Amazon Unbound

Key Takeaways

Under Consideration — to be added.

Interconnections

Under Consideration — to be added.

Highlights

• “His genius was not in inventing; rather, it was in inventing a system of invention. Dozens of researchers and engineers and developmental tinkerers labored beneath Edison in a carefully constructed hierarchical organization that he founded and oversaw.” —Graham Moore, The Last Days of Night: A Novel
• “It has always seemed strange to me…. The things we admire in men—kindness and generosity, openness, honesty, understanding, and feeling—are the concomitants of failure in our system. And those traits we detest—sharpness, greed, acquisitiveness, meanness, egotism, and self-interest—are the traits of success. And while men admire the quality of the first, they love the produce of the second.” —John Steinbeck, Cannery Row
• “Every interesting thing I’ve ever done, every important thing I’ve ever done, every beneficial thing I’ve ever done, has been through a cascade of experiments and mistakes and failures,”
• “I really do believe when ingenuity gets involved, when invention gets involved, when people get determined, when passion comes out, when they make strong goals—you can invent your way out of any box. That’s what we humans need to do right now. I believe we’re going to do it. I’m sure we’re going to do it.”
• Vowing upon the age of thirty to risk the entrepreneurial path, Jeffrey Preston Bezos quit his high-paying job at the esteemed Wall Street hedge fund D. E. Shaw to start a seemingly modest business: an online bookstore. With his twenty-four-year-old wife, MacKenzie, he flew from New York City to Fort Worth, took his family’s ’88 Chevy Blazer out of storage, and asked her to drive northwest while he sat in the passenger’s seat, tapping financial projections into a spreadsheet on his laptop. It was 1994, the paleolithic year of the internet.
• There was 30, 40, 50 percent growth in orders each week, undermining any attempts at careful planning and pushing that earliest batch of eclectic recruits into such a frenetic pace that they would later share a palpable sense of amnesia about those early times.
• Bezos wanted to set his own metrics for success, without interference from impatient outsiders, so he encoded his operating philosophy in his first letter to shareholders, vowing a focus not on immediate financial returns or on satisfying the myopic demands of Wall Street, but on increasing cash flow and growing market share to generate value over the long term for loyal shareholders.
• But behind the scenes, things were a mess. Amazon’s profligate investments in other dot-com startups were souring, a host of acquisitions hadn’t worked, and many of the early hires, from traditional retailers like Walmart, looked askance at the sprawling chaos and fled.
• Wilke was a lot like Bezos: precocious, ambitious, and focused on satisfying customers over just about everything else, including the feelings of his employees.
• The idea was that Amazon would sell raw computing power to other organizations, who could access it online and use it to economically run their own operations. The business plan was barely understandable to many of Amazon’s own employees and board members. But the forty-year-old Bezos believed in it, micromanaging the project and sending extraordinarily detailed recommendations and goals to AWS team leaders, often late at night.
• Colleagues thought it was crazy for the perennially money-losing Amazon to make gadgets. “I absolutely know it’s hard, but we’ll learn how to do it,” Bezos told them.
• He was a ravenous reader, leading senior executives in discussion of books like Clayton Christensen’s The Innovator’s Dilemma, and he had an utter aversion to doing anything conventionally. Employees were instructed to model his fourteen leadership principles, such as customer obsession, high bar for talent, and frugality, and they were trained to consider them daily when making decisions about things like new hires, promotions, and even trivial changes to products.
• PowerPoint presentations, with their litany of bullet points and incomplete thoughts, were banned inside the company despite being popular in the rest of corporate America. Instead, all meetings started with almost meditative readings of data-rich, six-page documents, called “narratives.”
• This unusual and decentralized corporate culture hammered into employees that there was no trade-off between speed and accuracy. They were supposed to move fast and never break things.
• Goals, accountability, and deadlines were pushed down into the organization, while metrics were fed upward, via weekly and quarterly business reports and biannual companywide reviews,
• His blasts of annoyance, directed at employees who failed to meet those standards, were legendary inside the company. “Why are you wasting my life?” he’d ask, scoffing at disappointing underlings. Or he leveled them with “I’m sorry, did I take my stupid pills today?” While the brutal leadership style and distinct culture was enervating to many employees, it was also proving unmistakably effective. In the spring of 2011, Amazon was valued at $80 billion.
  • It’s not about the market cap. But it sure helps to have those external metrics to validate your radical behavior
• While he had triumphed against enormous odds, Jeff Bezos preferred those negative articles, like the old “Amazon.bomb” cover story in Barron’s, to be posted on his office walls, so that he and his colleagues would remain frightened and motivated.
• In 2015, the total value of the products sold on the marketplace surpassed the value of the units that Amazon sold itself on its own site.
  • Decentralized infrastructure will almost always empower grander scale than one organization could ever achieve independently
• Designers convinced Bezos to lose the microphone in subsequent versions of the Kindle, but he clung to his belief in the inevitability of conversational computing and the potential of artificial intelligence to make it practical. It was a trope in all his favorite science fiction, from TV’s Star Trek (“computer, open a channel”) to authors like Arthur C. Clarke, Isaac Asimov, and Robert A. Heinlein whose books lined the library of hundreds of volumes in his lakefront Seattle-area home.
• As with several other projects at Amazon, the origins of Project D can be traced back to discussions between Bezos and his “technical advisor” or TA, the promising executive handpicked to shadow the CEO. Among the TA’s duties were to take notes in meetings, write the first draft of the annual shareholder letter, and learn by interacting with the master closely for more than a year.
• If Bezos took one leadership principle most to heart—which would also come to define the next half decade at Amazon—it was principle #8, “think big”: Thinking small is a self-fulfilling prophecy. Leaders create and communicate a bold direction that inspires results. They think differently and look around corners for ways to serve customers.
• Designers convinced Bezos to lose the microphone in subsequent versions of the Kindle, but he clung to his belief in the inevitability of conversational computing and the potential of artificial intelligence to make it practical. It was a trope in all his favorite science fiction, from TV’s Star Trek (“computer, open a channel”) to authors like Arthur C. Clarke, Isaac Asimov, and Robert A. Heinlein, whose books lined the library of hundreds of volumes in his lakefront Seattle-area home.
• While others read these classics and only dreamed of alternate realities, Bezos seemed to consider the books blueprints for an exciting future.
• As with several other projects at Amazon, the origins of Project D can be traced back to discussions between Bezos and his “technical advisor,” or TA, the promising executive handpicked to shadow the CEO. Among the TA’s duties were to take notes in meetings, write the first draft of the annual shareholder letter, and learn by interacting with the master closely for more than a year.
• Bezos jotted their ideas down on a whiteboard, adding a few of his own, and then started to apply his usual criteria to assess their merit: If they work, will they grow to become big businesses? If the company didn’t pursue them aggressively now, would it miss an opportunity?
• “Jeff, I don’t have any experience in hardware, and the largest software team I’ve led is only about forty people,” Hart recalled saying. “You’ll do fine,” Bezos replied. Hart thanked him for the vote of confidence and said, “Okay, well, remember that when we screw up along the way.”
• Bezos would remain intimately involved in the project, meeting with the team as frequently as every other day, making detailed product decisions, and authorizing the investment of hundreds of millions of dollars in the project before the first Echo was ever released.
• Greg Hart finally described “this little device, about the size of a Coke can, that would sit on your table and you could ask it natural language questions and it would be a smart assistant,” recalled Yap’s VP of research, Jeff Adams, a two-decade veteran of the speech industry. “Half of my team were rolling their eyes, saying ‘oh my word, what have we gotten ourselves into.’ ”
• The Amazon executives responded by channeling Bezos’s resolve. “They basically told me, ‘We don’t care. Hire more people. Take as long as it takes. Solve the problem,’ ” recalled Adams. “They were unflappable.”
• Characteristically secretive, Amazon has never revealed the name of the voice artist behind Alexa. I learned her identity after canvasing the professional voice-over community: Boulder-based singer and voice actress Nina Rolle.
