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Brad Stone on Big Tech Companies (Podcast) · Masters in Business

• 0:00
  Speaker 1: M. This is Mesters in Business with Very Renaults on
• 0:06
  Speaker 1: Bloomberg Radio. Here this week on the podcast, I have
• 0:10
  Speaker 1: a special guest. Brad Stone is the editor at Bloomberg
• 0:15
  Speaker 1: News who covers technology and the author of a number
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  Speaker 1: of books. The one that just came out, Amazon Unbound,
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  Speaker 1: Jeff Bezos and the Invention of a Global Empire really
• 0:25
  Speaker 1: quite fascinating. I had previously read his um his first
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  Speaker 1: book on Amazon, The Everything Store, and when that had
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  Speaker 1: come out, I think it was Amazon was still a
• 0:39
  Speaker 1: successful company, but not the dominant juggernaut it's become. And
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  Speaker 1: this book really is, you know, the sequel to that
• 0:50
  Speaker 1: that talks about how from the low point in when
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  Speaker 1: Amazon actually had a pretty substantial negative year in the
• 1:00
  Speaker 1: stock market down over all of these new drivers of
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  Speaker 1: revenue and growth, we're just teeing up. And what ends
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  Speaker 1: up happening is the company just starts to hit on
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  Speaker 1: all cylinders. And that's before the pandemic, and then the
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  Speaker 1: pandemic essentially doubles so many different sectors within Amazon. They
• 1:24
  Speaker 1: were a company that was made for a work from
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  Speaker 1: home lockdown situation, UH, perfectly positioned and took full advantage
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  Speaker 1: of it. Over the course of those years, Amazon became
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  Speaker 1: the second largest employer in the country behind Walmart. Bezos
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  Speaker 1: became the wealthiest man in the world. And Amazon just
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  Speaker 1: dominates so many areas of our everyday lives, from uh
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  Speaker 1: supermarkets and and delivery of just about everything to Amazon
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  Speaker 1: web servers too. You you just go through everything they do,
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  Speaker 1: Amazon Prime, in Amazon Video, and it's it's just endless.
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  Speaker 1: They have changed the fabric of our society and our economy,
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  Speaker 1: and Stone does a fantastic job telling the story of
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  Speaker 1: how that happened. I really enjoyed the book, and I
• 2:14
  Speaker 1: think you'll really enjoy our conversation. So, with no further ado,
• 2:19
  Speaker 1: my interview with Amazon Unbound author Brad Stone. This is
• 2:27
  Speaker 1: Mesters in Business with Very Results on Bloomberg Radio. My
• 2:34
  Speaker 1: special guest this week is Brad Stone. He is the
• 2:38
  Speaker 1: senior executive editor for Technology at Bloomberg News. Previously, he
• 2:43
  Speaker 1: was the Business Week writer covering tech in Silicon Valley,
• 2:48
  Speaker 1: and before that he was the tech correspondent for The
• 2:51
  Speaker 1: New York Times and Newsweek. He is the author of
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  Speaker 1: four books, including The Everything Store, Jeff Bezos, and The
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  Speaker 1: Age of Amazon From. His most recent book is Amazon Unbound.
• 3:04
  Speaker 1: Jeff Bezos and the invention of a global empire. Normally,
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  Speaker 1: at this point I would say, brad Stone, welcome to Bloomberg.
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  Speaker 1: But since you worked for Bloomberg, let me just say
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  Speaker 1: welcome to Masters in Business. Thank you very great to
• 3:21
  Speaker 1: be here. So I have to start off with the
• 3:24
  Speaker 1: simple question, and I know you define this in the
• 3:28
  Speaker 1: earlier book, Bezos or Bezos? How do you pronounce his name?
• 3:34
  Speaker 1: It is Bezos, yes, and I have encountered uh and
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  Speaker 1: I'm sure he has as well, numerous alternative pronunciations, but
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  Speaker 1: indeed it is Bezos. Interesting. So so let's start out
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  Speaker 1: a little bit with your background. I mentioned you're the
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  Speaker 1: senior executive editor at Bloomberg News. You were a writer
• 3:55
  Speaker 1: at Business Week for ten years, and before that the
• 3:58
  Speaker 1: New York Times and and Newsweek. How did you start
• 4:02
  Speaker 1: covering technology? What led you into that space? Yeah, well, Verry,
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  Speaker 1: I was way back before the New York Times. I
• 4:09
  Speaker 1: was had a once proud magazine known as Newsweek, and um,
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  Speaker 1: I was a junior reporter kind of just looking for
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  Speaker 1: an avenue, um, something that I could you know, write about,
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  Speaker 1: where my my articles would appear and what was a
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  Speaker 1: very competitive magazine at the time. For for journalists. And
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  Speaker 1: this was the nineties and the Internet was becoming more popular.
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  Speaker 1: And I had, you know, used the Internet and become
• 4:36
  Speaker 1: familiar with it while I was in a college and
• 4:40
  Speaker 1: I just started writing about it. And then they moved
• 4:41
  Speaker 1: me out to Silicon Valley in good timing, just just
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  Speaker 1: in time for the crash. So I read, I read
• 4:49
  Speaker 1: a bunch of your New York time pieces. Um, but
• 4:53
  Speaker 1: they were YouTube and iPads and Google Search. How did
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  Speaker 1: you ultimately you happened on to Amazon as a subject matter.
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  Speaker 1: I was covering Amazon at the time. Um, it was
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  Speaker 1: it was a little bit overlooked. If we go back
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  Speaker 1: to two thousand and six, two seven, you know, the
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  Speaker 1: eBay market cap was larger than Amazon's at the time.
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  Speaker 1: It's really remarkable to remember that the Amazon was stopped
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  Speaker 1: as maybe haven't picked the wrong business model for the
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  Speaker 1: Internet age. You know, Google was a much more high
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  Speaker 1: profile and interesting company, it seemed like. And yeah, I
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  Speaker 1: remember doing a couple of stories about the introduction of
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  Speaker 1: prime and fulfillment by Amazon and and and Amazon Web Services.
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  Speaker 1: And I mean I basically I was I would talk
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  Speaker 1: to Bezos. Um. When when Amazon got into the fight
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  Speaker 1: with the book publishers around kindle pricing. He was. He
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  Speaker 1: was on the phone quite a bit arguing Amazon's case,
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  Speaker 1: and I was always fascinated by the company. I was
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  Speaker 1: fascinated by Bezos. And then when I went over to
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  Speaker 1: Business Week and wrote a couple of stories about Amazon
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  Speaker 1: there it was it was really just sort of opportunistic
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  Speaker 1: writing my first book. I felt like nobody had really
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  Speaker 1: done the great Amazon story, and books had been devoted
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  Speaker 1: to the other big tech companies. Of course, I had
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  Speaker 1: no idea what kind of juggernaut it was still to become,
• 6:14
  Speaker 1: but it seemed to me that it had been a
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  Speaker 1: little bit overlooked. And that book really I read it
• 6:19
  Speaker 1: on vacation. I think in like it was a good read,
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  Speaker 1: and you had fairly decent access to Bezos prior to that.
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  Speaker 1: How cooperative was he for the book Everything Store Right.
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  Speaker 1: I can't quite remember the timeline, but I went in
• 6:38
  Speaker 1: there to meet with him to pitch the book, and
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  Speaker 1: he was very receptive. You know, Amazon has this weird
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  Speaker 1: cultural ritual where they start every meeting with a dot
• 6:48
  Speaker 1: with by reading a document. So I brought him a
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  Speaker 1: document to read and spiking the book and yeah, and
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  Speaker 1: he read it in sort of silence, and then he said,
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  Speaker 1: you know, it's too early to write the Amazon book.
• 7:00
  Speaker 1: I did talk to him a couple of times on
• 7:02
  Speaker 1: news things while I was reporting on it, and he
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  Speaker 1: allowed me to talk to his parents and friends and employees,
• 7:07
  Speaker 1: but he was pretty distant. It was limited access for
• 7:10
  Speaker 1: the first book. Uh that that's really kind of interesting.
