Tag: amazon

Recommended recent reads (Shillbert, early YC, enshittification, longevity, The New Yorker, longevity, and more)

I’ve been reading more articles lately, so I wanted to share some good ones.

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A corporate fraud bigger than Enron? Thread from @ramahluwalia detailing the accusations against Barry Silbert and DCG / Genesis. Another black eye for crypto but honey badger don’t care

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Jessica’s wonderful recounting of early YC days and the lessons she learned and advice she has for startup founders:

When it came to investing, I had something that my cofounders didn’t have: I was the Social Radar. I couldn’t judge our applicants’ technical ability, or even most of the ideas. My cofounders were experts at those things. I looked at qualities of the applicants my cofounders couldn’t see. Did they seem earnest? Were they determined? Were they flexible-minded? And most importantly, what was the relationship between the cofounders like? While my partners discussed the idea with the applicants, I usually sat observing silently. Afterward, they would turn to me and ask, “Should we fund them?”

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Must read from Cory Doctorow on the “enshittification” of the big internet platforms

Search Amazon for “cat beds” and the entire first screen is ads, including ads for products Amazon cloned from its own sellers, putting them out of business (third parties have to pay 45 percent in junk fees to Amazon, but Amazon doesn’t charge itself these fees). All told, the first five screens of results for “cat bed” are 50 percent ads.

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Thorough and accessible round-up of the longevity industry from Nathan Cheng. Wish he had the time to write more of these again!

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The New Yorker on the the present and future of AI:

Neal Stephenson imagined an artificially intelligent book called “A Young Lady’s Illustrated Primer”; in effect, it was a chatbot, built specifically to teach the protagonist everything she needed to know, with lessons that were always pitched at the right level and that adapted to her curiosity and feedback—in other words, a perfectly designed curriculum.

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What it’s like to live poor. Many anecdotes that stick with me such as:

When someone is telling me they are or have been poor and I’m trying to determine how poor exactly they were, there’s one evergreen question I ask that has never failed to give me a good idea of what kind of situation I’m dealing with. That question is: “How many times have they turned off your water?”.

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Another Balaji banger on what I beliee is the main storyline with macro and US credit markets:

Jerome Powell and Janet Yellen are bond villains. They destroyed every institution that trusted their words in 2021. They said inflation was transitory and that they’d keep rates low even as late as November 2021. They sold billions in bonds on that false pretense. Then the Fed executed a surprise rate hike, devaluing all the bonds the government had just sold, and turning Treasuries into the new toxic waste.

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Gwern compendium of all things nicotine (tldr: worth trying for yourself)

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Reading this on Amazon ad business is interesting especially in context of Doctorow’s enshittification essay:

“Given [Amazon Ads] margin structure and incremental cost base, it’s highly likely to be generating similar absolute profits to [the Amazon Web Services cloud business].”

Napkin math based on Q2 2023 earnings checks out: AWS revenue hit $22B (at a 30% margin, that is $6.6B of operating profit) while Amazon ads hit $10.7B (at 68% margin, that is $7.3B of operating profit).

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One of the most creative thinkers on Twitter / X crypto right now, love this one reframing AI:

Augmenting humans with tools like Google and AI can accelerate our data, or experiential, age. You can also view this as “prosthetic experience”. Someone enhanced by these tools can posses greater knowledge and wisdom than their biological age suggests. If you’ve been using Google the last 20 years, you’ve accessed several human lifetimes of info compared to someone who had to go to the library and laboriously search through stacks of paper to figure out one thing. If you exist in certain esoteric nooks of Twitter, you’re probably at least a data centenarian.

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Highlights from The Everything Store about how Amazon was built: “If you’re not good, Jeff will chew you up and spit you out. And if you’re good, he will jump on your back and ride you into the ground.”

Brad Stone’s The Everything Store was a good book about Amazon’s journey. Like most long and successful journeys, the details are messy, but Brad is evenhanded and thorough at reporting and analyzing the facts.

