Special: Amazon Unbound (with Brad Stone)
01:17:06 Share

Oh yeah, no. I mean, i've been a fan of the podcast from the early days.

thanks.

And what we did to do. And uber indeed, uber, indeed.

That's right. I don't know that he told you guys this. I booked an L, B, M, B, just to get Better wifi, because the place I was living in paris had crappy wifi.

So I this really awkward message with the host hours, like, I just want to come for an hour. But it's not what you think. I saw her.

That's funny to spoke a love hotel for podcasting.

嗯。

Welcome to this special episode of acquired the podcast about great technology companies and the stories and playbooks behind them. I'm then gilbert, and I am the cofounder and managing director of seattle based pioneer square labs and our venture .

fund p and i'm David rosen all and I am an Angel investor based in sentences code.

And we are your hosts on today s show. We are sharing our most recent books club discussion with you all. We were fortunate enough to have repeat acquired guest brad stone join us to talk about his most recent book, amazon unbound.

Brad is the best.

This book is the successor to brad's first book, the everything store. IT is about everything that has happened at amazon since twenty thirteen, including alexa, amazon go, third party shellers.

Well, the further development of the third party sale ecosystem, anyway, they're various grocery businesses and of course, the activities of jeff BIOS outside of amazon, this episode was recorded live with our required L P, S on the line, and they'll hear some questions from them at the end. As always, if you want to become and acquire L P, and be a deeper part of everything we do here, you can go to data FM slash acquired. Okay, listeners, now is a great time to tell you about long time friend of the show service now.

Yes, as you know, service now is the A I platform for business transformation, and they have some new news to share. Service now is introducing A I agents. So only the service now platform puts A I agents to work across every corner .

of your business. yeah. And as you know from listening to us all year, service now is pretty remarkable about embracing the latest AI developments and building them into products for their customers. AI agents are the next phase of this.

So what are A I agents? A I agents can think, learn, solve problems and make decisions autonomously. They work on behalf of your teams, elevating their productivity and potential. And while you get incredible productivity enhancements, you also get to stay in full control.

Yep, with service now, AI agents proactively solve chAllenges from I, T, H, R, customer service software development. You name IT. These agents collaborate, they learn from each other, and they continuously improve handling the busy work across your business so that your teams can actually focus on what truly matters .

ultimately service. Now, an agenda I is the way to deploy A I across every corner of your enterprise. They boost productivity for employees and rich customer experiences and make work Better for everyone.

Yeah, so learn how you can put A I agents to work for your people by clicking the link in the shower notes or going to service now dot com slash A I dash agents. Now, under our conversation with brad stone on amazon unbound is.

we thought kind of a fun way to start that I don't think we heard you do on any the other post i've been on yet that I wanted to. The story behind that was what take is he called the the monograph page at the .

front of the book of the the .

apple PH the epigraph. You have two quotes, and the second one I just loved. As a lifelong back fan myself, you say, I think this is from kenya.

O IT has always seem strange to me. The things we admire in men, kindness and generosity, openness, honesty, understanding and feeling, are the on committments 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. Where did you find that?

Well, first of all, let me start with the other quote on that page is from a book called the last days of night about Thomas Edison. And that one, you know, actually was an amazon board member named being gordon who had pointed me to that novel. And that's about Edison in a system of invention, and how applicable that is to amazon, the basis he has created, a system of invention.

And amazon, not just being an invention, but creating the processes and the rituals and all of that, and then extended IT to the washington post. And that was my soul quote on that page, but it's a little bit of a flowery quote in this book. You know, I wanted readers to really think about amazon's impact, the good and the bad, not just the system of invention, but the unanticipated consequences of building systems at scale.

They're supposed to move fast and never break things. But in fact, with the marketplace globalizing and with the transportation network expanding, there have been repercussions. And so I was searching for that alternate quote that can bring readers into the book with two things to think about. And yeah, Kenny row was a book I had read and probably had underlined that quote, was looking back in talking to my editor, steffani at Simon tusa, about IT and had just came back returned to that quote is being the great example that may be know something that could get readers thinking about the things that we're celebrating in business figures like just basis.

It's such a perfect quote. So he tells before we get into the content of the book and talk. And although the amazon, what was the moment when you decided everything store needed a equal?

I was thinking about that, and I went back to my notes, and I started to do interviews for this in two thousand and seventeen. So that was before H. Q. Two was announced and before bazas became a figure of tablet interest, and obviously before some of the more recent anti trust stuff in the pandemic. So I think IT was around the realization that alexa had changed the company, the market cap had expanded so quickly, the transport oration business had started, and that I was still on the road doing talks about amazon, about the everything store. But the story had changed.

right? Which came out in twenty thirteen.

right? So a hundred and twenty billion dollar cap was at the end of two thousand and seven teen, probably around, and eight hundred billion dollar market cap. And I just felt like there was a lot of story.

And you know, when you start on the book, you're also realizing, matt, you'll be working on IT for at least two or three years. And so I figured it's probably to get Better. And I had no idea right. They kept adding other chapters for a long time.

I was thinking, how can I end this in the pandemic? And its navigation of that, I think, ended up being the encapsulation of everything that's probably great and effective about amazon and some of the dangers of IT getting so big and dominant and having so many advantages. That was Christal zed during the pandemic when all of its competitors basically stopped Operating.

And quite dought about this, a bit like it's a huge opportunity cost for you to aside to read a book because your full time journal alist editor, your random blob x technology team, you had to take a full separate to do this, right?

Yeah, I took a couple months after write IT. I am fortunate in that at my project, bloomberg, we're working and writing and thinking about this stuff anyway. And so doing this, at least reporting IT in addition to the age job isn't as difficult as IT seems.

And maybe i'm also fortunate that i'm a manager with a lot of support around me so I can kind of pull that off. But David, the one difficult thing is particularly writing about tech companies is they've change so often. I just sometimes think about IT is jumping onto a train and you guys remember my last book was called the upstarts about uber and airbnb. I jumped in the train, moved and I fell under the tracks because I was like, a month after that book came .

out twenty seventeen with uber. Yeah, yeah.

The first, a medium post by Susan, came out alleging a discriminatory culture and uber. And then the story surged, rapidly changing. And I I came out with a paper back a year later, the head and additional chapter on that.

And you know, i'm proud of that in retrospect, and that captures a moment, silicon valley. But IT was a great illustration of just the risks of writing our companies that change so often. And IT basis postponed his CEO resignation announcement for another quarter. Now what have been to design you?

Definitely what had a thing. yeah.

And so in this respect and this one, I got lucky, as unlucky as I got with the upstart because I had time to add to the book. And I also recognize that the story I was telling in some ways was very consistent with the idea of basis getting more and more distant from amazon and then move, get IT, moving into a broader world and focusing on other things.

Well, just a frame. How much has happens since the first book? I was reading, my copy of amazon unbound, and the friend said, what is that? And I was I got, it's the second book by brad stone or amazon, who's like here.

He wrote the book on amazon, right? And I was looking at the date that the everything store came out. And amazon has created over a trillion and a half dollars of market cap since you released the first book.

Oh my god.

crazy. It's crazy. And that's just the numerical representation of IT. The kindle company became the elexa company. A W S was a cyber two thousand and thirteen.