• With his science fiction obsession, Bezos was forcing his team to think bigger and to push the boundaries of established technology.
• the six-page narrative Amazonians craft in the form of a press release at the start of a new initiative to envision the product’s market impact. The paper, a hallowed part of Amazon’s rituals around innovation, forces them to begin any conversation about a new product in terms of the benefit it creates for customers.
• Bezos also suggested “Alexa,” an homage to the ancient library of Alexandria, regarded as the capital of knowledge.
• Evi employed a programming technique called knowledge graphs, or large databases of ontologies, which connect concepts and categories in related domains. If, for example, a user asked Evi, “What is the population of Cleveland?” the software interpreted the question and knew to turn to an accompanying source of demographic data. Wired described the technique as a “giant treelike structure” of logical connections to useful facts.
• Proponents of another method of natural language understanding, called deep learning, believed that Evi’s knowledge graphs wouldn’t give Alexa the kind of authentic intelligence that would satisfy Bezos’s dream of a versatile assistant that could talk to users and answer any question.
• Evi’s knowledge graphs were too regimented to be Alexa’s foundational response model; if a user says, “Play music by Sting,” such a system may think he is trying to say “bye” to the artist and get confused, Prasad later explained. By using the statistical training methods of deep learning, the system could quickly ascertain that when the sentence is uttered, the intent is almost certainly to blast “Every Breath You Take.”
• But Evi’s Tunstall-Pedoe argued that knowledge graphs were the more practical solution and mistrusted the deep learning approach. He felt it was error-prone and would require an endless diet of training data to properly mold Alexa’s learning models. “The thing about machine learning scientists is that they never admit defeat because all of their problems can be solved with more data,” he explained.
• That response might carry a tinge of regret with it, because to the über product manager, Bezos himself, there was no question about which way time’s arrow was pointed—toward machine learning and deep neural networks. With its vast and sophisticated AWS data centers, Amazon was also in the unique position of being able to harness a large number of high-powered computer processors to train its speech models, exploiting its advantage in the cloud in a way few of its competitors could. Defeated, Tunstall-Pedoe ended up leaving Amazon in 2016.
• “You are going about this the wrong way,” Bezos said after reading about the delay. “First tell me what would be a magical product, then tell me how to get there.”
• “You guys aren’t serious about making this product,” and abruptly ended the meeting.
• Bezos met the Tyto team every few days for three years, at the same time he was meeting the Alexa team as frequently. He was infatuated with new technologies and business lines and loved spitballing ideas and reviewing the team’s progress. And while he was inordinately focused on customer feedback in other parts of Amazon’s business, Bezos did not believe that listening to them could result in dramatic product inventions, evangelizing instead for creative “wandering,” which he believed was the path to dramatic breakthroughs. “The biggest needle movers will be things that customers don’t know to ask for,” he would write years later in a letter to shareholders. “We must invent on their behalf. We have to tap into our own inner imagination about what’s possible.”
  • “Creative wandering” -> you need an engineering team that you trust to engage with, go away and execute on ideas, and come back with incremental steps in the right direction. #[[Roam Brainstorm]]
• Bezos also had some worrisome blind spots about smartphones. “Does anyone actually use the calendar on their phone?” he asked in one meeting. “We do use the calendar, yes,” someone who did not have several personal assistants replied.
  • #[[User-Centered Design]] #Empathy
• Naturally, they didn’t tell anyone what they’d be working on until their first day. “If you had a good reputation in the tech industry, they found you,” said a Fire Phone manager.
  • [[Hiring]] is rarely done well by waiting for people to come to you. You need to go find every talented person that might possibly be able to help you do what you need to do. Applying critical filtering is important, but the top of the funnel has to be air tight.
• In his annual letter to shareholders released in April 2014, Bezos wrote, “Inventing is messy, and over time, it’s certain that we’ll fail at some big bets too.”
• On June 18, 2014, Bezos unveiled the Fire Phone at a Seattle event space called Fremont Studios, where he attempted to summon some of the charismatic magic of the late Steve Jobs and waxed enthusiastic about the device’s 3D display and gesture tracking. “I actually think he was a believer,” said Craig Berman, an Amazon PR vice president at the time. “I really do. If he wasn’t, he certainly wasn’t going to signal it to the team.”
• “There was a lot of differentiation, but in the end, customers didn’t care about it,” said Ian Freed, the vice president in charge of the project. “I made a mistake and Jeff made a mistake. We didn’t align the Fire Phone’s value proposition with the Amazon brand, which is great value.” Freed said that Bezos told him afterward, “You can’t, for one minute, feel bad about the Fire Phone. Promise me you won’t lose a minute of sleep.”
  • There is a balance between “we have to invent for the customer” and “we have to build with the customer in mind.” #[[Roam Brainstorm]]
• Most importantly, Bezos didn’t penalize Ian Freed and other Fire Phone managers, sending a strong message inside Amazon that taking risks was rewarded—especially if the entire debacle was primarily his own fault.
  • Creating a safe space for people to experiment.
• On the other hand, it revealed a worrisome fact about life inside Amazon. Many employees who worked on the Fire Phone had serious doubts about it, but no one, it seemed, had been brave or clever enough to take a stand and win an argument with their obstinate leader.
  • Disagree and commit doesn’t work if everyone is too busy committing to disagree
• By 2014, it had increased its store of speech data by a factor of ten thousand and largely closed the data gap with rivals like Apple and Google. Bezos was giddy. Hart hadn’t asked for his approval of the AMPED project, but a few weeks before the program began, he updated Bezos with a six-page document that described it and its multimillion-dollar cost. A huge grin spread over Bezos’s face as he read, and all signs of past peevishness were gone. “Now I know you are serious about it! What are we going to do next?”
  • “Just do it”
• Toni Reid, a director Hart hired to launch the product, had to write the user manual without ever actually naming the product. “That’s a skill everyone should have,” she said.
  • [[Writing]] within constraints
• There was no press conference or visionary speech by Bezos—he was seemingly done forever with his halfhearted impression of the late Steve Jobs, who had unveiled new products with such verve. Instead, Bezos appeared more comfortable with a new, understated approach: the team announced the Echo with a press release and two-minute explanatory video on YouTube that showed a family cheerfully talking to Alexa.
• Echo. Along with some natural skepticism, positive reviews rolled in, with quotes like “I just spoke to the future and it listened,”
• Bezos deployed his playbook for experiments that produced promising sparks: he poured gasoline on them. “We had a running success on our hands and that’s where my life changed,” said Rohit Prasad, who would be promoted to vice president and eventually join the vaunted Amazon leadership committee, the S-team. “I knew the playbook to the launch of Alexa and Echo. The playbook for the next five years, I didn’t have.”
  • #[[Roadmaps are Fake News]]
• Bezos’s wish list became the product plan—he wanted Alexa to be everywhere, doing everything, all at once.
• Commenting on the race to build a virtual assistant and smart speaker, Bezos said, “Amazon’s going to be fine if someone comes along and overtakes us,” as part of the annual late-summer OP1 series of planning meetings, the year after Alexa’s introduction. “But wouldn’t it be incredibly annoying if we can’t be the leader in creating this?”
  • It’s fine not to be hyper focused on competitors. But there should be a competitive hunger to cut the edge.
• Silicon Valley startups call this style of product development “minimum viable product,” or MVP. At Amazon, Jeff Wilke had popularized the idea of calling it “minimum lovable product,” or MLP, asking, “What would we be proud to take to the market?”
• Through it all, like a crazed pyromaniac, Bezos kept spraying lighter fluid on the fire, promoting Alexa by paying an estimated $10 million for Amazon’s first ever Super Bowl ad in January 2016,
• Greg Hart, who had produced the device out of nothing more than a Bezos email and whiteboard drawing, left the division and moved over to help run Prime Video. “The thing that I got up every day loving doing was the creation of Alexa,” he said wistfully years later. But with the Alexa group growing fast, “it was probably a better fit for another leader.”