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  Speaker 1: So tell us a little bit about your research and
• 7:16
  Speaker 1: writing process. The new book, Amazon on Bound is very
• 7:21
  Speaker 1: much told chronologically. How do you go about putting together
• 7:26
  Speaker 1: this monstrous right? Well, let me continue the story. So
• 7:32
  Speaker 1: after after the last book, the Everything Store comes out
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  Speaker 1: in twos and thirteen, and Bezos does not like it
• 7:38
  Speaker 1: very I don't know if you recall this, but he
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  Speaker 1: had his wife at the time, Mackenzie Um and some
• 7:43
  Speaker 1: employees like including Andy Jafsey, the new CEO. They all
• 7:47
  Speaker 1: wrote one star reviews, and I thought, I thought Amazon
• 7:51
  Speaker 1: was wasn't aren't they against people buying reviews that that
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  Speaker 1: violates their policies? I guess it was on the arm,
• 7:59
  Speaker 1: So right they been, and they bought it and read it,
• 8:02
  Speaker 1: I guess. Um. So anyway, there was a chill, and
• 8:05
  Speaker 1: and a couple of years went by, and and then
• 8:09
  Speaker 1: I and then at some point I realized that, you know,
• 8:11
  Speaker 1: the books took off and had come to be seen
• 8:14
  Speaker 1: as kind of the definitive history of early Amazon. But
• 8:17
  Speaker 1: I realized that so much had happened Alexa and the
• 8:20
  Speaker 1: global marketplace and Bezos becoming the wealthiest person in the world,
• 8:23
  Speaker 1: that there were simply more story to tell. And so
• 8:26
  Speaker 1: I went back to Amazon, probably a little cheekily and
• 8:30
  Speaker 1: just told them that I was going to do it.
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  Speaker 1: And this time there was no meeting with Bezos, but
• 8:35
  Speaker 1: they did allow they did allow me to talk to
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  Speaker 1: more more than a dozen senior executives, members of the
• 8:42
  Speaker 1: Senior Leadership team, the FES team. Yeah, and and they
• 8:45
  Speaker 1: basis a lot of going to talk to friends, and
• 8:47
  Speaker 1: so the access wasn't all that different. But the foundation
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  Speaker 1: of the book of both books really were the employees
• 8:53
  Speaker 1: who had been there, had participated in key projects, and
• 8:58
  Speaker 1: then who had left or were there. But we're willing
• 9:00
  Speaker 1: to sort of talk carefully because obviously Amazon and most
• 9:04
  Speaker 1: companies these days they try to lock up former employees
• 9:07
  Speaker 1: or current employees and nondisclosure agreements. I'd like to say
• 9:10
  Speaker 1: that Amazon has a lot of surface area, right more
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  Speaker 1: so than a lot of other companies. It does so
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  Speaker 1: many things, and there's actually very few people with any
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  Speaker 1: kind of a bird's eye view over it. Maybe really
• 9:22
  Speaker 1: just Jeff Bezos, I mean Andy Chassis and Jeff Wilkie,
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  Speaker 1: the former head of the retail business, you know, certainly,
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  Speaker 1: but they're extremely disciplined and careful in what they say.
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  Speaker 1: So it's really just it was almost like aggregating enough interviews,
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  Speaker 1: enough conversations that I could start to piece together enough
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  Speaker 1: of a picture of this entire company. And then also,
• 9:45
  Speaker 1: and by the way, very not just Amazon, put the
• 9:48
  Speaker 1: Washington Post blue Origin Bezos and Space company his basis,
• 9:52
  Speaker 1: his personal type of the natural Enquirer, like lots of
• 9:55
  Speaker 1: different avenues to go down. So it's really almost just
• 9:57
  Speaker 1: a sheer exercise and talking to as many people as
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  Speaker 1: it could. And so people went on the record, even
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  Speaker 1: fail the inner circle of people without giving you a
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  Speaker 1: lot of pushback. Did you find this book was a
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  Speaker 1: little more challenging because it's such a moving target Compared
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  Speaker 1: to the first version, the version that you wrote in
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  Speaker 1: Yes and no, it was easier, and that the Everything
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  Speaker 1: Store was kind of a calling card so I could
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  Speaker 1: talk I could reach out to hundreds of people, and
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  Speaker 1: they instantly knew who I was and what I was
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  Speaker 1: up to, right and and and in some cases I
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  Speaker 1: had earned a measure of trust by what they saw
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  Speaker 1: as a as an accurate retelling of the company's early years.
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  Speaker 1: But it was more difficult in that it was it
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  Speaker 1: posted an enormous organizational and structural challenge. So in the
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  Speaker 1: Everything Store, it was a very linear story. It was
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  Speaker 1: a group of it was one guy in Wall Street
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  Speaker 1: and then a group of people in a garage and
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  Speaker 1: bellevue with an idea to sell books on the Internet
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  Speaker 1: straight through, you know, through the dot com boom, almost
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  Speaker 1: cratering in the dot com bust, and then a revival.
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  Speaker 1: It feels iconic that that story in a way. And
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  Speaker 1: then this story is a sprawl of things happening at
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  Speaker 1: the same time. I mean, it's Alexa at the and
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  Speaker 1: the entry in the India and Prime Video and the marketplace,
• 11:18
  Speaker 1: and the grocery business and the logistics operation and adds
• 11:23
  Speaker 1: and and all the other stuff I mentioned. So it
• 11:25
  Speaker 1: was an organizational challenge. But in some ways this story
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  Speaker 1: was actually the better story. I mean, when you think
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  Speaker 1: about it from a pure value creation point of view,
• 11:34
  Speaker 1: you know, the Everything Store covers the creation of about
• 11:37
  Speaker 1: eighty billion dollars in market capitalization, and this this story
• 11:42
  Speaker 1: covers the creation of one point six trillion. So in
• 11:45
  Speaker 1: some ways, you know, this was the more dramatic business story. Sure,
• 11:50
  Speaker 1: just the numbers are just mind blowing, and we'll talk
• 11:52
  Speaker 1: about some of the numbers a little later. Any chapter
• 11:55
  Speaker 1: stand out as particularly challenging to write or particularly fun
• 12:00
  Speaker 1: to dive into. I started this book in two dozen seventeen,
• 12:05
  Speaker 1: so this was before h G two, before um the
• 12:09
  Speaker 1: Antitrust Subcommittee report into the big tech companies, before obviously
• 12:13
  Speaker 1: before the pandemic. But the funnest and the most unexpected
• 12:16
  Speaker 1: story was bezos is tangled with the National Enquirer and
• 12:20
  Speaker 1: Medium post about the bodies and the Washot post I
• 12:24
  Speaker 1: had never expected. Well, let me step back, because you'll
• 12:26
  Speaker 1: appreciate this. Most most companies will draw, you know, we'll
• 12:31
  Speaker 1: build a spense around the private lives of their key executives. Right,
• 12:35
  Speaker 1: it's seen as maybe a no go area. And Amazon
• 12:39
  Speaker 1: was fiercely is fiercely protective of bezos Is privacy, and
• 12:43
  Speaker 1: Bezos and is seriously protective of his family's privacy. And
• 12:47
  Speaker 1: so for this thing to blow up at the end
• 12:49
  Speaker 1: of two thousand, a pen as I'm writing the book,
• 12:52
  Speaker 1: you know, and an alleged affair, a trashy tabloid newspaper
• 12:58
  Speaker 1: accusations of political interfere inspired the Trump administration, a hall
• 13:02
  Speaker 1: of mirrors, of crazy characters and private detectives and you know,
• 13:08
  Speaker 1: unethical Hollywood characters and perhaps mbs. I mean, it was
• 13:12
  Speaker 1: beyond anything that I had imagined, so in terms of
• 13:15
  Speaker 1: like challenge and and maybe entertainment value. And I just
• 13:19
  Speaker 1: couldn't sort of couldn't believe that this is where not
• 13:21
  Speaker 1: only this is where, you know, something that I had
• 13:23
  Speaker 1: pried open, but this is where Bezos had kind of
• 13:26
  Speaker 1: led the world and lead his own story. Was astonishing
• 13:29
  Speaker 1: to me. Let's talk a little bit about that empire
• 13:33
  Speaker 1: and put some some flesh on the bones. In terms
• 13:37
  Speaker 1: of numbers, I like the way you broke the book
• 13:40
  Speaker 1: up into three sections, and each section starts with four
• 13:46
  Speaker 1: data points. Annual revenues, number of employees, the market cap
• 13:52
  Speaker 1: of Amazon and and Bezos is net worth, and some
• 13:56
  Speaker 1: of the numbers from just over a decade, they were
• 13:59
  Speaker 1: doing thirty four billion in sales in and then by
• 14:04
  Speaker 1: it's a hundred and thirty six billion, and then by
• 14:07
  Speaker 1: last year it's two hundred and thirty three billion. And
• 14:11
  Speaker 1: along the way, they went from thirty three thousand employees
• 14:14
  Speaker 1: to three hundred fifty two. Now they have about six
• 14:18
  Speaker 1: hundred fifty thousand employees. Uh, and Bezos went from a
• 14:23
  Speaker 1: mere fifteen billion in net worth today's worth well over
• 14:28
  Speaker 1: UM was one five. Now he's coming up on two
• 14:33
  Speaker 1: hundred billion. And by the way, very employees, it's over
• 14:36
  Speaker 1: a million now over a million. Yeah. Sword So so
• 14:43
  Speaker 1: that was the question I was gonna ask, is how
• 14:45
  Speaker 1: much of the numbers are pandemic related and how much
• 14:49
  Speaker 1: of this is just an acceleration of all these trends
• 14:53
  Speaker 1: at Amazon that were in place before last year even
• 14:57
  Speaker 1: you know began. I mean, I think it's both the
• 15:01
  Speaker 1: pandemic was an accelerant and that growth might have happened,
• 15:05
  Speaker 1: and the pandemic just moved everything forward. If if people
• 15:09
  Speaker 1: are wondering, doesn't roll back to Amazon, let people go,
• 15:13
  Speaker 1: I don't think so. I think what the pandemic did
• 15:15
  Speaker 1: is that it made people more familiar with UM, you know,
• 15:20
  Speaker 1: next Amazon's next day delivery, UM possibilities, grocery shopping. It
• 15:26
  Speaker 1: increased Amazon's profits, and what they always do with that
• 15:30
  Speaker 1: is they reinvested in the more Amazon So it created
• 15:33
  Speaker 1: profilming centers closer to major cities, closer to our homes,
• 15:37
  Speaker 1: more trucks on the highway, more events in our neighborhoods,
• 15:40
  Speaker 1: more data centers. And what that means is, you know,
• 15:42
  Speaker 1: Amazon spent the pandemic basically capturing more advantages, uh, the
• 15:49
  Speaker 1: advantage advantages of performance centers close order to our homes
• 15:53
  Speaker 1: and faster delivery. And it's not going to unline that.
