Acquired - Special- Amazon Unbound (with Brad Stone)

0:00Oh yeah, no, I mean, I've been a fan of the podcast from the early days. Oh, thank you. And my gosh, did we do Amazon Zappos? Uber and DD. Uber and DD. That's right. I don't know that I told you guys this. I booked an Airbnb just to get better Wi-Fi because the place I was living in Paris had crappy Wi-Fi. So I had this really awkward message with the host. I was like, I just want to come for an hour, but it's not what you think I swear. That's funny. Just book a love hotel for podcasting. Welcome to this special episode of Acquired, the podcast about great technology companies and the stories and playbooks behind them. I'm Ben Gilbert and I'm the co-founder and managing director of Seattle based Pioneer Square Labs and our venture fund, PSL Ventures.

1:00And I'm David Rosenthal, and I am an angel investor based in St. Francisco. And we are your hosts. On today's show, we are sharing our most recent book 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. Yeah.

1:23This book is the successor to Brad's first book, The Everything Store. It is about everything that has happened at Amazon since 2013, including Alexa, Amazon Go, third-party sellers, well, the further development of the third-party seller ecosystem anyway. There are various grocery businesses, and of course, the activities of Jeff Bezos outside of Amazon.

1:47This episode was recorded live with our acquired LPs on the line, and you'll hear some questions from them at the end. As always, if you want to become an acquired LP and be a deeper part of everything we do here, you can go to glow.fm-slash-acquired. All right, listeners. Now is a great time to talk about a new partner of ours here on acquired, LaGora, the agentic operating system that is redefining how the world's best legal teams work.

2:16Yup, it's sort of obvious that AI is going to completely change the legal industry. I bet most of you listening have dropped a contract into some sort of AI chatbot out there. Legora took that insight and asked the question, what if you really built something with that power from the ground up for the legal industry? So the founders did exactly what great founders do, operate with obsessive customer focus. They embedded inside a massive law firm.

2:43for months. They sat with the lawyers just watching how the work really gets done. And that's how you get features that customers love, like tabular review, where you drop in a folder of hundreds of contracts, and it pulls every key term into a grid a lawyer can actually work with. Lagora's bed here is interesting. Since it lets each lawyer handle more complexity, any given person can increase the quality of their work, and do higher value work. And this means that the pie can grow even as each individual task takes less time.

3:12And they recently launched LaGora agent offering greater intelligence and performance. The agent lets lawyers set an objective. Then it can handle the planning and the execution and delivery of the final product. Legal teams get to maintain full control and transparency since they're still involved where judgment is required. And LaGora works where you already work. You can use it within Microsoft Word while redlining or drafting. The early LaGora numbers essentially speak for themselves. When they have a head-to-head pilot with their top competitor, they win 70% of the time. LaGora now has over 100,000 lawyers on the platform from 1200 legal teams in 50 countries, and crazily, they went from 1 million to 100 million in ARR in about 18 months. Truly insane numbers. And that is the real test.

4:04Plenty of things demo well, but the question is whether a busy associate actually reaches for it during crunch time, or whether a partner trusts it before going into a conversation with a major client. If your legal team wants to check it out, whether you're a law firm or you're in-house at a company, you can learn more at logora.com slash acquired and just tell them that Ben and David sent you. Now on to our conversation with Brad Stone on Amazon Unbound.

4:30So we thought kind of a fun way to start that I don't think we've heard you do on any of the other parts you've been on yet that I want to hear the story behind was what is he called the the monograph page at the front of the book or the the epigraph the epigraph you have two quotes and the second one I just loved as a lifelong Steinbeck fan myself you say I think this is from Canary Row it has always seemed strange to me the things we admire in men kindness and generosity, openness, honesty, understanding and feeling are the con-comitants of failure in our system. And those traits we detest, sharpness, greed, equisitiveness, 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?

5:21Well, 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 Bing Gordon who had pointed me to that novel and that's about Edison and the system of invention.

5:39and how applicable that is to Amazon Debazos. He has created a system of invention at Amazon, not just being an inventor, but creating the processes and the rituals and all of that and then extended it to the Washington Post. That was my sole quote on that page, but it's a little bit of a flowery quote. In this book, I wanted readers to really think about Amazon's impact, the good and the bad, not just the system of invention.

6:05but 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, Canary Row was a book I had read and probably had underlined that quote and was looking back and talking to my editor Stephanie at Simon Schuster about it.

6:34and I just came back, returned to that quote as being this great example of maybe something that could get readers thinking about the things that were celebrating in business figures like Jeff Bezos. It's such a perfect quote. So tell us before we get into the content of the book and talking all about Amazon, what was the moment when you decided everything stored needed a sequel? I was thinking about that and I went back to my notes and I started to do interviews for this in 2017. So that was before HQ 2 was announced and before Bezos became a figure of tabloid interest and obviously before some of the more recent antitrust 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 transportation 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 2013.

7:31Right. So a $120 billion market cap was at the end of 2017, probably around an $800 billion market cap. And I just felt like there was a lot of story. And you know, when you start in a book, you're also realizing that you'll be working on it for at least two or three years. And so I figured it's probably going 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 it's navigation of it. 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 crystallized during the pandemic when all of its competitors basically stopped operating. I didn't quite thought about this so now but like it's a huge opportunity cost for you to decide to write a book because your full-time journalist editor you're running Bloomberg's technology team you had to take a full sabbatical to do this right?

8:30Yep, I took a couple months off to write it. I'm fortunate in that at my purchase Bloomberg, we're working and writing and thinking about this stuff anyway. And so doing this, at least reporting it in addition to the day 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 changed so often. I just sometimes think about it as 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 onto the tracks because it was like a month after that book came out 2017 with Uber. Yeah, the first medium post by Susan came out alleging a discriminatory culture at Uber. And then the story started rapidly changing.

9:22And I came out with a paper back a year later that had an additional chapter on that. And, you know, I'm proud of that book and retrospect and it captures a moment in Silicon Valley. But it was a great illustration of just the risks of writing about companies that change so often. And at Bezos postponed his CEO resignation announcement for another quarter. That would have been a disaster. You definitely would have had to rate the third book. Yeah. And so in this respect and this one, I got lucky as unlucky as I got with the upstarts because I had time to add to the book.