The company revealed the financials in two thousand and fifteen, and the world recognized how good a ba business that was. The mark place became global and on and on. Amazon entered india of a chapter about that in the book in mexico. And the high profile battle with the trumpet administration, the genre contract H. Q. To the advertising business really germinated over the past few years, the prime video and amazon studios s business and BIOS neck deep involvement in that in some ways maybe the moment of and some of the ideas were there back in two thousand and thirteen. But certainly it's all become very public and shape the perception of amazon everything.

I don't know if listeners would agree or if you would agree. I felt to a circumstances everything store was that was kind of like the liars poker or the social network of amazon. I don't think you intend IT to be like a cautionary tale in the same way that those books were.

But for me at least, like I read that book and I was like, this is an amazing company. IT doubled, tripled, quite dropped. My admiration for the company in you drew me to IT as a shareholder. Did you feel that way in the company? Whatever they felt initially, they see that they got applicants who started come to the company being like, I read the everything store.

I want to work here. I do take a little Better pride in the fact that people can come to both these books and take a lot of different things out of IT. And critics will come out of IT the first book and then amazon unbound with, you know, dockets full of evidence that they have for the next attack.

And amazon. And fans of the company or employees of the company might find in A A flattering but to my goal is really just to tell a good story. Yeah, i'm an amazon customer and I don't think I would be writing two books about the company if I did not some level admire the entrepreneurship.

And I also find plenty of cause for concern in some of their anticompetitive tactics and some of the ways in which they administered the marketplace or they build these transportation networks without really controlling them or employing the workers and how there are repercussions there. But I don't feel like i'm a critic and I hopefully i'm not a hydra. Gr, and it's not an old school silicon valley book of the, you know how this triumph accomplish, but it's really, I try to tell the words in all story and then hope different people can take different things.

Thought of IT why I finished IT. I came in right into the finish line yesterday. I definitely felt like toward the end, your description of how the company did through covet and basically what they did for the world was really well baLanced.

And that was the thing that definitely hit me the most in your skill as a author of something that is currently unfolding is both looking back and saying, here's the things that they really screwed up during covet and they seem pretty on a bashed about. But balancing that with the fact that between A W S. And the incredible logistics network they've built, we're all way Better off over the last year for them existing.

I think that is easier than IT looks because in the moment, everyone is telling a really simpler stic version of that story. You have critics inside and around the company, particularly in the organized labor movement, that are simply looking for the most stabs and to character, is the company is irresponsible and putting employees at risk and obscure the the toll. And that's obviously not true.

There are human beings that I was on, and they did their best during the pandemic amid incredibly chAllenging circumstances. And then on the other side, you have amazon wrapping itself up in the mental of the pandemic hero, who made no missteps and did everything by the book. And we're virtually perfect and are unfairly .

malian you the in the book that I think like i'm confident when the short term and long term histories are written. No one will have done more of her.

The world the name was on here, right? And so just purely in talking everyone and figuring out what they did, they hired some world famous vero logi C2Counsel the m. But they got lost in the confusion of march twenty twenty.

And they did make some mistakes. They did fire the whistle blowers. And there were lots of employees and executives who left the company and felt that was as wrong. And so talking as many people as I could and combining their accounts and looking at both sides and trying to navigate the real story instead of the partisan stories that emerge over last year and half, that's basically the formula.

I'm curious what your relationship with amazon was as you are writing this because I think you made me pretty clear that you didn't actually speak with jeff. But I imagine there's lots of conversations with on P, R. And of course, many departed and current executives. How does that dance .

go when I approached them in two thousand seventeen, or maybe eighteen, when I first told them about IT, they were pretty receptive, almost as if they had maybe had been anticipating at, or at least anticipating that somebody would do them update to the everything store.

They could see the sales data. They were going to lot. There are first party version.

Yeah, exactly. The amazon S, I D. Send base of a couple notes explaining what I wanted to do and asking, of course, of access to him.

They signed A P, R person to me and maybe basically said, you know, after a while that they would give me access to anyone I wanted to talk to at the company and they would see about BIOS told the end. And so I did labor under the perhaps false hope that I would break down his reluctance and get him to talk. And in the end, IT didn't happen. And I would just point to the recent history and his reluctance to really engage in a meaningful way with any kind of journalists over the past few years into address the chAllenges and tension points in amazon history when he's done IT, it's always been about the broader things, bu origin or the washington post. He's talked to fellow billionaire or animals on employee, his brother in the end, even though I did harbor some hopes, maybe wasn't all that surprising that he's not willing to sit for a Steve jobs like end of career retrospective .

playing a time.

Yeah, he's got time. But the other thing is, I don't feel like the book suffered because of that. He's incredibly disciplined. He tells the same stories that are like polished little stones, and he's crafted over the years, and i've heard them all, and Frankly, I could probably recite them all.

I know that to me. I thought he was almost Better. That you didn't. A, because you didn't get you. You knew what he was given you if you had. But B, I thought one of the cool things about this book that I don't remember as much being in the everything store with the access you had to the s team. I feel like we really got the stories of dave Clark, some of the other folks that most people don't know about, but i've had huge impacts.

So people really don't know who dave Clark is. He's not the C. E. O of the retail business. So one of the most powerful executives at amazon.

And he grew up in the sort of Operations and fulfillment part of the business. And you know, I obviously a genius and graded, building big systems, and he devised and executed the whole transportation ARM amazon logistics. And one of the interesting, revealing things that I found in my research was his original boss at amazon, a.

One of his first bosses became as, like, best friend and was the best one of his wedding. And then he gets promoted over that eye. And when that executive leaves amazon to go to target, dave Clark basically has amazon sum. Yeah.

that was the most heartbreaking moment in the park.

and they never talk again. And right there, in capsule ted perfectly, is amazon's ruthless, relentless, business focused competitive mindset where relationships and empathy I don't really factor into IT. I don't want to say that there is a little bit of the heart less ness or a lack of empathy that goes into this empire building. But okay, I did just say that. And right there was illustrated, he suit his best man, and he is one of them now, you know, most successful executives, most prominent executives and amazon sitting their trading tweet with the bernie Sanders and amazon critics.

How do you think about given the fact that, I mean, this is dave Clark, this isn't jeff bezos, this is an employee who rose up through the ranks who was indoctrinated with the amazon culture, clearly leads into his personal life because he severities with his best man. That's completely outside the scope of a business relationship. How do you think about your comments that you've made in the everything stories around jeff bots in the current day? And does that apply in this situation?

Well, I actually dropped that terminology. You don't wanted to send out that someone to be fresh in part because even though I was sort of kidding about that in the first book well basis in men zy mentioned in or once their review, I think and there are definitely executives who took IT really wait you personally. But I do make the same point.

I think at the end of that chapter on dave Clark and Operations, I say that he had demonstrated in some way as some of the basotho als, you know, the work in the company over everything else, and you know not a lot of empathy. Consensus building is really subjective to getting to the right answer in doing what's best for the company and the customer. And so in some of these actions towards his fellow friend, Clark illustrated a little bit of BIOS philosophy. So maybe I said IT without just using the free you know.

it's body of the jeff pots. I don't think the layers poker analogy is super ethnic everything store is its own thing but that was one of those things to you were as like the kenza at least got so offended by that and probably azo and jeffrey but there's another decide to that where you like yeah if you're onna come to amazon, you're going to enter ge to something and you get to be jeff for something there's something appealing in that too.

right? I think what I originally was reefing on with that term was how he so effortlessly eluted difficult questions back when he gave interviews. And then I noticed that when I was talked to like an executive like Steve castle, who was running the kindle business and then started to run the physical retail business, that he had the same method for evading questions. And that was the origin of the the jeff bot idea that they were just so also skilled in the same exact way of speaking publicly and not saying anything.