• 15:56
  Speaker 1: And it just means that shopping offline for food and
• 15:59
  Speaker 1: for everything else is going to be more convenient, and
• 16:02
  Speaker 1: that is probably frightening for offline competitors supermarkets. The other
• 16:08
  Speaker 1: thing Amazon's doing is creating physical retail stores, so that's
• 16:11
  Speaker 1: still capturing of all retail people shopping in actual stores,
• 16:16
  Speaker 1: and Amazon itself stamping out these Amazon Fresh grocery stores.
• 16:20
  Speaker 1: So it had a productive pandemic. You might you might
• 16:23
  Speaker 1: say it was sort of perversely lucky because it had
• 16:26
  Speaker 1: all the advantages going into it, and now it has
• 16:28
  Speaker 1: even more. So we're gonna get to some of the acquisitions.
• 16:32
  Speaker 1: We'll talk about Amazon Prime and Whole Foods, but before
• 16:35
  Speaker 1: we do that. Early in the book, you talk about
• 16:38
  Speaker 1: sort of the tens low point for Amazon, which was October.
• 16:45
  Speaker 1: They had kind of stumbled with the Amazon Phone and
• 16:49
  Speaker 1: a lot of the big growth engines were just starting
• 16:53
  Speaker 1: to ramp up. I have to ask, who is possibly
• 16:57
  Speaker 1: worse at assessing padditors then Microsoft, Steve Balmer? Is there
• 17:04
  Speaker 1: anybody who is? I mean, if this guy, this guy
• 17:07
  Speaker 1: missed everything from the iPhone to the iPod two and
• 17:13
  Speaker 1: and he was dissing Amazon in like they don't make
• 17:19
  Speaker 1: a profit? Who nobody's interested in those guys? I mean,
• 17:23
  Speaker 1: I love your usage of him. What attracted you to
• 17:26
  Speaker 1: using him as the uh, the patsy and as I
• 17:29
  Speaker 1: think I call him the contrarian indicator. Um, but let
• 17:32
  Speaker 1: me give a little bit of the defense of Steve
• 17:34
  Speaker 1: Balmer and lay to us in fourteen. Um, he wasn't alone, right,
• 17:38
  Speaker 1: There were there were investors like David Einhorn who were
• 17:41
  Speaker 1: who were adding Amazon to the to the bubble stock basket.
• 17:45
  Speaker 1: Um analyts we were mixed. At the time. There was
• 17:49
  Speaker 1: a lot of speculation about the underlying profitability of Amazon
• 17:52
  Speaker 1: Web Services, which the company was disguising on its income statement.
• 17:55
  Speaker 1: At the R and yet we have to have to
• 17:58
  Speaker 1: understand that Amazon is deliberately opaque, and you know, in
• 18:02
  Speaker 1: a way that it's sort of surprising the sec You know,
• 18:04
  Speaker 1: our other regulatory authorities haven't been more aggressive in getting
• 18:09
  Speaker 1: the company to reveal more, but it is. It doesn't
• 18:12
  Speaker 1: want the world to know how profitable a business Amazon
• 18:15
  Speaker 1: Web Services is, and it's not showing profits. It's disguising
• 18:19
  Speaker 1: its profits on its income statement by investing in more
• 18:24
  Speaker 1: data centers, more fulfillment centers, expansion. At that point, the
• 18:28
  Speaker 1: expansion in the India begins, and it's spending a billion
• 18:32
  Speaker 1: dollars a year at that point a prime video. So
• 18:35
  Speaker 1: no one has any idea because Bezos is sitting there
• 18:38
  Speaker 1: at the craft table making new bets, and you know,
• 18:41
  Speaker 1: Balmer just happens to be a bit of a loud
• 18:43
  Speaker 1: mouth and expressed it at exactly the wrong time. Because
• 18:47
  Speaker 1: you can go back and march the exact moment when
• 18:50
  Speaker 1: Amazon has to finally reveal a WS as financials and
• 18:53
  Speaker 1: the thing starts to take off. Huh. It's interesting that
• 18:57
  Speaker 1: it was such a strategic advantage, uh, to not discuss
• 19:03
  Speaker 1: Amazon Web Servers for so long, and they were able
• 19:07
  Speaker 1: to to get away with that because of um it
• 19:11
  Speaker 1: wasn't more than ten percent of the revenues. Is that
• 19:13
  Speaker 1: was that the rationale for hiding that. I think that's right.
• 19:17
  Speaker 1: That they could another business. Another CEO is going to
• 19:22
  Speaker 1: want to show that off. It's going to want to
• 19:24
  Speaker 1: impress investors, particularly because if you look at the stock
• 19:28
  Speaker 1: performance in two thousand fourteen, I mean my recollection is
• 19:32
  Speaker 1: the stock went down and you know, or at least
• 19:34
  Speaker 1: it was embattled, and you know, another CEO is going
• 19:38
  Speaker 1: to say, well, it's gonna like cater to their own ego,
• 19:41
  Speaker 1: uh and to their recruitment needs of their company into
• 19:44
  Speaker 1: the image and want to release that. But Basos, across
• 19:48
  Speaker 1: the ten years of this of a WS growth, you know,
• 19:51
  Speaker 1: he thinks long term, he thinks competitively. He didn't want
• 19:54
  Speaker 1: to tip off competitors to how good of a business
• 19:57
  Speaker 1: this was, and he kept it hidden. I mean that
• 19:59
  Speaker 1: takes a little bit of a remarkable act of CEO
• 20:02
  Speaker 1: patients and bravery to do that. But they felt like
• 20:05
  Speaker 1: they had a gold mine there and they wanted to
• 20:07
  Speaker 1: mine it for whatever it was worth. Let's see in
• 20:14
  Speaker 1: let's see what the stock price looks like. Bear with
• 20:16
  Speaker 1: me one second while I pull this up. Oh no,
• 20:21
  Speaker 1: this was this was not a good year. They were
• 20:25
  Speaker 1: down for the full year, and you're right the bottom
• 20:29
  Speaker 1: while there was a low over the summer in in May,
• 20:32
  Speaker 1: and then there was another low in October. But yeah,
• 20:36
  Speaker 1: that doesn't surprise me that that bomber nailed the bottom.
