As a consultant, I see companies struggling to compete with Amazon (or Amazon-like companies). Most companies struggle for a couple of reasons - They are ego driven, with legacy execs & others relentlessly protecting their status - whereas Amazon is relentlessly data-driven - They have poor incentive structures and are feature factories. They value velocity over outcomes. Amazon, by being more data driven, is focused…
I agree with your points, but I've also found another one that is far more common: They sell products at a loss to gain income in other places. For example, if you are a content producer you are competing with a company that sells "ad-free" video (Prime Video) attached to a low-cost service (Prime) so that they can sell more goods online. Amazon is killing content producers by running a negative margin content busine…
The Anti-Amazon Alliance
151–160 of 419 posts
Re: The Anti-Amazon Alliance
#152Earlier quoted context omitted.
These are all fine and perhaps valid, but it's not a serious conversation until you add this at the top: - Because Amazon has extreme market power and engages in predatory anti-competitive behavior
> - Because Amazon has extreme market power and engages in predatory anti-competitive behavior Sure it does. The American consumer continues to empower it to behave that way because no one other than Amazon gives them what they need. Kind of like how people continue to complain about their cable provider being evil but they don't do anything about it except complain. Want to solve your cable provider being evil? Star…
But that's a longer conversation. Ignoring all of that, the ISP argument is really weird to me.
> Start a cheap WISP. Anyone can do it, yet no one does.
Google started their own ISP, and then almost got forced out of the market by crony regulations that made it impossible for them to compete, despite offering a product that across the board was better priced and had higher customer satisfaction. And this is Google, who else in the US market was better positioned to start an ISP?
A big part of capitalist theory is the idea that markets trend towards efficiency. If you believe that ISPs are ruthlessly incompetent, and that the only thing blocking consumers from jumping ship to a better alternative is that nobody else has built one yet, then an efficient market should have solved that problem at some point in the last two decades.
If you're a Capitalist, and you believe there's an obviously underserved market where customers are constantly complaining about their current options, and nobody is stepping into that market even though anybody could -- well, there are two possibilities there:
A) Either the market doesn't actually trend towards efficiency, and all of Capitalism is wrong.
or
B) There's some kind of regulation, monopoly, or other barrier of entry that means ordinary people can't actually step in and easily compete.
Believing in Capitalism means believing that people follow money. You're telling me there's a massive underserved ISP market, everybody already knows that it exists, and that the only reason nobody has stolen every Comcast customer over the past decade is because people today are lazy? That's not how a free market works.
But of course, Capitalism does (at least mostly) work. So once you do the research on ISPs to figure out why they don't have competitors, you start to discover how many states ban community wifi efforts. You discover how many states still don't have decent one-touch-make-ready laws surrounding telephone poles. You find out how much money ISPs are willing to spend to sue and bully competitors out of the market, and how much government money ISPs rely on to keep their services running. You figure out that a lot of the free market businesses you're championing are basically publicly funded utilities that convert taxpayer money into private profits via exclusive government-funded contracts.
And once you discover all of that stuff, you realize that solving those problem requires serious legislative intervention, and it's not actually trivial to just vote with your wallet, and it's not actually that people are lazy or that they just want to complain. Some of the people you think are just complaining are actually working really hard to try and build (through legislative solutions) the type of market you think is going to magically solve the problem.
ISPs are a really good example of how sometimes if you want a legitimately free market, you have to work for it in government, and not just complain that other people haven't started their own business yet.
Re: The Anti-Amazon Alliance
#153Earlier quoted context omitted.
These sound like platitudes. And in particular the claim of Amazon's tremendous autonomy for workers doesn't even ring true to me (though I could be wrong since I'm basing this on anecdotal conversations with Amazon engineers). I think there are real, deterministic reasons why Amazon is successful (other than its unscrupulous practices) but I'm not sure your comment adequately covers them. It's hard to make these det…
Engineering teams at Amazon does indeed have a lot of autonomy. I have been part of multiple teams over a fairly long periods of time (7+ years), and it's been my experience every time. There were times when it felt like each team was its own start up, at least when it came to deciding what to build / prioritize.
Re: The Anti-Amazon Alliance
#154As a consultant, I see companies struggling to compete with Amazon (or Amazon-like companies). Most companies struggle for a couple of reasons - They are ego driven, with legacy execs & others relentlessly protecting their status - whereas Amazon is relentlessly data-driven - They have poor incentive structures and are feature factories. They value velocity over outcomes. Amazon, by being more data driven, is focused…
These sound like platitudes. And in particular the claim of Amazon's tremendous autonomy for workers doesn't even ring true to me (though I could be wrong since I'm basing this on anecdotal conversations with Amazon engineers). I think there are real, deterministic reasons why Amazon is successful (other than its unscrupulous practices) but I'm not sure your comment adequately covers them. It's hard to make these det…
Re: The Anti-Amazon Alliance
#155Earlier quoted context omitted.
