Amazon

"Today, overnight shipping is a way of life—order something from Amazon and it’s on your doorstep within days or even hours. Risley was ahead of the game by decades, developing rapid air shipping of lobster to Europe and Asia in the late 1970s and early ’80s. With Ocean Nutrition, Risley foresaw opportunity in the burgeoning nutrition, health, and supplements marketplace. Columbus, meanwhile, rode the wave of massive internet expansion during the 2000s. In other words, Risley has been a pioneer and innovator in three very different industries—in each case riding on the crest of global forces."

"Of course, Musk wasn’t alone in thinking that offline banks were too slow to move online. By the late 1990s, the digital finance and banking space swarmed with start-ups. But Musk found those services lacking in one respect or another—he wasn’t keen on launching just another dot-com bank. Musk’s vision for his new financial services firm was—unsurprisingly—ambitious. What if, he wondered, a single entity unified a person’s entire financial life? In some of his earliest investor pitches, he called this idea “the Amazon of financial services”: finance’s one-stop shop, offering not just standard-issue savings and checking accounts, but everything from mortgages to lines of credit, stock trading, loans, and even insurance. Wherever money went, Musk believed his new company should go, too."

"The document pushed a familiar refrain about time to market. “Speed is of the essence for three reasons,” the spec noted: The product’s inherent network effects meant the first mover will have a tremendous advantage. Every day we have the market to ourselves is an irreplaceable chance to build an insuperable lead. The company needs to demonstrate a revenue track record going back at least 6 months for the IPO. X-Click could provide immediate revenues. Competitors such as Yahoo, eBay, and Amazon are hot on our heels in terms of matching basic P2P functionality. X-Click is needed to counter their superior distribution and ability to integrate."

"That criteria led to a culling of possible expansion targets—as when Sacks rejected one employee’s proposition that Pizza Hut or Amazon were ripe for the taking. For Sacks, offline retailers were “a revolutionary (rather than evolutionary) step from where [PayPal was] today, and it’s also not clear that PayPal adds much over existing options.” He also considered expansion to Amazon and similar sites a nonstarter: The team understood all too well the frustration and friction of burrowing into eBay’s payment process. Established sites, he wrote, “are loathe to outsource their checkout line to PayPal.”"

"What those people weren’t realising was path dependency, which is about how I want a book or I hear about a book or someone mentions a book or I read about a book or I think about a book or my course professor tells me I need a book. The next decision is which channel I should buy it in — shall I go to a shop or shall I go online? And then the third decision is, in that channel, which branch shall I go to? Now, within the bookshop channel, Barnes & Noble were strong, but once you’ve made the decision that you’re buying that book online the strongest brand in the online channel was Amazon."

"The street finds its own uses for things, as someone once said. And isn’t it interesting how many successful brands eschew user imagery. easyJet works hard to deposition itself — to be socially neutral. Apple uses dead people or silhouettes. BMW for years had a rule that no people could be shown in its ads (an especially wise move as not even BMW drivers like other BMW drivers — or anyone else for that matter; note to BMW … don’t try starting a social network). Is Red Bull an energy drink or a mixer? What is the user-imagery of Amazon? Who is the typical Google user? What makes Google better? The fact that we cannot answer these questions simply would typically be considered a flaw."

"Of course, Musk wasn’t alone in thinking that offline banks were too slow to move online. By the late 1990s, the digital finance and banking space swarmed with start-ups. But Musk found those services lacking in one respect or another—he wasn’t keen on launching just another dot-com bank. Musk’s vision for his new financial services firm was—unsurprisingly—ambitious. What if, he wondered, a single entity unified a person’s entire financial life? In some of his earliest investor pitches, he called this idea “the Amazon of financial services”: finance’s one-stop shop, offering not just standard-issue savings and checking accounts, but everything from mortgages to lines of credit, stock trading, loans, and even insurance. Wherever money went, Musk believed his new company should go, too."

"That criteria led to a culling of possible expansion targets—as when Sacks rejected one employee’s proposition that Pizza Hut or Amazon were ripe for the taking. For Sacks, offline retailers were “a revolutionary (rather than evolutionary) step from where [PayPal was] today, and it’s also not clear that PayPal adds much over existing options.” He also considered expansion to Amazon and similar sites a nonstarter: The team understood all too well the frustration and friction of burrowing into eBay’s payment process. Established sites, he wrote, “are loathe to outsource their checkout line to PayPal.”"