• 20:41
  Speaker 1: But a lot of people were pretty skeptical in an
• 20:44
  Speaker 1: otherwise pretty decent year for the market, right right, And
• 20:50
  Speaker 1: and when you look back at two thousand fourteen, it's
• 20:53
  Speaker 1: so remarkable that that there was such skepticism because that
• 20:58
  Speaker 1: that is the year that Amazon introduces Alexa. It is
• 21:01
  Speaker 1: the year that they started preparing to to introduce the
• 21:04
  Speaker 1: financials of aws UM. I think I think that might
• 21:08
  Speaker 1: have been the first year that Amazon Studios originals start
• 21:11
  Speaker 1: to come out, So the first batch of TV shows
• 21:13
  Speaker 1: that weren't all that good, but I think it marked
• 21:16
  Speaker 1: a transformation of Amazon Prime into more of a content service.
• 21:20
  Speaker 1: So uh and and then and then the expansion in
• 21:23
  Speaker 1: the India really begins in earnest in two thou fourteen,
• 21:26
  Speaker 1: and so they're placing a lot of vests there and
• 21:29
  Speaker 1: to the public markets and two investors. Everything looks kind
• 21:32
  Speaker 1: of dire, but it's really the beginning of probably the
• 21:35
  Speaker 1: most impressive wealth creation, maybe even in the history of business.
• 21:40
  Speaker 1: I mean, Um, it's just it's such a perhaps perhaps
• 21:44
  Speaker 1: alongside Apple, you know, the kind of scale that we
• 21:46
  Speaker 1: haven't really seen before. Right, So so let's talk about
• 21:49
  Speaker 1: some of the big winners that are driving that growth. Um,
• 21:53
  Speaker 1: Amazon Prime. This really turned out to be quite a
• 21:57
  Speaker 1: game change or not only making clients stickier, but really
• 22:05
  Speaker 1: taking Amazon to a whole new level. It really has evolved.
• 22:08
  Speaker 1: So back into thousan five, you know, when they conceived it,
• 22:12
  Speaker 1: Um Basis wanted to kind of take shipping charges off
• 22:15
  Speaker 1: the table. Like he knew Amazon could compete with selection,
• 22:19
  Speaker 1: it could be competitive with prices, but the convenience just
• 22:22
  Speaker 1: wasn't there to take many days for people to get
• 22:25
  Speaker 1: their packages. And at the time Amazon had maybe a
• 22:28
  Speaker 1: dozen fu filment centers in the US. So taking shipping
• 22:31
  Speaker 1: off the table, trying to offset it with what was
• 22:34
  Speaker 1: the seventy nine dollar a year charge it made It
• 22:37
  Speaker 1: made a lot of sense. And then you you wrap
• 22:39
  Speaker 1: people up into the Prime ecosystem UM, and they spent more.
• 22:44
  Speaker 1: And then you fast forward five seven years and Basis
• 22:48
  Speaker 1: sees that maybe shipping isn't going to be that much
• 22:51
  Speaker 1: of a differentiator anymore in a world where Amazon has
• 22:54
  Speaker 1: hundreds of fulfilment centers around the country where one day
• 22:57
  Speaker 1: or two day shipping might be possible even without Prime membership.
• 23:00
  Speaker 1: And so we kind of surprises all of his executives
• 23:03
  Speaker 1: by saying we're gonna put free TV shows and movies
• 23:06
  Speaker 1: into this. And now today I would say that's probably
• 23:09
  Speaker 1: more more important to the prime to Prime membership, the
• 23:13
  Speaker 1: fact that you get access to prime video, prime music.
• 23:17
  Speaker 1: I mean, they've got I think it's Amazon Music, mkindle club.
• 23:21
  Speaker 1: People don't even know what it gets to you, and
• 23:23
  Speaker 1: maybe that's part of it. They're sort of this hazy,
• 23:25
  Speaker 1: ambiguous it's a lot of it. That's a lot of things,
• 23:29
  Speaker 1: and people tend to maximize the value. It's want to
• 23:32
  Speaker 1: maximize the value of any club they belong to. So
• 23:35
  Speaker 1: it's a sort of neat psychological trick and and and
• 23:39
  Speaker 1: the center of the Amazon operating model. And and then
• 23:43
  Speaker 1: related to the expansion of groceries, but as well as
• 23:47
  Speaker 1: coming up with um physical locations near I think it
• 23:51
  Speaker 1: was prime members was the purchase of whole foods, which
• 23:56
  Speaker 1: you discussed in the book. You know, remind me a
• 23:58
  Speaker 1: little bit of the Google YouTube purchase. The increase in
• 24:02
  Speaker 1: stock price essentially made the purchase free. To tell us
• 24:06
  Speaker 1: about the whole Foods purchase. I so I devote a
• 24:10
  Speaker 1: whole chapter to Amazon's adventures slash misadventures in groceries. And
• 24:15
  Speaker 1: it's really interesting because this is one area where Bethos
• 24:19
  Speaker 1: wasn't as far sighted as some of his executives. He
• 24:22
  Speaker 1: had people advocating for an expansion in the grocery delivery
• 24:26
  Speaker 1: as far back because two thousand and seven he thought
• 24:29
  Speaker 1: that this would be an opportunity that would be there
• 24:32
  Speaker 1: for Amazon. Um and and executives were writing papers and
• 24:35
  Speaker 1: I quote some of them in the book. UM, I
• 24:38
  Speaker 1: love the one that was called Amazon's futurist crap, which
• 24:41
  Speaker 1: stood for can't realize the profits and was a lot
• 24:44
  Speaker 1: of basically consumables and grocery store items. And it wasn't
• 24:47
  Speaker 1: until Google introduces Google Express and instat Cart kind of
• 24:52
  Speaker 1: comes unto the scene, starts raising torrents of money that
• 24:56
  Speaker 1: he starts moving faster. And the challenge with fresh food
• 25:00
  Speaker 1: is that is that you need to hold different fulfillment
• 25:02
  Speaker 1: network refrigerated and rapid deliveries Mainly people want to be
• 25:08
  Speaker 1: at their homes when they when they get when they
• 25:10
  Speaker 1: get their deliveries. And um and and nothing that Amazon
• 25:14
  Speaker 1: was trying is working very well. There was Prime Now
• 25:17
  Speaker 1: and Amazon Fresh, and so Whole Foods comes along in
• 25:19
  Speaker 1: two seventeen. It's a distressed asset um. John mackew is
• 25:24
  Speaker 1: beset on all sides by activists investors clinging to his
• 25:28
  Speaker 1: organic selection in an age of broader selection and prevalent
• 25:33
  Speaker 1: junk food and supermarkets. And and Bezos buys it. Now.
• 25:39
  Speaker 1: It's interesting because amazon s futuring groceries isn't necessarily whole food.
• 25:43
  Speaker 1: They're creating these Amazon Fresh supermarkets. But I think they realized,
• 25:46
  Speaker 1: or Bezos realized, that he was going to need to
• 25:48
  Speaker 1: learn a lot about the grocery businesses if Amazon was
• 25:51
  Speaker 1: going to fill its potential there. So let's talk a
• 25:54
  Speaker 1: little bit about some of their products. Um that we're winners,
• 25:57
  Speaker 1: will talk about Kindle, go on, Alexa and fire TV.
• 26:02
  Speaker 1: It's kind of amazing to think a CEO said, I
• 26:06
  Speaker 1: have an idea for a reader and we're going to
• 26:09
  Speaker 1: build this from scratch. Tell us a little bit about
• 26:13
  Speaker 1: the genesis of Kindle and what it meant for Amazon,
• 26:18
  Speaker 1: whose roots were in book selling, right right. So we're
• 26:22
  Speaker 1: going back now to to some of the material I
• 26:25
  Speaker 1: cover in the Everything Store, And this is probably about
• 26:28
  Speaker 1: two four and Bezos is basically watching Apple vaporized his
• 26:33
  Speaker 1: music business with the iPod and itube store, and he
• 26:38
  Speaker 1: understands that a digital transformation is coming from media and
• 26:41
  Speaker 1: that Amazon's brand is still very tightly intertwined with the
• 26:45
  Speaker 1: book business, and concludes that if Apple were to ever
• 26:49
  Speaker 1: move into digital books, that Amazon would be vulnerable. And
• 26:53
  Speaker 1: so he basically tells his leadership team, the f team,
• 26:56
  Speaker 1: that they're going to build a knee reader. At the time,
• 26:58
  Speaker 1: Sony had tried to do it and had sort of
• 27:01
  Speaker 1: failed with the Sony Reader. And there's all sorts of
• 27:03
  Speaker 1: objections because what does Amazon at the time know about
• 27:06
  Speaker 1: building devices, And Beza says, I know it's hard, We're
• 27:10
  Speaker 1: going to do it, and it's a three year process.
