Who’s afraid of Jeff Bezos?

http://blog.samgerstenzang.com/post/56847377794/whos-afraid-of-jeff-bezos

by ddfisher • 13 years ago

87 81 13 years ago

blog.samgerstenzang.com

forkandwait4• 13 years ago

Reinvest in infrastructure and put quality ahead of everything, including dividends and share price? Wow, what a concept...

wellboy• 13 years ago

Well nobody else is doing it apparently. Everybody gets seduced to pursue vanity metrics once they go big, that's the art in it.

eruditely• 13 years ago

well i guess we'll never impress you

chatman2• 13 years ago

Surprisingly, no mention of Washington Post. That keeps him firmly up there in the zone of evil.

Congratulations, sir

The tone seems like that of a Bozo fanboy.

dboat2• 13 years ago

I agree about the tone. The information makes a nice enough point, but the tone is a bit much.

Edit: Also, is it normal for a post to get so many of its comments deleted? I thought we collectively moderated through scorn and disapproval, some of those comments were interesting.

akulbe• 13 years ago

What makes his buying WaPo evil? Seriously. At all. Anything?

mynameishere• 13 years ago

There's nothing particularly evil about Bezos buying the WP, but it's another step in my long-held belief that all of the major traditional news organs will be controlled by people who make their money elsewhere.

samg• 13 years ago

Please read the post with a heavy dose of sarcasm mixed with admiration :) I'd very much like to see formidable challengers arise.

And I actually wrote this post a week before Bezos bought the WaPo, although I think it only underscores the point.

chatman2• 13 years ago

Before you write anything again on Bozo or Amazon, please read http://stallman.org/amazon. If you have already read it, fine.

beautybasics• 13 years ago

Larry-Sergey

& Google is far more feature proof company

Amazon

- Solves easy problems at large scale

Google

- Solves complex problems at large scale

forkandwait4• 13 years ago

Google -- solved a single very important problem really well by applying a well known tool (SVD and graph networks) to a novel example, also made android, otherwise not very exciting.

Furthermore, brick and mortar problems are hard -- things break, rot, get lost, require staff to move them around, etc. Not to poo-poo Google or any other pure software company, but it isn't harder because its on a computer, it's actually easier.

gbog• 13 years ago

not very exciting

So you are "unexcited" by Glass, Loons, Earth/map/streetview, Go, etc.?

enraged_camel• 13 years ago

also made android

This is a common misconception. Google didn't "make" Android. They acquired it by purchasing Android, Inc.

meric• 13 years ago

Steel producers - Simple manufacturing at large scale

Car producers - Complex manufacturing at large scale

I wouldn't say one is necessarily better than the other.

runako• 13 years ago

I'm not sure it's that easy.

Logistics is an easy problem? AWS is an easy problem? Overturning the publishing industry is an easy problem?

Put another way: Google has one product (search) that makes them money. Amazon has several.

DSingularity• 13 years ago

You kidding right? I hardly think Amazon Prime 2 day shipping an easy problem at scale. Fortune 500 companies outsource this kind of problem to companies like IBM, and they deal with it on smaller scales.

This is not an easy problem to solve while being profitable. And they are working on introducing perishables into the problem statement. Hardly easy.

saosebastiao2• 13 years ago

    Solves easy problems at large scale

I would love to see you in an Amazon interview. 80% of the interviewed melt down in the middle of it because they can't solve a problem that is 10 orders of magnitude easier than the problems they would be tackling on the job.

dboat2• 13 years ago

Well, I was going to say something similar, but I really just think he means Amazon's problems are easy compared to googles. That being the point, I don't think his phrasing is worth taking issue over.

temuze• 13 years ago

Yeah, Amazon is a super easy problem. Let's try to make a website that sells everything. We'll only need to get every manufacturer under the sun to sell under us and make a system is compatible with all other theirs. Heck, we can easily make a big ol' warehouse system that stores every single freaking product known to man-kind and make it profitable. Super easy.

Oh, and getting your customers to become more loyal to you? Easy peazy. Combine those little warehouses with two day shipping literally anywhere in the United States and offer it to customers for under a hundred bucks a year. Trivial optimization problem, if you ask me.

And Amazon Web Services? Pbbbt. Just get some servers and make software that separates them into virtualized storage, computing, DNS, long-term storage, etc into different sizes and make the uptime not suck. That's like CS101

Don't even get me started on the Kindle. Just switch your entire focus from eCommerce and other industries to hardware and make a tablet and integrate it with your other media services (music, video, books, etc) and offer it for cheaper than anyone else. Super easy.