9:51And I also recognize that the story I was telling in some ways was very consistent with the idea of Bezos getting more and more distant from Amazon and then moving into a broader world and focusing on other things. Well, just to frame how much has happened since the first book, I was reading my copy of Amazon Unbound and a friend said, what is that? And I was like, oh, it's the second book by Brad Stone on Amazon. He was like, He already 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 Alexa company. AWS was a cipher in 2013. The company revealed the financials in 2015.

10:43and the world recognized how good of a business that was. The marketplace became global and on and on. Amazon entered India. I have a chapter about that in the book in Mexico and the high profile battle with the Trump administration, the Jedi contract, HQ2, the advertising business really germinated over the past two years. The prime video and Amazon Studios business and Bezos's neck deep involvement in that. In some ways, maybe the momentum and some of the ideas were there back in 2013, but certainly it's all become very public and shape the perception of Amazon ever since. I don't know if listeners would agree or if you would agree, I felt to a certain extent like everything store was, it was kind of like the liar's poker or the social network of Amazon. I don't think you intended 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,

11:39This is an amazing company. It doubled, tripled, quadrupled my admiration for the company and drew me to it as a shareholder. Did you feel that way and the company, whatever they felt initially, did they see that they got applicants who started coming to the company, being like, I read the everything story, I want to work here? I do take a little bit of 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, docket's full of evidence that they have for the next attack on Amazon and fans of the company or employees at the company might find in a flattering portrayal. But my goal is really just to tell a good story. Yeah, I'm an Amazon customer. I mean, 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

12:30find plenty of cause for concern in some of their anti-competitive tactics and some of the ways in which they've 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'm hopefully I'm not a hageographer and it's not an old school Silicon Valley book of how this Triumph was accomplished, but it's really, I try to tell the words in all story and then hope different people can take different things out of it. Well, I finished it. I came in right under the finish line yesterday. I definitely felt like toward the end, your description of how the company did through COVID and basically what they did for the world.

13:15was 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 COVID. And they seem pretty unabashed about, but balancing that with the fact that between AWS and the incredible logistics networks 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 simplistic version of that story. You have critics inside and around the company, particularly in the organized labor movement, that are simply looking for the missteps and to characterize the company as irresponsible and putting employees at risk and obscuring the toll. And that's obviously not true. They're human beings at Amazon and they did their best during the pandemic.

14:06amid incredibly challenging circumstances. And then on the other side, you have Amazon wrapping itself up in the mantle of the pandemic hero, who made no missteps and did everything by the book. And we're virtually perfect and are unfairly maligned. You had the J Cardi quote in the book that I think you said like I'm confident when the short term and long term histories are written, no one will have done more for the world than Amazon here. Right. And so just purely, you know, talking to everyone and figuring out what they did, they hired some world famous Verologist to counsel them but they got lost in the confusion of March 2020 and they did make some mistakes and they did fire the whistleblowers and there were lots of employees and executives who left the company and felt that was just wrong and so talking to 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 emerged over the last year and a half that's basically the formula

15:01I'm curious what your relationship with Amazon was as you are writing this because I think you made it pretty clear that you didn't actually speak with Jeff But I imagine there's lots of conversations with Amazon PR and of course many departed and current executives. How does that dance go when I approached them in 2017 or maybe 18 when I first told them about it They were pretty receptive almost as if they had maybe had been anticipating it or at least anticipating that somebody would do the update to the everything store. They could see the sales data. They were going to watch their first party version. Yeah, exactly. The Amazon basics history. I had sent Bezos a couple of notes explaining what I wanted to do and asking of course for access to him. They assigned a PR person to me and they basically said after a while that they would give me access to anyone I wanted to talk to at the company.

15:55and they would see about Bezos toward 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 journalist over the past few years into address.

16:18the challenges and tension points in Amazon history. When he's done it, it's always been about the broader things. Blue origin or the Washington Post. He's talked to fellow billionaires or an Amazon employee or his brother. In the end, even though I did harbor some hopes, maybe it wasn't all that surprising that he's not willing to sit for a Steve Jobs-like end of career retrospective. Plenty of time. Yeah, he's got time. But the other thing is I don't feel like the book suffered because of that.

16:45He'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 don't know. To me, I thought it was almost better that you didn't A because you didn't get you knew what he would have given you if you had. But B, I thought one of the coolest things about this book that I don't remember as much being in the everything store was the access you had to the STM. I feel like we really got the stories of Dave Clark.

17:14Some 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 now the CEO of the retail business. So one of the most powerful executives had Amazon. And he grew up in the sort of operations and fulfillment part of the business. And you know, it's obviously a genius and great at 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 or one of his first bosses became his like best friend and was the best man in his wedding. And then he gets promoted over that guy. And when that executive leaves Amazon to go to Target, Dave Clark basically has Amazon Sue him.

18:01Yeah, that was the most heartbreaking moment in the book. Yeah, and they never talk again. And right there encapsulated perfectly is Amazon's ruthless relentless business focused competitive mindset where relationships and empathy don't really factor into it. I don't want to say that there's a little bit of a heartlessness or a lack of empathy that goes into this empire building, but okay, I did just say that. And right there was illustrated. He sued his best man.

18:31And he's one of them now, you know, most successful executives, most prominent executives at Amazon, sitting there trading tweets with Bernie Sanders and other 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 bleeds into his personal life because He severed ties with his best man. That's completely outside the scope of a business relationship. How do you think about your comments that you had made in the everything store around Jeff bots in the current day? And does that apply in this situation? Well, I actually dropped that terminology. You know, I wanted to stand on its own and be fresh in part because even though I was sort of kidding about that in the first book, well, Bezos, Mackenzie mentioned that in her one-star review, I think, and there were definitely executives who took it.

19:26really weight 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 baseless ideals, you know, the work and the company over everything else and, you know, not a lot of empathy, consensus building is really subjugated to getting to the right answer and doing what's best for the company and the customer. And so in some of these actions towards his fellow friend, Clark had illustrated a little bit of baseless philosophy.

19:56So maybe I said it without just using the phrase. Oh, you know, it's funny. All the Jeff Pots. I don't think the Liars poker analogy is super aptly. Everything store is its own thing. But that was one of those things to be worse. Like McKenzie at least got so offended by that and probably Amazon and Jeff did too. But there's another side of that where you're like, yeah, if you're going to come to Amazon, you're going to be in charge of something and you get to be Jeff for something.

20:23There's something appealing in that too, right? I think what I originally was riffing on with that term was how he so effortlessly alluded difficult questions back when he gave interviews. And then I noticed that when I would talk to like an executive like Steve Kessel, 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 Jeff Bod idea that they were just so also skilled in the same exact way of speaking publicly and not saying anything.