• 27:13
  Speaker 1: It's actually very similar to the Alexis story which I
• 27:15
  Speaker 1: tell him in Amazon Unbound. But he drives the initiative,
• 27:19
  Speaker 1: he sponsors it, he authorizes all sorts of investments, he harangued,
• 27:23
  Speaker 1: He gets his his sales folks to go to New
• 27:27
  Speaker 1: York City and harangue the book publishers and the unlocking
• 27:30
  Speaker 1: more of their catalogs for the for the e book business.
• 27:33
  Speaker 1: They had been very hesitant because it wasn't a major
• 27:35
  Speaker 1: business for them. Amazon uses its leverage and strength with
• 27:39
  Speaker 1: the publishers to basically get them to digitize their books,
• 27:43
  Speaker 1: and then they announced the thing into two thousand and seven,
• 27:45
  Speaker 1: and that is the beginning. Um that is the beginning
• 27:48
  Speaker 1: of Amazon and devices at leads to everything from Alexa
• 27:52
  Speaker 1: to the failed fire phone, to the fire TVs to
• 27:54
  Speaker 1: all sorts of things we haven't seen yet. And it's
• 27:56
  Speaker 1: a great illustration of Bezos really inventing his company in
• 28:01
  Speaker 1: every turn and thinking ambitiously in an unbound way about
• 28:06
  Speaker 1: what Amazon could become. It wasn't just a retailer, it
• 28:10
  Speaker 1: wasn't just a bookseller. It wasn't just an enterprise software company.
• 28:14
  Speaker 1: When it's cloud business, he doesn't he doesn't place any limits,
• 28:18
  Speaker 1: it doesn't seem to me, and what what Amazon can be,
• 28:22
  Speaker 1: and that kind of tease up the Echo, which is
• 28:25
  Speaker 1: its own product category. If this was a standalone product
• 28:29
  Speaker 1: from a new startup company that had sold hundreds of
• 28:33
  Speaker 1: millions of units, they would be a really successful company.
• 28:37
  Speaker 1: Tell us how how did the echo come about? Well,
• 28:42
  Speaker 1: it's interesting that you see the very I don't I
• 28:45
  Speaker 1: don't know if it would be. Um, Amazon probably sells
• 28:50
  Speaker 1: those units at close to cost. And and this will
• 28:54
  Speaker 1: get to the origin. You know, it's the brains of
• 28:57
  Speaker 1: Alexa are in Amazon webster uses and and I'm sure
• 29:02
  Speaker 1: it gets a nice wholesale rate on that. And that's
• 29:05
  Speaker 1: where Beza started with this. He sent an email to
• 29:08
  Speaker 1: his his colleagues and late to us in ten we
• 29:11
  Speaker 1: should build a computer whose brains are in the cloud
• 29:14
  Speaker 1: that's completely controllable by your voice. Because he's thinking at
• 29:17
  Speaker 1: the time, how does he exploit Amazon's advantage in cloud computing,
• 29:21
  Speaker 1: and how does he create some consumer facing applications. And
• 29:25
  Speaker 1: he's a big science fiction fan and he's totally engrossed
• 29:28
  Speaker 1: with the possibilities and improvements and voice search at the time.
• 29:33
  Speaker 1: And that's that email spawns Alexa, and very much like
• 29:35
  Speaker 1: the kindle, he gets in the in the weeds, and
• 29:38
  Speaker 1: he sponsors it, and he authorizes the hiring of all
• 29:41
  Speaker 1: sorts of oppressive voice scientists and they bring it out
• 29:46
  Speaker 1: into the world and collect data in a very surreptitious
• 29:48
  Speaker 1: and interesting way. Um and and now it's so tightly
• 29:53
  Speaker 1: interwoven into the Amazon empire that we don't know if
• 29:57
  Speaker 1: that if it makes money. I don't think it's been
• 29:59
  Speaker 1: as evolutionaries maybe they have hoped. It's certainly not a
• 30:03
  Speaker 1: conversational computer or or really a useful every day assistant
• 30:08
  Speaker 1: in the way that they hoped. And there's not really
• 30:10
  Speaker 1: a productive app ecosystem as there is with the iPhone.
• 30:14
  Speaker 1: So it's interesting. Um. It certainly has helped to change
• 30:16
  Speaker 1: Amazon's image, and they market the thing, and I think
• 30:19
  Speaker 1: it helps their their image as an innovator. Alexa. What's
• 30:23
  Speaker 1: the title of brad Stone's new book? I don't have
• 30:27
  Speaker 1: an answer. I guess Masos is not too happy with
• 30:32
  Speaker 1: you these days. I didn't hear. It's sorry. I don't
• 30:35
  Speaker 1: have an answer to that. All right, we'll go after
• 30:38
  Speaker 1: the get get it to fix it. Did you see
• 30:41
  Speaker 1: in the new book, I I fleuped out the identity
• 30:45
  Speaker 1: of the voice Alex. I was very proud of that. Yes,
• 30:48
  Speaker 1: that was really interesting. It's a woman who's a voiceover
• 30:52
  Speaker 1: artist in Colorado? Is that right? What's right? Right? Na?
• 30:56
  Speaker 1: Nina Raleigh? And you know I had I had recalled
• 30:59
  Speaker 1: that the identity of theory had been unveiled a couple
• 31:02
  Speaker 1: of years ago, and so I was very curious. Okay,
• 31:04
  Speaker 1: who's voice is springing from Alexa? And and before we
• 31:08
  Speaker 1: move on from the section of of what's been driving
• 31:11
  Speaker 1: Amazon's growth, I mean, Amazon Web Services is just a monster,
• 31:17
  Speaker 1: isn't it. Oh, it's it's it's there's a I think
• 31:21
  Speaker 1: it's a fifty billion dollar run rate. Um. You know,
• 31:24
  Speaker 1: it's a ten year old division and tide Amazon. It's
• 31:30
  Speaker 1: in and it's changed the way companies and universities and
• 31:33
  Speaker 1: governments compute and run their businesses. Um, it's it's created,
• 31:37
  Speaker 1: you know, massive new business opportunities from Microsoft and IBM
• 31:40
  Speaker 1: and Google. It is and and it's showing no signs
• 31:44
  Speaker 1: of slowing down. So when you when you think about
• 31:48
  Speaker 1: you know, Bethos who really had some of the initial ideas,
• 31:51
  Speaker 1: and and Andy Jassey's success running it over the past
• 31:54
  Speaker 1: ten years. And yes, it's it's been remarkable. Earlier we
• 31:57
  Speaker 1: were talking about some of the drivers of growth of Amazon.
• 32:01
  Speaker 1: There are two other areas that help drive growth, but
• 32:05
  Speaker 1: not without some problems. And let's talk about both of them.
• 32:10
  Speaker 1: The first is the third party market sort of turning
• 32:14
  Speaker 1: Amazon into a quasi eBay in some ways tell us
• 32:19
  Speaker 1: a little bit about what that did, opening Amazon up
• 32:23
  Speaker 1: to basically anyone who wants to sell goods on their site.