  • [[Self-Reflection]] - know what you are and are not best at
• Mike George had what Bezos called a “fungible” energy. Over the years, Bezos deployed him like a firefighter to douse the flames of chaos and instill order in divisions like human resources, marketplace, payments, and later, Bezos’s private philanthropy, Day 1 Academies Fund.
• George also instituted a dramatic change in the Alexa group’s structure. It had been a functional organization, with centralized engineering, product management, and marketing teams. But that wasn’t growing smoothly or fast enough for Bezos’s liking. George instead reorganized Alexa around the Amazonian ideal of fast-moving “two pizza” teams, each devoted to a specific Alexa domain, like music, weather, lighting, thermostats, video devices, and so on. Each team was run by a so-called “single-threaded leader” who had ultimate control and absolute accountability over their success or failure. (The phrase comes from computer science terminology; a single-threaded program executes one command at a time.) Alexa, like Amazon itself, became a land of countless CEOs, each operating autonomously. To yoke them all together, George oversaw the creation of a “north star” document, to crystalize the strategy of a global, voice-enabled computing platform.
  • [[Decentralization]] requires a north star in order to avoid devolving into fiefdoms amidst chaos
• Meanwhile Bezos approved all these changes and stayed intimately involved, attending product reviews and reading the Friday night compilation of updates from all the various two-pizza teams, and responding with detailed questions or problems that the groups would then have to fix over the weekend.
  • A culture of [[Writing]] only works if it is paired with a culture of [[Reading]]
• He was also the chief evangelist for Alexa within the company. “What are you doing for Alexa?” he asked other executives, as he had for AWS years before. Everyone in the company had to include Alexa in the OP1 documents they presented to the S-team, describing their plans for the coming year.
• Even though those companies were allergic to what they considered copycat products, eventually they couldn’t resist the fast-growing smart speaker market.
• Later, Alexa execs would say that Bezos’s close involvement made their lives more difficult but also produced immeasurable results. Jeff “gave us the license and permission to do some of the things we needed to do to go faster and to go bigger,” Toni Reid said. “You can regulate yourself quite easily or think about what you’re going to do with your existing resources…. Sometimes, you don’t know what the boundaries are. Jeff just wanted us to be unbounded.”
  • Finding the balance between being micro-managed and being a bar raiser
• The decentralized and chaotic approach of countless two-pizza teams run by single-threaded leaders was manifested in aspects of the product that had become overly complex. Basic tasks, like setting up a device and connecting it to smart home appliances, had become “painful, very painful to the customer,” agreed Tom Taylor, a sardonic and even-keeled Amazon executive who took over from Mike George as leader of the Alexa unit in 2017. He set out to “find all the places that customers are suffering from our organizational structure.”
• After those incidents, employees had to write a “correction of error” report, which analyzes an incident in detail and tries to get to its underlying root causes by going through a series of iterative questions and answers called “the five whys.” The memo went all the way to Bezos, describing what had happened and recommending how the process that created the problem in the first place could be fixed.
  • #[[Post-Mortem]]
• By 2019, Amazon had sold more than 100 million Echo devices. In the span of a decade, a product spawned by Bezos’s love of science fiction and infatuation with invention had become a universally recognized product whose miscues and challenges to conventional notions of privacy were widely covered by the media.
• Earlier that year, he had circulated among Amazon’s senior engineers an article in the New York Times that described how a Google supercomputer had pored over ten million images and taught itself to recognize cats. “Jeff had faith that this was a really important trend that we should pay attention to,” said Joseph Sirosh, chief technology officer of Amazon’s retail business at the time. “Just as he got really enthusiastic about computer voice recognition, he was also really excited about computer vision.”
  • If you’re not paying attention to trends how can you consider yourself to be cutting the edge
• “When I asked Steve ‘Why me?’ a key part of his answer was that while we had a lot in common, he thought we would approach problems from different angles and look at things in different ways,” Puerini said. “I loved that he acknowledged the diversity of perspective and thought process…. I think I emailed Steve that night and said, ‘I’m in!’ ”
  • [[Hiring]] people that fill in your gaps; connect to experience with Elder Curl and the story of the two hole-filled boards
• Bezos had no particular opinion about what they should sell, just that he wanted to disrupt traditional retail.
• While he could be a remorseless boss capable of terrifying employees when they failed to meet his exacting standards, he seemed to have an unusual wellspring of patience for those at the company who practiced the challenging art of invention. “If there was any time the guy should have been agitated, that was it,” said Lamontagne. “Every time I was in a room with him, he never asked us, ‘How much is this going to cost me?’ or ‘Can we make money in X amount of time?’ He would look at us and say, ‘I know this is really hard and there is a lot of fatigue that comes with inventing something new. You’re heading in the right direction.’ ”
• Bezos is usually one of the slowest readers in these sessions; he seems to carefully consider every sentence.
  • A culture of [[Writing]] has to go hand in hand with a culture of [[Reading]]
• Others were exhausted from two years of nonstop work and felt captive to an abrasive personality who pushed them relentlessly, generating numerous sprints toward artificial deadlines even as the race started to resemble a grueling marathon. Surprisingly, this time it was not Bezos but the executive who had worked by Bezos’s side and exhibited some of the trademark characteristics that executives often need to be successful at Amazon, Bezos’s former TA, Dilip Kumar.
• Kumar inhabited a few aspects of the Amazonian leadership template forged by Bezos in his younger, more tempestuous years as CEO: hard-driving, maniacal about the customer, IQ over EQ, raw force of will over innate leadership ability.
• “If I have to choose between agreement and conflict, I’ll take conflict every time,” Bezos often said. “It always yields a better result.”
• “If he was treating you nicely, it meant you were not important,” said a senior scientist on the project. Added Bali Raghavan, “He’s an intense guy to work for, and it used to drive me nuts. He also brings out the best in people.” Of course, the same thing was often said of Bezos as well.
• So in the peculiar fashion of invention at Amazon, they created separate teams to pursue the singular goal of bringing the company into the vast realm of physical retail. Bezos liked to say Amazon was “stubborn on vision, flexible on details,” and here was an illustration: groups working on parallel tracks would essentially compete to fulfill the “Just Walk Out” ideal and solve the problem of the cashierless store.
  • #[[Roam Brainstorm]] - vision vs. details
• “If you were a venture capitalist, this just did not make sense anymore,” said another executive privy to the decision-making. But Bezos wanted to forge ahead. “Jeff is master of ‘this isn’t working today, but could work tomorrow.’ If customers like it, he’s got the cash flow to fund it,” this exec said.
• We all know that if you swing for the fences, you’re going to strike out a lot, but you’re also going to hit some home runs. The difference between baseball and business, however, is that baseball has a truncated outcome distribution. When you swing, no matter how well you connect with the ball, the most runs you can get is four. In business, every once in a while, when you step up to the plate, you can score 1,000 runs. This long-tailed distribution of returns is why it’s important to be bold.
• Amazon.cn executives from that time said that Bezos was totally uninterested in understanding the inner machinations of the Chinese government, cultivating ties with Chinese leaders, or using his budding fame to help Amazon’s cause in the country, as Elon Musk would do years later to set up a Tesla Gigafactory in Shanghai.
• “If there was a week when we didn’t launch selection in a category, we used to sit down and say this was a disappointing week,” he later recalled.
  • Why is it important to ship? Builds a flow of feedback that drives iteration. Experimentation isn’t actually possible without running tests in the real world.
• In most OP1 sessions, he usually spoke last, not to sway the group with his formidable opinion.
• “You guys are going to fail,” he bluntly told the Indian crew. “I don’t need computer scientists in India. I need cowboys. “Don’t come to me with a plan that assumes I will only make a certain level of investment,” Bezos continued, according to the recollection of two executives who were there. “Tell me how to win. Then tell me how much it costs.”
• “There are two ways of building a business. Many times, you aim, aim, aim, and then shoot,” he said, according to three executives who were there. “Or, you shoot, shoot, shoot, and then aim a little bit. That is what you want to do here. Don’t spend a lot of time on analysis and precision. Keep trying stuff.”
