video communication device that integrated with the Alexa voice assistant.

Nucleus’s founders and the venture-capital funds investing alongside the Alexa Fund had reservations about collaborating with an Amazon-backed firm, according to some of the co-investors. "

"After striking the deal, the Alexa Fund got access to Nucleus’s financials, strategic plans and other proprietary information, these people said. Eight months later, Amazon announced its Echo Show device, an Alexa-enabled video-chat device that did many of the same things as Nucleus’s product.

Nucleus’s founders and other investors were furious. One of the founders held a conference call with some investors to seek advice. He said there was no way his small company could compete against Amazon in the consumer space, according to people on the phone call, and began brainstorming ways to pivot his company’s product.

An Amazon spokeswoman said that the Alexa Fund told Nucleus about its plans for an Echo with a screen before taking a stake in the company. Several people on the Nucleus side of the deal disputed that.

Before Amazon introduced its product, the Nucleus device was sold at major retailers such as Home Depot, Lowe’s and Best Buy. Once the Echo began selling, those sales declined sharply and retailers stopped placing orders, said two people involved in the deal.

Nucleus threatened to sue Amazon, which settled with Nucleus for $5 million without admitting wrongdoing, according to people familiar with the settlement. Both sides agreed not to discuss the matter.

Nucleus reoriented its product to the health-care market, where it has struggled to gain traction, some of those people said."

Wow, Gavin Belson must be furious.

Jyaif• 6 years ago

Best $5 million ever spent.

disambiguation• 6 years ago

Wow, Gavin Belson must be furious.

life imitating art

rvnx2• 6 years ago

Plot twist: Amazon discovers this topic is actually discussed on HN and asks for the 5 million USD back

xyzzy_plugh2• 6 years ago

The Echo Show was conceived before the first Echo was ever released. I think I even saw a demo in 2014/2015. Source: I worked on the first Echo.

sib• 6 years ago

Agreed. I worked on the first Echo and was one of the participants in the conversations about what became the Echo Show in 2012/2013.

8note2• 6 years ago

FaceTime was released in 2010 says wikipedia, and Siri launched in 2011. How is this concept different from putting your phone down on a table?

kumarvvr• 6 years ago

As a startup, you ought to protect your ip.

Its the job of Amazon to guesstimate your worth.

A billionaire will get away with shit, if they can.

pseudolus• 6 years ago

Chinese Wall = Maginot Line

tekcyb-org• 6 years ago

I bet you Amazon thought of this before that company even formed. That's not an original idea.

jacquesm8• 6 years ago

For the longest time (more than a decade) I ran a small company (< 50 employees) that fielded a video chat service. The whole thing revolved around a minor bug that just happened to be present in all major browsers.

All that time I thought: next week someone else is going to clue in to this, it is so obvious. But nobody ever did.

You can read more about it here:

https://jacquesmattheij.com/the-several-million-dollar-bug/

So I totally believe that the seed for the idea came from somewhere else.

dboreham• 6 years ago

Isn't this more to do with how TCP and the socket interface is implemented (or more accurately its intended semantics) than a bug in browsers? Not draining any inbound data on a new connection prior to sending my request doesn't sound like a bug.

RobRivera• 6 years ago

And this is why when I recant an answer based on docs or rfc, I use the phrase "X should do Y, but I'd have to verify it by hand"

jessaustin5• 6 years ago

At this time, the first link in that story is bad:

https://jacquesmattheij.com/content/story-behind-wwcom-camar...

This seems to work:

https://jacquesmattheij.com/story-behind-wwcom-camaradescom/

k__• 6 years ago

Makes sense.

They look if they should buy or build.

rlewkov• 6 years ago

MSFT well know for this

m3kw9• 6 years ago

The meeting probably went like this. “I want (crazy %) for (low ball $) or we start one ourselves.

rvnx2• 6 years ago

Well, I have been on both side (a company that wants to be acquired, and a large buyer), and yes, that's the discussion you have. It's normal and expected by all parties.

When you want to buy a company it's because you want to launch yourself into that field.

throwaway_aws4• 6 years ago

"An Amazon spokesman said the company doesn’t use confidential information that companies share with it to build competing products"

Maybe...but in the past, AWS proactively looked at traction of products hosted on its platform, built competing products, and then scraped & targeted customer list of those hosted products. In fact, I was on a team in AWS that did exactly that. Why wouldn't their investing arm do the same?

bobbychairs• 6 years ago

Not trying to come across as judgemental. But if I may ask, did you at the time feel like that was an ethical thing to do?

throwaway_aws4• 6 years ago

I joined after the team had gotten traction already. Both the GM and senior most product person on the team told me about their tactics independently.

To be honest, I didn't think of it as anything sinister at that time. AWS had such high octane culture to move fast and innovate that I actually felt what they had done was quite smart. It was a super competitive culture and people did whatever was needed to build new things. On a day to day basis the only pressure was to build... I don't remember instances where ethical guidelines were brought up. So, in a way, the outcomes were a result of what people were rewarded on.

Only after I left AWS I started thinking it was ethically iffy. I still believe Amazon is an amazing company and my time at AWS was one of the best learning experiences.

bald• 6 years ago

confidential information

aka, we did not sign an NDA with the party across the table

Judgmentality• 6 years ago

This doesn't matter if you don't have the millions set aside to defend yourself in court against a giant conglomerate. Giant companies breaking NDAs with scrappy startups is a story I have heard often.

former-aws• 6 years ago

Cannot up vote this enough. During my time both at Retail and AWS it was perfectly normal to trawl production customer data and come up with ideas to launch competing products. Prices were always set lower or free offering justified as data-driven and customer obsession. I hated the gas lighting their customers and left in disgust of the company and its leadership which encourages that behavior.

rckoepke• 6 years ago

What types of AWS data would be trawled? Are we talking about data inside S3 buckets, database schemas, particular architecure styles, the fact that a product is consuming {x, y, z} amounts of cloud resources, or simply "spending $m / year" in gross?

ajross• 6 years ago

I think there's a difference there, though. Retail sales and reselling are parts of what most people broadly consider the "same industry". I mean, a small seller making a deal with Amazon to resell something that they know Amazon could sell on its own is at least always aware of the competition.

In this case, tech investing and online retailing are not the same industry. Amazon is using a dominance in one to fund the other, which then it uses to either drive valuations of potential competitors down or to simply outcompete them.

And that's a plausible antitrust problem.