#shitthatHNsays

jmduke4• 13 years ago

Amazon and Microsoft solve business problems.

Google solves information problems.

Twitter and Facebook solve communication problems.

So many of these silos have similar solutions, but approaches are so incredibly different that it can be difficult to compare them at first blush.

CrankyPants4• 13 years ago

Google literally has one product that keeps nearly all of their lights on.

They're far more vulnerable than most people think.

altoz• 13 years ago

Marissa Mayer's going to be on this list shortly.

eulerphi• 13 years ago

She's pretty and smells good but I think we need some more solid proof.

jonchang• 13 years ago

@shit_hn_says

jmduke4• 13 years ago

Think about how much you hear about Yahoo in 2013.

Think about how much you heard about Yahoo in 2011.

unknownian• 13 years ago

I'm no feminist, but look up Mayer's background before making idiotic statements like that.

na85• 13 years ago

Nah, tech doesn't have a sexism problem at all.

CrankyPants4• 13 years ago

She really isn't. Her efforts at Google, especially as time went on, were increasingly mediocre, and at Yahoo she's proven to be little different.

What she has going in her favor is that Yahoo was mismanaged to an utterly stunning degree before her time. I don't doubt that a more sensible approach is going to do net-good things for them.

But there's just no way she's going to be included in the same chapter of history as the other names given.

jmduke4• 13 years ago

Maybe not the same chapter, but at least the same font size.

I think she's going to go down as the first female major player in the Big Tech realm -- which is not to disparage Meg Whitman or Carly Fiorina, but they haven't achieved the same level of household recognition that Marissa has.

(I'm not really familiar with her goings-on at Google, but everything she's done at Yahoo seems incredibly positive. Like you said, though, that could just be a 'going from awful to merely okay' effect.)

lvs• 13 years ago

There's a lot of overlap between business commentary and sports commentary.

michaelwww2• 13 years ago

What does that have to do with the price of tea in China?

tempestn2• 13 years ago

Sports commentary has been called (paraphrase) 'a business built on talking about the results of a weighted random number generator'. I expect that parent is using this comparison to express a judgement on the value of the article...

snowwrestler• 13 years ago

It's a good question: who in technology is afraid of Bezos?

While a lot of technology leaders might admire Bezos for his leadership of Amazon, I wonder how many fear him. Most of what Amazon does, does not compete with technology companies. In the few places they do, they're not a juggernaut.

For example, despite years of effort, the Kindle Fire has not significantly harmed the market share or margin of the iPad. Google and Samsung have done far more damage to Apple. And Amazon's media sales are not much of a threat to Apple: they haven't stolen significant share, and Apple does not try to make money on content anyway.

I think there are a lot of people who do fear Bezos, but they are mostly retailers and hosting companies.

selectiveshift• 13 years ago

Most of what Amazon does, does not compete with technology companies. In the few places they do, they're not a juggernaut.

Since when is AWS not a juggernaut...

ankitml• 13 years ago

Rackspace is slowly eating AWS up. Their customer service is unmatchable.

toomuchtodo3• 13 years ago

They're definitely a leader in the space, but its not like it isn't a commodity. Great, you've got a durable object store and virtual machines. I'm not Netflix, I'm not Reddit. I don't need to scale to a bazillian users, and even if I did, its going to be with Akamai and the whole damn site mostly static (I'm looking at you, Healthcare.gov).

So, yeah, AWS is awesome. But its not like others can't/aren't catching up.

robryan• 13 years ago

Anyone trying to sell products that they don't manufacture themselves. Even if you do make things amazon might be a very important distribution channel.

area51org• 13 years ago

Not much new here — who doesn't already realize this — and Heroku does not belong on the list of EC2 competitors, given that they actually host on EC2. There's a big difference between IaaS and PaaS.

jordanthoms2• 13 years ago

Well, AWS has been making moves more towards Heroku PaaS territory with elastic beanstalk, rds, etc.

curiouslurker• 13 years ago

I will make the bold claim that within 10 years amazon will fall apart at the seams like a cheap suit in a storm. You cannot run a non profit forever no matter how large your market share is or how obsessed you are about customers.

The culture (from what we can glean from the excerpts of the new book on Bezo's) is also toxic and is unlikely to produce an enduring successful company. Senior execs can't pass gas without Bezos' permission? When he steps down, there is unlikely to be the continuity that produces great enduring companies.

hacknat2• 13 years ago

They are hardly a non-profit. He is maybe the most aggressive CEO in the US right now for putting money back into the company.