• He regaled them with stories of backpacking through Europe as a broke college graduate, and about Infosys University, the company’s massive internal training program to furnish recent college graduates with practical technical skills. Bezos listened intently; Piacentini recalled that Bezos and the elder Murthy had “an immediate chemistry.”
  • Alternative education (practical)
• One of Gagnon’s colleagues later said they were nervous going into the meeting, after hearing that Bezos was in a particularly foul mood that day. But the session, scheduled for ninety minutes, lasted only forty-five—always a good sign. “His reaction was generally that we were not early but not too late either,” Gagnon said. “He felt that we had a good plan and that we should launch as soon as we could.”
• He was asked to write a six-page document explaining “the most innovative thing I’ve ever done” and “the most customer obsessed thing I had ever done in my career.”
• “The future is going to be the U.S., China, and India,” he declared, according to a colleague who reports hearing him say it multiple times. “For Amazon to be a truly world-class global company, we have to be relevant in two out of the three markets.”
• Ballmer and other Amazon skeptics, like the hedge fund investor David Einhorn, who added Amazon to his “bubble basket of stocks” that fall, were looking at Amazon’s reported losses and significant investments in new initiatives. They were also underestimating the true performance of its older business units, which the company shrouded in secrecy. Amazon was profitable, particularly mature retail categories like books and electronics in the U.S. and UK. But rather than accumulating record amounts of cash and reporting it on its income statement, as companies like Microsoft and Apple were doing at the time, Bezos invested Amazon’s winnings like a crazed gambler at the craps table in Las Vegas.
• Ballmer and other Amazon skeptics, like the hedge fund investor David Einhorn, who added Amazon to his “bubble basket of stocks” that fall, were looking at Amazon’s reported losses and significant investments in new initiatives. They were also underestimating the true performance of its older business units, which the company shrouded in secrecy. Amazon was profitable, particularly in mature retail categories like books and electronics in the U.S. and UK. But rather than accumulating record amounts of cash and reporting it on its income statement, as companies like Microsoft and Apple were doing at the time, Bezos invested Amazon’s winnings like a crazed gambler at the craps table in Las Vegas.
• In the years after the introduction of its first products in 2006, AWS was used mostly by startups and university labs that needed extra processing power and signed up with a credit card to run their software over the internet on Amazon’s servers. When engineers inside corporations and governments wanted to run their computing experiments via AWS, they often quietly routed around their organizations’ stringent procurement processes. Like many other technology revolutions, cloud computing was first the provenance of geeks, and then spread outward.
• The first companies to embrace AWS became its beta testers and evangelists. Silicon Valley startups like Uber, Airbnb, Dropbox, and the photo-sharing site SmugMug ran their operations on AWS and could quickly order up more servers as their businesses grew at unprecedented rates. It was one of the greatest enablers of the post-recession technology boom—arguably more important than even the iPhone, though outsiders understood very little about it.
• Even some of AWS’s earliest executives had little sense for cloud computing’s enormous potential. “This business could be really big someday, maybe even $1 billion in revenue,” product manager Matt Garman once told an incredulous fellow Amazon newbie, Matt Peterson, his former business school classmate, over lunch in 2006. “Are you kidding, there is no way this will be a billion dollars. Do you know how big that would be?” Peterson responded. Garman is now an AWS vice president and member of the S-team; Peterson is an Amazon corporate development director; and AWS generated $45.4 billion in sales in 2020.
• Amazon’s original cloud products were conceived by Jeff Bezos in concert with other technical leaders between the years 2004 and 2006. The Simple Storage Service, or S3, and the Elastic Compute Cloud, or EC2, provided most of the functionality of a back-office computer room—but one that could be accessed remotely, and existed inside the massive, air-conditioned data centers that Amazon would construct elsewhere in the country. These would be the dial tones of the twenty-first-century internet explosion.
• Bezos liked to say that “good intentions don’t work, but mechanisms do.” Inside AWS, Jassy applied that adage ferociously. The rhythms of a week at AWS revolved around several formal “mechanisms” or well-honed processes or rituals.
• Daily operations were driven by data-filled six-page narratives and the obsessive contemplation of the needs of customers.
• When employees returned strong results, attention always turned to the ways in which they could have done better.
  • Connect to Ed Catmull video, post-mortems
• Bezos liked to say that “good intentions don’t work, but mechanisms do.” Inside AWS, Jassy applied that adage ferociously. The rhythms of a week at AWS revolved around several formal “mechanisms,” or well-honed processes or rituals.
• For managers, a failure to deeply understand and communicate the operational posture of their service could amount to career death.
• Analyst Ben Thompson facetiously called that April 2015 earnings report “one of the technology industry’s biggest and most important IPOs.”
• Years later, Wulff reflected on that wistfully and considered it an illustration of the Amazon leadership principle that stipulates leaders must be “vocally self-critical.” “That’s when I learned a lesson that regardless of whether you just delivered the biggest revenue day in Amazon’s history, your first sentence is, ‘We fucked up.’ ”
• As an Amazonian, she had to earn the trust of her colleagues and superiors every day she had worked at Amazon. Had Jeff Bezos, she wondered, earned her trust?
• Bezos, on the other hand, dove into the tedious details of HR and tried to formulate mechanisms that would substitute for good intentions. He was a student of organizations, culture, and innovation.
• “The greatest pain any leader will feel are the open jobs in their organization,” he once told Niekerk. “That means leaders will be very hesitant to let anyone go.” Bezos suspected that managers couldn’t be counted on to voluntarily embrace the hassle of additional hiring and feared that a tolerance for mediocre performers would spread through the company and erode the “Day 1 mentality.” Stack ranking would force managers to upgrade the talent on their teams. “People thought it was a mean-spirited process and to a certain extent it was,” Niekerk said. “But in the big picture, it kept Amazon fresh and innovative.”
• In this revamped performance review system, peers and managers were asked to write sixty words describing an employee’s “superpower,” and another sixty to describe a “growth idea” for the year ahead. “It was all about looking forward and being motivational,” Galetti said.
• “You can write down your corporate culture, but when you do so, you’re discovering it, uncovering it—not creating it,” he wrote. “It is created slowly over time by the people and by events—by the stories of past success and failure that become a deep part of the company lore.”
• “You have to acknowledge that the physical print business is in structural decline,” he told his new employees. “You have to accept it and move forward. The death knell for any enterprise is to glorify the past, no matter how good it was—especially for an institution like The Washington Post.”
• “You have to acknowledge that the physical print business is in structural decline,” he told his new employees. “You have to accept it and move forward. The death knell for any enterprise is to glorify the past, no matter how good it was—especially for an institution like the Washington Post.”
• Bezos asked Post managers to “bring me new things”; he wanted to see everything, including changes in pricing and how to expand the paper’s audience and revenue, in the form of six-page Amazon-style narratives, subject to Bezos’s careful reading and detailed questions.
• Post execs said that Bezos read every memo beforehand save for once, when he apologized for not getting to it and took the time to read it quietly at the start of the meeting.
• Fred Ryan recalled Bezos saying as he described what he wanted in the slogan. “If this was on a T-shirt, would you want to wear it?” Bezos offered a single suggestion—something he had heard in speeches by Watergate reporter Bob Woodward, who had read a version of the phrase long ago in an appellate court decision: “Democracy dies in darkness.”
• It had all started, as these things usually do at Amazon, with a counterintuitive decision by Bezos that confounded his colleagues and looked smart only with the passage of time.
• Bezos now wanted to define Prime as something different and less transactional: an all-access entry pass to a library of digital content. “I didn’t get it at first,” Bill Carr said. “But what I had learned at that point of my career is that when Jeff comes up with a novel idea, you listen carefully, ask a lot of questions to get clarification of how to think about it, and then come back to him later with details.”
• Reed Hastings and Netflix stayed ahead of Amazon at every turn. “Netflix drove our strategy a lot,” Carr said. “I’m not ashamed to say we learned from them.”