I'm normally not in the Amazon haters camp. Most of the time I'll defend them against the typical charges of unfair competition. Not this time. This is sketchy.

marta_morena_25• 6 years ago

"perfectly normal to trawl production customer data"

It's not. And there are plenty of trainings inside of Amazon to make you aware of that. It is your fault, in the end, to not report your team. I have been on several teams at Amazon and this would always be an absolute no-go. It's already difficult to even get basic ideas about customer data, things that you would consider "essential" to improving the customer experience.

thoraway10102• 6 years ago

This frankly doesn't match my experience and I have to say I find it unlikely.

Before going into our AWS production S3 buckets, looking at our databases for customer lists AWS seems to be pretty careful to get an OK.

Now we are being told that production customer data was normal to trawl? How in the HELL are they passing all their certs with all production data so wide open. I do customer managed keys - I mean, this is a HUGE backdoor.

Either Amazon is lying about AWS security (and has fooled a bunch of others) or routinely trawling AWS customer production workloads for data is a false statement.

julianeon• 6 years ago

I want to be careful here, as I respect that you worked at AWS (that is, most likely), while I never have, and don't know what goes inside the company.

But it would be helpful if you broke that down a little more than 'trawling customer data', because at the most innocuous, if they're just looking at what's publicly selling on Amazon, what goes into sales rank, that seems acceptable, to me anyway.

httpsterio2• 6 years ago

Considering that OP created this account today and that they're admitting to what would be a felony and against Amazon's own privacy policy, I doubt this statement is true.

Even if the customer had a misconfigured S3 bucket that was exposed to the public, it would still constitute as accessing customer data you're not meant to see.

As other users have provided insight on, everything you do as an Amazon employee basically leaves a trail with your employee ID, even if you had access to private information (which you wouldn't basically because it's locked behind several layers of security). Fireable and sueable offense which Amazon would definitely not allow, let alone endorse.

api• 6 years ago

Stallman was right:

https://www.gnu.org/philosophy/who-does-that-server-really-s...

munk-a2• 6 years ago

I know it's hard to do when you're making good money and would be going against co-workers.

But, if you see something, say something. This crap continues because there are too many folks that are happy to help support immoral business practices for some extra scratch. This isn't all on you in particular but when google folks started raising hell about Chinese censorship the company was forced to move. We all have the power to withdraw consent over how our labour will be used and, as software developers, we've got a strong enough employment market that we have real power to help make companies behave better - power that folks working in the warehouse are absolutely deprived of.

rorykoehler2• 6 years ago

Didn't you anonymously tip off the customer?

daiwaka2• 6 years ago

As I said to throwaway -- if you are of the mind to share, i am here to listen. my email is dai.wakabayashi@nytimes.com

caralombardo2• 6 years ago

Hi former-aws: I'm one of the reporters and would like to hear more about your experience. Mind sending me an email at cara.lombardo@wsj.com so we can connect?

arprocter• 6 years ago

Interesting

Previous discussion of Amazon releasing a Basics version of an item at half the price:

https://news.ycombinator.com/item?id=11533973

ggl_thorwaway• 6 years ago

When I was at Google, we were encouraged by our lawyers not to worry about patents or unique parts of any product. If there ever will be a claim, they will drown the company in legal fees, so nobody is going to dare to sue us.

Patents were used, in many cases, as a form of research into a new area.

former-googler• 6 years ago

Not my google experience. They do say not worrying about patents, but that's because searching for patents could indeed make you liable as you were influenced by prior art.

Nobody at google even remotely mentioned "we will drown them in legal fees".

If anything, I have a huge respect for google legal.

Disclaimer: former googler.

speeder• 6 years ago

That is actually patents working as intended.

Unfortunately the way patent law works now, make patents usually not work unless someone is ignoring the law.

Patents were created to give a reason for people to publish their "secret sauce" in a public manner, so anyone could read and copy them or create new products based on the patent.

If you DON'T want your product copied, the correct course of action instead is make it secret, for example this is what Coca-Cola does (they rarely, if ever, patent their products, and they hide the best they can their recipes and processes)

secondcoming• 6 years ago

Indeed

https://arstechnica.com/tech-policy/2018/06/inventor-says-go...

hn_throwaway_992• 6 years ago

Just ... wow. This is an egregious abuse of monopoly power and is exactly the kind of thing that antitrust laws are supposed to address.

I was certainly naive when I heard about other big retailers who would refuse to allow any subcontractors to use AWS. "Surely Amazon has a Chinese wall" to prevent that kind of data sharing, I thought. Never underestimate the lack of morals in business is the right answer I guess.

TimSchumann4• 6 years ago

"Surely Amazon has a Chinese wall" to prevent that kind of data sharing, I thought. Never underestimate the lack of morals in business is the right answer I guess.

It’s remarkable to me how many competent programmers with years or decades experience in this industry don’t understand —- If you’re using AWS, Amazon has access to ALL of the data you put on AWS.

Not that they 'can' or 'want to', given the current state of technology they absolutely have to have access to all your data for AWS to function.

There isn’t currently a feasible technical way to work around this. And to head off all the ‘but FHE’ comments, see the ‘currently feasible’ above.

jariel3• 6 years ago

Amazon does not access private S3/Ec3 data for retail competitive purposes.

The comments above indicating 'well someone has access' - yea, obviously, it's data hosting. Someone has access.

But the amount of conspiracy here is frustrating.

Amazon will play very aggressively within the bounds of the law, meaning, if they can glean public info about something, or look at their own sales data for a product, they will do that.

But to look at s3 data would risk the entire empire.

It's rational for people to be a bit skeptical, and so Walmart can say 'no data on AWS' but it's also an easy thing to do.

Now - is it possible that new retail PM, who used to be an AWS PM, and who for some reason still had access to things he shouldn't - went ahead and did that? That could happen. And maybe his boss finds out and looks the other way but calls IT and tries to have the loophole closed quietly. Etc.

As a policy are they trying to copy your product and even ask you for information and aggressively pursue customer data? Yes.

As a policy are they looking at your S3/ec2 data - no.

jacquesm8• 6 years ago

Wow. I understand you do this as a throwaway but if true this is very bad stuff and it would be nice to have a lot more substantiation so that it could be verified.

ceedan• 6 years ago

If you're building a competing product and using a monopoly in order to price gouge - nothing is throwaway.

throwaway_aws4• 6 years ago

I wish I could reveal team and product name... but that would be a career suicide. I'm not asking you to believe what I'm saying... but I truly am sharing my experience. I'd encourage you to talk to folks you know from AWS who were there for last 8-10 years.

