Benedict Evans, Partner at Andreessen Horowitz, had a great post today on “The Amazon machine.” He is one of the best technology analysts out there and the post demonstrates that.
Amazon is an awe inspiring company in many ways led by an all-conquering, thoughtful CEO who seems to have cracked innovation at scale. As Ben puts it –
Amazon at its core is two platforms – the physical logistics platform and the ecommerce platform. Sitting on top of those, there is radical decentralization. Amazon is hundreds of small, decentralized, atomized teams sitting on top of standardised common internal systems. If Amazon decides that it’s going to do (say) shoes in Germany, it hires half a dozen people from very different backgrounds, maybe with none of them having anything to do with shoes or ecommerce, and it gives them those platforms, with internal transparency of the metrics of every other team, and of course, other people (and Jeff) have internal transparency to their metrics.
Amazon is on its way to become the world’s most valuable company. It is only a matter of time its market cap reaches one trillion dollars. I am bullish on Amazon in the short term.
However, when we look back at Amazon’s rise and fall (and there will be a fall) three decades later, it is likely we’ll find it hard to pinpoint when Amazon began planting the seeds for its eventual demise. Amazon’s rise was based on everything they did to become the most customer centric company on the planet. And, for two decades, they definitely were.
But, over time, cracks have been appearing. And, their recent fight with Google shows that those cracks are very real. In a weird ego fuelled battle with Google, Amazon’s decisions to pull Google products have put the customer last every step of the way. They’re clearly feeling invincible.
The question today, then, is – Can Jeff Bezos stop this rot?
Or, will hubris win the day?
If it does, it will be the day that Amazon stopped being Amazon.