• But there was little evidence of a connection between viewing and purchasing behavior—especially one that justified the enormous outlay on video. Any correlation was also obfuscated by the fact that Prime was growing rapidly on its own. The truth was this: Bezos wanted Amazon to make TV shows and films. He could see that the decades-old way that TV shows and movies were produced and distributed was changing and sought a principal role for Amazon in that future. As in the early days of Alexa, the Go store, and Amazon India, the economic justification might be flimsy today, but opportunities for making money would always present themselves tomorrow.
• Price also felt that crowd-sourcing creative concepts was suspect: shows like Seinfeld and Breaking Bad were unpopular at first, after all. Do you trust storytellers, or do you trust data; the ingenuity of artists or the wisdom of the crowd?
• Bezos continued to reproach Price. “You and I are not aligned,” he said. “There must be a way to test these concepts. You are telling me that we are making $100 million decisions and we don’t have time to evaluate whether they are good decisions? There must be a way for us to see what will work and what won’t, so we don’t have to make all these decisions in a vacuum.”
• After more debate, Bezos boiled it down: “Look, I know what it takes to make a great show. This should not be that hard. All of these iconic shows have basic things in common.” And off the top of his head, displaying his characteristic ability to shift disciplines multiple times a day, then reduce complex issues down to their most essential essence, he started to reel off the ingredients of epic storytelling:
• Another way to understand Amazon’s fervid growth as a large company was by its successful pursuit of operating leverage, or growing revenues at a faster rate than expenses. Operating leverage is a little like trimming the sails of a sailboat as it picks up speed. Bezos and his lieutenants on the S-team asked the same questions of the executives in their older, more mature business units: How could they reduce costs in their operations while maintaining sales growth? How could they maximize the productivity of every hour they were getting from their employees? Where could automation and algorithms stem the growth in headcount or replace employees altogether?
• “What’s this?” he demanded of an FBA executive in a memorable October 2008 review, pointing to a statistic in an Excel appendix of a six-page narrative outlining FBA’s overseas economics. This was back in the formative years of Bezos’s maturation as a CEO, before he managed to occasionally suppress his temperamental management style and bad habit of punishing underlings with scathingly direct feedback. Cynthia Williams, the finance director who’d prepared the document, had suspected something was wrong with her analysis but hadn’t been able to identify the problem beforehand. “I looked down and sure enough, it was blatantly obvious,” she said years later. “I am telling you, my heart sank all the way to my toes.” Bezos then said: “If this number is wrong, I don’t know how I can trust any of these numbers. You’ve wasted an hour of my time.” He tore the paper in half, threw it down the table at Williams, and walked out the door, leaving the room in stunned silence.
• Other “Jeffisms,” recorded by the FBA team in their annual OP1 planning session with Bezos, further shaped their perspective. Among his greatest hits, recorded in a memo that was later passed to me: “Focus on lowering cost structure. It is better to have low costs and then charge to maximize your value versus charging to cover costs.” “Having a stupid rate card equals stupid things happen. Rate cards must be equal to the value.” “We do not charge more because we can’t figure out how to make it cost less. We invent to make it cost less.” “We should be able to fulfill 100% of the 3P business. I do not know what the debate is, yes, we must fulfill low priced selection, it is crucial.” “Averages are bad measures. I want to see actuals, highs, lows and why—not an average. An average is just lazy.”
• Bezos was frustrated by its lack of progress and tore up the team’s documents in OP1 meetings and demanded more ambitious rewrites. “How would you get a million sellers into this marketplace?” he asked the stream of executives whom he interviewed to take over the group.
• Faricy understood that there was only one answer to Bezos’s interview question—you couldn’t possibly reach out to sellers and recruit a million of them one by one. You would have to build a machine that would have to be self-service, and sellers would have to come to Amazon instead of the other way around.
• That year, for the first time, the value of goods sold through marketplace surpassed sales from Amazon’s retail side. Best of all, since the business was largely self-service, revenues were growing much faster than headcount. “Finally, a business that is able to get some leverage after it becomes successful,” Bezos crowed at the team’s OP1 meeting that year, holding the six-page narrative to his chest. “I’m going to take this document home and sleep with it.”
• Over the ensuing months, defective batteries in cell phones, laptops, and vape pens bought on Amazon also led to injuries, more lawsuits, and more news coverage. Bezos was apoplectic about the problems and the bad publicity, colleagues said, even though he had helped to create the situation with his relentless pursuit of expanding product selection and obtaining leverage. “Jeff’s tone was ‘how can you guys not have foreseen this?’ ” said Adrian Agostini, the marketplace VP.
• But Wall Street can be an unforgiving place for stagnating public companies that are “grounded in an ethical system based on value creation for all stakeholders”—as Mackey’s 2013 book, Conscious Capitalism, put it.
• Internet historians would view Webvan as the ultimate symbol of Silicon Valley’s arrogant rush to create a future that people didn’t want. According to Herrington, a Princeton University and Harvard Business School alumnus who ran product development and marketing at Webvan, the real story was more complex. CEO Louis Borders—cofounder of the eponymous book chain—and his team erred by building a network of warehouses that were so costly to operate that the company lost money on every order. Before they could rectify that mistake or even open for business in many cities where they had set up operations, Wall Street stopped funding unprofitable startups during the early 2000s recession. The company’s sales and customer base were growing, but it couldn’t withdraw from its financial commitments fast enough and declared bankruptcy. “I walked away saying, ‘theoretically this model can work,’ ” Herrington said. “We made the wrong choices, we did some inefficient things, but customers loved it.”
• Each executive was asked to bring a one- to two-page memo that contemplated a significant new opportunity for Amazon.
• He concluded the memo by subtly needling his colleagues, including Bezos, who considered himself implacably bold. “We should be less timid in investing in this future,” Herrington wrote. “We have the capacity to put a much more significant bet on the table, if we have the will.”
• After the S-team sat in silence for several hours reading one another’s papers, the CEO picked up Herrington’s and said, “This one really made me think.”
• Google chairman Eric Schmidt cleared it up at a speech that fall in Berlin. “Many people think our main competition is Bing or Yahoo,” he said. “Really, our biggest search competitor is Amazon. People don’t think of Amazon as search, but if you are looking for something to buy, you are more often than not looking for it on Amazon.”
• Sitting next to Wilke in the meeting and taking notes was his technical advisor, a ten-year Amazon veteran named Stephenie Landry.
• The failed discussions with hostile retailers had also been a revelation. With limited opportunities for partnerships, Amazon itself would have to push much deeper into the supply chain of everyday household products and groceries if it was ever going to be successful in a brutally competitive business.
• They set “S-team goals” such as requiring the team to grow product selection by a certain amount. Around five hundred such goals were established inside Amazon and approved by the leadership committee at the end of every calendar year, establishing the most important metrics for each business unit at the company. Teams that owned those goals were required to supply frequent updates on their progress and explanations if they fell behind schedule. It was a crucial way that the S-team managed a sprawling amalgamation of loosely affiliated business units.
• Amazon also sent in the “principal engineers”: an elite squad of about a dozen technical wizards at the company who parachute into troubled projects to diagnose problems.
• “I felt like I was always getting crazy daunting goals that seemed almost impossible,” she said.
• The project once again represented a different style of innovation within Amazon. Employees didn’t “work backwards” from their idealized customers, who had never asked for such a creation. They worked backwards from Bezos’s intuition and were catering to his sometimes eclectic tastes (literally). Bezos was right a lot, particularly when it came to cutting-edge technology. But in the end, the single cow burger and other culinary innovations introduced within Amazon Fresh generated little buzz or increased business.
• But Bezos often allowed acquired companies and their eccentric CEOs to operate autonomously, as he had years before with the late Tony Hsieh and Zappos. He preferred to learn from their experience and harvest the data and business lessons that emerged.
• “Teaching 250 seventh graders who have never played an instrument before prepares you for a lot of challenges in life,” he later told me.