"The document pushed a familiar refrain about time to market. “Speed is of the essence for three reasons,” the spec noted: The product’s inherent network effects meant the first mover will have a tremendous advantage. Every day we have the market to ourselves is an irreplaceable chance to build an insuperable lead. The company needs to demonstrate a revenue track record going back at least 6 months for the IPO. X-Click could provide immediate revenues. Competitors such as Yahoo, eBay, and Amazon are hot on our heels in terms of matching basic P2P functionality. X-Click is needed to counter their superior distribution and ability to integrate."

"the companies we highlight survived the peaks and valleys of business realities, and most thrived. With iterations of both failure and success, they developed the most advanced business systems on the planet. The very best defied the odds and became exceptional. The truth is that their secrets are hardly secrets at all—continuous improvement, rigorous benchmarking, disciplined investment, principled leadership, solid business systems—but these practices have been long forgotten, ignored, or dismissed by the businesspeople hypnotized by the Google-Amazon-Apple dream."

"Bezos, the founder and CEO of Amazon, said, “A few big successes compensate for dozens and dozens of things that did not work.”"

"Personal vehicles of players Player Personal vehicles created Bain Bain & Company; the unique Bain consulting formula; recommendations from client CEOs to other CEOs; Bain Capital Bezos Amazon; the Bezos business formula for Amazon Bismarck The Prussian state and army; North German Confederation; German state and military; successful wars against Denmark, Austria and France Churchill His opposition to Hitler; British state and Empire; their armies and people Curie Radium Disney Disney Studio; cartoons, movies and television; Mickey Mouse and later Disney characters; Disney’s personal WED corporation; Disneyland Dylan The folk movement; Columbia Records; songs and albums; fans Einstein Theory of Relativity; Zurich, Prague, Berlin, Caltech, Berkeley and Princeton universities; media Frankl Man’s Search for Meaning; lectures; awards; school of followers Henderson Boston Consulting Group (BCG); the Experience Curve and Boston Box concepts; Perspectives (short thought-pieces mailed to senior managers); BCG conferences Jobs Apple, NeXT and Pixar; Macintosh computers; Apple digital devices; Apple store; Apple apps Keynes The Economic Consequences of the Peace; King’s College Cambridge; The General Theory Lenin Iskra (Russian revolutionary newspaper); What Is To Be Done?; Bolshevik party; Russian state; military and secret police Leonardo His studio in Florence; his paintings, sculptures Madonna Record labels; albums, videos, movies; media; personal business ventures Mandela ANC; Robben Island prison; South African state Rowling Harry Potter Rubinstein Eponymous cosmetics empire; advertising and media; personality marketing and personal networking Paul of Tarsus City churches he founded; his letters (epistles) to them, Acts of the Apostles; Marcion and his pioneering New Testament canon Thatcher Conservative Party; British state and military; Falklands war; ‘Thatcherism’ programme in favour of free enterprise, against state business monopolies and abuses of trade union power"

"Transformations that occur in an unusual firm, before you start a new venture There was Jeff Bezos, working out the plan for Amazon while still working in that most remarkable of firms, D. E. Shaw & Co, one of the very few that knew how much the internet was going to change the world. Before Amazon was even born, Bezos was transformed, equipped, almost Messianic. There was Bill Bain, still within BCG, already transformed, already happily piloting the approach he would perfect in his own domain. This first model is the best – you can acquire ideas and authority, and start to experiment, while still employed by someone else. You become transformed on their dime. The firm you found is not really a start-up, more a continuation and personalisation – your personalisation – of a validated prototype. The new venture can be relatively low-risk, yet still high-return, both financially and, more important, psychically. Work for a strange, singular, surprising – and surprisingly successful – company. Look for one that is growing fast; that does things differently from its larger rivals; that focuses on a special subset of customers and that knows something the rivals do not know. Attain rare knowledge and confidence from what the firm knows. Next, work out how to use that special knowledge in a different way, just as Bezos did."

"DESCO’s business bore no resemblance to that of the future Amazon, and yet DESCO gave Bezos the model for Amazon in four vital ways: •  The template for a firm with incredibly high standards and brilliant people. •  More specifically, the early discovery of the internet and its amazing growth potential. •  Even more specifically, the vision for Amazon originated at DESCO. •  Yet more precisely, the ideal first product for Amazon was identified at DESCO."