• 32:27
  Speaker 1: I would say in the first years it was it
• 32:31
  Speaker 1: was it was pretty positive. I mean, um, creating a
• 32:34
  Speaker 1: third credit marketplace, added selection, and added product categories that
• 32:38
  Speaker 1: Amazon wasn't going to touch itself create minted a lot
• 32:41
  Speaker 1: of success, particularly in the West. And the key turning point,
• 32:46
  Speaker 1: and the story that I'm telling in the book and
• 32:48
  Speaker 1: the chapter devoted to marketplace, is when Amazon quite consciously
• 32:53
  Speaker 1: in about two thousand fifteen, started pursuing the global selling
• 32:57
  Speaker 1: opportunity of basos stalk companies like Ali Baba with all
• 33:01
  Speaker 1: the express and a startup called wish dot com basically
• 33:05
  Speaker 1: conducting a form of geographic arbitrage, allowing sellers and manufacturers
• 33:09
  Speaker 1: and China and other other parts of the world to
• 33:12
  Speaker 1: sell in the West and and to lower lower prices
• 33:15
  Speaker 1: and increased selection. And they pursued task in a very
• 33:18
  Speaker 1: Amazon like way, building systems, self service systems and translation tools,
• 33:23
  Speaker 1: aggregating inventory and lowering the cost of ship and then
• 33:27
  Speaker 1: suddenly the marketplace tilt in favor of of overseas sellers,
• 33:31
  Speaker 1: and you have a lot of disgradled sellers in the West,
• 33:34
  Speaker 1: and an explosion selection lower prices and all kinds of casks, counterfeits, fraud,
• 33:40
  Speaker 1: exploding cover boards, UM, and and perhaps a real depreciation
• 33:44
  Speaker 1: and the quality of products that are sold on Right.
• 33:47
  Speaker 1: That's where I wanted to get to, is that. Look,
• 33:50
  Speaker 1: my my first Amazon purchase was when my college roommate
• 33:54
  Speaker 1: gave me a gift certificate and I actually hunted down
• 33:58
  Speaker 1: with that. First purchase was in December. UM burn Rate
• 34:04
  Speaker 1: was the book. But I'm I'm kind of surprised at
• 34:08
  Speaker 1: after working so hard to maintain quality and to guarantee
• 34:13
  Speaker 1: lowest prices and to guarantee a very high level of
• 34:18
  Speaker 1: customer service, suddenly there's just fakes and stuff that's poorly
• 34:23
  Speaker 1: made and falls apart. You mentioned the hoverboard. Um, a
• 34:28
  Speaker 1: number of houses had burned down, and half of the
• 34:32
  Speaker 1: you write in the book half the houses that burnt
• 34:34
  Speaker 1: down due to hoverboard fires, they were purchased on Amazon.
• 34:39
  Speaker 1: How did the company respond to to this problem? Well,
• 34:43
  Speaker 1: in terms of the hoverboard challenge, I mean they stopped
• 34:46
  Speaker 1: selling them a little a little bit too late, and
• 34:48
  Speaker 1: now they're involved in endless litigation, and in terms of
• 34:52
  Speaker 1: the overall problems of fraud and counterfeit and fake reviews,
• 34:56
  Speaker 1: they've been a very Amazon and Silicon Valley type. They've
• 35:00
  Speaker 1: created systems, they've they've tried to use technology to an
• 35:04
  Speaker 1: artificial intelligence to weed out fraud, to increase the level
• 35:08
  Speaker 1: of the quality of of sellers on the platform, and
• 35:12
  Speaker 1: with with I think some mixed results. On a related
• 35:16
  Speaker 1: issue to that, I recall sending an email to to
• 35:20
  Speaker 1: Bezos after I'm trying to remember which Michael Lewis book
• 35:25
  Speaker 1: it was that had come out. Maybe it was Flashboys
• 35:29
  Speaker 1: or The Big Short and I always it had to
• 35:31
  Speaker 1: be after the Kindle because there were all these one
• 35:35
  Speaker 1: star reviews of a Michael Lewis book, because the Kindle
• 35:39
  Speaker 1: release was set by the publisher to take place like
• 35:43
  Speaker 1: three months or six months later, it was it was
• 35:47
  Speaker 1: after the book public It was kind of insane that
• 35:50
  Speaker 1: these Kindle fan boys were one starring reviews. Since then,
• 35:54
  Speaker 1: we've had like a much bigger problem with reviews, fake reviews,
• 35:59
  Speaker 1: purchase reviews. How is Amazon responding to that? My takeaway,
• 36:05
  Speaker 1: I just can no longer rely on reviews. I just
• 36:08
  Speaker 1: assume most of them are nonsense. That's true. And as
• 36:12
  Speaker 1: a as an author whose sales are are taking place,
• 36:16
  Speaker 1: uh predominantly, And I was getting to test the I
• 36:20
  Speaker 1: just I just saw a I think it was a
• 36:22
  Speaker 1: two star review because somebody felt that there were fingerprints
• 36:26
  Speaker 1: smudges on the cover. You's like, you gotta be getting
• 36:30
  Speaker 1: me but doing Yeah, I mean, I think you know.
• 36:34
  Speaker 1: They they've done a couple of things. They prioritize UM
• 36:38
  Speaker 1: actual purchases, the reviews from yeah, verified reviews, but they've
• 36:44
  Speaker 1: also i think lowered the significance of reviews. And when
• 36:48
  Speaker 1: when you think back a couple of years ago, and
• 36:50
  Speaker 1: this leads into advertising. Um, the search engine was this
• 36:54
  Speaker 1: taxonomy of useful products UM that a very secretive and
• 37:00
  Speaker 1: is on algorithm would order. And one of the big
• 37:03
  Speaker 1: variables was the number and the quality of reviews that
• 37:06
  Speaker 1: a product got. And of course that just opened it
• 37:09
  Speaker 1: up to third party sellers gaming the system, buying fake reviews,
• 37:13
  Speaker 1: generating their own, and you know, and that variable ended
• 37:17
  Speaker 1: up being less useful. And now it's basically the Amazon
• 37:20
  Speaker 1: Church results are essentially pay for play people by search
• 37:24
  Speaker 1: ads to appear there, and reviews are no longer important.
• 37:28
  Speaker 1: The advertising is a little bit of a fail also,
• 37:31
  Speaker 1: because you know, I was searching for a lithium battery
• 37:34
  Speaker 1: the other day. It's number thirty four fifty and up
• 37:37
  Speaker 1: pops during cell and I click it and buy it.
• 37:39
  Speaker 1: And it's only after it arrives that I realized this
• 37:42
  Speaker 1: isn't this is the you know, three thousand and twenty three.
• 37:47
  Speaker 1: Why would that show up in a search for a
• 37:49
  Speaker 1: very specific and so I've I've kind of learned be
• 37:54
  Speaker 1: aware of sponsored results, and really it's best to start
• 37:58
  Speaker 1: your search off of Amazon. I never approached Amazon shopping
• 38:03
  Speaker 1: that way. Now it's look for what you want to
• 38:07
  Speaker 1: get and then if Amazon has it, great, But don't
• 38:10
  Speaker 1: begin your search on Amazon. I wonder are they trading
• 38:14
  Speaker 1: off advertising revenues for sales. I told the story of
• 38:20
  Speaker 1: the evolution of the ad business inside Amazon and the
• 38:24
  Speaker 1: decision to move sponsored search results up to the top.
• 38:27
  Speaker 1: Sponsored listing to the top of search results was a
• 38:30
  Speaker 1: very specific decision made by days Os, and I think
• 38:34
  Speaker 1: he understood how profitable the search business could be inside
• 38:37
  Speaker 1: Amazon and simply wanted the cash to go, you know,
• 38:41
  Speaker 1: to make his investments in Prime video and satellite internet
• 38:44
  Speaker 1: access and the other ambitious plans that he has. They
• 38:48
  Speaker 1: saw that it would lead to a decrease in in
• 38:51
  Speaker 1: customer satisfaction. I believe that this might even be seen
• 38:54
  Speaker 1: as a turning point in Amazon's history. Um He judged
• 38:58
  Speaker 1: that the impact on customer satisfaction would have to be
• 39:02
  Speaker 1: so large as to outweigh the benefit that AMA Amazon
• 39:06
  Speaker 1: would be getting. I call this the gold mine in
• 39:08
  Speaker 1: the back gyard. But I do think there's some cough.
• 39:10
  Speaker 1: And I just did a lithium battery search the one
• 39:12
  Speaker 1: Barry that you just described, and it's a mess. Yeah,
• 39:16
  Speaker 1: it's a debacle, absolutely. Yeah. It's all sponsored a private
• 39:20
  Speaker 1: label brands, and I have, you know, just absolutely no
• 39:23
  Speaker 1: idea here, right. If you don't know exactly what you're
• 39:26
  Speaker 1: looking for, the Amazon search is as often as not unhelpful.
• 39:32
  Speaker 1: Let's let's talk about two of the biggest failures um
• 39:36
  Speaker 1: and I'm going to use those terms loosely, A new
• 39:39
  Speaker 1: one and an old one. The latest debacle h Q two.