20:52When David and I were reading it, we were talking about this beforehand. The big sort of aha moment of this book, at least in my opinion, was that this concept of interlocking and self-reinforcing businesses, whereas in the previous book, it was very clearly the Amazon flywheel. And we've all seen the diagram of Zillion Times at this point. How did you sort of come to that realization of the self-reinforcing businesses as the sort of point that you want to drive home this time?

21:20It might have been in the chapter on prime video. It just seemed like for a long time, even employees and some board members and investors in Amazon didn't understand Bayesos' infatuation with Hollywood and his investment in video and almost saw it as sort of a personal weakness or midlife crisis or digression or a diversion. But as with all these things so often, Bayesos is just simply sort of a head of the pack and thinking about it.

21:48You know, it was this idea that Prime was a two-day shipping club. And then it was a one-day shipping club. But the reality is that fulfillment centers are outside, you know, every major American city and shipping really ceases to be a differentiating factor. And Prime would have to be something more. It would have to be a content club. And so the way in which Prime Video feeds into Prime and reinforces the retail business and Prime Video is in some ways a consumer application of AWS.

22:16because it's streaming and sitting on Amazon servers. And the same with Alexa, it being a consumer application of AWS. And that's how Jeff conceived it with that first email to executives, a $20 computer whose brains are in the cloud, controllable by voice. And it also goes back to one quote from the everything store where he said to Tim O'Reilly, we don't have many big advantages. So we have to weave a rope of smaller advantages. And that's the way Bezos thinks and the way he's encouraging his executives to think.

22:45What 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 opaque and hidden connections between all these businesses that is at the center of how Amazon operates and while they'll probably really resist mightily any effort or suggestion that they should break up.

23:09Actually, I want to put a pin in antitrust for one second and ask this question sort of in a different way, which was, when I heard you were 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 store and it's the story of this maniacal guy who's going to 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.

23:37They're not a conglomerate like Berkshire Hathaway because the S team is much more than capital allocators. They're not just sending money to the head office. These businesses really do as you would later coin interlock and I 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 normal business should just go into near adjacencies, where it's like, well, let's explain and address a very similar market. Whereas Amazon has taken the strategy of we're 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.

24:15Well, they do both, right? I mean, there's for every satellite project Kuiper where they're going to get into internet access if they can ever launch these satellites, there's the physical retail initiative, the Amazon grocery stores that'll also function as e-commerce distribution centers and pick and pack. In addition to using their AI strength, you know, use the ghost or technology to do cashier lists checkout.

24:39There is some sort of far-field business expansion at the same time as they do kind of leach out into adjacent markets. Do you think there's any advantage to AWS and the retail business being under the same roof at this point? Totally. Yeah, retail is the biggest customer of AWS. It's the first customer. AWS is going to 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.

25:08And then on the retail side, I would assume they're going to pay in quotes more of a wholesale 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 an LP show a couple of weeks ago with Oliver Sharp from High Spot about a customer, you know, Lake Growth and customer said just it's like, yeah, the number one customer is right there in the same building.

25:37Just really quickly and the device business with the whole goals to and the video business to intensify the relationship with the Amazon customer is built to top, you know, AWS and things like Alexa are possible because the brains are set in the Amazon data center and are constantly being upgraded. You mentioned this in the book and I'd heard this before that Amazon retail ran on Oracle.

26:04Does it still in addition to AWS did you find out if that's still the game or have they totally transitioned off to Oracle now? They made a big fuss online when Jeff Wilkie went and ripped out the last Oracle server or use it in Amazon retail. I think that was a couple of years ago. They were they were very proud of it. And that was part of the, you know, the longstanding devolution of the relationship between the two companies. Yeah. Well, everything that was to come. Okay. So on those threads, the long-term, the interlocking businesses and video in particular. One thing I've been watching following Amazon for a long time, been a shareholder for a long time, have lots of friends there. I had no idea that this campfire thing happened, and that it started in 2010, way before video and Hollywood, and it tells more about this campfire thing, and for people who haven't read the book yet, you can tell it bad. Yeah, and thank you, David. That's one of those things, and I feel like,

27:02I got in the book and I was proud of and it took a lot of detective work and not a lot of people picked up on it. This has been mentioned in a couple of times in the press, but basically for the last 10 years, at least before the pandemic, Bezos was hosting this secretive event first in Santa Fe among the kind of literary elite and then it migrated to Santa Barbara more and moved in the direction of the Hollywood elite. And so Oprah and Shonda Rhymes and every celebrity you can imagine is invited.

27:32They're flown in 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 it thinking that that actually Bezos paid for it personally because it's so not unfrugal. They get bags of swag and their hotel rooms. The kids, when the kids come, they're given an individual counselor. It's like Sun Valley, the Allen company conference.

27:59combined with a Ted because they'll bring in speakers and a networking event. They're hikes. There's a beach club. They rent out a whole hotel and beach club in Santa Barbara. They had Michael Lewis come speak that one year. I've got a bunch of the guests and the attendees in the book. When are we getting? Are we getting our invites for next year? I am hoping for mine. But in fact, as I looked into an Amazon pace for it. And Bezos always he brought his family called it the best part of his year. He loved it.

28:28And it was essentially, you had to almost put this, you know, first literary community and then the entertainment community bring them into Amazon's orbit, get to know people, strengthen the relationships. And yeah, showed how important that was to him as he was thinking, you know, more about prime being a bundle of important content than that, not just a shipping program. Yeah, I was blown away like everything about that just.

28:51Seemed so anti Amazon to me and that it started in 2010. It really is a symbol of its evolving ambitions because it was very much a literary weekend. And you would have big name authors George or Martin would be the center of attention. You know, actually, he probably would still be the center of attention. Well, Bezos, as you said in the book, he wants his game of thrones, right? He wants his game of thrones, right? And maybe if they purchase MGM in the next couple of days, they'll have their James Bond, at least.

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31:09three 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, 10, 20, 30, 40 billion dollars of capital from Amazon sunk into video easily. Good use of capital. Jerry still out because there's no way to know this from Amazon's financial reporting.

31:31When you think about how valuable prime is to the whole Amazon ecosystem and the fact that yes shipping is receding as the centerpiece 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 like the DVDs, you know, shelves 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 IMDB TV, which you know, it's horrible.

32:00Name for anything, but is this streaming service that is alongside print video and is free, but supported by ads? And you know, and now you've got this massive advertising business, I think six billion in the last quarter. Well, that's the other category quarter.