"What does Bezos believe? •  High standards can be taught. If you start with a highstandards team, newcomers will quickly adapt. •  High standards are domain-specific. ‘When I started Amazon,’ Bezos says, ‘I had high standards on inventing, customer care, and hiring. But I didn’t have high standards on operational process … I had to learn and develop high standards on all that (my colleagues were my tutors).’ •  High standards result in better products and services for customers. But less obviously, ‘people are drawn to high standards – they help with recruiting and retention’. •  ‘And finally, high standards are fun! Once you’ve tasted high standards, there’s no going back.’"

"Jeff Bezos illustrates this. His breakthrough obsession and achievement was his peculiar vision for Amazon – the internet’s ‘everything store’ marked by unbeatable prices and customer service. Bezos made his vision a reality in a special, very unusual way. Do you realise how different Amazon is from almost all other companies? Can you imagine the fights there must have been in the boardroom when investors and managers wanted to raise prices so that the share price could be underpinned by real profits? Bezos alone clung to the creed that if you provide extraordinarily low prices and high customer service, your ultimate reward will be massive. Part of Bezos’ achievement comes from being pig-headed and dictatorial – he preaches; he insists that business should be done his way. There is a cult of Jeff at Amazon, just as there was – some would say, there still is – a cult of Steve at Apple. We can understand the Bezos cult from this – in March 2000 Amazon was worth $30 billion. Not bad. But today it hovers around $800 billion – twenty-seven times as much."

"We can see this easily in the case of Jeff Bezos. It’s hard to describe Bezos except in terms of his own philosophy and vision for Amazon – the internet’s everything store with unbeatable prices and customer service. A business philosophy is not unusual – but what is rare is dedication to a philosophy, even when it appears to conflict with commercial common sense."

"Jeff Bezos needs the leverage of his Amazon army to an even greater extent than Bill Bain did. Bezos too places enormous importance on the quality and ambition of those he recruits. To get big fast required him to build an enormous organisation. Collaboration was similarly vital. Because Bezos knew nothing about functions such as warehousing and logistics, when Amazon had to start investing very heavily in these Jeff hired the very best people he could find, backed them totally unless they failed, and fired them if they did. Credibility was also vital. It came by becoming the largest online retailer by far – later the largest retailer period – of books, and then of other products. And as we saw earlier, Jeff’s relentless focus on exceptional customer service and unbeatable prices underpinned Amazon’s rapid expansion. Again, the business formula was also the vehicle."

"Here are examples of pool vehicles the players used. For Bill Bain, it was the theories of business strategy that had been originated by the Boston Consulting Group. BCG put its ideas such as the Boston Box out into the public domain to build reputation and sell business. When Bill Bain started Bain & Company, he was able to use all BCG’s concepts. They were high-octane stuff, fuelling a whole new industry. Jeff Bezos also used the BCG ideas to develop his philosophy for Amazon, especially dominant market share, and lowest costs and prices. Bezos also benefitted from two other pool vehicles – internet retailing and ‘Californian Venture Capital Syndrome’, which values growth above short-term profits, supporting Amazon’s losses for long years, allowing a focus on customer experience and low prices. Otto von Bismarck rode the rise of nationalism in the nineteenth century. This was his pool vehicle to turn Germany from a fragmented cluster of dozens of independent states into a unified superpower dominating central Europe. The popularity he gained by his unification of Germany pleased the liberal politicians and William, the Prussian King, and kept Bismarck in power for a generation. Winston Churchill’s pool vehicle was the rise of German National Socialism, Hitler’s murderous anti-Semitism, and his own opposition to them. An environmental factor does not have to be appeased or promoted; it can also be a pool vehicle when it is opposed first or most vigorously. Marie Curie’s pool vehicle was the new field of x-rays and radiation. The two pool vehicles which Walt Disney exploited so well were the rise of animated cartoons and, later, the rise of amusement parks. Disneyland was in many ways the opposite of traditional amusement parks, which Walt disdained as ‘nasty, dirty places run by hard-faced men’. Without their existence he would probably not have had the idea for a pristine and uplifting park idealising the best of American small-town values. Leonardo da Vinci would not have been Leonardo if he had not been born where and when he was. Renaissance Florence was his pool vehicle. Bob Dylan’s pool vehicle was the early 1960s folk movement in New York City, with its liberal-protest values, and self-importance, epitomised by his relationship with Joan Baez. He rode them until he became famous, then dumped them sharpish. Albert Einstein benefited from the…"

"If you are in business, have you started a company that is sufficiently different from any other, with a great business formula, like Amazon or Apple or the Boston Consulting Group or Bain & Company or Helena Rubinstein or Walt…"

"As the excitement over high-speed modems made headlines, I got a call in December 1994 from John Doerr, a Silicon Valley investor at venture capital firm Kleiner Perkins, renowned for his Midas touch with start-ups in the computer industry. He backed Compaq, Netscape, Sun Microsystems, and later, Amazon and Google."

