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January 2, 2015

Book Review: The Everything Store: Jeff Bezos and the Age of Amazon by Brad Stone

Amazon is one of the most interesting companies I’ve read about. Not especially Jeff Bezos, but Amazon. Obviously, you can’t really separate the two, but I’ve been always interested in how Amazon, a company that started on the internet by selling books, then became a retailer, then became again a technology company, single handedly starting the “cloud” revolution.

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The latest book I’ve read about the company (I just finished it about 20 minutes ago) is The Everything Store: Jeff Bezos and the Age of Amazon by Brad Stone. I’ve heard about it some time ago, but only recently had the time to read it. More, I’ve become even more interested when I’ve heard about the review that MacKenzie Bezos (the wife of Jeff) wrote on Amazon (you can read it here), awarding one star to the book for the fact that it underlines the sensationalist aspects of Amazon’s evolution, while also having big factual errors.

The thing is, though, I found the book really interesting. Obviously, I do not know about the factual errors (especially strictly related to the founder and CEO, Jeff Bezos) and I don’t care about it, anyway, but it’s a good read if you want to follow and understand the evolution of Amazon starting almost 20 years ago. From what I know about the company and what I’ve read in the last 10 years about it, I think that those aspects are pretty accurate.

Amazon is, in my opinion, one of the companies that wasn’t afraid to test things, to go outside their default area of expertise, and try (and succeed) in reinventing itself. I mean, 10 years ago, the biggest issue they faced was the chaos in the deposits, now it’s the fact the their phone, the Fire phone, was a flop. How do you go from getting packages to customers in overnight delivery to starting the startup/cloud revolution?

You need to read the book to find out more, but I will add some quotes I found interesting.

“It is far better to cannibalise yourself than have someone else do it,”. I totally agree with this.

I didn’t know that Kodak actually had the digital cameras technology available since the ’70s and didn’t want to use it so that they do not lose on the profits from normal cameras. The quote above also was related to this: The reference was to the century-old photography giant whose engineers had invented digital cameras in the 1970s but whose profit margins were so healthy that its executives couldn’t bear to risk it all on an unproven venture in a less profitable frontier.

Another interesting quote about focus: “If you are running both businesses you will never go after the digital opportunity with tenacity,” he said. It regards the move of the person responsible with the books at Amazon (one of the most influential positions in the company) to Kindle only books. The reason Bezos didn’t want to let that guy handle both businesses was the aforementioned quote.

People always feel the need to understand the context a CEO/manager takes decisions. But what do you do if the context is not that easy to understand? This is what Bezos told the designers of Kindle when he told them to include space for the cellular/wifi module in the first device so that anybody could download the books instantly, free of charge. The designers fought back saying that this wasn’t possible, that it would cost too much. The answer? “I’ll figure this out and it is not going to be a business model you understand. You are the designers, I want you to design this and I’ll think about the business model.”

One of the companies I enjoyed reading about and visiting while in Las Vegas was Zappos. The thing is I always thought of the company being a fast mover, achieving success and growing fast. Well. apparently it wasn’t like this and this is the reason they sold to Amazon. Here is what Mike Moritz, investor and board member at Zappos, had to say about it: “We just didn’t move quickly enough,” Moritz says. “You could sense it was going to be much harder to achieve, and we were squandering the opportunity. The hiring was too slow, the engineering department was not good enough, and the software was inferior to Amazon’s. It was very frustrating, and the Las Vegas location, plus an unwillingness to pay competitively, made it even harder to recruit talented people. We were starting to compete with the very best in the business and they had a lot of arrows in their quiver to make life painful. The last thing we wanted to do was to sell. It was mortifying.”. It’s interesting for me because we always thought MavenHut is moving really fast. Well, we might need to move a lot faster, or else Amazon might buy us :)

And, finally, I didn’t know, but Bezos may not get ferried to work in a black sedan, but Amazon still spends $1.6 million per year on personal security for him and his family, according to the company’s financial reports. It’s not that simple being a CEO of a multi-billion dollar company.

I’ve highlighted a lot more content, but I think you need to read the book to make sense of it :)

Finally, go buy it (or borrow it from a friend). By the way, all these links are affiliate links, just so you know.

Oh and, finally, if you are interested, you can see the interview Bezos gave to the Business Insider recently (or read the main ideas):

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