32:17It's a six billion dollar quarter business that's like a hundred percent margin. Yeah, right exactly. Yeah, that's one of the business lines. I 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 it was there and they kind of turned it on. And so the more programming 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.

32:45On its own, it's valuable and then it ties into the Amazon ecosystem in these really interesting ways and then drives the central retail flywheel. Okay, so that's video. International. You devote a few chapters to this and hey, they screwed up China just like eBay back in the day, unclear if any Western company ever would have won there any commerce, probably not. Then India and Latin, that you talk about too.

33:10Another business line that they have sunk untold billions into the scene of Bezos wanting to ride in on the elephant and he has to settle for the flatbed truck to deliver the check to India, right? In India. Yeah. What's the state of those businesses? So India, I think they built a big business there. It wouldn't surprise me if it 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 Modi coalition has become nationalist. And they're protecting the mom and pop shops that make up that economy. And so Amazon's had to operate as a pure marketplace business and really has been restricted with some of its workarounds like investing in the largest sellers on its marketplace. But it's invested in

34:07prime video and TV shows and movies there and you know and change the way people shot particularly in the larger cities and now of course everything has been thrown into chaos by COVID-19. I wouldn't call that a failure it's still like a bit of massively expensive work in progress and you know I quote Bezos 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 are not taken know for an answer. Well, the interesting thing in India is it does seem like the game is still afoot because Flipkart, to my mind, I hadn't thought about this till reading the book totally screwed up by selling to Walmart. Like if Flipkart were still an independent Indian national company,

34:51Absolutely, the Modi regime to my mind will be putting their fingers on the scale. It would be where reliance is right now is the homegrown champion. And I think I quote a flip card, maybe board member investor in the book is saying, if there was a mistake to make, we made it. There's also you had the great quote to, I don't know that you had a name on it. It was just a nice team member said, we didn't know if we were going to get it right in India, but we knew Walmart was going to get it wrong. Exactly. And then you have reliance who's now.

35:20an offline conglomerate who's now trying to be the national e-commerce champion. And yet as we know from experience, moving an expertise in physical stores into the online channel is not easy. And it's really a completely different business. And at some ways it's really disruptive. So yeah, that's a game in progress. And then I call a story in Mexico. In part for two reasons. One, they tried to launch in Mexico without Google.

35:44And it was a great illustration of how concerned Bezos and Jeff Wilkie were about Amazon's reliance on Google and how they spent billions of dollars every year to advertise and get acquired customers via search. And so they launched in Mexico without search advertising and it doesn't work. Their numbers are upside down because they're trying to acquire customers with billboards and conventional ads and it's super expensive and ultimately unproductive. So they turn on Google advertising.

36:13And then the second reason that was interesting was it's a tragic story, but they hired the CEO of their business in Mexico who ends up getting fired from the company and then is accused of having his wife assassinated and then goes on the land and has never been seen since. And you had coffee with him in San Francisco like before he hired the assassins. I had absolutely no idea.

36:37And, you know, to me, it was an interesting look. I mean, I don't want to read too much of it. But, you know, they hired the guy and they had him run their business in Mexico. And obviously he turned out to be an unsavory 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 nugget is in this business book.

37:07And like we haven't even gotten to the whole sort of 2018 2019 saga and Jeff's personal life, but like you're reading this. It's not by any means dry. It's one of the 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, I'm 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 dig in further and that and you know, and sort of had to measure it because it is so.

37:36startling in different in tone and in content. I felt like it was interesting. And I think it was relevant. And the kicker was of that whole section was how Amazon had to turn off Google AdWords after the assassination, because the news story kept popping up. And the hear like it was just so interesting and showed the strange interdependence between the two companies. Well, this is like a place where I really wanted to ask this question because we were talking a lot about Flipkart.

38:05it became very obvious to me reading this book that Jeff Bezos does indeed care about competition in addition to the customer and it's this famous anecdote and I've heard it quoted to me by a thousand startup founders over the years saying oh I don't pay attention to the competition because Jeff Bezos doesn't and I'm only worried about my customer and like sure but how would you after diving in as deep as you have how would you Massage how he actually looks at competition and when to pay attention to it and when not to Whatever they say it's disingenuous about that right and it's it's theater, but Brad it's a leadership principle Right of course we pay attention to them, but we studied them But we just don't obsess over them. We obsess over customers and you know Bezos comes to India in 2014 and

38:56Flipkart's got billboards 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's space program the next day. And he wants to make a splash with the elephants. And it's all very explicit. And the Google story in Mexico, there's another part of the book where he authorizes Prime Now.

39:22you know, and a real foray into grocery delivery and fast to our delivery because Google is launching Google Express. And at some point, they're launching it in Seattle, his backyard. And this was an opportunity that he thought would be there for him down the road. And suddenly he saw, you know, Google moving after it. And this was a land grab. I don't hold it 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 or beyond focusing on competitors is definitely not true.

39:52to that moment and this competitive dynamic of basis. I don't think you wrote this in the book, but was primed now also partially response to Instacart. And I can't ignore the irony of both Instacart and Flipkart being founded by former Amazon engineers who were like, we should do this. And then Amazon was like, we're not going to do this. And then they go do it and raise billions of dollars in Amazon. It's like, we're doing it.

40:15No, it was in that chapter, it's not just Google Express, it's Instacart and they're successive fundraising rounds and sometimes it's a story in the Wall Street Journal or the Times or Bloomberg that catches their eye and there's a competitive response. And yeah, certainly Instacart the fact that this was a former employee had to hit him hard and they try to copy it. I talk about what Prime now was at the beginning and one element of it which they called Copperfield was an effort to basically do the same thing as Instacart.

40:45kind of syndicate offline physical retailers and use their shelves as fulfillment centers and deliver those with contractors to people's homes. And what they found when they tried to emulate Instacart is that no grocery store was going to work with Amazon.

41:00that would be madness particularly since in a very Amazon-like way they also had this Amazon fresh experiment happening in Seattle and by that point probably San Francisco and L.A. that seemed like this big mortal threat to the grocery stores. Well little did they know Amazon fresh at the time was kind of a disaster you know and wasn't really being expanded but Instacart had the benefit of being a technology platform for other grocery stores whereas Amazon was kind of doing both a little bit of 3p and 1p and so they even went to Whole Foods back in 2015 and got told no which you know was interesting and precipitated a little bit the relationship down the line there was a fun little moment that just reminded me of in the book I think you by the rotor implied that John Mackey and Whole Foods

41:47reached out to Bezos either through Bloomberg or after having seen something in Bloomberg. Right. The companies had been circling each other. Activist investors were kind of bubbling Whole Foods market. My colleague at Bloomberg Spencer Sober wrote an article that suggested that Amazon had considered buying Whole Foods in the past, which they had.