NicoJuicy2• 6 years ago

And that's why existing businesses joining the cloud pick azure.

atarian• 6 years ago

What makes you think Microsoft would behave differently?

bdefore• 6 years ago

Would Amazon be more, less, or equally liable if you used a cloud provider that then relied upon AWS for its hosting.

How would a startup that was concerned of Amazon copying it be certain to avoid such surveillance other than running its own data center?

gaogao• 6 years ago

There's a House of Reps. hearing on Online Platforms and Market Power next Monday with Bezos attending. If anyone has some staffer friends, could be a good line of questioning to poke them about.

thetinguy• 6 years ago

Please do this. The only way people like Bezos are held accountable are from people speaking up.

cheez• 6 years ago

Funny... I have software that combines well with something that has an online app store. They've been begging me to put my stuff in there. Nothing doing, I seen how you guys have embraced and extinguished others. They just took out their biggest app on the app store with their own version.

divbzero• 6 years ago

This echoes the distrust felt by many Amazon Marketplace sellers that drives them to seek alternatives like Shopify.

ganeshkrishnan2• 6 years ago

Shopify is way way worse than Amazon. If you think Amazon is evil, Shopify is 10 steps ahead.

It's not just my experience. Talking to startups and warehouses in Canada, the stories are all about how Shopify invites for friendly talks and then stonewalls you once they have got the required information

aaronbrethorst• 6 years ago

As it happens, the Congresswoman who represents the part of Seattle that contains Amazon is on the House Judiciary committee, and may also very well be your member of Congress. Seems like something her office would probably want to know about if you could substantiate the claim.

https://www.wsha.org/policy-advocacy/legislative/u-s-congres...

(ignore the odd source of the link. it's the only place I could find her CoS and District Director's email addresses.)

rattray4• 6 years ago

It didn't sound like GP was saying their team did anything illegal – they accessed _public_ information about the companies they were copying.

It definitely feels scummy, but it didn't sound like GP had access to evidence of a crime. IANAL.

KoftaBob• 6 years ago

How is that not a form of corporate espionage?

hodgesrm3• 6 years ago

"An Amazon spokesman said the company doesn’t use confidential information that companies share with it to build competing products"

The above statement may be "true" if you redefine what is confidential. The Amazon MNDA in past years basically said that they could use any information they remembered from the meeting. I read non-disclosures carefully. I've never seen anything like it.

borski2• 6 years ago

This is called a residuals clause, and it’s increasingly common. Be really careful looking for these - I won’t sign a vague/broad one, unless I am out of options. (e.g., acquisition or fail)

akerro• 6 years ago

Amazon does it also with popular independent sellers. I know a motorcycle shop that was selling top quality products. Amazon representative contacted him if he would like to sell on Amazon, showed him offers how to stock and sell items. Amazon started a brand with the same name and their products were higher in search, were poor quality China made, jackets that were falling apart within a year. For the same price! Angry consumers targeted their anger to the real website leaving negative comments, not on Amazon! Shop owner had to change his brand after 18 years of being in business, as legal battle against Amazon would cost him more than the business had in stock.

pier25• 6 years ago

This reminded me of the time Amazon started selling diapers at a loss to price-battle diapers.com. They won and ended up buying the parent company.

https://www.vox.com/2017/3/29/15112314/amazon-shutting-down-...

throwaway_aws4• 6 years ago

A clarification: I'm talking about tactics from 2010-2014. I left in 2015.

Aperocky4• 6 years ago

What I did not find from your post is in what manner are the data accessed. Is it at all publicly available? Is it metadata e.g. usage/billing? or is it production content like S3/lambda code/EC2 storage? It would be very helpful if you can clarify what kind of access it is.

pal_90002• 6 years ago

Just a word of caution regarding the throwaways in this thread. Take them for what they are, anecdotal claims

thoughtstheseus• 6 years ago

This is likely disingenuous. Large corporations like Amazon systematically refuse to sign NDAs with small players, hence none of the info is “confidential”. The rationale is that large companies might have people working on the idea already and they meet so many people/companies it would be restrictive for them to agree to any confidentiality.

jacquesm8• 6 years ago

It is a reasonable expectation that your data is kept confidential. If my hosting provider were to so much as look at my data without my explicit permission I'd sue.

ryanmarsh• 6 years ago

That is straight up some Darth Vader shit.

ctvo• 6 years ago

A single comment from a throwaway account with no evidence but confirms my personal bias that Amazon is evil? I'm fully bought in before I catch myself.

The economic and reputation cost Amazon would take in ever accessing customer data to come up with some competing B-list product (say ElasticSearch as a managed service) is astronomical compared to potential profits. One thing I know about that company... they care about optimizing profit and are long term focused.

Please provide evidence for your extraordinary claim.

wolco2• 6 years ago

Whenever anyone asks for evidence I start to wonder why they need the proof. Why did you need this link? Do you have a business relationship with Amazon?

https://www.google.com/amp/s/www.wsj.com/amp/articles/amazon...

ekianjo2• 6 years ago

AWS proactively looked at traction of products hosted on its platform

How is that confidential information if it's hosted on their own servers?

lmeyerov• 6 years ago

I was on a business call with someone from AWS on a different topic, and it was pretty darn clear they opened up some sort of Account page that discussed our (limited) AWS usage, and were trying to infer a bunch about our business from that. It doesn't even really matter how deep that data goes - even just month-over-month billing #'s or something like compute/bandwidth consumption is super telling.

We mostly only do CI type stuff there, so that didn't work so well for them, but if most of our revenue & operational use was through AWS, you bet I'd be worried about what they could infer.

ashtonkem• 6 years ago

Amazon and arguably google are in desperate need of a good anti-trust investigation.

QuinnyPig2• 6 years ago

I’ve heard credible rumors of AWS teams using customer billing data to unpack what they’re doing in their accounts to inform competitive products.

daiwaka2• 6 years ago

if you are ever of the mind to share, i am of the mind to listen. my email is dai.wakabayashi@nytimes.com

ganeshkrishnan2• 6 years ago

Do you want to write an opinion piece on Shopify? I can get some minds to share

caralombardo2• 6 years ago

Hi throwaway_aws: I'm one of the reporters and would like to hear more about your experience. Mind sending me an email at cara.lombardo@wsj.com so we can connect?

toyg2• 6 years ago

Silicon Valley is clearly not a comedy: https://youtu.be/JlwwVuSUUfc

newyankee• 6 years ago

I wonder if founders are as petty as Gavin Belson

rurp• 6 years ago

I would imagine it's common. There was an article on here not too long ago about how the entire Amazon HQ2 fiasco came about because Bezos was jealous that Elon Musk was getting more govt subsidies than him. If one of the most successful people in the world can be so focused on petty grudges, I imagine there are plenty of others doing the same.

samfisher83• 6 years ago

You should listen to Michael Jordans hall of speech to see how pretty he was. He is considered the greatest basketball player in the world and he spend the whole speech belittling people.

ngngngng• 6 years ago

It's like when somebody says they want to go birding with you, but really they just want to get you alone in the woods so they can take your binoculars.