• One of Onetto’s goals was to promote empathy and teamwork in Amazon’s operations, which Seattle managers worried had grown heartless and punitive. At the time, the company was measuring worker productivity in every way possible and aggressively “stack ranking,” or firing the lowest performing percentile of workers every year.
• In 2009, Onetto’s human resources deputy, David Niekerk, wrote a paper titled “Respect for People,” and presented it at an S-team meeting. The paper drew from Toyota’s proven Lean ideology and argued for “treating people fairly,” building “mutual trust between managers and associates,” and empowering leaders to inspire employees rather than act as disciplinarians. Bezos hated it. He not only railed against it in the meeting but called Niekerk the following morning to continue the browbeating. Amazon should never imply that it didn’t have respect for people embedded in the very fabric of how it operated, he said. Bezos also solemnly declared that one of the biggest threats to the company was a disgruntled and entrenched hourly workforce—like the unionized workers that impaired U.S. automakers with strikes and onerous contract negotiations.
• Before the incident, Onetto had presented a white paper to the S-team that included a few paragraphs proposing to install rooftop air-conditioning units in Amazon’s facilities. But according to Niekerk, Bezos bluntly dismissed the request, citing the cost. After the Morning Call article drew widespread condemnation, Bezos approved the $52 million expense, establishing a pattern of making changes only after he read criticism in the media. But he also criticized Onetto for not anticipating the crisis.
• Fuming, Onetto prepared to remind Bezos of his original proposal. Colleagues begged him to let it go, but he couldn’t. As they anticipated, the meeting did not go well. Bezos said that as a matter of fact, he did remember the paper and that it was so poorly written and ambiguous that no one had understood what course of action Onetto was recommending. As other S-team members cringed, Bezos declared that the entire incident was evidence of what happens when Amazon puts people in top jobs who can’t articulate their ideas clearly and support them with data.
  • #[[Roam Brainstorm]] - culture of reading vs writing
• “When you run operations, there are always tough moments because you are a cost center and you are always the one who screwed up,” said Onetto,
• Bezos didn’t want another empathetic business philosopher to replace Onetto as the head of Amazon’s operations; he sought an uncompromising operator who could gain operating leverage by slowing down the growth of costs in the FCs relative to Amazon’s skyrocketing sales.
• The deal to acquire Kiva Systems was Dave Clark’s baby—he implicitly understood its potential to remake the FCs and turn Amazon’s surging variable labor costs into a more predictable fixed investment in robotics and software.
• Like many of the managers at Amazon who so snugly fit the Bezosian leadership template, Clark’s intellect trumped his emotional intelligence.
• But all of that was handily overshadowed by Clark’s strengths—a sharp, analytical mind and masterful ability to dive into the most intricate level of detail to identify problems and negative trends. He possessed a crucial skill at Amazon that was about to prove exceedingly useful: he could take Bezos’s ambitious visions, convert them into something approximating reality, and then grow them into systems that didn’t blow apart at Amazon’s tremendous size.
  • #[[Roam Brainstorm]]
• Such arm’s-length deals with drivers would indemnify Amazon from all of the unseemly and inevitable corollaries of the transportation business—such as botched deliveries, driver misbehavior, or worse, car accidents and deaths. Economists called this kind of arrangement, where companies outsourced specialized forms of work to subcontractors, “the fissured workplace,” and blamed it for eroding labor standards and fomenting a legalized form of wage discrimination that exacerbated inequality. This was a decades-long trend propagated not just by transportation providers like FedEx and Uber but by hotels, cable providers, and other tech companies like Apple. Amazon’s size, of course, spread it that much further, and policymakers, whose job it was to protect workers, were caught flat-footed.
  • #Unions
• “I’m okay with you making sophisticated mistakes, but this is just us being stupid,” Bezos said in one review of Amazon Logistics, according to an operations exec.
• Clark was more concerned with resolving the tricky economics of Amazon Logistics, like maximizing the shipments per truck and getting the pay for drivers just right. He made decisions based on cold, hard data, while employees’ initial concerns about safety were based on anecdotal evidence.
• Without quantifiable evidence of a widespread safety problem though, Clark and other execs largely dismissed the complaints. “I don’t think safety was the number one problem or priority,” said Will Gordon, the senior manager. “It was productivity and cost-effectiveness.”
• In June 2018, he introduced a new program for delivery service providers with fewer than forty vans, offering discounts on Amazon-branded vehicles, uniforms, fuel, and insurance—while still requiring them to operate independently and provide healthcare and pay overtime. The addition of multiple, smaller firms in each city would guarantee Amazon had plenty of partners to work with and ensure that it had yet another kind of leverage: the ability to dictate terms and cut ties with any disruptive or poorly performing companies without compromising the level of service for customers.
  • #[[Business-in-a-Box]]
• It also aligned Amazon’s delivery expenses with its growth; the more customers signed up for Amazon Prime and Amazon’s grocery delivery services, Prime Now and Amazon Fresh, the more efficient and cost-effective it became to send drivers into those neighborhoods.
• “I’m a simplifier,” Clark said, when I asked about the set of skills that had enabled him to progress from the Campbellsville FC, all the way to the upper echelons of the S-team. “I can take complicated stuff and figure out how to boil it down into what you need to do to actually make it big.”
  • #[[First Principles]]
• While they would never publicly admit it, Amazon’s senior leaders were happy to operate with more independence, and with fewer of the founder’s impossibly probing questions and demanding ambitions. Meetings with Bezos could still go sideways, resetting projects and depleting employee morale. Even the most inconsequential of utterances from the sagacious chief executive could instigate a flurry of wheel-spinning and white paper–writing inside the company.
• “Day two is stasis, followed by irrelevance, followed by excruciating, painful decline, followed by death,” he had said earlier that year on stage at an all-hands meeting. “And that is why it is always Day one.”
• He talked about two hypothetical e-commerce websites: one with ads that subsidized low prices and another that was ad-free but had higher prices. Customers, he said, would always flock to the website with better deals. “We are stupid if we don’t do it” was his usual conclusion, according to several S-team members.
• Amazon moved hesitantly to grow its New York–based ad sales team. It didn’t throw people at problems, it threw brainpower, went the common internal refrain.
• In one debate, Doug Herrington, chief of the domestic retail division, used the parable of the scorpion and the frog to frame the issue. In the story, the scorpion asks the frog if it can climb onto its back for passage across a river, then can’t help but sting the frog along the way, dooming both. His counterparts in advertising were the scorpion—they weren’t evil, per se, but it was simply in their nature to pervert the more egalitarian playing field of the authentic search results.
• That year, sales in the “other” category on Amazon’s income statement (the former home of AWS revenues), where the company parked advertising revenues, hit $4.65 billion—a 58 percent jump from the year before. Amazon had discovered a veritable gold mine in its own backyard.
• In the midst of this realignment, Bezos found another way to reduce fixed costs, flatten his organizational chart, and avoid a specter that he dreaded: that Amazon might become a stodgy “Day 2 company.” He issued a company-wide mandate (“He’s doing that all the time, of course, and people scramble like ants being pounded with a rubber mallet whenever it happens,” wrote former Amazon engineer Steve Yegge in a 2011 blog post). From henceforth, all Amazon managers—whose direct reports consisted primarily of other managers—would have to have a minimum of six employees reporting to them.
• To many Amazon employees, the organizational rearrangement revived the feeling that an informal cruelty was present in the corporate culture, reminiscent from the days of stack ranking.
• “From the standpoint of organizational morale, they couldn’t possibly have handled it more poorly,” said Stan Friedlander, a former chief merchant in Amazon’s shoe and apparel category who otherwise enjoyed his ten years at the company. “When most big companies go through this, they usually announce they are going to have layoffs,” he said. “You can stick around or get a severance. But Amazon to this day never announced how many people they were trying to get rid of, so it created a culture of fear, which they probably prefer.”
• It was a typical Bezos move—brilliant, and rather cruel.