42:07And that was a precipitating event to Mackie saying maybe we should pick up the phone and call these guys. Maybe Allison's are way out. And then I've got the name of whoever this was in the book. And I'm not going to be able to remember it. But somebody who was advising Mackie was had been active in democratic politics and called Jay Carney and that precipitated the deal. Fascinating.

42:27I was like one of David in my first big episodes. I woke up, saw the news, we texted each other and said, oh my God, we have to do this. We have to cover Amazon 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 it's just cool to hear it on Earth. Yeah. Okay. So the third business line I want your opinion on is not the OG OG, but pretty close. The first kind of pillar of the stool of Amazon is Marketplace. You know, I'd always assumed that like This is an unassailable, unbelievable business. You know, even put AWS aside, which on its own should be a Fang company. US Marketplace also on its own should be a Fang company. You paint kind of a dark picture of what's going on with Marketplace right now. What to take? Tell us more. Well, they made a series of very logical choices over the years, which unlocked a tremendous amount of opportunity and growth. In fact, one of the big questions I had going into the book was, how does

43:27retail growth of a 20-year-old company started to re-accelerate, right? That seems to defy the laws of company gravity. You know, the bigger you are, the slower you grow. And so what exactly happened there in 2015, 2016, and that GMV kind of takes off? Yeah, I remember looking into it and talking to former members of that team. And essentially, again, back to the competition point, they are, quote, unquote, inspired.

43:53their eyes open by two companies. One, Ali Baba is expanding Ali Express with this idea that the sellers who have learned how to sell on Ali Baba in China could now reach customers in the US and Europe. You know, that was a seductive idea. I think got the attention of Amazon executives. But in fact, I think except for maybe parts of Europe, it really hasn't worked out that well. But in any event, that was sort of one inspiration. And there was internal communication among Amazon executives that I cite in the book, you know, expressing fear that maybe Jack Ma would like reduce fees to nothing in an effort to expand outside China. Which is normal in China, he covers as we see unacquired. Exactly. And then, you know, the other inspiration was wish.com, conducting a kind of geographic arbitrage, getting sellers in China and other countries to sell to the West with really low fees, no name brands, generic products, sometimes low quality.

44:51and weeks long wait shipping time for nevertheless huge selection and really low prices and was raising money in Silicon Valley and kind of taking off. And so Bezos looks at his lieutenants and says, you're on this, right? And that was like, that's all they need. It's like the sly nod from the Godfather. And so they open up marketplace. They basically reduce all the friction to selling from China to the rest of the world.

45:16you know, they're translating from Mandarin, it's self-service, you know, sign up, sell anywhere. They're aggregating product in the ports and shipping it at low cost to the west. They're storing items in Amazon fulfillment centers. They're making it really easy for cross-border commerce to happen. And that sounds great. And it was great. Great for consumers, I mean, and the businesses.

45:38booming in terms of revenue. And by the way, Amazon has seen that if you offer a curated selection of branded items at a high price, a very orderly store in say shoes, and then you AB test that with a disorderly selection of unbranded products at low prices with extensive selection.

45:57and even low quality actually customers still gravitate to the chaos and the large selection of the low prices. So they knew what customers wanted and the corporate compass at 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.

46:19These sellers who aren't paying the same taxes, who don't have the same labor costs, who are close to or in some cases are the manufacturers, no brands, no markups on prices, and then also a group of sellers in that community that are playing hardball or wearing black hats. Yeah, still an IP or all sorts of stuff. But with the reviews. Oh, man, the number of times, I don't know about everybody listening or you, but the number of times I get a little card on stuff I order from Amazon now saying, right a review and email it to us at this address and you know we'll send you something and when you read about exploding hoverboards or you know sneakers that are self-destructing after the second wear or out and out fraud it's because Amazon built these systems and scaled them and in an Amazon like way ran them with algorithms and software and not a lot of you know human care and curation

47:11Because they were moving quickly and setting up the systems and trying to globalize the marketplace and you know before Alibaba or wish or anyone else. Yeah, I thought there was a really interesting point that you made that was like sure there's this big problem with counter-fitting and IP theft and you know factory selling direct even though really it's someone else's product but let's even put that aside for a minute. There's 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 chargers and all sorts of like gadgets and they just have a dramatically lower cost structure than the American brand that they're selling against because everything about the company is China based and as long as they can ship them to American customers they can always undercut on the third party seller marketplace

48:04Steven Yang, the CEO of Anchor, says to a Western seller named Bernie Thompson, who's the CEO of Plugable, which is in the same business accessories. And he says to him at one point, in a very kind way, because Steven's a nice guy says, Bernie, we're going to run you over. Just because there's an acknowledgement that you really can't compete and Steven and Anchor, they have the manufacturing relationships, and they have an underlying cost advantage.

48:32But I went back to a lot of the sellers who over the years had been mentioned in Bezos investor letters to take their temperature and like here they are in the letters as the evangelist for Amazon Marketplace. And I thought after many years what would their tune be and all of them had become disgruntled 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.

48:58This was the moment. I mean, for me, like, I get unapologetically a huge Amazon fanboy up until that moment. I was like, yeah, yeah, yeah, yeah, but it's good for customers. It's good for customers. It's good for customers. And then when you went to every single person, every single seller that Amazon had championed in the past and everywhere, even though guy that was sort of reluctant, like you could tell, like he was pretty pissed off. He just didn't want to say it. But I will say that Bernie Thompson is one of those sellers who has mentioned in the investor letter, the guy that Steven Yang of anchor said, I'm going to run you over. And pluggable among all those guys still is doing well. He's still selling on Amazon. He, he, it's not, he wasn't as embittered, although he did bring some arguments to Amazon 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 on the marketplace. You know, they're being rolled up by bigger players. Thrasio and the, and the like. Yeah. And what, but

49:54Pluggable is like constantly change their product mix and kept bringing out new things and innovating and so that's the key, right? Someone who was selling stand-up paddle boards five years ago and still wants to be selling stand-up paddle boards today in the same way, you know, that's commerce. That's capitalism. It's globalization plus Amazon on 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 in their Amazon way. And I'm not too worried about Amazon, but it did make me think a, not that I'm a shareholder or anything, but less bullish on the Thrasio type model and aggregating sellers. Like, you were a commodity before and now you're a super commodity. And like, whatever your cash flow dynamics are today is not going to be what they are tomorrow. And two, just, you know, also more bullish on the Shopify and arming the rebels thesis to existing alongside Amazon.