Apocryphon2• 6 years ago

Just what did happen to Yelp?

vikramkr• 6 years ago

So this didnt come across in the title - but the first company they use as an example is one Amazon actually did invest in? And that was four years before the "competing" product (which is literally just providing data for AI training as far as I can tell)? I'm not sure what I'm missing, but that reads like if coke invested in an energy drink brand and four years later launched another energy drink brand. It's basically a commodity and it's 4 years after the fact- what's so controversial here?

xwdv• 6 years ago

Not as sinister as it seems. You could also not be approached for investment, launch your product, then get killed by a competing product from a big company, all the same.

x86_64Ubuntu• 6 years ago

It's different when the companies are being baited with investments to spill their secrets and visions to you, and then you take the idea and throw your infinite power behind it without them.

dcow2• 6 years ago

But you would hypothetically be accounting for that outcome in your strategy. If I'm understanding the commentary correctly, Amazon would regularly invest in companies in order to gain access to their data and technology while another team used the info to undercut and kill their product. You don’t generally assume your investment partner is actively planning your demise by pretending to support you while siphoning off your life blood.

I agree though that it’s not as sinister as it initially seems. Companies create competition at times to stimulate product development even though it’s a shitty operating mode for the ground soldiers involved. In that case though they’re spending entirely of their own resources and not leeching off other investments to actively undermine a successful exit.

Perhaps startups are undervaluing their IP if this behavior is able to manifest easily. And in light of this news I’d be super hesitant as a board to allow any money from Amazon whatsoever.

Zhenya• 6 years ago

http://archive.is/ps8xv

lloyddobbler• 6 years ago

History repeats itself. This is straight out of Microsoft's playbook from back in the day.

ChrisMarshallNY• 6 years ago

Yup. Here's something that was written in the 1990s.

http://www.microbizz.nl/foodforwindows.htm

mathattack• 6 years ago

Wasn’t this whole behavior spoofed in Silicon Valley?

seizethecheese5• 6 years ago

Amazon announced a copycat of us pretty quickly after we went through YC. I suspect it’s not some sinister top-down thing (unless they are actually reading all YC company descriptions). Most likely, the copycats are ambitious, unoriginal PMs pitching some budget.

We facilitate subscriptions using a smart scale, and it works way better than a Dash button (Bottomless.com, YC W19). I’m actually surprised they haven’t launched yet and are taking so long.

It’s pretty wild, the hardware on their launch page is exactly like ours, only they're so slow that it’s a copy of two versions ago and hasn’t even hit the market.

2sk21• 6 years ago

Indeed, as a startup you do typically have a speed advantage!

seizethecheese5• 6 years ago

Hardware is hard for startups though.

pyrrhotech• 6 years ago

There's nothing sinister about a copycat. It just feels that way selfishly for the original creator. Capitalism works best in the long run with near perfect competition, copy cats are great for everyone except the first guy with the idea.

RhodesianHunter• 6 years ago

Capitalism works best in the long run with near perfect competition

Unfortunately someone like Amazon using their size and market power to produce copycats is the opposite of perfect competition since they can operate at a loss or at cost and starve out any newcomers.

pyrrh0tech• 6 years ago

Hey it's me pyrrhotech, and upon some additional reflection decided that I was wrong and maybe there are some issues with copycats. Just wasn't thinking straight before.

throwaway-cdo• 6 years ago

Throwaway to avoid being ID'd.

I was on the team that was peripherally involved in building the Amazon Dash collection of products. The scale idea has been floating around within the company since 2015/2016. It takes long to do this at scale and a cost-effective point.

There were also other similar products that were scrapped because there was no way we could sell them at a reasonable price.

seizethecheese5• 6 years ago

Interesting! The scale concept is obvious so I thought the timing of actually moving forward with it somewhat suspect. Fascinating intel.

matthewmcg• 6 years ago

Try saying this one three times fast: Smart Sally in Sales scales sales from a smart scale.

mrandish3• 6 years ago

"The scale idea has been floating around within the company since 2015/2016."

So much this.

As a former startup founder now acquired into a Top 10 valley tech company, few people understand just how many nascent projects, features and ideas a huge, successful tech company has in development. At least for our active product domains, I never saw a feature from a competitive product that we didn't already have on a list and usually in development somewhere.

When I first started, I would sometimes see a "neato" new feature publicly demoed in some competing product and bring it to the relevant PM's attention, only to be sent back a two-year-old internal video of a similar feature already working and either queued for shipping, dropped in market testing due to weak response or deferred to the "next version" queue due to resource prioritization.

mritchie712• 6 years ago

what launch page, this?

https://www.amazon.com/b?ie=UTF8&node=20657644011

It might not be hitting market due to lack of interest. The way I "solve" this today is to just send myself an email when I think I need to order something, then order it next time I check my email... works pretty good.

relaxing2• 6 years ago

Of course they’re reading the new startup descriptions. That’s the sort of market research due diligence that’s expected of any PM.

They fly in startups for presentations to get a glimpse into their inner workings, you think they aren’t taking the time to read about what everyone’s doing first?

seizethecheese5• 6 years ago

Well, no I didn’t think they were doing that much research on startups. Do you know this from experience?

billmalarky• 6 years ago

Neat idea. I had the same thoughts a while back around a toilet paper tower/holder ("never run out of TP again"). It's a fun concept.

seizethecheese5• 6 years ago

Thanks! Yeah, we thought about doing TP first with a smart roll holder. Coffee is a better e-commerce product. We will do TP eventually!

fsociety• 6 years ago

Amazon met with an unnamed startup I worked for to do this, luckily our investors warned us before the meeting.

xyzzy_plugh2• 6 years ago

I think what is missing here is an insider's perspective.

The volume of concepts that are being actively worked on, let alone conceived, is pretty incredible. I've been in Amazon meetings with startups before/during talks of investing. Usually it goes something like this:

There are multiple principle engineers involved. There are multiple engineers from potentially related projects involved. Most of the decision making boils down to: - the obvious: would this investment likely be profitable? - does investing/acquiring this company enable us to ship sooner/gain a competitive advantage?