When David and I was reading that we are talking about this beforehand, the bigs aha moment of this book, at least in my opinion, was that this concept of like inner locking and self reinforcing businesses, whereas in the previous book, IT was very clearly the amazon fly wheel, and we've all seen the diagram as zillion times at this point. How did you sort of come to that realization of the self read enforcing businesses as the sort of point that you want to drive home this time?

IT might have been in the chapter on prime video. IT just seemed like for a long time, even employees in some board members and investors and amazon didn't understand basics infatuation with hollywood and is investment in in video and almost saw D A sort of a personal weakness or midlife crisis, or diversion or diversion. But as with all these things, so often, basis is just simply sort of ahead of the pack.

And thinking about IT, and, you know, was this idea that prime was a two day shipping club, and then I was a one day shipping club. But the reality is that fully lon centres are outside, you know, every major american city. And shipping really ceases to be a different cheating factor.

And I would have to be something more, would have to be a content club. And so the way in which prime video feeds in the prime and reinforces the retail business and prime videos, in some ways, the consumer application of A W S because it's streaming and sitting on amazon servers and the same with alexa, is being a consumer application of the A W S. And that's how jeff conceived IT with that first email to executives, a twenty dollars puter whose brains are in the cloud, controllable by voice.

And IT also goes back to one quote from the everything store where he said the timo rally, we don't have many big advantages, so we have to weave a op of smaller advantage es. And that's the way basic things in the way he's encouraging his executives to think, what are you doing for the cloud business? What are you doing for alexa, getting everyone to go and exploit the assets into advantages amazon has. And so you've got this set of really OPEC and hidden connections between all these businesses that is at the center of how amazon Operates. And while they probably really resist mildly any effort or suggestion that they should break up.

actually, I want to put a pin in anti trust for one second and asked this question would have been a different way, which was when I heard you are writing this book, I made the comment to David that the everything store is a pretty clean narrative. It's one idea. It's e commerce.

Starting with books becoming everything. It's the everything storm is the story of this maniacal guy who's gona pull that off. And for this one I was like, oh my god, amazon has done so many random things and many of them have become very big businesses.

And they're not a conglomerate bircher half way because the s team is much more than capital alligators. They're not just sending money to the head office. These businesses really do as you would later coin inter lock. And I had just think it's so fascinating that they occupy this middle ground between a classic conglomerate and what you would think of that they sort of a norm business should just go into nea jesenia es, where it's like it's explained and address a very similar market where as amazon is taking the strategy of we are going to go after completely different markets and find ways to link them together at the same customer. It's just a super .

unique structure. What they do both, right? I mean, there's for every new satellite project caper where they're going to get into internet access if they can ever launch a satellite. There's the physical retail initiative, the amazon grocery stories that are also function as e commerce distribution centers and picking pack in addition to using their A I strength to know use the ghost ore technology to do casuals check out there is some sort of far field business expansion at the same time as they do kinder leach out into adjacent markets.

Do you think there's any advantage to A W S. And the retail business being under the same roof at this point.

totally yeah, retail is the biggest customer of A W S is the first customer. Now A W S is gona have a beta tester for every new service. It'll get to scale very quickly and enjoy the economies of scale because amazon retail would be a big, big customer. And then on the retail side, I I would assume they're gona sort of you know pay in quotes more of a whole sale Price for the cloud instead of a retail Price and then have the biggest and the best cloud provider behind them. At moments of intense traffic during a pandemic or in the holiday season.

We did not be show a couple weeks ago with all of a shark from high spot about the customer like growth and customer suggestions. Yeah, the number of customer is right there in the same building .

just really quickly in the device business with the whole goals to end end the video business to intensify the relationship with the amazon customer is built to top. You know A W thinks like alexa are possible because the brains are set in the amazon data center and are constantly being upgraded.

You mention this in the book, and i'd heard this before, that amazon retail ran on oracle. Does IT still in addition to A W S. Did you find out if that still look? Or have they totally transition?

After all, they made a big fast online when jeff wilky went in and ripped out the last oracle server or use at in emison retail. I think there was a couple of years ago, they were they were very proud of that. And that was part of the you know, the long standing devolution of the relationship between .

the two companies, everything that was to come. okay. So on those threads, the long term, the interlacing business is in video in particular. One thing i've been watching following azz for a long time, but a shareholder for a long time. I have lots of friends there. I had no idea that this camp fire thing happened and that IT started in twenty and way before video and hollywood and not like he tells us more about this campfire thing and and for people who haven't read the book yet and you you can tell that.

yeah, thank you, David. That's one of the things I feel like the book, and I was proud, got a lot of detective work and not a lot of people picked up on IT.

This has been mentioned in a couple times in the press, but basically for the last ten years, at least before the pandemic, bazas was hosting this secretive event, first in santiago, among the kind of literary elite, and then immigrated to send a barba more and moved in direction of the hollywood elite. And so Opera and sharm, and you know, every every celebrity can imagine is invited. They are flow and private jets, their families are invited.

This is so not amazon.

No, it's not. And that's why no one ever knew or was never reported who actually paid for this. And I went into thinking that that actually BIOS paid for IT personally because it's so not unfruitful. They get bags of swag and their hotel, the kids, when the kids come, they are given an individual councillor.

It's like sun valley, the island and .

company efforts combined with a ted because they will bring in speakers and in a networking event, their hikes. There's a beach club. They rent out a whole hotel and beach club in sana barber.

if they had Michael Lewis come speak, that one year i've .

got a bunch of the guests. And the attention is that in the book.

when we get are we get our invites for next year.

I am hoping for mine. But in fact, as I look at the amazon pace for IT and base has always he brought his family called IT the best part of his year. He loved IT. And IT was essentially had to almost put this first a literary community and then the entertainment community, bring in the amazon's orbit, get to know people, strengthen the relationships. And yeah, showed how important that was to him as he was thinking, you more about prime being a bundle of of important content and not not just a shipping program.

Yeah, I was blown away, like everything about that just seem so. And I amazon to me. And that IT started in twenty ten.

IT really is a symbol of its evolving ambitions, because that was very much a literary weekend. And you would have big name author s. George R.

R. Martin would be the center of attention. You know, actually, he probably would still be the center of attention.

What does, as you said in the book, he wants his game of throne.

He wants his game of the room, right? And maybe if they purchase M, G, M in the next couple of days, you'll have their James bond.

at least all right listeners. Our next sponsor is a new friend of the show hunters. Huntress is one of the fastest growing and most loved cyber security companies today. Its purpose built for small emit sized businesses and provides enterprise grade security with the technology, services and expertise needed to protect you.

They offer a revolutionary approach to manage cyber security that isn't only about tech, it's about real people providing real defense around the clock.