50:52I agree with that. Yeah, Amazon's doing so much now and serving so many constituencies that the brand holder who wants no part of this frontier chaos and wants to sell directly and have a relationship with their customers, Shopify is serving that need and Amazon can't do it all. For anyone listening to the show right now, we're live on the line with a bunch of our LPs live. So we want to get to some questions that they have, but we have to touch on the as David has it in quotes here the baseless lapse of judgment in the 2018 and 19 time 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 the things that you found about the helicopter flying and the helipads of part of HQ two and the insane like leak from Lauren Sanchez's brother that was happening simultaneously with the hack from

51:49MBS and the Saudi Arabian involvement, like, you know, you can't make this stuff up. Was there anything that was like original insights that you had found where you're like, oh my gosh, this hadn't been uncovered before? No, I mean, I think there's a lot in there. I mean, you mentioned the helipads, right? The idea that...

52:07Yeah, the request for helipads in Long Island City and Crystal City that were part of HQ2 that instituted a political backlash in New York that Amazon claim was really just a normal, ordinary corporate request for aerial access and that Bezos, you know, not only for a company that doesn't own helicopters. Right, except that Bezos, you know, what I found out, not only was he seeing Lawrence Sanchez who's a helicopter pilot, but he has taken helicopter lessons at the time.

52:35We gotta stop for a second. Like, what is up with that? Like, the dude himself almost died in a helicopter accident. Like, obviously, there's Kobe art. Like, does he not get that people die in helicopters? And he's flying them. And although I looked for the pilot's license and I couldn't find it in any database, but...

52:51I do know that he took lessons and I found that he had personally bought a Bell helicopter and that Lauren Sanchez's company had also registered a new Bell helicopter at the same time. So my hypothesis, he bought his and hers, Bell Textron, State of the Art helicopter. So anyway, there's a lot, I mean, there's a lot in there. You know, well, the yacht, the fact that he's building this super yacht, three-mass schooner within a company and support yacht for the helicopters, that's all fresh in the book.

53:21that took a lot of slew thing. And then, you know, little aspects of the three-way fight between the National Enquirer, Bezos and his representatives, and, you know, Michael Sanchez trying to clear his solid name. Then he had MBS, you know, and that really had nothing to do with the whole thing. Yeah, I mean, people can go read it. It's chapter 13 in the book. There's a business week excerpts. It's a tangled, strange, bizarre, hall of mirrors saga.

53:50It's an unbelievable chapter, even if you feel like, ah, you know, I know a lot of these, this story, I'm not going to read them. Go buy the book and read chapter 13. It is such a crazy story completely on its own. And do I have it right that his phone via WhatsApp was hacked by Muhammad bin Salman? And that was very likely exfiltrating data, but that has nothing to do with how the public found out about the affair.

54:19The second part is right. It had nothing to do with the national inquire story, which was supply. The evidence filed in the voluminous court cases, amplies show the evidence was supplied by the brother. But I would say that there's just ambiguity around whether the Saudis hacked his phone. There was a study done by a consulting company that Bayzos' private investigator hired. There's a lot of skepticism in the cyber security community about that study and what they found. So I don't know. And I don't know that we'll ever know. And what's unfortunate is that the Saudi bots on Twitter have kind of taken what I wrote in that book to launch another wave of attacks against Bezos, saying that he improperly accused them. So the interesting thing is that there is obviously real enmity from the Saudi government and the Crown Prince and their agents against the Washington Post and against Jeff Bezos. So that is unequivocally true. And the question of whether they

55:13employed Pegasus software and hacked his phone. It's also true, by the way, that MBS was sending in very curious texts. Yeah, that was suspicious. But wait, I just wanted to say one other thing, Ben. I just remembered you asked, you know, what was new? And I'll just sort of like at a distance refer. You remember the center of this whole thing was whether the inquire had acquired explicit photographs. Yes. Yes. The selfie will just leave it there. And the fact that they never had it.

55:41What they had was a photograph that Michael Sanchez had taken from an escort website and passed off as an explicit photograph of the richest man in the world. And that was one you just can't, you cannot make up. It was funny. In retrospect, all of these parties were battling over a photograph that actually didn't exist. It's unbelievable. We could do a whole nother podcast that is not a business podcast about this. But I do want to ask them.

56:08a meta question. What was it like reporting that you were kind of going behind the scenes of this story and sources and you're a journalist yourself. You have sources, obviously you know the sanctity of sources and you're trying to report on this. Meanwhile, like there's all sorts of legal ramifications here. People could be going to jail. Like, what was that like? David, I'm not going to lie. It was awesome.

56:35I'm a business journalist. We're writing about deals. We're writing about business people who tend to be scripted and disciplined and boring. And so to write about explicit selfies and Saudi agents and hacks and tabloid journalists and double crossing sibling betrayal. Oh, it's great. That's awesome. That's awesome. All right. Last question before we sort of open it up to the floor. Brad is Have you heard from Amazon or Jeff or anyone in the book sense publishing and have you gotten any more recent feedback than what you actually wrote in the book? Not anything official and I think they having maybe 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 Bezos Instagram retort or even

57:29praying to the heavens another McKenzie review or Lauren 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, you know, a factual account and well told. And so that's really informal reaction. Obviously nothing from Bezos nor do I expect to. There's response so far that I've gotten it's been favorable. That's great. All right, listeners.

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59:32So if you're trying to turn AI ambition into real business outcomes and make it work safely, securely at scale, go check out servicenow.com slash acquired and tell them that Ben and David sent you. All right. Well, anyone, anyone want to kick us off here with the first question? Logan, see your hand raised. Yeah, obviously give a plug for the book, read the book, love the thank you for coming on. So my question is related to Nina Roll.

59:58voice of Alexa and the questions more on the journalistic approach basically can you go into more detail or whatever detail you can provide that you didn't include in the book on how you're able to I don't know if this is the right phrase hunt Nina 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 her name in the book how do you find out that she was Alexa and what was that process Yeah, thank you, Logan. I definitely love talking about this. It was in the first book, I tracked down Bezos' biological father. Unfortunately, there were no more long lost relatives to hunt down in this one. So I thought, well, what secrets are there to unearth? And if you remember, Logan, the voice of Siri a couple of years, way back, maybe like 2012 was unveiled. And it was a woman named Susan Bennett.