Often times Amazon prefers to acquire companies not directly operating in the space Amazon needs them to, and then steering them to do what Amazon needs. Often times it's just talent acquisition.

For all we know, Amazon already had competing products in the works (and let's be real, given how slowly Amazon moves, this is the most likely scenario) and decided that this investment wouldn't be worth it.

dcow2• 6 years ago

If I’m reading commentary correctly, Amazon would invest in other companies using its Alexa fund in order to gain access to their data and then actively operate in a way that undermines the success of the company. Sounds like they’re essentially enjoying most of the benefits of purchasing a company but for a fraction of the price. Rather than spend their own capital to do the hard legwork of building and validating a product idea, they’re effectively spending others’ and then swooping in for the bait and switch kill.

If I were a founder or board member I’d be super skeptical about ever taking money from Amazon in light of this news.

If this isn’t illegal it at least seems wildly unethical. If it’s neither of those and considered an acceptable tactic, then perhaps companies are generally undervaluing themselves otherwise it wouldn't be financially feasible?

kirillzubovsky• 6 years ago

Let’s be honest tho, what did they expect? In this case, Amazon gave them funding and a 4-year head start. The point of Alexa fund was to use Amazon money, and Alexa as a launch vehicle, to grow a product. Obviously Amazon had to gain something back.

neonate• 6 years ago

https://archive.is/ps8xv

snird• 6 years ago

Am I the only one who thinks this is to be expected?

Stealing good ideas is literally amazon biggest strategy in retail. They monitor best selling products, then launch their own brand and crash the competition.

Why anyone expected them to change strategy with business ideas? This strategy served them well.

klyrs• 6 years ago

If nothing else, it doesn't come as a surprise because amazon consistently operates in an anticompetitive nature. I see this as building public understanding of why amazon should be broken up.

ApicalDendrite2• 6 years ago

I worked on the Echo Show team. The product had been in development for over a year when we invested in Nucleus. I remember thinking it was very strange that Amazon was investing in that company when we were building such a similar product internally.

rattray4• 6 years ago

Thanks, that's a really helpful perspective.

I've definitely seen the same thing happen – an org that isn't sure it can build function X well might invest in a startup building X just in case.

Of course, they may or may not take advantage of that situation by misusing confidential information.

Either way the startup could lose (or just not have much negotiating power).

So yeah, sounds like this may not be a case of AMZN misbehaving. But I'm still not sure I'd want to talk to them if I were a startup, at least until I know they really need us and are willing to pay a lot.

ApicalDendrite2• 6 years ago

Nothing I saw indicated that the Echo Show was in any way influenced by Nucleus.

I suspect, but don't know directly, that this investment was more about trying to jumpstart an ecosystem of third-party Echo devices rather than hedging bets.

cik• 6 years ago

Why are people surprised by this? There was a period of time in the VC world (~2001) where this was di-rigeur. You were caught between a rock and a hard place, as pitching literally meant potentially enabling a competitor.

chevman• 6 years ago

Yes, this is often times how business operates.

Guess what, we meet with potential competitors in our market and sometimes even contract with them to provide services on our behalf, and use that to gauge the market and current solutions!

gentleman11• 6 years ago

Standard advice to to not keep your startup secret but to talk about openly to as many people as possible. Eg, quotes about how only 1/1000 startups die to competition, and the rest self destruct or fail to get traction.

Is that still the case?

kristopolous• 6 years ago

this is more than that.

I've seen people try to play this game. They'll pretend they want to buy you/partnership/invest/be a client and then ask pointed questions: "What dependencies are you using on your backend for XYZ ... have you found any issues with that? If you were going to rewrite it, how would you approach it?"

In the weeds questions about detailed implementation. "Do you have a detailed architecture diagram?" etc. People who haven't seen it are like "boy they are serious. Look at their diligence"

These people need to up their street smarts game: "Nah bro, they're just stealing shit."

How do you know? Check who's in the room/on the call. Ask yourself what kind of decisions these people would make. Find out who they are.

Amazon has been actually pretty light with this practice. They're pretty picky but the right people have been in the room and they haven't really gone deep into the spy questions. The real nasty violators are companies like uber and microsoft. I wouldn't be surprised if they had actual corporate spy departments.

We had GM try to do it but they were bumblers. It was kinda cute. It also seems to be mostly American. I've dealt with a lot of Japanese and Chinese businesses and they were all genuine. If they said they wanted a partnership for reason X, then they indeed want a partnership for reason X.

If they want to steal the tech and go to other markets then there's clear nonexclusive and rights parts of the contract. It's not the "100% lies all the way down" of Uber.

ivalm• 6 years ago

This is a bit complicated. I’m not in Amazon but work for a (very large) org. Often we will have some product in mind and approach/maybe even partner with a vendor while at the same time having an internal effort. Occasionally we go with an internally developed solution, sometimes we go with vendor solution. I am sure some vendors feel bad that suddenly they are forced out by a “similar” internal product. However, in every case I’ve been involved it wasn’t sinister. There was a business need and the company actively invested into multiple parallel solutions, eventually an internal solution won after we used a vendor solution for some years(but sometimes it is the vendor that wins!).

rattray4• 6 years ago

Yeah, I haven't read the article (paywall) but from the first paragraph or two it sounded like AWS invested in the company and launched a competitor 4 years later.

To me, that sounds like the startup just wasn't able to perform well enough to beat an AWS-built solution, in the eyes of an executive.

Of course, if I were doing a startup that played in AWS's space, I'd view them as a pretty formidable competitor and I wouldn't expect to get a great deal from an investment or acquisition from them, since unless I have a really special sauce they can probably build whatever we've done and sell it better.

It's shitty, IMO, and probably drives startups away from a field in which they could sell to AMZN – since they know they won't get an awesome deal. Probably reduces innovation in the field overall.

darawk• 6 years ago

Isn't this just what you would expect a company of this size to do?

"We want to launch a product in category X"

"Ok, should we roll it ourselves, or buy something?"