• 39:44
  Speaker 1: I mean, how tone deaf was that? That was just
• 39:48
  Speaker 1: such an avoidable self inflicted wounds? How did they blow
• 39:53
  Speaker 1: that so badly? So it's interesting. I have a chapter
• 39:57
  Speaker 1: in the book about HQ two and and one I
• 40:00
  Speaker 1: think easy answer is that the political environment kind of
• 40:04
  Speaker 1: drastically changed under them as they as they embark on
• 40:09
  Speaker 1: this um on, this on the search, which lasted much
• 40:14
  Speaker 1: longer than they thought. And it starts with a kind
• 40:16
  Speaker 1: of political earthquake in Seattle, the city council turning hospital,
• 40:21
  Speaker 1: Amazon being blamed for all sorts of ills, and Bezos
• 40:24
  Speaker 1: think looking at Elon with the giga factory in Nevada
• 40:27
  Speaker 1: and fox Kind in Wisconsin and thinking this process is
• 40:30
  Speaker 1: going to underscore who wants us? And in the year
• 40:34
  Speaker 1: plus as they do this, Amazon hits the trillion dollars
• 40:37
  Speaker 1: in market cap, Bezos becomes the wealthiest person in the world.
• 40:40
  Speaker 1: AOC gets elected, the progressive political movement gathers steam and
• 40:45
  Speaker 1: a sense, and the tech lash begins. And as they announced, um,
• 40:49
  Speaker 1: you know New York City, in Washington, d c um,
• 40:52
  Speaker 1: they you know, they realize that it's it's not just
• 40:55
  Speaker 1: gonna be expression of who whats us. It's going to
• 40:57
  Speaker 1: be a verdict about the role that tech company, me
• 41:00
  Speaker 1: and even big companies are playing in our community. So
• 41:02
  Speaker 1: that's a much different discussion than the one they wanted
• 41:05
  Speaker 1: to have. Huh. So, So to two things about that,
• 41:09
  Speaker 1: I'm gonna push back a little bit. First, the tech
• 41:12
  Speaker 1: lash had been ramping up for a good couple of
• 41:16
  Speaker 1: years before h Q two. Remember Bernie Sanders almost bat
• 41:24
  Speaker 1: Hillary Clinton to be the nominee. So issues of wealth
• 41:30
  Speaker 1: inequality and income inequality and and the halves and the
• 41:33
  Speaker 1: half nots. I mean, that's been an ongoing discussion for
• 41:37
  Speaker 1: at least since the Great Financial Crisis. Uh, it's certainly accelerated.
• 41:42
  Speaker 1: But but the other thing is when you look at
• 41:45
  Speaker 1: when they started the search, they were already a giant
• 41:49
  Speaker 1: and wildly successful company. Um. It just seems and and
• 41:56
  Speaker 1: kudos to Scott Galloway at n y U who basically said,
• 42:01
  Speaker 1: all these things are are affront and the areas that
• 42:05
  Speaker 1: are gonna win are gonna be where the CEO has
• 42:09
  Speaker 1: a home or one to live and and he literally
• 42:12
  Speaker 1: said it will either be New York or d C.
• 42:14
  Speaker 1: And lo and behold it was both. Um. So the
• 42:17
  Speaker 1: question is why not why not be small? Are they
• 42:21
  Speaker 1: just at a at a certain point you become so wealthy,
• 42:23
  Speaker 1: you just out of touch. Why not say Hey, we're
• 42:26
  Speaker 1: gonna come in and here's what we're gonna do for
• 42:28
  Speaker 1: the community, and we're gonna build a waterfront park, and
• 42:31
  Speaker 1: we're gonna help expand um mass transit, and we're gonna
• 42:35
  Speaker 1: do this, and we're gonna do that. This looks like
• 42:38
  Speaker 1: it was just sold so poorly. And I want to
• 42:42
  Speaker 1: actually agree agree with you that there were there worked
• 42:45
  Speaker 1: some quite clear, invisible signs that the political climates and shifted.
• 42:50
  Speaker 1: But I think it's a function of how reclusive and
• 42:53
  Speaker 1: maybe self absorbed by us and other Amazon executives were,
• 42:56
  Speaker 1: so they just kind of failed to see it. And
• 42:59
  Speaker 1: you know, the fact they you know, they wanted to
• 43:01
  Speaker 1: be wooed by communities. But I think you're making a
• 43:04
  Speaker 1: pretty good point, which is that they actually were going
• 43:07
  Speaker 1: to be the ones that would have to do the wooing.
• 43:09
  Speaker 1: And seeing two hundred thirty regions prostrate themselves, sorry, prostrate
• 43:15
  Speaker 1: themselves in front of Amazon, a big, wealthy technology company,
• 43:19
  Speaker 1: was just unseemly, I think exactly exactly. It's amazing. And
• 43:27
  Speaker 1: then the other failure I have to talk about, which
• 43:29
  Speaker 1: is kind of shocking, is Blue Origins has just been
• 43:34
  Speaker 1: a mess from day one. It was preordained to fail.
• 43:38
  Speaker 1: How how could you say we're going to set up
• 43:41
  Speaker 1: a private company to reinvigorate space travel, but we're going
• 43:45
  Speaker 1: to do it on the cheap. It's just it's so
• 43:48
  Speaker 1: opposite of the Amazon approach. What was he thinking? Yeah, well,
• 43:53
  Speaker 1: this is um he sets up Blue Origin in two thousand.
• 43:56
  Speaker 1: He is a relative popper by by today's standards in
• 44:01
  Speaker 1: terms of his his wealth and this whole saying in
• 44:04
  Speaker 1: the space business, Um that the quickest way to become
• 44:07
  Speaker 1: a millionaire is the start off as a billionaire. So
• 44:10
  Speaker 1: I think he went into it knowing that building rockets
• 44:14
  Speaker 1: is not for the faint of heart, and so he
• 44:15
  Speaker 1: righte he sets out to constrain the investment, to keep
• 44:19
  Speaker 1: the headcount small. He's going to privately fund it, and
• 44:21
  Speaker 1: he's going to think long term, all the sort of
• 44:23
  Speaker 1: Bezos hallmarks. And what happens is Elon Musk comes in
• 44:27
  Speaker 1: and Um literally you know, starts going quickly raising money
• 44:32
  Speaker 1: from venture capitalists, UM, funding space X with government contracts,
• 44:36
  Speaker 1: and and Bezos's approach seems you know, kind of meager
• 44:40
  Speaker 1: and tame. In response, then Bezos changes gears, starts selling
• 44:43
  Speaker 1: a billion dollars worth of Amazon stock every year to
• 44:46
  Speaker 1: fund it, and sees a lot of dysfunction at the company. Right, Yeah,
• 44:50
  Speaker 1: that this function was ongoing. There's a data point you
• 44:53
  Speaker 1: mentioned the book that was mind blowing. Elon Musk's SpaceX
• 44:58
  Speaker 1: wins a contract for FO forty million dollars, but like
• 45:02
  Speaker 1: so many Defense Department and government contracts, there are some
• 45:07
  Speaker 1: price over rides and he ends up, according to an
• 45:10
  Speaker 1: inspector general, getting paid seven point seven billion dollars went
• 45:16
  Speaker 1: to space X, which which makes every time he complains
• 45:19
  Speaker 1: kind of laughing. Right. I think that's more that that first,
• 45:24
  Speaker 1: that was the first installment of a contract than that
• 45:27
  Speaker 1: then kind of continued to evolve UM and that Bezos
• 45:31
  Speaker 1: was looking at back go and you know, we should
• 45:33
  Speaker 1: have we should have been on this UM. He he
• 45:36
  Speaker 1: was ultimately I think jealous, probably a strange position for
• 45:40
  Speaker 1: Jeff Bezos to be in that that musque was getting
• 45:43
  Speaker 1: paid to play. You know, they have similar dreams in
• 45:46
  Speaker 1: space UM. And here the government is funding SpaceX and
• 45:50
  Speaker 1: its ambitions and helping Elon scale the company, and and
• 45:54
  Speaker 1: Bezos is still shelling out personally for Blue Origins Amazing
• 45:58
  Speaker 1: and our final discussion on failure UM. They had an
• 46:02
  Speaker 1: internal process of reviewing employees called stacked ranking that led
• 46:08
  Speaker 1: to what you described as a quote informal cruelty unquote
• 46:12
  Speaker 1: that is definitional for the company's corporate culture. Explain what
• 46:19
  Speaker 1: that was about and why they ultimately had to change
• 46:21
  Speaker 1: it right and and different companies have experimented with different
• 46:26
  Speaker 1: versions of this. Bezos early on never wanted Amazon to
• 46:31
  Speaker 1: become a country club, a place where employees got comfortable.