So how does IT work? Well, you probably only know this, but IT has become pretty trivial for an entry level hacker to buy access and data about compromised businesses. This means cybercriminal activity towards small and medium businesses is at an all time high.

So hunches created a full managed security platform for their customers to guard from these threats. This includes end point detection and response, identity threat detection, response security awareness, training in a revolutionary security information and event management product that actually just got launched. Essentially, IT is the full sweet of great software that you need to secure your business, plus twenty four, seven monitoring, buying a elite team of human threat hunters in a security Operation center to stop attacks that really software all these solutions could sometimes miss countries is democratizing security, particularly cyber security, by taking security techniques that were historically only available to large enterprises and bringing them to businesses with as few as ten, a hundred or a thousand employees at Price points that makes sense for them.

In fact, it's pretty wild. There are over one hundred and twenty five thousand businesses now using, and they rave about IT from the hill tops. They were voted by customers in the g two rankings as the industrial leader in end point detection and response for the eighth consecutive season and the industry leader in manage detection and response again this summer.

Yep, so if you want cutting edge cyber security solutions backed by a twenty four seventeen of experts who motor or investigate and respond to threats with precision, head on over to hunters ous dot com slash acquired or click the link in the show notes are huge, thanks to huntress.

So three individual business lines I want to get your take on since you studied them so deeply. Let's start with video. There's now been, what do we think, ten, twenty, thirty, forty billion dollars of capital from amazon sunk in the video easily good use of capital jury still out because there's no way to know this from amazon's financial reporting.

When you think about how valuable promise to the whole amazon ecosystem and the fact that yet shipping is receding as the center piece, as I said, you know, in the direction that entertainment is going in and the fact that amazon wants to be the everything store and write the dvds, you know, shells disappeared. This is the future of entertainment. They tend to also move in these directions and then figure out how to monetize them later.

And so only now we're seeing the emergence of I M D B T V, which he knows a horrible name for anything, but is the streaming service that is alongside me video and is free but supported by ads. And and now you've got this massive advertising business, I think six billion in the last quarter. Well, that's the other category quarter to .

six billion hour a quarter business. That's like a hundred percent margin. Yeah right. exactly.

yeah. That's one of the business lines. Don't need your take on whether it's good or not, like it's obviously good.

That's why in the book I call IT that chapter, the gold mine in the backyard because I was there and they kind of turn IT on. And so the more programing and content they add to that, the larger the video ad component of that becomes. And so it's just another act of business building on its own is valuable and then a ties into the amazon ecosystem in these really interesting ways and then drives the central retail fly.

okay. So that's a video international. You devote a few chapters to this.

And a they screw up china, just like ebay back in the day. Unclear if any western company ever would have won there. Any commerce? Probably not in india.

And let him that you talk about to another business line that they have, suck untold billions into, you know, the scene of basis wanting to right in on the elephant, he has to settle for the flatbed truck to deliver the check in india, right in india? Yeah, what's the state of those businesses? So india, I I think they are .

built a big business there. IT wouldn't surprise me. That was still unprofitable, although I think the international part of the income statement in the last quarter was profitable for one of the first times. But india strikes me as still probably a money losing proposition, in part because the political climate there has become so hostile to international companies, the muddy coalition has become nationalist, and they're protecting the moment pop shops that you know make up that economy.

And so amazon had to Operate as a peer marketplace business and really has been restricted and up with some of its work around like you investing in larger sellers on its marketplace, but it's invested in prime video and T V shows and movies there and you know and change the way people shop, particularly in the larger city. And now, of course, everything has been thrown into case by covered. I won't call that a failure is still like a bit a massively expensive work in progress.

And you know, I quote basis in the book is saying the future of the world is the united states, china and india. We need to succeed in two out of three. So they're not taking off for the answer .

when the interesting thing in india is IT does seem like the game is still a foot, because flip card, to my mind, I thought about this, told reading the book, totally screw up by selling the walmart. If flip card, we're still an independent indian national company. absolutely. The motive regime, to my mind, would be put in their fingers on the scale.

would be reliances right now is the homegrown champion. And I think I quote a flip card, maybe board member, investor in the book saying if there was a mistake to make.

we made IT there's also you had a great quote to I don't know that you had a name on of IT A S team member said, uh, we didn't know if we were going to get IT right india, but we knew walmart was going to get .

a wrong exactly. And then have reliance who is now an offline consumer who is now trying to be the national e commerce. And yet as we know from experience in moving uh expertise and physical stores into the online channel is not easy anitra a completely different business and at some ways, it's really disruptive. So yeah, that's a given progress. And then a collector in mexico, in part for two reasons.

One, they tried to launch in mexico with out google and there was a great illustration of how concern basili and jeff wilky were about amazon's for reliance on google and and how they spent millions of dollars every year to advertise and get acquire customers via search and said they launched in mexico without uh, search advertising and IT doesn't work. Their numbers are upside down because they're trying to acquire customers with bill boards and conventional ads, and it's super expensive and ultimately unproductive. So they turn on google advertising. And then the second reason that was interesting was it's a tragic story, but they hired the CEO, their business in mexico, who ends up getting fired from the company and then is accused of a having his wife assassinated and then goes on the lamb and has never been seen since.

And you had coffee with him, it's ever to a good .

before he hired the sassine, I had absolutely idea, and you know to me is an interesting look at me. I don't want to read too much A A bit. But you know, they they hired the guy and he they had to run their their business in mexico. And obviously he turned out to be an unsafe character. You know, there was a little bit of interesting judgment and who knows, maybe unforeseeable, but that was a story that ended in like really hard to believe.

Tragedy totally IT is staggering that that not is in this business book. And like we haven't even gotten to the whole sort of twenty, eighteen, twenty nineteen saga and jeff's personal life. But like you're reading this, it's not by any means dry. It's one of most interesting companies in the world written in this thriller like way, but it's a business book and then you hear that anecdote and you're like, sorry, what did you have to hold yourself back from wanting to like dig in further to that as a drama a little bit?

I mean, I did digging in further and that you and sort of had to measure IT because IT is so startling and different in tone and in content. I felt like I was interesting and and I think IT was relevant. And the kicker was of that whole section was how amazon had to turn off google ad words after the assassination, because the news story kept popping up and they hear like IT was just so interesting and showed the strange interdependence between the two companies.

Well, this is like a place, right? Really wanted to ask this question because we were talking a lot about flip card. IT became very obvious to me reading this book that jeff bezos dos indeed care about competition in addition to the customer.

And it's a famous anecdote, and i've heard a quoted to me by a thousand started founders over the years saying, oh, I don't pay attention of the competition because jeff is a dozen and all. They worried about my customer and like, sure, but how would you after diving in his deepest you have how would you massage how he actually looks at competition and when to pay attention to IT? I went not to .

whatever they say, it's just generous about that, right? And it's it's thief.

But brand is a leadership principle.

right? Of course, if we pay attention to them, but we we study them, but we just don't obsess over them. We obsess over our customers. And you know basis comes to indian two thousand and and fourteen and flip cards got billboards you know lining the road from the airport, and he's there studying their methods and they launch big billion day.

And then he insists on launching a sort of celebration of india space program the next day, and he wants to make a splash with the elephants, know, and it's all very explicit. And you know the google story in mexico. There's another part of the book where he authorizes prime now you and a real for ray in the grocery delivery and and fast two hour delivery because google is launching google express and at some point they are launching IT in seattle has backyard and this was an opportunity that he thought would be there forum down the road.