"Well, let's interview a few companies, see if there's any we like, and if not, we'll make it ourselves"

jconley• 6 years ago

Yeah, given the resources, I'd want to pursue all the possibilities in a promising product/market in parallel. They may have even had working prototypes for some time or even be near launch and they are just feeling out whether the startup would be competitive and/or complementary. Doubt it's anything evil. Just sounds like business minded people at work.

bernardom• 6 years ago

I don't understand how anyone is shocked by this.

amitport• 6 years ago

you forgot that big companies also have option C:

A) copy; B) buy; C) sue

you're always violating some patents by IBM and the like, sometimes they don't want to compete with a product only to get you off the table... and sometimes they can do that easily

Oh, and there is the enterprise variation (option D?): talk with the costumers and demand that they stop working with the competition

anewguy9000• 6 years ago

um, duh? it happens everywhere all the time are you kidding? hey did you know google can read your email lol

idoh• 6 years ago

"Earth's most customer-centric company"

mahastore• 6 years ago

Microsoft is famous for always doing a "better" copy than their competitors. :D They always come second but then start to overtake.

sdinsn• 6 years ago

Why would anyone with a brain hand over proprietary information?

dimgl• 6 years ago

I worked for a gaming startup that had Amazon do this to them. Pretty scummy.

code4tee• 6 years ago

There’s a big difference between stealing actual IP and executing on someone else’s idea (even if the idea was “stolen”).

The sour grapes here seem to be coming from those who thought they “owned” having an idea but failed to fully execute on it. The winner is the one who actually does it.

wintorez• 6 years ago

https://www.youtube.com/watch?v=i6QvIrruZjw

blackswan101• 6 years ago

I'm surprised they haven't been hit by antitrust laws yet.

aws_pmthrowaway• 6 years ago

I was a senior manager on the very first product the article talks about. I was closely involved in designing the service and presenting it to Amazon senior leadership. WSJ quotes the CEO of a startup called DefinedCrowd as accusing us of stealing their ideas from a meeting 4 years earlier.

What a bunch of conceit. I don't remember our team discussing DefinedCrowd even once. We focused on the many other more interesting players that are doing the same thing, and researching them by trying out their service etc. like anyone normally would.

I'm sure someone talked with DefinedCrowd 4 years before that. Amazon, like all other tech companies, routinely has NDA conversations with startups that never go anywhere.

I can't speak to the rest of the article, but the very first example is totally false. WSJ is looking for an angle, and this startup is probably looking for a way to blame Amazon for their own execution problems.

fizx• 6 years ago

Four years in the AI space is like two lifetimes.

devindotcom• 6 years ago

DefinedCrowd is pretty successful actually, just so you know this isn't sour grapes. And it isn't about a meeting 4 years ago, the very first line of the article says that Amazon was an investor (at seed stage, probably a few hundred K).

So the problem isn't that someone heard about DefinedCrowd and decided years later to make something like it. Amazon made a significant investment in an early player in this space, and then started building a direct competitor while still presumably having both access and influence over that company. Doesn't seem responsible or ethical to me.

stepstop2• 6 years ago

This comment chain appears to answer you: https://news.ycombinator.com/item?id=23930812

b200002• 6 years ago

you mean NDAs that basically state that whatever you tell amazon belongs to amazon?

AndrewKemendo• 6 years ago

There's no way to really know how true this is but it certainly feels true if you're on the startup side - however most startups just aren't being realistic with themselves, and thinking they are special.

For example, my previous company brought our 6DOF MonoSLAM SDK, 3D model processor and OpenGL viewer to Amazon from 2014-2017 pitching the "AR View" functionality that they eventually put in 2017 [1].

Was that a result of us coming and pitching it? Probably not because that use case and stack wasn't a novel concept even back to 2010. So the concept and stack was certainly there for them to do on their own.

What we DID provide to Amazon however was a significant data point (based on our user velocity/interaction metrics and the rate of increase of 3D model generation from retailers) about whether the market was ready for that feature - and so they said ok it's probably time to do this. It just so happened that the cost of implementing it crashed to basically "trivial" in 2017 with the introduction of ARKit and so it was a no-brainer for them to roll out for a few years.

What's the takeaway? These big companies aren't dumb, your idea isn't that novel and they probably have the team and technology to do it better than you for cheaper.

[1] https://www.theverge.com/2017/11/1/16590160/amazon-furniture...

guessbest• 6 years ago

Why even pitch the idea to big companies then? Seems like a no brainer to just avoid discussing technology with anyone on the M&A team of any large company with an development team, unless you went to the same college as their executive staff.

IshKebab• 6 years ago

To try and sell it to them.

twic• 6 years ago

Because that's where the money is.

VRay• 6 years ago

I dunno if they can necessarily do a better or cheaper job. A lot of the engineers at these megacorps are super burned out 9-to-5ers who don't particularly care about what they're doing, since it won't have that big an impact on their lives one way or the other if it succeeds. ("Woo, 20% bonus this year" vs "Team's being reorged, gotta hit up leetcode and find another corporate job")

mkagenius• 6 years ago

These big companies aren't dumb, your idea isn't that novel and they probably have the team and technology to do it better than you for cheaper.

This is only partially true. The thing is that even if your idea _is_ novel, giants like AWS can launch a similar product after seeing yours and thats a problem, imo.

riazrizvi2• 6 years ago

Almost every established VC is a potential competitor as much as a potential backer, because they already have backed ventures in/near your market, you won't get approached by one without expertise in your market. Any of their other backed ventures might be mulling over a new strategic goal and doing indirect research on you via their sponsors. Before you say NDA, it's practically unenforceable, you can't stop a VC chatting about what they've seen in confidence to a trusted friend, the bar to prosecute breach is far too high.

You can't stop someone seeing what you offer, and it's hard to prevent competitors from seeing how successful you are, especially giving the lack of privacy in consumer space. In this article, we don't know if Amazon used any IP, we are told they just copied the offering, which anyone is free to try.

I bet the problem with DefinedCrowd is not so much they revealed too much, rather they revealed too little. How so? The VC dance is really about demonstrating to the uncertain backer-competitor that you are so good, it's not worth competing. That's a main point to inviting outside parties in. I imagine these guys were just so weak, they made competition more appealing that partnership.

relaxing2• 6 years ago

No startup is so good they can’t get steamrolled by a company with Amazon’s resources.

riazrizvi2• 6 years ago

The decision isn't made by a trillion dollar 'Amazon'. It's made by a person inside Amazon with a limited budget, whose ROI is critical to their personal financial success. At the end of the day, the decision to compete will be an ROI question, Is it better/cheap enough to roll-my-own, or is it has this outfit done a good enough job that it is better to partner? Outstanding people are a precious commodity, so if the startup is really good, why wouldn't you partner with them? And if mediocre when you are really good, why would you?

iJohnDoe• 6 years ago

Google has done this and worse. Some of you may remember this one.

https://news.ycombinator.com/item?id=18566929

jcz_nz2• 6 years ago

This. There are other instances too. Short story is that you need to be extremely careful talking to G/A/F/M

uses• 6 years ago

It's weird how questions of "is what we're doing, wrong?" can be so easily and inevitably obliterated by the profit motive.

kartayyar• 6 years ago

You as as a startup should be fully aware that a big player can enter the space at any time they want. This is not Amazon's problem. It's your problem.