Amazon's cash flow is insane, if they put the brakes on reinvestment right now, they would be making billions and billions per quarter.

hncommenter133• 13 years ago

1. I'm not so sure about that. According to the most recent financial statement[1], AMZN hasn't generated much in the way of net cash from operations over the past 12 months. Worse yet, they're spending an amount in excess of that on investments (some of which is really capitalized operating expense, like internal software development, that companies like MSFT expense directly). In fact, for the 12 months ended 6/30/2013, the only reason ending cash was greater than beginning cash was because they undertook financing transactions (selling stock, issuing debt, etc.) See the section that discusses "free cash flow," which is in itself a non-GAAP measure, as it omits non-avoidable expenses like operating lease payments, principal repayments on debt, etc. In other words, even that measure doesn't really represent distributable cash.

2. Unlike SaaS companies that sign multi-year contracts as their main source of revenue, the vast majority of Amazon's revenue is products, for which revenue is recognized almost immediately. Over time, then, the cash the company collects should roughly correspond to its GAAP income, unless services that are paid up-front for consumption over time increase as a % of its revenue (e.g., reserved instances, annual subscription fees, etc). In other words, it is unlikely to profitlessly generate cash; the two should rise or fall together.

3. Amazon is a fearsome competitor. But ORCL makes vastly more money. In fact, when Walmart's revenues were the size Amazon's are today (in the early 80s, roughly, adjusting for inflation), it was far more profitable then than Amazon is today--despite having to operate stores and truck fleets.

[1] http://edgar.sec.gov/Archives/edgar/data/1018724/00011931251...

saosebastiao2• 13 years ago

That's not a bold claim...hundreds of pundits have said exactly the same thing. Not only do you not have a reputation to maintain, but you have chosen a completely conspicuous comment section to make the claim, ensuring that nobody cares enough to track down your comment 10 years from now.

Funnily enough, there is one Exec whose 40 year strategy is almost identical despite radically different markets and tactics...namely the "reinvest until you are blue in the face" strategy. You may have heard of him, his name is Warren Buffet. Bezos has the advantage that with his company, he doesn't have to realize any profits.

adventured3• 13 years ago

You don't seem to actually understand Amazon's business.

First of all, there isn't even a remote threat to their retail empire. Everybody else is a drastically distant joke. They're already the size of Target, and they're still growing rapidly. Nobody stands a chance at catching them. Walmart.com continues to just flail in the wind. That means they're going to end up with a monster position that can't be assaulted in the next decade. A simple extrapolation reveals that in a matter of seconds. Just toss a mere 5 years onto their growth and they'll do nothing but pad their crazy lead over the competition.

They paid off billions in debt post dotcom bubble. How do you suppose they dug themselves out of that hole without generating tons of cash?

Where'd they get the $11.3b in cash they ended fiscal '12 with? How'd they pay for all those warehouses?

Answer: they produce plenty of cash courtesy of a very healthy business model

kken• 13 years ago

First of all, there isn't even a remote threat to their retail empire.

How about Alibaba? They already have more revenue than Amazon and eBay combined.

stevewillows• 13 years ago

I admire Bezos tactic of reinvesting in new markets. It's something that the other 'kingpins' in the article haven't done as well. Beyond that, he's done quite well in these markets.

badman_ting• 13 years ago

Well, whoever doesn't had better start. His empire is huge and just getting started. And he is by all accounts a formidable thinker. I have a lot of respect for him, as opposed to biz-mag dorks like Ballmer.

saabster27• 13 years ago

Let's not overlook Jack Ma of Alibaba. When it started Taobao in China to compete with eBay China, eBay had 85% of the online auction market in China. Within a few years, eBay was forced out of the China market completely. And if one looks at Taobao closely, its model is much friendlier to small businesses and that's the main driver of its success. I wouldn't be surprised if Taobao starts competing with eBay globally within the next few years. And then there is alibaba.com...

r00fus• 13 years ago

China is not a normal market. It's clear that the communist party has their hands in all the pies, and where they can promote Chinese companies, foreign ones will suffer intense competition or be forced out of the market.

I'll start paying attention when Taobao actually competes outside of China before proclaiming it's success over eBay.

snambi• 13 years ago

If everyone is is afraid of Amazon, then Amazon should be afraid of everyone. Potentially any one of them can topple amazon. The truth is, amazon hasn't killed any companies other than certain old bookstores. Have they killed walmart, costco, ebay, target, macys ? Nope, not even close.

Who’s afraid of Jeff Bezos?

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