And suddenly he saw, you know, google moving after IT. And this was A I don't hold that against them like it's IT all seems like good business to me. But yeah, the idea that they've got a higher ideal that puts them above beyond focusing on competitors is definitely not true to that moment.

And this competitive dynamics basis, I don't think you brought this in the book, but was prime now also partially respond installed. And I can ignore the irony of both instant car and flip card being founded by former amazon engineer who are like, we should do this and then amazon is like, where are not going to do this and then they go do IT and raise billion of dollars.

And amazon, like we're doing IT. no. IT was in the in the chapter is not just google express, its installed and their successive fund raising rounds.

And sometimes it's a story in the wall street journal of the times are bloomberg that catches their eye. And there is a competitive response. And you have certainly installed the fact that this was a former employee had a hit him hard and they tried to copy IT.

I talk about what prime now was at the beginning. And one element debt, which they called copper field, was an effort to basically do the same thing as installed kind of syndicate offline physical retailers and use their shells as performance centers and deliver those with contractors to people's homes. And what they found when they try to emulate insecure is that no grocery store was gonna with an amazon.

That would be much is particularly sense in a very amazon like way. They also had this amazon fresh experiment happening in seattle, and by that point, probably sandfords go L A. That seem like this big moral threat to the grocery stores. Well, little did they know ams on fresh at the time was kind of a disaster now and wasn't really being expanded. But insecure had the benefit of being a technology platform for other grocery as amazon was kind of doing both a little bit of three p and one p and so they even went to hold foods back in two thousand and fifteen, and god told no, which, you know was interesting and pacificated a little bit. The relationship done, the line.

There was a one little moment that just reminded me of in the book. I think you, by the router, implied that john makin whole foods reached out to basis either throw blueberry after having seeing something in blue burger, right?

The companies had been certainly each other activist investors were kind of pushing whole foods market. My colleague of bluebook expensive super vote in article that suggested that amazon had considered buying whole foods in the past, you know, which they had. And that was a precipitating event to maki saying maybe we should pick up the phone and call this guys maybe else on way out.

And then i've got the name of forever. This was in the book and i'm not able to remember IT. But somebody who was advising maki was had been active in democratic politics and called jay carney, uh, and that preciptation the deal.

fascinating. He is like one of David. In my first big episodes, I woke up, saw the news, we text to each other and and oh my god, we have to do this.

We have to cover amazon and and whole foods even though we've never done like a live on the scene thing before. And that was, of course, nowhere not a part of the narrative at that point in history. So just cool ly heat on earths.

okay. So the third business line I want your opinion on is, uh, not the O G O G, but pretty good as the first kind of pillar of the store of amazon is marketplace. You know I always assumed that like this is an unassailable, unbelievable business.

You know even put that aside, we're on its own should be a fan company. U S. Marketplace also on its own to be a fan company. You pay kind of a dark picture of what's going on with marketplace right now. What you take tells more well.

they made a series of very logical choices over the years, which unlike the tremendous amount, opportunity and growth. In fact, one of the questions I had going into the book was how does retail growth of twenty year old companies? So to reacclimatise, right? That seems to define the laws of company gravity.

You know, the bigger you are, the slower you grow. And so what exactly happened there in two thousand and fifteen, two thousand and sixty in the G. M.

V kind of takes off. yeah. Remember looking into IT and talk in the former members of that team, and essentially, again, back to the competition point, there they are.

Her quote and quote inspired their eyes open by two companies. One, alibaba is expanding aliexpress with this idea that the cellars who have learned not to cell on alibaba in china could now reach customers in the U. S.

And europe. You know, that was a seductive idea, I think got the attention of amazon executives. But in fact, I I think IT, except maybe parts of year up that really hasn't worked out that well. But in an event that was sort of one inspiration and there were there was internal communication among amazon executives that I set the work, you know, expressing fear that maybe jack mao would like reduce fees to nothing in an effort to expand outside china.

which is Normal in china, e cameras says we see on acquired exactly.

And then, you know, the other inspiration was wished dot com conducting a kind of geographic arbitrage, getting sellers in china and other countries to sell to the west with really low fees, um no name brands, generic products, sometimes low quality and weeks long weight shipping time for nevertheless huge selection and really low places and was raising money in silicon valley and kind of taking off and so baza selected, as you know, his lootenants and says, you're on this right and that was like that all they need, it's like the sly nod from the godfather.

And so, you know, they open up marketplace. They basically reduce all the friction of selling from china to the rest of the world. Know they're translating from Mandarin, self service, you know, sign up, sell anywhere.

They're aggregating product in the port shipping and low cost to the west. They are storing items in amazon. Fillmont centers are making a really easy for crossed border commerce to happen, and that sounds great. And IT was great.

great for consumers. I and the businesses booming in terms of revenue.

And by the way, amazon has seen that if you offer accurate selection of branded items at a high Price, a very orderly store and say, shoes and the new A B test, that with a disorderly selection of unbranded products at low Prices, with extensive selection and even low quality, actually customers still gravity to the chaos in the large selection, the low Prices, so they knew what customers wanted in the corporate compass.

And amazon is always pointed to what customers want. So again, good for customers. And then every seller in the west is suddenly blown out of the water by a wave of competition from overseas sellers who aren't paying the same taxes, who you know don't have the same labor costs, who are close to or in some cases, are the manufacturer, no brands, no markup on on places. And then also, you know, a group of sellers in that community that are playing hard ball, you know are wearing black ads.

have still an IP or all sorts of the reviews. The number of times, I don't know that everybody listings or you, but like the number of times I get a little card on stuff I order from amazon now saying write a review and email to us this address and you know we will send you something.

And when you read about exploding harbor boards or you know sneakers that are self destructing after the second way or out now fraud, um it's because amazon beauty systems and scale them and in an amazon like we ran them with algorithm software and not a lot of you know human care curation because they were moving quickly and setting up these systems and trying to globalize the marketplace and you know before alibaba or wish anyone else yeah I thought .

there was a really interesting point that you made that was like, sure, there is this big problem with counter fitting and I P F, you know factory selling direct even though really at someone else's product. But let's even put that aside for a minute. There is a sort of legitimate battle going on between chinese manufacturers with lower cost structures who are willing to play by the rules and are willing to build legitimate brands. I think anchor is the the brand that you cited that made like the phone charges and all sorts of like gadget, and they just have a dramatically lower cost structure and the american brand that they're selling against because everything about the company is china based. And as long as they can ship to american customers, they can always under cut on on the third party sellar marketplace.

Steven Young, the CEO of anchor, says to a western selling in bertie thomson, whose whose the C. E. O of pluggable, which is in the same business successors and he says to him at one point, you know, in a very kind way.

But Stephen nice, bernie, we're going to run you over just because, you know there's an acknowledgement that you really can compete. And Steve, in and and anchor, they have the manufacturing relationships and they have an underlying cost advantage. But I went back to a lot of the sellers who over the years had been mentioned in BIOS investor letters to take their temperature.