• At the same time as he issued the directive, he also ordered S-team members to watch a nineteen-minute video on YouTube, produced by Bain & Company, called “Founder’s Mentality.” It was all about eliminating bureaucracy, maintaining the voice of customers in everyday decision-making, and preserving the mindset and motivation of an insurgent startup.
• Susan Harker, Amazon’s vice president of recruiting, led the search for Bezos. The process included an entreaty to Gwynne Shotwell, SpaceX’s dynamic chief operating officer and president, who quickly rebuffed it, saying that it “wouldn’t look right,” according to a person privy to the discussion.
• Bezos spent his summer vacations watching the Apollo launches, devouring the extensive science fiction collection at the local library, and dreaming of humanity’s manifest destiny in space.
• For the first few years, Blue resembled “a club more than a company,” as journalist Steven Levy later wrote in Wired, a think tank that included a dozen aficionados, like novelist Neal Stephenson and science historian George Dyson, who brainstormed radical and unproven ways to travel into space.
• While Bezos couldn’t supervise every detail at Blue Origin, he could devise the mechanisms—a system of invention—to guide how employees set priorities and conducted their work. In June 2004, he wrote an eight-hundred-word memo, informally dubbed “The Welcome Letter,” which to this day is given to new Blue employees as part of their hiring packet and has never before been publicly revealed.
• “We’ve been dropped off on an unexplored mountain without maps and the visibility is poor,” he wrote. “You don’t start and stop. Keep climbing at a steady pace. Be the tortoise and not the hare.
• He condensed its central idea into the company’s Latin motto, Gradatim Ferociter, or “Step by Step, Ferociously.”
• “Don’t just build a space vehicle, build a company that builds space vehicles,” Bezos had written in the Welcome Letter.
• “Are we making sophisticated errors or embarrassingly stupid errors?”
• Blue was reliant on funding from Bezos, while Uncle Sam, taxpayers, and other customers were paying most of SpaceX’s bills. In other words, this wasn’t a fable: the tortoise was racing an actual hare, and not surprisingly, the hare was winning.
• This style of oversight put the company’s president in a difficult position. Meyerson was acting as a conduit for Bezos but had none of his imposing authority; he also struggled to follow Bezos’s inconsistent directives, embracing constraints while hiring rapidly to accommodate the company’s growing ambitions. He held confrontational Monday meetings with his direct reports, which he often used to criticize them for not moving fast enough, leaving them demoralized and unproductive. They viewed him skeptically, according to numerous accounts, believing that he took copious notes for the purpose of sending Bezos frequent reports and acted as a distorting filter between them and their real boss.
• In a technology review meeting that February, he directed a withering stream of invective at New Shepard systems architect Greg Seymour, who had been with the company for twelve years. Seymour, who had already been unhappy, quit via text message at 3 a.m. the following morning.
• A portion of those employees came from Musk’s company, and the damning refrain in the industry—that “Blue was the country club you go to after toiling at SpaceX”—would have infuriated Bezos if he heard it.
• Bezos began to frame the operation less as a hobby or business pursuit and more as a kind of long-term philanthropy. “I get increasing conviction with every passing year that Blue Origin, the space company, is the most important work that I’m doing,” he said in a May 2018 onstage interview with Mathias Döpfner, CEO of media giant Axel Springer. “I’m pursuing this work, because I believe if we don’t, we will eventually end up with a civilization of stasis, which I find very demoralizing. I don’t want my great-grandchildren’s great-grandchildren to live in a civilization of stasis.”
• Bezos’s favorite space theorists, the late physicist Gerard K. O’Neill.
  • #[[Historical Futurists]]
• He was characteristically focused on the business and largely transactional when discussing community involvement. Internal documents at the company advocated that Amazon do enough to maintain its “social license to operate”—the business concept that refers to the public’s acceptance of a company, its employees, and business practices.
• In the days before the finalists were announced, the HQ2 team divided the list of more than two hundred cities that hadn’t made the cut and placed phone calls to local officials, alerting them to the bad news. Most asked why, while expressing disappointment with the amount of time and resources they had put into the failed effort. Amazon employees responded with blasts of data. “Your metro area only has 375,000 people and of those only 10 percent have advanced degrees,” went a typical explanation. “Sorry, that’s not enough of a labor pipeline.” City officials mostly agreed that Amazon’s outreach was conscientious, and that Holly Sullivan in particular spent more time than she needed answering questions and preserving relationships that might be helpful to the company in the future.
  • #Prosperable
• “Capital goes where it is welcome and stays where it is well treated.”
• After navigating a disaster of its own making, the company barely missed a step. Online purchases, cloud computing contracts, and Prime video streams appeared totally impervious to the unanticipated flavors of controversy that were suddenly coming Amazon’s way. This was the true lesson of the HQ2 saga: Amazon was getting perilously close to invincible.
• But one of the specific breaking points, of course, was the talk of unions, which had triggered the same reaction from Jeff Bezos and his colleagues that they had exhibited across the entire arc of Amazon history—at a Seattle call center in 2000, at German fulfillment centers in 2013, and soon, in France, at the start of the deadly Covid-19 pandemic. In all those cases, when talk of unionization and worker strikes came up, Amazon either tamped down on growth plans in the region, temporarily shut things down, or walked away from a site altogether.
  • #Unions
• After navigating a disaster of its own making, the company barely missed a step. Online purchases, cloud computing contracts, and Prime Video streams appeared totally impervious to the unanticipated flavors of controversy that were suddenly coming Amazon’s way. This was the true lesson of the HQ2 saga: Amazon was getting perilously close to invincible.
• Bezos was a master compartmentalizer; his ability to keep the intricate threads of his personal and professional lives separate was unrivaled.
• Bezos had always demanded that Amazonians comport themselves with discretion and impeccable judgment. He ripped documents in half and walked out of rooms when employees fell short of expectations. By conducting an extramarital relationship so carelessly that it became fodder for a salacious spread in the National Enquirer and then a high-profile media free-for-all, he had failed to meet his own high standards.
• But like the “Reynolds Pamphlet,” which Alexander Hamilton penned in the 1790s, accusing his opponents of extortion when he was confronted with charges of an adulterous affair, the Medium post was a public relations master stroke.
• As the Medium post was being published on the afternoon of February 7, Gavin de Becker stalled Dylan Howard, who was pressing him via text messages for an update on the Bezos camp’s response to AMI’s offer. Finally, the famed security consultant delivered the coup de grâce, texting the tabloid editor: “As you can likely see, I ran into resistance to your proposal.”
• Over the course of 2020, she would donate almost $6 billion to organizations like food banks, community groups, and historically Black colleges, while posting a personal essay about her motivations—a departure from her reticent approach to promoting Bystander Revolution years before.
• “All big institutions of any kind are going to be and should be examined, scrutinized, inspected,” he told the private equity billionaire David Rubinstein during an onstage interview at the Economic Club in Washington, D.C., in 2018. “It’s not personal, it’s kind of what we as a society want to have happen.” He sounded almost resigned toward whatever outcome might result: “We are so inventive that whatever regulations are promulgated or however it works, that will not stop us from serving customers.”
• In private though, Bezos prepared to take a less accommodating approach toward the intensifying techlash. In the fall of 2019, the S-team and Amazon’s board of directors read The Great A&P and the Struggle for Small Business in America, by the economic historian Marc Levinson. The book traces the rise and fall of the first American grocery chain of the twentieth century, as well as its strategic drift after the death of its founders and the decades-long crusade against it by populist politicians and determined trustbusters.
• Defending the company with his usual combativeness, senior vice president Jay Carney said of the subcommittee’s report, “There was very little that I see that has a lot of credibility to it.” But Lina Khan, who had helped steer the report as counsel to the subcommittee and whose Yale Law Journal paper on revitalizing antitrust statutes had provided the intellectual foundation for Congress’s investigation, rejected the notion that the proceedings were political.
• When information advantages and bargaining power are so skewed towards a single player that unilaterally sets all the rules, it’s no longer a ‘market’ in any meaningful sense.”