"We would ultimately merge QVC with HSN more than twenty years later. And even with the rise of Amazon and online shopping, TV shopping remains a valuable business, with QVC, HSN, and online retailer Zulily delivering nearly $11 billion through the QVC Group. Yielding to a better, smaller competitor taught me that when you lack a special expertise, it is better to own a small piece of a thriving enterprise rather than to own 100 percent of a struggling one you don’t know how to run."

"And in retail, cable TV offered something called “home shopping.” While it’s hard to imagine what life was like before websites like Amazon, the only way back then that you could get a product you could not buy in person at a physical store was to order it from a paper catalog, either by mail order or by telephone (one connected to the wall with a cord). The notion that you could now see on TV a necklace on a live model, or watch a power saw buzz through a board, and order it up sparked the imagination of retailers, and literally dozens of shopping networks jumped into the race within months. As we sat in the Helmsley, Irwin said all the right things, claiming he had plenty of inventory, big warehouses, and “everything we need to make it happen fast.”"

"As an example, we at USA had come up with an innovative idea to buy $2 billion of Amazon’s debt. The stock market tech bubble of 2000 had burst, and people were worried that Amazon wouldn’t be able to meet its obligations. The bonds had sold off for twenty-five cents on the dollar."

"“Fifteen years ago, 50% of internet users were Americans. Asians were 19%. However, five years from now, Americans will be 12% of the internet population, and Asians will be 50%. (ellipsis) Until now, you could not become the number one internet company without being an American company. Companies like Google, Amazon, Yahoo US, and eBay—all American companies. In other words, if 50% of users were American, naturally, it would evolve into an English website with a business model suited to American lifestyles. So, Americans had the advantage of location. But from now on, Asians will become 50% of the internet population. In just five years. Already, Chinese internet users have surpassed Americans. 50% will be centered on China and Asia, with Americans becoming 12%. In this sense, we precisely gained the advantage of location. If we obtain the opportuneness of Heaven and the advantage of location, we must act.”"

"“Fifteen years ago, Americans comprised 50% of the internet population. Asians made up 19% back then. (Omitted) Until now, only American companies could be number one on the internet. Google, Amazon, Yahoo US, eBay, etc., all those were American companies, right? Since 50% of the customers, the users, were Americans, naturally, the website would be in English, with a business model suited to American lifestyles. Hence, Americans had the advantage of the land.”"

"Greg’s girlfriend worked at Apple and had a few encounters with her boss, Steve. Perhaps feeling as if Steve’s gaze was saying “Why are you guys here?” they eventually began visiting the store on Fridays when Steve was less likely to appear. Greg at one point said, “I’m having more business trips to Seattle.” Amazon has a subsidiary in Silicon Valley responsible for research and development. They were making the Kindle there, but he often also visited the Seattle area where the headquarters are located."

"Primondo only had three competitors worldwide: Amazon, the Otto Group, and the RedCats Group (PPR). Thus, Primondo was considered the prime cut of the Arcandor corporate group. In November 2010, the Carlyle Group made its move, retained the six profitable mail-order companies, and sold the rest, which quickly found further buyers. For instance, Baby-Walz has developed into a successful entity for the Carlyle Group: with over 300 million in sales, the company is now number 1 in the German baby specialty market."

"The leak is particularly large at SSU. The abbreviation could stand for "Signas Super Disaster," but actually it refers to Signa Sports United, a collection of online stores, from fahrrad.de to Tennis-Point to the team sport specialist Outfitter, which were acquired gradually after 2016. Originally, SSU was conceived as an online platform for Karstadt Sport and SportScheck, but in the end, the idea was discarded. SSU is intended to become an online-only player, thereby serving the investors' dreams of spectacular value increases. At that time, retail was under the impression of Amazon's success; in 2014, the market capitalization of the American behemoth was $144 billion, by 2016 it had already reached $356 billion, and by 2020 it comfortably exceeded the trillion dollar mark. It was the heyday of successful IPOs, with digital companies performing the best."