And like here they are in the letters as the advantages for amazon marketplace. And I thought, after many years, what would their tune be? And all of them had become discrete tl in because of exactly what we're talking about. And yet one of them had that great quote, I feel like I was invited for thanksgiving dinner, and I was the turkey.

This was the movie. I mean, for me, like I can unpoetically a huge as on fan boy. Up until that moment, I was like, yeah, ah yeah but is good for customers, is good for customers, is good for customers. And then when you went to every single person, every single seller that amazon a champed in the past and every even though guy that was sort of reluctant, like you could tell that he was pretty pest of, he just didn't want to say IT.

But I will say that berny thomson is one of those sellers who is mentioned investor letter. This guy that Steve and yang of anchor said i'm going to run you over and plugged among all those guys still is doing well. He's still selling on amazon.

He he is not he wasn't as a bittered, although he did bring um some arguments to to try to get them to change some policy. And look, sellers are being aggregated right now. You guys have probably heard about this, you know so there's obviously opportunity in the marketplace. They're being rolled up by bigger players.

you and and .

the lake yeah what but plugged I constantly change to product mix and cap, bring out new things and innovating and and so that's the key, right? Someone who was selling stand up paddle board five years ago and still wants to be selling stand up panel board today in the same way, you know, that's commerce, that's capitalism, its globalization plus amazon a top is it's not going to be possible.

The conclusion I kind of came to was like there's a problem there in marketplace. I do think amazon will probably fix IT enough a in their amazon way. I am not too worried about amazon, but I did make me think a not that I shareholder anything bit less bullish on the thresh o type model and aggregating cellars like you're A A commodity before now you're a super commodity and like whatever you catch flow of DNA ics are today is not going to be what they are tomorrow. And to just do also more bullish, ed on the shop, pithy and arming the rebels, these are two existing alongside amazon.

I agree with that. Yeah, amazon doing so much now and serving so many constituencies that the brand holder who wants no part of this frontier chaos and you wants to sell directly, you know, and have relationship with their customers, shop vise, you know, serving that need. And amazon kind of can't do IT all for anyone .

listening to the share right now. We're live on the line with a bunch of our R L P S um lives. So we want to get to some questions that they have. We have to touch on the as David hazard and quote here, the basic lapse of judgment in the twenty, eighteen and one thousand nine hundred frame. And there's so much stuff that you said in the book that I don't think that we need to rehash. But I did have one question for you, which was of all of the things that you found about the helicopter flying and the hello pads of part of H Q two and the insane like leak from laun sanchez's brother that was happening cy multi eus with the hack from M B S and the study arabian involvement, like, you know, you can make the stuff up. Was there anything that was like original insights that you had found where you're like, oh my gosh, s this hadn't been uncovered before?

No, I mean, I think there's a lot in there. I mean, you mention the hell pads, right? The idea that yeah the request for hello pads in long island city and Crystal city that were part of H Q two that instituted a political backlog in new york, that amazon claim was really just a Normal ordinary corporate request for arial access and that basis for a company .

that doesn't know helicopters.

right? Except that basis, you know what I found out, not only was he seeing learn sanz, who is a helicopter pilot, but he has taken helicopter lessons at the time.

We have a stuff first, like what is up with that? Like the dude himself almost died in a helicopter accident. Like obviously this kobe, like he might get that people .

die in helicopter and he's find, and although I look for the pilot license and I could find IT any database, but I do know that he took lessons and I found that he had personally bought a bell helicopter and that Lawrence sanchez, his company had also uh, registered a new bell health after the same time. So my hypothesis, he bought his and hers bell textron stay to the art collector.

So anyway, there's a lot I mean, there's a lot in there um you know that the world, the yacht, the fact that is building the super yet three mass schools were an accompanying ort yet for the helicopters had told fresh in the book that took a lot of soothing and then you know little aspects of the three way fight between the national inquire, bazas and his representatives. And now Michael sanchez, trying to clear his solid name. Then he had N, B, S.

You know and that really had nothing to do with the whole thing. Yeah I mean, people can go read IT. It's chapter thirteen in the book there, the business week exercise. It's a tangled, strange, bizarre holie r saga.

It's an unbelievable chapter even if you you feel like um you know I know a lot of this story, i'm not going to go go buy the book and to read chapter IT is a such a crazy story completely on its own and do I have IT right that his phone via WhatsApp was hacked by muhamad salmon and that was very likely explore trading data, but that has nothing to do with how the public found out about the affair.

The second part is right. IT had nothing to do with the national quire story, which was supply the evidence filed in the voluminous court cases empty show. The evidence was supplied by the brother.

But I would say that there is just ambiguity around whether sadd hacked this phone. There was a study done by a consulting company that basis is private investigator hired. There is a lot of skepticism in the cybersecurity community about that study and what they found.

So I don't know and I don't know that will ever know. And what's unfortunately, is that the sadi bots on twitter have kind of taken what I wrote in that book to launch another way of attacks against spaces know, saying that he improperly accused them. So the the interesting thing is that there is obviously real enmity from the sadi government and the crown print and their agents against the washington, the post and against jeff pisa. So that is unequipped ably true. And the question of whether they employed peg as software hack this phone is also true, by the way, that N, B, S, were sending a very curious tax.

Yeah, that was suspicious.

But wait, I just wanted to say one other thing then. I just remember red, you you asked, you know what was new and i'll just sort of like at a distance for fur, you remember the center of this whole thing is whether the inquire had acquired explicit photographs. Yes, yes, the cells, I will, will just leave in there.

And the fact that they never had IT, what they had was a photograph that Michael Sanders had taken from an escorted website and passed off as an explosion. Sive photograph, the richest man in the world. And that was one you just can, you cannot make up. IT was funny. In retrospect, all of these parties were battling over photograph that actually didn't exist.

Unreliable, able. We can do a another podcast that is not a business power test about this. I I do want to ask just a little question.

What was that like reporting that you are going na go behind the scenes of this story and sources and you are journalist yourself. You have a source obviously you know the thanks to your sources and you're trying to report on this. Meanwhile, like there's also illegal ramifications here. People could be going to jail. Like what is that like.

dave, i'm not gonna. E IT was awesome.

I'm a business journalist.

We're writing about deals. We're writing that business people who tend to be scripted and disciplined and boring. And so to write about explicit self fees and study agent and hacks and taboo journalists and double crossing sibling betrayal. Oh, great.

That's awesome. That's awesome.

Are I last question before we sort of open IT up to the floor grad, is have you heard from amazon or jeff or anyone in the book sense publishing? And have you got any more recent feedback than what you actually wrote in the book?

Not anything official. And I think they, having may be learned from the aftermath of the everything store, have realized that to respond publicly would only add oxygen to the fire as much as I might hope for a dave Clark tweet or a base us instagram retour, or even praying to the heavens, another machinery review or lawn sanchez review, that would be awesome. I have a feeling that is not forthcoming and then you know, informally, it's the feedback s all been good IT feels like a know a factual account and well told and so that's really informal reaction. Obviously nothing from BIOS nor do expect to the response so far that god .

has been favorable able. It's great. We want to think our a long time friend of the show, venta, the leading trust management platform, venta, of course, automate your security reviews and compliance efforts. So frameworks like soc two, I saw twenty seven o one gdpr and hip compliance and modeling ing vent to takes care of these otherwise incredibly time and resource training efforts for your organization and makes them fast and simple.