• Warren resumed this cause after entering the race for the Democratic Party’s presidential nomination, authoring an aggressively titled article on the publishing site Medium in March 2019, “Here’s How We Can Break Up Big Tech.”
• “What I teach and preach inside Amazon is [that] when you’re criticized, first look in a mirror and decide, are your critics right?” he said in an onstage interview in Berlin in 2018. “If they’re right, change. Don’t resist.”
• “If big tech companies are going to turn their back on the U.S. Department of Defense, this country is going to be in trouble,” Bezos said in a speech at the defense forum at the Reagan Library in Simi Valley, California.
• Words mattered, Zapolsky preached constantly; they had power, and the wrong ones could be used against Amazon. “Those terms aren’t helpful, and they are particularly unhelpful when regulators start using them as buzzwords,” Zapolsky said, “because they can actually do damage.”
• The person most responsible for initiating this argument was Lina Khan, who in her last year of Yale Law School in January 2017 published a ninety-three-page article in the Yale Law Journal titled “Amazon’s Antitrust Paradox.”
• Khan was an unlikely figure to challenge decades of conventional wisdom on antitrust. The oldest child of Pakistani parents who immigrated to the U.S. when she was eleven, she majored in political theory at Williams College and wrote her thesis on the philosopher Hannah Arendt’s 1958 book The Human Condition, which examines how modern technologies affected democracy.
• Her paper took its name from a seminal 1978 book by Robert Bork, The Antitrust Paradox, which argued that regulators should curb market power only when it might result in higher prices for consumers. Khan soberly countered that the so-called “consumer welfare standard” was ill-suited to the consolidating effects of the internet and to a company like Amazon, which ruthlessly lowered prices to bleed out competitors and amass market share—a perpetually money-losing strategy that was nevertheless endorsed by its patient investors.
• One critic of Khan’s paper derisively called it “hipster antitrust.” The moniker, not necessarily pejorative, stuck.
• Bezos earnestly answered these questions, but also seemed somewhat ill-prepared and unable (or unwilling) to respond with anything other than defensive corporate aphorisms. Former Amazon executives later compared his performance to that of countless employees who had worked hard, prepared for weeks, and still gotten their butts kicked when peppered with probing questions by the demanding and bellicose S-team.
• Amazon executives argued that the case for widespread discord was based on nothing more than anecdotes and that most of the independent merchants who sold 60 percent of the physical products on Amazon were thriving. “Anytime you have a population of a million, it’s not going to be too hard to find some folks who are unhappy,” said David Zapolsky. While he conceded that some of those anecdotes arise from Amazon’s mistakes, he said that most come from disgruntled sellers who “are not winning as much as they think they should be winning.”
• “I truly believe, and I know firsthand that numerous Amazonians agree, that Amazon understands the marketplace is a mess, but they just don’t know how to fix it,” he told me.
• Invent & Wander, Bezos’s subsequent collection of writings,
• “The company has become so complex that it makes no sense for him to be aware of all the details of these things,” said James Thomson, a former Amazon Marketplace employee and chief strategy officer for the e-commerce consultancy Buy Box Experts. “But he should know that some of the things that Amazon works hard to tell a good story about are wildly broken.”
• Lina Khan and her colleagues made a persuasive case: that the big tech platforms arbitrarily and self-interestedly controlled our political discourse, our financial lives, and the health of countless smaller companies—and that the failure to regulate them was a dangerous abdication of government responsibility.
• The report also struggled to establish that Amazon even had the kind of monopoly power that might make certain conduct illegal under U.S. law. The industry’s most widely cited data gatherer, eMarketer, put Amazon’s share of U.S. e-commerce sales at 38.7 percent. The success of Walmart and Target’s websites, as well as the Canadian company Shopify, which developed sites for brands to sell directly to customers, also belied the notion that Amazon had any kind of hammerlock on the industry.
• “There is no company in the world that is more complex and difficult for outsiders to understand than Amazon,” said Kurt Zumwalt, Amazon’s treasurer for fifteen years, before he left in 2019. “This is not a typical corporate conglomerate like Berkshire Hathaway or General Electric. Almost every aspect of Amazon is built around subtly increasing its connection to customers. The power of the business model is the combination of the sum of its self-reinforcing businesses and services, enabled by world-class technology, operational excellence, and a rigorous review and measurement process.”
• Jeff Bezos and his global empire appeared, at least in the moment, totally unbound from the laws of corporate gravity that slowed the growth of large enterprises, inhibited their agility, and clouded the judgment of senior leaders with exorbitant wealth.
  • #Forecasting - why do businesses so typically slow down as they get bigger?
• But it was the rare introduction from his oldest son, nineteen-year-old Preston Bezos, that described a dimension to the billionaire that was arguably unknown to the public: I remember sitting in the kitchen when I was eight years old, watching him slowly wind a piece of wire around a nail. I remember him taking the ends of that wire and touching them to a battery. I remember when he brought that nail close to a piece of metal and they stuck together. I remember the absolute awe in my eyes when he dragged a white board from the basement and tried to explain to me as best you can, to an eight-year-old, the absolute magic that can imbue that nail with magnetic force…. And the reason that memory is so special for me is because he had shown me how to do that maybe a dozen times before. But that was the time that it stuck…. It was that caring compassion, that gleeful pursuit of knowledge, and that patient perseverance, that made it possible. Those are the things that I love about my dad. Those are the things I think are so special about him. And it’s what I hope, at the end of the day, he is remembered by.
• Dave Clark, the bespectacled former middle school band teacher, had proven himself uniquely capable of developing large, complex systems, like the network of warehouses using Kiva robots and the in-house transportation division, Amazon Logistics, which was now responsible for approximately half of all Amazon deliveries globally and two-thirds in the U.S. If supply chains win wars, as the old military proverb went, Bezos had one of the most accomplished generals in the world by his side.
• In early May, Bray quit his job and wrote a stinging rejoinder on his personal website, arguing that the firings were unjust and that Amazon’s careless view toward its workers reflected a flaw in the company’s genetic makeup. “Firing whistleblowers isn’t just a side-effect of macroeconomic forces, nor is it intrinsic to the function of free markets,” he wrote. “It’s evidence of a vein of toxicity running through the company culture. I choose neither to serve nor drink that poison.”
• Bray believed the testimonials of the activist employees reflected understandable anxiety at a harrowing time. But Amazon, in its reflexive defensiveness, didn’t see regular people with genuine concerns but the invisible hand of its opposition, such as organized labor groups.
• In many European countries, for example, workplaces of a certain size have legally mandated Works Councils, which are independent of labor unions but give employees a voice in major developments at their facilities. There is no such thing in the U.S., where dramatic changes to workers’ lives can be made thousands of miles away—and if they don’t like it, they have no recourse except to quit and find another job, or speak up publicly and risk getting fired.
• Jeff Bezos’s mission had been to stave off stasis and to keep Amazon a “Day 1” company with an inventive culture and durable customs that would outlast him. “Amazon is not too big to fail,” he once warned employees at an all-hands meeting. “In fact, I predict one day Amazon will fail. Amazon will go bankrupt. If you look at large companies, their lifespans tend to be thirty-plus years, not a hundred-plus years.”
• Still looming, of course, was a definitive answer to a perennial question that even now is almost impossible to resolve: Is the world better off with Amazon in it? Or perhaps, in the wake of Amazon’s evolution into a trillion-dollar empire and Jeff Bezos’s graduation into the annals of business history, it simply no longer makes sense to ask. The company is now woven inextricably into our lives and communities, hooking customers on the convenience of ordering from home and posing insurmountable challenges for all but the nimblest local retailers. It calls to mind Bezos’s old saying about one-way and two-way doors, and “type one” irreversible decisions. Long ago, we stepped through a one-way door and into the technological society conceived of and built in large part by Jeff Bezos and his colleagues. Whatever you think about the company—and the man—that controls so much of our economic reality in the third decade of the twenty-first century, there is no turning back now.