Below are some of my favorite highlights, copied verbatim from the book, which I also bought from Amazon, and read on my Kindle app lol.

HIGHLIGHTS:

They agreed on five core values and wrote them down on a whiteboard in a conference room: customer obsession, frugality, bias for action, ownership, and high bar for talent. Later Amazon would add a sixth value, innovation.

As Amazon’s growth accelerated, Bezos drove employees even harder, calling meetings over the weekends, starting an executive book club that gathered on Saturday mornings, and often repeating his quote about working smart, hard, and long.

“There are two kinds of retailers: there are those folks who work to figure how to charge more, and there are companies that work to figure how to charge less, and we are going to be the second, full-stop,” he said in that month’s quarterly conference call with analysts, coining a new Jeffism to be repeated over and over ad nauseam for years.

Kim Rachmeler shared a favorite quote she heard from a colleague around that time. “If you’re not good, Jeff will chew you up and spit you out. And if you’re good, he will jump on your back and ride you into the ground.”

He gave Blue Origin a coat of arms and a Latin motto, Gradatim Ferociter, which translates to “Step by Step, Ferociously.” The phrase accurately captures Amazon’s guiding philosophy as well. Steady progress toward seemingly impossible goals will win the day. Setbacks are temporary. Naysayers are best ignored.

He simply refused to accept Amazon’s fate as an unexciting and marginally profitable online retailer. “There’s only one way out of this predicament,” he said repeatedly to employees during this time, “and that is to invent our way out.”

Bezos believed that high margins justified rivals’ investments in research and development and attracted more competition, while low margins attracted customers and were more defensible.

Bezos was clearly nervous about Netflix’s gathering momentum. With its recognizable red envelopes and late-fee-slaying DVD-by-mail program, it was forging a bond with customers and a strong brand in movies, a key media category. Bezos’s lieutenants met with CEO Reed Hastings several times during Netflix’s formative years but they always reported back that Hastings was “painfully uninterested” in selling

“Jeff does a couple of things better than anyone I’ve ever worked for,” Dalzell says. “He embraces the truth. A lot of people talk about the truth, but they don’t engage their decision-making around the best truth at the time. “The second thing is that he is not tethered by conventional thinking. What is amazing to me is that he is bound only by the laws of physics. He can’t change those. Everything else he views as open to discussion.”

“When given the choice of obsessing over competitors or obsessing over customers, we always obsess over customers,” he said

Target had outsourced its online operations to Amazon in 2001 but the relationship was far from perfect, with joint projects frequently falling behind schedule. “We had no resources to build infrastructure for Target,” says Faisal Masud, who worked on the Target business at Amazon. “It was all about Amazon first and Target next.”

He told business-development vice president Peter Krawiec not to spend over a certain amount to buy Quidsi but to make sure that Amazon did not, under any circumstances, lose the deal to Walmart.

“For different reasons, in different ways and to different degrees, companies like Apple, Nike, Disney, Google, Whole Foods, Costco and even UPS strike me as examples of large companies that are well-liked by their customers.” On the other end of spectrum, he added, companies like Walmart, Microsoft, Goldman Sachs, and ExxonMobil tended to be feared.

Regret, that formidable adversary Jeff Bezos worked so hard to outrun, hangs heavily over the life of his biological father.

The entire company is scaffolding built around his brain—an amplification machine meant to disseminate his ingenuity and drive across the greatest possible radius. “It’s scaffolding to magnify the thinking embodied by Jeff, to the greatest extent possible,” says Jeff Wilke when I bounce that theory off him. “Jeff was learning as he went along. He learned things from each of us who had expertise and incorporated the best pieces into his mental model. Now everyone is expected to think as much as they can like Jeff.”

It is easy to draw a straight line from the vision he had back then to the Amazon of today. There were a few little wobbles and detours in places, but really I don’t know any other company that has created such a juggernaut that is so consistent with the original ideas of the founder. It is almost like he fired an arrow and then followed that arc.