Also, it's a flawed abstraction to view large companies as a monolith: the investing arms are usually very separated from product teams.

TLDR: If a large company wants to enter a space, that's their choice. Accept this as a fact of life if you want to go work on a startup.

kerng3• 6 years ago

As a startup, if a company is serious in investing or buying they will make an offer.

It's a common mistake to be lured into talks that drag out for weeks and months.

If they are serious it will start with an offer.

jonplackett4• 6 years ago

Not from Amazon but this happened to me when I had an app in the top 10 of the AppStore. This a-hole from Silicon Valley flew over to London, asked me loads of stuff, saying he wanted to buy it, offering large amounts of cash and then just launched his own version and some copies of other things I’d made. I’m still not sure if it was his plan all along or not - He did try and recruit me to his company at one point but when I refused, his parting words were “if someone offers you a seat on a spaceship, don’t ask which seat”. Really glad I didn’t take that seat.

gt2• 6 years ago

Can you link your app? Or his?

jonplackett4• 6 years ago

My app: https://apps.apple.com/gb/app/face-juggler-plus/id482482373

I believe it was the very first (much copied) automatic face swap app

A-hole’s app: https://apps.apple.com/gb/app/face-swap/id555094868

Bit of background to making the app in this interview if anyone’s interested: https://www.indiehackers.com/interview/face-juggler-6f79cf6f...

pylua• 6 years ago

Seems like copycats are not allowed as per iOS store policy ?

jonplackett4• 6 years ago

If that is the case I don’t think it’s policed at all. You can’t copyright or patent an idea so people just do what they want - at least when you’re an indie developer.

curious_fella1• 6 years ago

his parting words were “if someone offers you a seat on a spaceship, don’t ask which seat”

Lol what a jackass

jonplackett4• 6 years ago

It was good because it made me 100% sure I’d done the right thing.

all_blue_chucks• 6 years ago

This just sounds like a failed acqui-hire to me.

MangoCoffee• 6 years ago

we need a pure-play cloud provider like TSMC.

No one should trust the big three. (AWS, GCP, Azure)

p0rkbelly2• 6 years ago

I think that was supposed to be OpenStack. It failed.

mrandish3• 6 years ago

I'm a serial tech startup founder who has seen all sides of this up close. I've had startups I founded or co-founded IPO, be acquired by a Top 10 valley tech giant, acquire smaller startups, and (of course) go bust. I've self-funded, VC funded, angel funded and had corporate investors. In the acquisition, I ended up working for the Top 10 valley tech company for over a decade reporting directly to a key C-Suite exec and was deeply involved in company strategy, multi-billion dollar M&A, partnerships and investments.

In all that time I never saw any hint of anything even remotely unethical involving investments or M&A at my acquirer/employer. The company always played strictly by the rules, sometimes to an almost excessive degree (avoiding even the possible appearance of impropriety). This was both innately cultural, constantly preached from the BOD to CEO on down, as well as tactical since the reputational cost of negative perception was simply considered too high. Word gets around the valley fast. The invisible cost of the potential partner or startup that chooses to pass on meeting with us due to reputation could be very high.

That said, we would negotiate hard and do our due diligence, gathering public information in every legit way possible as we evaluated potential markets, product areas, acquisitions, partnerships and investments. Tons of startups were always contacting us to meet regarding investment, licensing, partnership, etc. So many that we'd actually meet with far less than 1 in 10, and even we'd usually just send a junior staffer to the mtg for a "first pass".

Those first mtgs were almost always set up as NNPI (No Non-Public Info). We'd actually have the startup sign a doc in advance stating that they wouldn't share anything with us that wasn't already public info. This was then re-iterated at the beginning of the mtg. Afterward the junior staffer would then circulate a brief memo on the mtg outlining if there were any areas of interest and recommending whether there should be any follow-up with actual business unit or tech people with domain expertise. Most such mtgs had no follow-up. In the cases where there was follow-up, before mtg again we'd internally specify what our possible interests were (acquisition, investment, partnership, etc) and if acquisition or investment we'd have at least a first-pass thesis on what our interest was, usually at the level of "interesting tech", "good talent", "cool product - might slot into XYZ product line."

Back when I was a fledgling startup founder on the other side of all this, it was sort of mysterious and I remember my first mtgs with Big Cos (including Google, Apple, Intel, Microsoft, etc). It was all very exciting until I realized that most of these 'first sniff' mtgs are with junior people and never go anywhere.

Even if my acquirer/employer was unique in being highly ethical, the reality is that any startup founder who isn't intensely aware of the risk of Big Co becoming a competitor is incredibly naive. If senior Big Co execs are taking time to meet with you (vs junior Big Co staffers), it's because they are interested in something. As a founder, your job is to figure out what why they are interested. Sometimes they are just making small investments to foster an ecosystem their primary business relies on. Or they might be interested in acqui-hiring your startup. Or they might be looking at moving into the emerging market you're in and doing a Build vs Buy analysis or even considering a roll-up of smaller firms. Or they might be looking at buying one of your competitors and doing market due diligence. As a Big Co exec, I'd usually just tell a startup founder point-blank what my interest was, as it tends to save everyone time.

Often the startup founders I'd talk to as a BigCo exec were actually too guarded, to the extent they'd hesitate to even informally have a 'get acquainted' drink at a conference or trade show. It's good to be cautious but at the same time, many of my most lucrative exits and deals began with such meetings. As a founder, I also often learned invaluable info from Big Co people at such informal mtgs. After all, Big Co folks tend to hear all the industry scuttle-butt and they actually subscribe to ALL those $10k market data reports us startup guys could never afford.

Bottom line: when engaging with Big Cos, ask good questions, rationally evaluate the benefits vs risks, plan for the worst and hope for the best.

jcz_nz2• 6 years ago

Your particular experience does not mirror that of others.

The risk here isn't Big Co Exec. It's the aspiring PM who wants to make a name for themselves at the Big Co.

NDA's aren't worth the paper they are printed on; when it comes to that, you'll just discover that Big Co has retainers in place with all the law firms you'd want to work with.

mrandish3• 6 years ago

Sure, that's why I said "Plan for the worst, hope for the best". It's always possible, even if mtg with an ethical company, the junior person you're meeting with that day could be a new-hire who's an idiot and tries to get actionable information.

