OK I GIVE UP

The Everything Store

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In case you are wondering what makes Jeff Bezos and his brain child Amazon so different and successful, this meticulously researched and written book probably has the answers. Brad Stone looks at every detail, person and event in the history of Amazon, and presents them to the reader in a very fluid and accessible manner. While doing so, he aims to avoid a common mistake Bezos personally warned him against: The narrative fallacy, which is the tendency to make historical events fit a definitive narrative, making them sound inevitable and logical. In order to not fall into this trap, Stone avoids asking and answering any grand questions, but gives the reader enough details to build such a narrative herself. This also makes the book worth a second or third read. The lengths Stone went to as a journalist to gather the said details also deserves respect; the most extreme example is him searching the trash bin of a secretive company Bezos founded to develop civilian space travel.

So, what makes Bezos and Amazon different? There is the audacity of the vision; Bezos wanted to start an “everything shop”, but set off with the one item which was easy to store and ship. There is Bezos’ talent at seeing what, in hindsight, is obvious, and being brave and stubborn enough to steer the whole company in that direction. The Internet exploded like nothing before it, for example, and Bezos asked himself the question, “How would a business with explosive growth look?” and actually managed to ride the wave of online growth. He also recognized rather quickly that an online handler has the chance to thoroughly understand its customers thanks to the data they generate. This insight enabled Amazon to be one of the first companies that fed the user with personalized recommandations, thereby increasing revenue. There is the authentic obsession with the customer experience, starting from offering the lowest price.

But above and beyond all, it’s the combination of smartness and drive. Bezos is universally acknowledged to be one of the smartest, most intelligent tech CEOs ever. He is well known for going into presentations and showing better understanding of the material than the presenter, and everyone else in the room. Bezos also put great effort into hiring the smartest people, especially at the executive level, and targetting individual executives at other retail companies. The drive part is, at least for me, more intriguing, and also with darker nuances. Bezos left a very comfortable job to move across the country, and worked like crazy to create Amazon. It should come as no surprise that he expected the same dedication from his employees, and similar working hours. Interesting details on how far this went are how employees went to an of-site for two weeks before the christmas season, and how they revolted when a new executive cancelled the surprising perk of free Advil for everyone. After their shares were vested, most of the early executives left Amazon; the demands of their boss and the relatively low salaries were just not worth it.

Bezos’ drive is also salient in his dealing with not only competitors, but also the sellers – who sometimes appear to have been even worse off. Amazon was relentless in its pursuit of discounts from publishers, for example, and a project which aimed to get high discounts from small publishers was named Gazelle, on account of Amazon being a cheetah that pursued and killed these publishers. Competitors, on the other hand, were not only relentlessly pursued, but snatched up at bargain prices after such a pursuit, if they were considered a credible threat to Amazon. One of the best examples for this is the acquisition of Zappos, told in great detail in this book. Zappos had established a brand of its own in the clothing and footwear online market. Bezos knew that the company could be acquired for 500 million dollars, but he didn’t want to pay that. His solution was to create, from scratch, a website that sold the same products, and offer them at a much lower rate than Zappos with free shipping, losing money with each order. This episode ended with Amazon acquiring Zappos at a higher rate, but with Amazon’s stock price soaring. A similar, but even more ruthless game was later played with Quidsi, which sold children’s supplies for parents.

This book is a great choice if you want to understand the cut-throat world of online business, especially retail. If you want to understand one of the companies that will have the biggest effect on the planet’s future, and how the big four (Apple, Facebook, Google, Amazon) are shaping our future, it is essential reading.