Review: The Everything Store: Jeff Bezos and the Age of Amazon

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http://www.amazon.com/Everything-Store-Jeff-Bezos-Amazon-ebook/dp/B00BWQW73E/?tag=dedasys-20

The Facebook, Apple and Microsoft stories have been made into movies.  Google’s founders are fairly well known, but Amazon’s Jeff Bezos and the company he created are far more opaque.

This book changes that.  Detailing the rise and rise of Amazon, this is the most comprehensive description of what makes Jeff Bezos tick, how he works, and how he runs his company.

As such, I’d highly recommend it to anyone with an interest in Amazon and the many, many markets it touches, from cloud servers to streaming video to all kinds of things you can buy and have shipped to your house.

Critically for such a private person, the book builds on several interviews with Bezos.  Apparently, those are not so easy to come by, due to Bezos’ understandable desire for privacy.  While any biography is unlikely to be perfectly accurate, and despite Bezos’ wife commenting on the book’s faults, I do get a sense that it’s better than anything else that has been written on the subject to date.

Some things that stand out about Amazon’s way of doing things:

  • They are highly customer focused.  It’s easy to see this in the numbers, too: http://finance.yahoo.com/q/ks?s=amzn+Key+Statistics : the profit margin is 0.31%. Compare and contrast to Google at 20.91%, Microsoft at 26.9%, and Oracle at 29.33%!   They are very clearly reinvesting a lot of money in the company, and simply giving customers good deals.  Numerous quotes attest to this throughout the book:

“Bezos believed that high margins justified rivals’ investments in research and development and attracted more competition, while low margins attracted customers and were more defensible.”

“Like Sam Walton, Bezos sees it as his company’s mission to drive inefficiencies out of the supply chain and deliver the lowest possible price to its customers”

“We don’t make money when we sell things. We make money when we help customers make purchase decisions.”

  • Relevant to Kindles:

One of the primary conclusions from their research was that a good book disappears in the reader’s hands. Bezos later called this the top design objective. “Kindle also had to get out of the way and disappear so that you could enter the author’s world,” he said.

  • This quote makes a great deal of sense for those trying to sell something on the internet.  There’s no longer a lack of storefront space, like along a busy road, but getting people’s attention among all the other people trying to sell stuff is very difficult:

“In a world where consumers had limited choice, you needed to compete for locations,” says Ross, who went on to cofound eCommera, a British e-commerce advisory firm. “But in a world where consumers have unlimited choice, you need to compete for attention. And this requires something more than selling other people’s products.”

  • On eBook pricing.  Granted, given how long it takes an author to write a book, the paper and other bits are really inconsequential when we talk about costs, but still, it feels a bit insulting to readers to sell an eBook at a higher price than a paper one, especially because you can’t resell the eBook.

“Customers are smart, and we felt like they would expect and deserve digital books to be lower priced than physical books,” says Steve Kessel.

  • Occasionally, Amazon steps on other people’s toes.  Part of the reason is that they, like Google, and perhaps Microsoft before them, grew so quickly that they still have some of the “go get ’em” startup mentality.  That’s something you need when you’re a small company competing against giants, but when you’re a giant thinking that way, sometimes it leads to people getting stomped on.

“It’s a weird mix of a startup that is trying to be super corporate and a corporation that is trying hard to still be a startup,”

Bezos comes across as being 100% dedicated to Amazon and its customers.  Occasionally this is depicted as being very rough on the people who work with him at Amazon, but the book conveys a sense that it’s not just about making more money for Bezos (although he certainly has), or exercising power, but about improving the company and their customers’ experience, whatever the cost to the people involved.

Certainly, there are many more chapters yet to be written in the Amazon story, but if you’re curious about the man and the company he built, this is the best book on the subject.

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