Yeah, fanta is the perfect example of the court that we talk about all the time here and acquired. Jeff bases his idea that the company only focus on what actually makes your beer taste Better. I E spend your time and resources only on what's actually going to move the needle for your product and your customers and outsource everything else that doesn't.

Every company needs compliance and trust with their vendors and customers. IT plays a major role enabling revenue because customers and partners demand IT. But yet IT add zero flavor to your actual product that IT .

takes care of volvo for you. No where spread sheet, no fragment to tools, no menu reviews to cobble together your security and compliance requirements. IT is one single software pain of glass that connects to all of your services via s and eliminates countless hours of work for your organization. There are now A I capabilities to make this even more powerful, and they even integrate with over three hundred external tools, plus they let customers build private integrations with their internal systems.

And perhaps most importantly, your security reviews are now real time instead of static, so you can monitor and share with your customers and partners to give them added confidence.

So whether you are start up or a large enterprise and your company is ready to automate compliance and streamline security reviews like vana seven thousand customers around the globe, i'd go back to making your beer taste Better.

Head on over to vented outcomes sh required and just tell them that been in David sent you and thanks to friend of the show, Christina anta CEO all acquired listeners get a thousand dollars of free credit venta com slash acquired alright. Well, anyone, anyone want to kick us off here with the first question. Logan.

see your hand raised. Obviously give the book, read the book, love the thank you for come on. So my question is related to minor role, the voice of aleta and the questions more on the jerald tic approach. This can you go on a more detail or whatever detail you can provide that you didn't include the book on how you are able to and know this the right phrase, hunt and roll down SHE sounds like none of the parties involved can confirm that she's the voice of alexa.

So as curious if you can basically say how you were able to confirm to the degree of confidence that you put your name of the book, how did you find out that he was elected? And what was that process? Yeah, thank you. Logan definitely love talking about this. I was in the first book I track down basis as biological father.

Unfortunately, there were no more long lost relatives to hunt down in this one so I thought, well what what secrets are there to unearth and if you remember logan, the um the voice of theory, a couple years way back, maybe like two thousand and twelve was was unveiled and was a woman Susan bennet, who actually hadn't even known maybe at early on that he was the voice of syria. Like IT was a data set the chief recorded for another company that had been acquired by theory um and then acquired by apple. And so you know I knew, and I remembered that, you know, that these synthetic voices start out with voice actors or actresses, were citing yards and yards of scripts.

And then the A I takes that and and produces a voice. And so, yeah, I just put finding alexas one of my chAllenges for book. And then I was right understanding, you know, where these voices come from.

There's really only a couple of studios to do IT. There's wanted atlanta that produces theory called gm voices and just networking through employees, former employees and people in the community. I found out that I was likely G M.

Voices that did alexa, and then networking around your voices. I had some candidates, and I went to their websites. And when I got to na ri rims of trolly, her website, you know, he had a bunch of boy solar clips that he had done in the past.

I remember one was for much apple sauce, I think. And, you know, just playing IT, I could tell. And I played for my daughters, and they were like, yeah, that sounds familiar.

And, you know, when then I called her and he said, no, SHE couldn't talk to me and that wasn't IT. I did sort of no and had confirmed that he was her beforehand just through networking. And then when amazon was to talk about IT and SHE wouldn't talk about IT, I had a pretty good signal. awesome. Thank you.

You that thanks, logan. right? Background, all super interesting book. Last week I was part of another book club and I was for working backward. So two great friday and row. You've done so much reporting on amazon and really doug deep, so two part.

Question one, what is amazon missing from their business model? What is a new opportunity revenue stream that they haven't pursued, which they could? And what's something that you think they should drop that they .

are currently doing? Did you ask the working backwards guys this question?

Well, side. no. So I was like an a personal ook club, and wilky came to a very different conversation.

OK going to chAllenge me. What is the thing that is missing? Hard to imagine what the missing pieces are right in the amazon quilter businesses, right? Because they are sort of doing everything right now.

You know, i'm clined to say like the super, the physical grocery opportunity was one that I think they are just late on what they bought whole foods, and they've been waiting to perfect this ghost ore technology. I think they they're viewing technology is a different tidor. Their cameras on the ceilings and the and the weight and the shells, the idea that you can buy, pass the cashier is is their big you know, selling point for these stores.

But I don't know personally, like I don't think that's a really big impediment. You know, waiting in line for couple minutes and checking your phone before you leave. I mean, maybe i'm wrong about that.

I just feel like perfecting that, which has been a super expensive ten year plus process, slow them down when IT comes to entering physical retail in a big way. And you know maybe without the obsessive focus on finding a you know a way to enter the market with a distinctive technology solution. They could have move faster on physical retail and the opportunity of supermarkets.

IT wasn't at ten billion dollars or something, he said in the book.

I don't know that I had a number, but I definitely had some sources thing that I was the biggest single investment in amazon history, at least alongside china, is the biggest capital investment, the ghost store. And then the second thing is what are they doing that they should drop yes um that's a tough one.

The A W S service recognition, the the image recognition service and A I service they have been selling to um corporate customers but also police you know and government authorities. They have suspended that they suspended IT for a year after the sort of outcry and anxiety about uh, image recognition. And now I think they've suspended IT in perpetuity.

There's just deep societal discomfort about the bias and those algorithms in the way in which police authorities have historically used them. So that that's an easy one for me to grasp. D do and say maybe this suspension of selling recognition, the governments should be following google and other companies and actually really abandoning the technology.

Very cool. Oh, I have a sort of an answer to that, that i'm curious of, brad thinks is an answer. And it's been a really long time since we covered this on acquire. But brad, do you think the epos acquisition was value creative and in a big way for amazon or has just been a stagnant business?

It's a little bit like the acquisition of the stock m, which was a little bit after IT in terms of neutralizing a competitor and then allowing a torn economy. Sly maybe learning from IT a little bit, but then pursuing their own strategy, you know. And amazon s never slow down in terms of selling shoes, are expanding the selection and choose in a peril on its own site.

So in terms of value creation, maybe IT hasn't been positive, but in terms of neutralizing a competitor and slowing its growth down and blocking the capital markets or a competitor from acquiring IT and posing a real competitive threat, it's been successful. In the exact same thing with diapers. I can.

Mark li did how I built this on N. P. R. Over the weekend where he tells the whole sort of bitter story of being acquired by amazon and feeling like they close some aven as frequency.

And so this is why, you know, regulators, lawmakers now think, you know, the wish that F. T. C. Had taken a harder look at those acquisitions.

Let's do brad romney next .

ious thoughts on which elements of amazon's innovation fly well, would you identify as being subbed yet impactful? And which elements could you potentially separate from the more, maybe less savery elements of the amazon culture that be reported on? As a good question, brad, you might stand me with that one. I mean, I I think that basis is central to the innovation process.

Amazon, as much as I like to talk about a culture of IT mentioned decentralized teams, when you peel back some of the biggest ideas that amazon IT tends to start with an idea from bezos like that alex I email and then his hurt of manic attention to IT and sponsorship within the company. know. And I think it's a long term chAllenge for amazon because, you know, Jessie, for all the skills as an Operator, you know, and he's been amazing at A W B S, I don't think is capable of you know wheeling off and and emAiling A A new business idea in the way the basis is.