NDAs aren't deterrents. At the same time, any secret that can be casually conveyed in a mtg, typically isn't all that valuable. If you have a strategic investor as an outside board member, a smart founder will ensure nothing disclosed in a board mtg or board materials is specific enough to be competitively actionable. If you do it correctly, they shouldn't gain any non-public info more specific than broad sales growth, and there are a lot of completely legal ways for interested Big Co competitors to get good intel on sales growth which are much cheaper and easier than investing.

That's why we generally passed on even evaluating most startup investments. They just weren't worth the time to manage plus if we really planned to be active in that space the legal exposure would require a formal "Chinese Wall" between our investment and our business unit, usually managed and audited by an outside law firm. If we were truly interested in the space, I'd always argue we should just acquire the startup now, buy one of their competitors or tilt up our own 'build it' version.

mytailorisrich• 6 years ago

This is business tactic 101.

Yes, they were definitely naive if they shared confidential data easily.

PaulHoule• 6 years ago

You could replace Amazon with Kodak or Open Text or 100 other names and hear the same story. It happens to customers and suppliers.

holidayacct• 6 years ago

It's entirely possible they launched competing products because they know something everyone else doesn't. Did anyone bother to investigate why they didn't acquire these companies?

I've worked at several startups and you'll be surprised at why some corporations don't purchase a startup.

Some of them have awful cultures of psychological abuse, you walk in the door and you know something isn't right because the founder(s) have a cult-like environment that includes abusing his/her employees to the point where they are all afraid to say anything.

Some startups have founders and employees that are lying about everything and when you actually dig into their source code and infrastructure they aren't doing anything they say they are doing.

Some of them have the worst infrastructure imaginable and/or they have such poor software engineering practices that they will never be able to scale to meet the kind of demand a company like amazon has.

Just because they have a good idea and a company doesn't mean they have an implementation that is worth investing in.

TheMagicHorsey• 6 years ago

If your business is so fragile that all anybody needs to do to out compete you is the description of your business idea, then I'd say you don't really have a business that is long for this world. If not Amazon, someone else is going to clone and eat you from San Francisco, Seattle, Hyderabad, or Shanghai.

Ideas don't really mean much if you don't have excellent, industry leading execution.

dastx• 6 years ago

Have a colleague who said the same. They had come in for reasons I can't remember, and shortly after launched a product that worked strangely similar to their offering. People got laid off, including my colleague, not long after that.

novalis78• 6 years ago

Good friend of mine said his company invented the book preview and had tons of publisher relationships due to their service for public libraries and preview snippets. They sat in a meeting with Amazon executives early 2000s - allegedly similar story. They were first offered a partnership then Amazon canceled all talks after getting a good grip on the business and launched their version shortly thereafter.

joewrong• 6 years ago

reminds me of this entertaining article https://thehardtimes.net/culture/jeff-bezos-announces-plan-j...

ryanSrich• 6 years ago

Yeah Amazon does this every year, it’s called AWS Re:Invent.

skela224• 6 years ago

Wpqcs

annoyingnoob• 6 years ago

I worked at a startup that made a VoIP product in the early 2000s. Microsoft was interested but declined after a technical review. Later they bought Skype instead. No hard feelings. But giving up too much technical detail was definitely a concern for us.

xyst• 6 years ago

Isn't this what Google did with Yelp? IIRC, google was in talks with yelp to buy them out. They either pulled out or lowballed them. Then a few months later they launched "Google Places"

At the time, this was referred to as a "brainfuck" of smaller companies for their IP.

beervirus• 6 years ago

People in here like to shit on the patent system... but this is what it’s designed to protect against.

TenJack• 6 years ago

I wonder how this will hurt general product innovation in the long wrong? Seems like it could have a trickle down effect of diminishing companies money for research and development to come up with new products that benefit consumers.

balls187• 6 years ago

This is like 1/2 the RFP world.

RFP, then build in-house.

I mean, I'm betting Facebook's "Small Business Grant" program is going to harvest that data and put it to use too.

As a startup, if your only defensibility is that you had a head start in product development, that's not much of a moat.

systematical• 6 years ago

I know this is not constructive, but they really are a horrible company and people should avoid using them whenever possible.

howon92• 6 years ago

Startups shouldn't be working on things that they can't do better than the big companies

rorykoehler2• 6 years ago

Rocket Internet in Germany do that too. They gas lit us about wanting to invest and then launched a competing product. I wasn't surprised.

sleepyhead00• 6 years ago

While I cannot comment on a startup's or Amazon's perspective on this matter, I had interactions with Amazon employees that was in fact deceptive.

Short story: Amazon representative tried to trick influencer into sending their traffic without compensation.

Long story:

At the time, I commercially represented an influencer (largest in a mainstream niche with an active targeted fanbase) who had been approached by Amazon to sell access to our online course on Amazon (as in: let customers buy a coupon code for our content platform). The paperwork we received to sign did not reflect the terms we had negotiated. It included some kind of fees etc. that had never been mentioned, basically shifting percentage in favour of Amazon using fine-print. This felt dishonest.

We decided to do it anyway due to their promises of considerable sales for our program including projections. Then the representative showed us a listing of a direct competitor and told us the number of sales this competitor was able to generate. While it's nice to be on the receiving end of such information, it's unethical. Who knows how truthful the numbers were anyway.

But then the week of deals started and nothing happened. No sales.

This could have had many causes but instead of revisiting the offer or the listing or just say "bad luck", the representative kept insisting that the influencer send their traffic to Amazon which is usually a business transaction but that wasn't part of the deal. They kept insisting anyway, even a second representative.

I'm not keen on doing business with Amazon after that encounter.

zanethomas• 6 years ago

Why is anyone surprised? Microsoft was doing this in the 80s.

catsarebetter• 6 years ago

Weren't they doing this a decade ago too? Might be mistaking it for another company...

edem• 6 years ago

The article is behind a paywall, is there a TL;DR?

apexalpha• 6 years ago

I think I've seen this on the show Silicon Valley. Braindrain they called it I think. So it can't be that uncommon...

PovilasID• 6 years ago

VCs will often meet with startups to get market analysis done for them. Maybe it's not the primary motivation of a meeting but information has to be presented to make the case for the business, so it gets recorded and used anyway. It can be used to look for alternative investment targets. Pitches have inherent risks to them, that have to be taken into consideration.

Also I get that Amazon has much more resources but if they there able to copy it after one meeting... Was your project really that valuable? And would not be copied then you launched?

arvindhmani• 6 years ago

Isn't this exactly what Amazon does with AmazonBasics?

Amazon met with startups about investing, then launched competing products

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