1:00:51who actually hadn't even known maybe early on that you was the voice of Siri like it was a data set that she had recorded for another company that had been acquired by Siri 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 reciting yards and yards of scripts. And then the AI takes that and produces a voice. And so yeah, I just put Finding Alexa is one of my challenges for the book and then it was like understanding, you know, where these voices come from. There's really only a couple of studios that do it. There's one in Atlanta that produces Siri called GM voices and just networking through employees, former employees and people in the community. I found out that it was likely GM voices that did Alexa and then networking around GM voices. I had some candidates and I went to their websites and when I got to Nina Raleigh rhymes with trolley.

1:01:47her website, you know, she had a bunch of voiceover clips that she had done in the past. I remember one was for Mott's Apple Sauce, I think. And you know, just playing it, I could tell. And I played it for my daughters and they were like, yeah, that sounds familiar. And, you know, when then I called her and she said, you know, she couldn't talk to me. And that wasn't it. I did sort of know and had confirmed that it was her beforehand just through networking. And then when Amazon wouldn't talk about it and she wouldn't talk about it, I had a pretty good signal.

1:02:16Awesome. Thank you. I'll leave it at that. Thanks, Logan. All right. Ben Grindel. Super interesting book. Last week I was part of another book club and it was for working backwards. So two great Fridays in a row. You've done so much reporting on Amazon and really dug deep. So two part question. One, what is Amazon missing from their business model? Like what is a new opportunity or revenue stream that they haven't pursued which they could? And what's something that you think they should drop that they're currently doing did you ask the working backwards guys this question well side note so it was like an eight person book club and Wilkie came to it very different conversation okay this is gonna challenge me what is the thing that's missing hard to imagine what the missing pieces are right in the amazon quilt of businesses right because they are sort of doing everything right now you know i'm inclined to say like the super the physical grocery opportunity was one that i think they were just laid on

1:03:15you know, while they bought Whole Foods and then they've been waiting to perfect this ghost or technology. I think they they're they're viewing technology as a differentiator. The cameras on the ceilings and the and the weights and the shells. The idea that you can bypass 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.

1:03:38you know, waiting in line for a 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 10 year plus process has slowed them down when it comes to entering physical retail in a big way. And, you know, maybe without that obsessive focus on finding a, you know, a way to enter the market with a distinctive technology solution, they could have moved faster on physical retail and the opportunity of supermarkets.

1:04:05It wasn't at $10 billion or something you said in the book. I don't know that I had a number, but I definitely had some sources saying that it was the biggest single investment in Amazon history, at least alongside China as the biggest capital investment, the ghost store. And then the second thing is, what are they doing that they should drop? Yeah. That's a tough one. The AWS service recognition, the image recognition service and AI service that they have been selling to corporate customers, but also police and government authorities. They have suspended that. They suspended it for a year after the sort of outcry and anxiety about image recognition. And now I think they've suspended it in perpetuity. There's just deep societal discomfort about the bias in those algorithms and the way in which police authorities have historically used them. So that's an easy one for me to grasp on to and say maybe this suspension of selling recognition to governments should be

1:05:01following Google and other companies and actually really abandoning the technology. Very cool. Ooh, I have a sort of an answer to that I'm curious if Brad thinks this is an answer. And it's been a really long time since we covered this on Acquired, but Brad, do you think the Zappos acquisition was value creative in a big way for Amazon, or has that just been a stagnant business? It's a little bit like the acquisition of diapers.com, which was a little bit after it, in terms of neutralizing the competitor.

1:05:30and then allowing it to run autonomously, maybe learning from it a little bit, but then pursuing their own strategy. And Amazon's never slowed down in terms of selling shoes or expanding the selection of shoes and apparel 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.

1:05:59It's been successful and the exact same thing with diapers.com. Mark Laurie did how I built this on NPR over the weekend where he tells the whole sort of bitter story of being acquired by Amazon and feeling like they close some avenues for Quincy. And so this is why regulators and lawmakers now think the wish that the FTC had taken a harder look at those acquisitions. All right, let's do Brad Romney next. I'm curious for your thoughts on which elements of Amazon's innovation fly will would you identify as being subtle yet impactful and which elements could you potentially separate from the more maybe less savory elements of the Amazon culture that we reported on?

1:06:46That's a good question, Brad. You might stump me with that one. I mean, I think that Bezos is central to the innovation process at Amazon. As much as they like to talk about a culture of invention and decentralized teams, when you peel back some of the biggest ideas at Amazon, it tends to start with an idea from Bezos like that, Alexa email, and then his sort of maniacal attention to it and sponsorship within the company.

1:07:10You know, and I think it's a long-term challenge for Amazon because, you know, Jassy for all his skills as an operator, you know, and he's been amazing at AWS. I don't think it's capable of, you know, wheeling off and emailing a new business idea in the way that Bezos is. And then as the founder, you know, and the CEO, Bezos just brought a level of magic to his, you know, sponsorship of these ideas and it was a combination of inspiring employees and terrifying them, you know, and getting them to jump through hoops and jump over high bars and he walks out of meetings. I have that anecdote in the book where he believes the Alexa team isn't collecting data fast enough and he walks out of the meeting and they come up with the AMP program to go and bring Alexa out secretively into the world to collect data. Those are the kind of like heroic entrepreneurial feats he can inspire. You can't bottle that up, right? Because there's one Jeff Bezos and it really often comes to

1:08:06having someone who's inventive and creative, but also has the fortitude to, you know, in 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 theme in the book, I think, is Bezos is willing to be embarrassed, right? He humiliates himself with the fire phone and then launches Alexa a couple of months later. And he risks embarrassment and is embarrassed by the Lauren Sanchez saga.

1:08:35and yet maybe doesn't really have the gene you know that he cares that much about or he's at least willing to to risk the humiliation and it turns out that maybe it's the susceptibility or allowing yourself to fail and fail really publicly that's also kind of key to the innovative process. Brad it does seem also just to chime in here that founders get more leeway from the street. Like Bezos 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 know who comes in but like future non-founders CEOs they get much shorter leash from investors.