And then is the founder and the C E O basis just brought a level of magic to his, a sponsorship of these ideas. And I was accommodation of inspiring employees and terrifying them. You know, i'm getting him to jump through hoops and jump over high bars and he he walk out meetings.

I have that. And in the book where he he believes the next team isn't collecting data fast enough and he walks out of the meeting, they come up with the amp program to go and bring a lexi out secretively into the world to collect data. Those are the kind of like arroyo entrepreneur feet he can inspire.

You can bottle that up, right? Because there's one jeff aso and IT really often comes to having someone who is inventive and creative but also you know has the fortitude to you know and a little bit of the guts and the resources to make these huge investments and try them and also to fall flat on his face. One team in the book, I think is is basis is willing to be embarrassed, right? He humility himself with the fire phone and then launches elexa a couple months later. And he you know riis embarrassment and is embarrassed by the lorn sanchez saga and yet maybe doesn't really have the gene you know that he cares that much about IT is at least willing to to rest the humiliation and IT turns out that maybe it's the suspect ability you're allowing yourself to fail and fail really publicly that also kind of key to the innovative process.

Predators seem also just to try and hear that founders get more leeway from the street. Like basis is the guy that made this happen. So therefore, he's got a lot of rope, not just from the board, but like what activist shareholder is going to come in and try and say he's not doing a good job. But you can see the successor, whoever comes in, you know are we we know who comes up. But like future non founder C E S, they get much shorter release from investors totally.

And when you think about like what dog make million or um you know the C U A B bay or even the c of target have to deal with in terms of managing the street court a quarter and never really being able to go and half for louy quarter so that you can you know have the potential of building something more promising down the line. And amazon can do that whenever ver they want. It's not just because basis the founder, it's because he stuck around but because he called the shots right with the first shareholder letter. He said this is how he's gonna n his business and then he has reproduced that letter every year and said it's still day one and repeated at all like a montral and you know and he's bought himself to the way in the flexibility .

to do IT quick that you bother them. Love to this in the book, but there's a real rival in between elon and basis. Is there is there any more that didn't make IT into the book that the you found on that?

I mean, you know I talk about the book how they met early on a couple of times, know that the e long tried to tell jeff that of technical decisions were wrong. You know that they had really different physical hes BIOS, was constraining as investment of blue origin, and wanted to keep the teams small and wanted to start with sub orbital space and then even comes and does IT all ten x gets government contracts and commercial contracts to pay for everything. And you know, bezos is kind of left as a struggler, something that he's really not accustom to being in second place.

Yeah I mean, I think the rivalry is real super entertaining to see elon exchange uh you know barbs with jeff uh, over twitter and sometimes vice and it'll be interesting to see whether basis commit more of a time to blue original aliis retiring A C E O and and tries to rescue IT. I I do think that, that company is a little bit diffunce tional in terms of you know basis, owning IT, Operating IT from a far trying to keep its headcount small, but then really in pursuit of space, exchanging directions of properly hiring airspace folks from companies honey well and changing the culture on a dime and that investing a billion dollar ars worth of his return from amazon stock every year in turbo charging yet. And that kind of you change of pace, I think, is yield to some disfunctional outcomes.

But look, the story there might change in the next couple weeks. They say they're going to go, new shepherd is going to fly, paying tourists to several overall space and maybe they'll be a bit crimps and create some momentum. But right now, there are sort of years behind all their projects and promises on on a lot of these new contracts like the moon, blue moon contract, they're losing the space ics.

Josh gutman, let's go to unix.

Yeah, I was kind of curious because like there's the time between the everything store and amazon abound, amazon started acquiring way more companies than they previously had. This was in a period where the company was much bigger. So in the acquisitions look smaller. They even hold foods if you think about feels like pretty insignificant. What has change internally, amazon for how to think about quiring companies and kind of like what kind of made the cut for you in terms like what was worth talking about from an acquisition point of view?

I do tell the keep a story in in in one of the chapters on Operations. And to me, IT was IT was a dave Clark call. IT was the opening of amazon in terms of trying to, you know, automate systems and take humans and equation.

IT was a little bit of a ruthless move in that they negotiated the thing over many years and try to suppress its growth and then bought IT and then made a promise to the keva founders that they can sell IT externally and then reneged on that promise. And IT allowed the super scaling the fulfillment centers and made them, you know, incredibly more efficient. And then IT IT also furnes Steve Clark with some like leadership credentials that allowed him to continue to grow inside the organization.

So I think you're right now, Joshua, that I I did take a little bit of a light pass on witch, definitely on ring. I did. I did not do much. Part of IT was just streamlining the story. And you know, i'm trying to shoot horn everything into a narrative without too many diversions, and also while keeping jeff basis at the center of the action that was like the main narrative chAllenge of the book.

But you know, amazon might acquire M, G, M in the next couple of is and and like, I always thought that amazon stability to the acquire companies was going to get severely curtailed because of all this anti trust. And you know we'll see what happens. But IT IT seems like, you know, that's an asset the doll ll easily be able to buy and then increase the output of of movies in their catalogue. So yeah, but you're describing one of the chAllenges I had and figuring out what to include od, what not to include, how to keep things moving in this book that covers the entire arc of amazon history. And all these characters are populated bread to rap.

Where can listener is by the book?

Well then David um IT turns out that you can get IT at your friendly local neighborhoods KTV. You can certainly pick IT up at burns and noble. Or if you must resort to IT. IT is. From amazon itself as an e book, as a hard cover or as an as an audible audio book.

That's great. You need to set up shop in .

your garage there, sell in IT out front day all and there's .

a couple parts that you actually, uh uh, read in the double. If I was hearing right.

I do, I do, I do the introduction and the .

acknowledged that had to be youtube.

right? But Frankly, is probably about as much as anyone wants to hear a me. Really there is a reason professionals do IT, which i've learned. That's great.

Well, thank you so much. Anywhere else listeners should find you on the internet or or follow you anything .

like that upbraid stone on twitter.

That's great. Well, really appreciate A L. P. S. Thank you for joining us today. Great questions and bad. Best of luck.

Thank you guys.

cheers. All right, listeners, that is all we have for you today. Thank you for tuning in.

Obviously, you heard where you can find bread on the internet. You can buy the book. And if you do buy the book, you should go liver of you.

I don't. Brad would greatly appreciated. And IT is years of shutting yourself in a room and working through this crazy process. And so we should allow go, uh, and helps brad sort of get the most out of this incredible story that he has. Has unarrested so good leave in a review totally.

I love to review. I I was very excited. I put a photo of my copy, the book with all my notes on IT. I aim to be the top reviewer for all the books that I review. I think I think .

you are on seven powers.

And number one, on seven powers, yeah, yeah, it's all because of the image. So when you leave a, you put a photo in there.

Growth hack, all right. Well, lesters, we really appreciate IT as you heat the top the show, if you want to join the next one of these, you should become an lp that's acquired df m slash lp. We are hanging out in the slack that is free to join.

Everybody can join. You don't have to be an L. P. To do IT that is acquire data, A M slash slacks.

So come talk about the news of the day with us. And if you like this episode, share with a friend, subscribe from the podcast player of your choice. And with that listers, we'll see you next time.

I'll see you next time.