I agree with your points, but I've also found another one that is far more common: They sell products at a loss to gain income in other places. For example, if you are a content producer you are competing with a company that sells "ad-free" video (Prime Video) attached to a low-cost service (Prime) so that they can sell more goods online. Amazon is killing content producers by running a negative margin content busine…
Yeah I agree. A lot of large companies can invest deeply just to drive out their competition. WalMart famously did the same to drive out other businesses in the 90s and 00s. I think though we need to recognize that Amazon is succesful for a reason, and those reasons are why they are in a position to invent even deeper and more relentlessly...
Re: The Anti-Amazon Alliance
#156As a consultant, I see companies struggling to compete with Amazon (or Amazon-like companies). Most companies struggle for a couple of reasons - They are ego driven, with legacy execs & others relentlessly protecting their status - whereas Amazon is relentlessly data-driven - They have poor incentive structures and are feature factories. They value velocity over outcomes. Amazon, by being more data driven, is focused…
To think Amazon doesn't have internal politics doesn't sound too believable.
I think Amazon had a very good business strategy and that has foremost been expansion at any cost, extending reach even at a loss by having multiple revenue streams. They leveraged the tendency for convenience in a fast world where everyone works hard, not just at Amazon. Solid business strategy, but the factors about incentives sound exotic to me.
> Not just dismiss them as some relentless and heartless evil empire.
This sentence could be straight from the middle of the last century and probably the cradle of literature. I am sure you will find many comparable quotes.
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Re: The Anti-Amazon Alliance
#157Earlier quoted context omitted.
have you talked to engineers who actually work at Amazon? they aren’t exactly running a tight ship. Market forces can make up for having a dysfunctional culture. This is roughly analogous to the role of luck in personal success- people say “I must have done something right!” when in reality you have far less control than you imagine
I have plenty of friends who are ex-Amazon engineers, and for all of their (valid) complaints about the place (management, incentive structure, culture, etc.), one thing no one has ever complained about was the efficiency and quality of Amazon’s engineering work. The stuff i heard about their internal build systems alone is straight up awe-inspiring, and that’s even compared to other tech giants (which is where i met…
Re: The Anti-Amazon Alliance
#158Most non-Amazon businesses are mediocre. Most grocery stores still don't have online ordering. Years, and years, and years, after Amazon entered the field, the other grocers have just decided to lie down and die. Still waiting for Chapters (a bookstore in Canada) to start sending me reading good reading recommendations. Still waiting on VISA to make generalized gift cards which are not miserable to use. I'm trying to…
> Still waiting for Chapters (a bookstore in Canada) to start sending me reading good reading recommendations. Why do you need the store to recommend to you what to buy from them next? Obviously the store is only going to recommend content which maximally increases its profits, regardless of whether that content is worth your time or really in tune with your most passionate interests. Buying the book from a shop is a…
I have lists upon lists of of music, library ebooks (the free way to not pay!), and video games as well as multiple lifetimes worth of free content on the internet. What today's consumer craves is for anyone to reach in, show them the next perfect thing, and promise that the barrier to entry will be worthwhile. Some fans immediately know what they want next thanks to friends, critics, or their own insatiable research, but most people* desire a buzz of encouragement to get them started.
* I use the phrase "most people" very deliberately here. The Blue Ocean Strategy theorizes that there's always a new demographic to pursue. Reduce the barrier to entry and some increase in customer retention is almost guaranteed.
Re: The Anti-Amazon Alliance
#159Earlier quoted context omitted.
Yeah I agree. A lot of large companies can invest deeply just to drive out their competition. WalMart famously did the same to drive out other businesses in the 90s and 00s. I think though we need to recognize that Amazon is succesful for a reason, and those reasons are why they are in a position to invent even deeper and more relentlessly...
The thing to recognize (or at least something I feel is under-recognized) is that Capitalism prefers monopolies or monopsonies, whichever the case may be. Capitalism talks a big game about the benefits of competition, but history tell us that it is actually their enemy. It reminds me of a Big Lie: https://en.wikipedia.org/wiki/Big_lie
Re: The Anti-Amazon Alliance
#160Good article. There are a few unknowns still. 1. Is Google really all in on product search? Their product search is pretty bad at the moment and it's a very challenging search space, esp when you work with tens of thousands of retailers. Going directly to retailer/niche-platform sites usually works better for me. For example, for music related I go to reverb.com, for outdoor to rei.com, etc. I then to Google and Amaz…