“The Internet is disrupting every media industry, Charlie,” he said. “You know, people can complain about that, but complaining is not a strategy.”

Jeff Bezos on Amazon’s culture and strategy: “Customers are always beautifully, wonderfully dissatisfied”

This is from his 2015 Amazon letter to shareholders [source]. So much good stuff on what makes Amazon such a sustaining high performing culture, how to align vastly different business units and products, what challenges he’s faced – and the lessons he’s learned from them – as the company has grown and grown and grown.

On alignment and shared values

[AWS and Amazon retail] share a distinctive organizational culture that cares deeply about and acts with conviction on a small number of principles. I’m talking about customer obsession rather than competitor obsession, eagerness to invent and pioneer, willingness to fail, the patience to think long-term, and the taking of professional pride in operational excellence.

There are many advantages to a customer-centric approach, but here’s the big one: customers are always beautifully, wonderfully dissatisfied, even when they report being happy and business is great. Even when they don’t yet know it, customers want something better, and your desire to delight customers will drive you to invent on their behalf.

On managing big company process and complexity

As companies get larger and more complex, there’s a tendency to manage to proxies. This comes in many shapes and sizes, and it’s dangerous, subtle, and very Day 2. A common example is process as proxy. Good process serves you so you can serve customers. But if you’re not watchful, the process can become the thing. This can happen very easily in large organizations. The process becomes the proxy for the result you want. You stop looking at outcomes

The outside world can push you into Day 2 if you won’t or can’t embrace powerful trends quickly. If you fight them, you’re probably fighting the future. Embrace them and you have a tailwind.

On decision making

Most decisions should probably be made with somewhere around 70% of the information you wish you had. If you wait for 90%, in most cases, you’re probably being slow. Plus, either way, you need to be good at quickly recognizing and correcting bad decisions. If you’re good at course correcting, being wrong may be less costly than you think, whereas being slow is going to be expensive for sure.

Recognize true misalignment issues early and escalate them immediately. Sometimes teams have different objectives and fundamentally different views. They are not aligned. No amount of discussion, no number of meetings will resolve that deep misalignment. Without escalation, the default dispute resolution mechanism for this scenario is exhaustion. Whoever has more stamina carries the decision.

Some decisions are consequential and irreversible or nearly irreversible – one-way doors – and these decisions must be made methodically, carefully, slowly, with great deliberation and consultation. If you walk through and don’t like what you see on the other side, you can’t get back to where you were before. We can call these Type 1 decisions. But most decisions aren’t like that – they are changeable, reversible – they’re two-way doors. If you’ve made a suboptimal Type 2 decision, you don’t have to live with the consequences for that long. You can reopen the door and go back through. Type 2 decisions can and should be made quickly by high judgment individuals or small groups.

Jeff Bezos sharing some wisdom

…at the 2012 re:Invent fireside chat with Amazon’s CTO, Werner Vogels.

Full video here.

My sporadic notes here. Mostly his words, with some editorializing and annotation:

  • Flywheels are important (I take this to mean something that will gain speed over time)
  • Some things won’t change in 10 years – focus on those. For example: people will always want cheaper prices, faster & better service
  • If you’re ok being misunderstood for long periods of time, you can ramp up your rate of experimentation
  • It’s easy to invent new things that customers don’t care about
  • It’s all about rate of innovation (echoes Eric Ries and his quote about moving through the build-measure-learn feedback loop as quickly as possible)
  • Used to be 30% product, 70% promotion/service; now it’s 70% product, 30% promotion/service
  • Bezos does front line work from time to time, e.g. on factory floor, in call center
  • 10K year clock is about long-term thinking. If I asked you to solve world hunger in 5 years, you’d say no way. But if I asked you to solve world hunger in 100 years, you’d think about it. The problem is the same, but the timeframe has changed
  • If you wanted to catch a wave, you’ll never do it. What you should do is position yourself and catch the wave
  • Missionaries build better products. I’ll take a missionary over a mercenary any day
  • Passion and customer centricity will take you an awful long way