1:09:18Totally. And when you think about like what Doug McMillan or the CEO of eBay or even the CEO of Target have to deal with in terms of managing the street quarter to quarter and never really being able to go and have four lousy quarters so that you can have the potential of building something more promising down the line. And Amazon can do that whenever they want. It's not just because Bezos is the founder.

1:09:41It's because he stuck around, but because he called the shots, right? With the first shareholder letter, he said, this is how he's going to run his business. And then he has reproduced that letter every year and said, it's still day one and repeated it all like a mantra. And, you know, and he's bought himself the leeway and the flexibility to do it. Real quick on that. You more than alluded to this in the book, but there's a real rivalry between Elon and Bezos.

1:10:07Is there any more that didn't make it into the book that you found on that? I mean, you know, I talk about in the book how they met early on a couple of times, you know, that Elon tried to tell Jeff that some of his technical decisions were wrong.

1:10:22you know, that they had really different philosophies. Bezos was constraining his investment of blue origin and wanted to keep the team small and wanted to start with suborbital space. And then Elon comes and does it all 10x gets government contracts and commercial contracts to pay for everything. And you know, Bezos is kind of left as a straggler, something that he's really not accustomed to being in second place.

1:10:45Yeah, I mean, I think the rivalry is real. It's super entertaining to see Elon exchange, you know, barbs with Jeff over Twitter and sometimes vice versa. And it'll be interesting to see whether Bezos commits more of his time to Blue Origin now that he's retiring as CEO and tries to rescue it. I do think that that company is a little bit dysfunctional in terms of, you know, Bezos owning it.

1:11:07operating it from afar, trying to keep its head count small, but then really in pursuit of space, exchanging directions abruptly, hiring aerospace folks from companies like Honeywell, and changing the culture on a dime, and then investing a billion dollars worth of his returns from Amazon stock every year in turbocharging it. And that kind of change of pace, I think, is yielded some dysfunctional outcomes. But look, the story there might change in the next couple of weeks. They say they're going to go new shepherd's gonna fly paying tourists to several orbital space and maybe that'll be a big triumph and create some momentum but right now they're sort of years behind all their projects and promises and a lot of these new contracts like the moon blue moon contract they're losing to SpaceX. Josh Gutman, let's go to you next. Yeah, I was kind of curious because like there's the time between the everything store and Amazon on bound Amazon started acquiring way more companies than they previously had.

1:12:05This was in a period where the company was much bigger too, so in some ways the acquisitions look smaller like on paper like in hindsight they even hold foods if you think about in terms of like market cap now feels like pretty insignificant. What has changed internally to Amazon for how they think about acquiring companies and kind of like what kind of made the cut for you in terms of like what was worth talking about from an acquisition point of view.

1:12:26I do tell the Kiva story in one of the chapters on operations. To me, it was a Dave Clark call. It was the opinion of Amazon in terms of trying to automate systems and take humans out of the equation. It was a little bit of a ruthless move in that they negotiated the thing over many years and tried to suppress its growth and then bought it and then made a promise to the Kiva founders that they could sell it externally and then re-nigged on that promise.

1:12:54and it allowed the super scaling of the fulfillment centers and made them, you know, incredibly more efficient. And then it also furnished Dave Clark with some like leadership credentials that allowed him to continue to grow inside the organization. So I think you're right, Joshua and that. I did take a little bit of a light pass on Twitch, definitely on ring. I did not do much.

1:13:15Part of it was just streamlining the story and trying to shoehorn everything into a narrative without too many digressions. And also while keeping Jeff Bezos at the center of the action, that was the main narrative challenge of the book. But Amazon might acquire MGM in the next couple of days. And I always thought that Amazon's ability to acquire companies was going to get severely curtailed because of all this antitrust scrutiny.

1:13:41We'll see what happens, but it seems like you know, that's an asset that they'll easily be able to buy and then increase their output of movies and their catalogs. So yeah, but you're describing one of the challenges I had and figuring out what to include, what not to include, how to keep things moving in this book that covers the entire arc of Amazon history and all these characters that populate it. Brad, to wrap, where can listeners buy the book?

1:14:08Well, Ben and David, it turns out that you can get it at your friendly local neighborhood bookstore. You can certainly pick it up. It burns a noble or if you must resort to it, it is available for Amazon itself as an ebook as a hardcover or as an as an audible audiobook. That's great. You need to set up shop in your garage there selling it out the front door. Exactly. Or I'll be selling it on my street corner this weekend.

1:14:32And there's a couple parts that you actually read in the audible if I was hearing right. I do. I do. I do the introduction and the acknowledgments that had to be you two, right? But frankly, it's probably about as much as anyone wants to hear me reading. There's 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 follow you or anything like that. I'm at Bradstone on Twitter. That's great. Well.

1:15:02Really appreciate it. LPs, thank you for joining us today. Great questions and Brad, best of luck. Thank you guys. Cheers. All right, listeners. Now is a great time to talk about one of our favorite companies, Statsig. Yes. There is a reason why the best product teams rely on Statsig, whether they are iterating on their core product features or shipping AI-powered experiences at scale. Yep. In the crazy speed of today's AI world. Shipping fast is just table stakes now. It's basically trivial to build and deploy your app constantly. The real advantage is how quickly you learn.

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1:16:01So if you want to make learning your competitive advantage, whether you're building new AI experiences, or just evolving your existing core product, go to statsig.com slash acquired to get started. All right, listeners, that is all we have for you today. Thank you for tuning in. Obviously, you heard where you can find Brad on the internet where you can buy the book.

1:16:22And if you do buy the book, you should go leave a review. I know Brad would greatly appreciate it. And it is years of shutting yourself in a room and working through this crazy process. And so we should all go and help Brad sort of get the most out of this incredible story that he has on Earth. So go leave him a review. Totally. I left a review. I, uh, I was very excited. I put a photo of my copy of the book with all my notes on it. And I aim to be the top reviewer for all the books that I review. I think you are on seven powers. I'm number one on seven powers. Yeah. Yeah. It's all because of the image. So when you leave a review, put a photo in there. Growth hack. All right. Well, listeners, we really appreciate it. As you heard at the top of the show, if you want to join the next one of these, you should become an LP. That's acquire.fm slash LP.

1:17:12We are hanging out in the Slack. That is free to join. Everybody can join. You don't have to be an LP to do it. That is acquired.fm slash Slack. So come talk about the news of the day with us. And if you like this episode, share it with a friend, subscribe from the podcast player of your choice. And with that, listeners, we'll see you next time. We'll see you next time.