• 46:36
  Speaker 1: He was particularly worried in the fulfillment center is that
• 46:39
  Speaker 1: if people stuck around for too long, they could be
• 46:41
  Speaker 1: susceptible to organizing efforts from unions. And the review process
• 46:47
  Speaker 1: really encouraged managers to you know, to to evaluate and
• 46:51
  Speaker 1: then and then um dismissed the lowest performers. And this
• 46:56
  Speaker 1: is a management practice that has wreak havoc everywhere Microsoft, off,
• 47:00
  Speaker 1: the General Electric etcetera. Um, there were there was one
• 47:04
  Speaker 1: element that led to I think these sort of negative
• 47:08
  Speaker 1: evaluations of Amazon, Amazon's culture. That was a theme in
• 47:11
  Speaker 1: the Everything Store. It was obviously there was that high
• 47:14
  Speaker 1: profile New York Times article into those of jifteen and yes,
• 47:18
  Speaker 1: I think after the Times article they re evaluated it.
• 47:23
  Speaker 1: I still get reports periodically that a form of it
• 47:25
  Speaker 1: still exists. And the Amazon so big of a company
• 47:28
  Speaker 1: right now, there are lots of different pockets of of
• 47:32
  Speaker 1: employee you know, experiences and reviews. Um, but I think
• 47:38
  Speaker 1: you know, this is part of the basis is philosophy.
• 47:40
  Speaker 1: He he wants people to come to Amazon, to have
• 47:43
  Speaker 1: the most productive years of their career, to move at
• 47:45
  Speaker 1: breakneck speed, and when they when they slow down, to
• 47:49
  Speaker 1: move on, he doesn't mind. He doesn't mind that even
• 47:52
  Speaker 1: the compensation systems are sort of geared towards avoiding people
• 47:56
  Speaker 1: becoming extraordinarily so extraordinarily wealthy that they stopped being motivated.
• 48:01
  Speaker 1: And yeah, it is interpreted as a kind of informal
• 48:04
  Speaker 1: cruelty among some people. And that's why, um, disgruntled former
• 48:08
  Speaker 1: Amazon employees are not a rare species, to say the least.
• 48:12
  Speaker 1: Let's talk a little bit about some really fascinating things
• 48:17
  Speaker 1: with Bezos, including one of my favorite memes circulating Twitter
• 48:23
  Speaker 1: is the photo of him in sort of bookish looking
• 48:28
  Speaker 1: with glasses. And then there's a photo from I think
• 48:31
  Speaker 1: it was sun Valley where he's kind of jacked in
• 48:34
  Speaker 1: a you know, vest and shirt, strolling confidently towards the viewer,
• 48:41
  Speaker 1: and it was Amazon, Amazon Prime, and that was everywhere
• 48:44
  Speaker 1: for a while. Tell us about the transformation of Bezos
• 48:49
  Speaker 1: from a sort of you know Wall Street geek into
• 48:54
  Speaker 1: uh an overlord. Right, Well, the physical transformation, so this
• 49:00
  Speaker 1: is only the most obvious part of it, right The
• 49:03
  Speaker 1: guy has been working out and getting in shape, and
• 49:06
  Speaker 1: in the first book I ascribed that from a former
• 49:09
  Speaker 1: friend to his interest in in um in one day
• 49:13
  Speaker 1: going to space until he's trying to safe fit. Now
• 49:15
  Speaker 1: I think it's more. I suspect it's more, you know,
• 49:18
  Speaker 1: the billionaire fixation with longevity and and and health. But
• 49:23
  Speaker 1: again that that's only part of it. He his eyes
• 49:26
  Speaker 1: have opened up to a larger world beyond Amazon, and
• 49:31
  Speaker 1: and that's me a his ownership of The Washington Post
• 49:33
  Speaker 1: and participation in in Washington, d C. Society, UM Space Company,
• 49:40
  Speaker 1: Hollywood right throwing parties. He simply seems to enjoy the lifestyle,
• 49:46
  Speaker 1: the extravagance that comes with his position, much more than
• 49:49
  Speaker 1: he ever did. And and the greatest symbol of this,
• 49:51
  Speaker 1: I never thought Jeff Bezos circa even two thousand and
• 49:54
  Speaker 1: ten would be a yacht guy, you know, someone who's
• 49:57
  Speaker 1: spending time on big books. And I was a report
• 50:00
  Speaker 1: in the book. He's building this massive three three mass
• 50:05
  Speaker 1: math with a with its own support yacht with it
• 50:09
  Speaker 1: was the right room for he and I think part
• 50:13
  Speaker 1: of that the the influence of Laurence Sanchez, his partner, um,
• 50:17
  Speaker 1: and part of it is simply him enjoying the world
• 50:20
  Speaker 1: stage that is human and the robot, the machine that
• 50:24
  Speaker 1: created Amazon. You know, is is susceptible too. I guess
• 50:27
  Speaker 1: some of these human impulses. Yes, so so you we
• 50:31
  Speaker 1: we already talked. Mackenzie Scott, his former wife, gave The
• 50:35
  Speaker 1: Everything Store a one star review. But but her and
• 50:40
  Speaker 1: and Bezos' new girlfriend, Sanchez could not possibly be more different.
• 50:47
  Speaker 1: She's very social and outgoing. Mackenzie Scott is a little
• 50:51
  Speaker 1: bit more of an introvert and and a homebody. How
• 50:56
  Speaker 1: much of the divorce comes from him wanting to step
• 51:00
  Speaker 1: out a bit and you know, literally the wife wanting
• 51:06
  Speaker 1: a quiet night at home. What's the genesis of this?
• 51:09
  Speaker 1: Because there wasn't a whole lot about the divorce um
• 51:13
  Speaker 1: other than to say it was already sort of happening
• 51:17
  Speaker 1: before Sanchez ever showed up on the scene. I mean, Barry,
• 51:21
  Speaker 1: this the easiest answers that we have no idea, right,
• 51:25
  Speaker 1: I mean, who really knows what happens in the private
• 51:27
  Speaker 1: confines of that marriage. Other than to observe what what
• 51:30
  Speaker 1: you've just said, which is Mackenzie Scott is fiercely private.
• 51:35
  Speaker 1: I think I think she's done one interview um around
• 51:39
  Speaker 1: the publication of one of her novels. Um. She she
• 51:42
  Speaker 1: speaks very carefully in the in the few medium posts
• 51:46
  Speaker 1: that she's written about her philanthropic contributions. And she didn't
• 51:50
  Speaker 1: seem to enjoy as much going to the awards shows
• 51:54
  Speaker 1: or to the fashion galas um as as Jeff Bethos did.
• 51:58
  Speaker 1: So yeah, they're they're they're interest for public attention were diverging. Um,
• 52:03
  Speaker 1: that's certainly true. And in Lauren Santis, Bezos has found
• 52:07
  Speaker 1: someone who's extremely comfortable moving in those circles. Um. And
• 52:12
  Speaker 1: yet who you know, I don't think it's it's ever
• 52:16
  Speaker 1: possible to know, Um, you know what what has really
• 52:19
  Speaker 1: you know, what really happens in a marriage? Huh? To
• 52:23
  Speaker 1: say the least, let's talk a little bit. You mentioned
• 52:25
  Speaker 1: the Washington Post Bezos really helped to drive a huge
• 52:29
  Speaker 1: turnaround at the Post, and I was kind of surprised
• 52:33
  Speaker 1: to read that the tagline democracy dies in darkness? Was
• 52:39
  Speaker 1: that really a Bezos line? Well, if you if you
• 52:43
  Speaker 1: remember Barry, that was a line in a speech um
• 52:48
  Speaker 1: that Bob Woodward had given crediting of pre Watergate era judge,
• 52:54
  Speaker 1: and then Bezos had heard that, and when he asked
• 52:57
  Speaker 1: Marty Baron and others is the Washington Post to go
• 53:01
  Speaker 1: find a slogan for the paper, he suggested that it
• 53:04
  Speaker 1: should do something like democracy Dies in Darkness. And then
• 53:08
  Speaker 1: they spent about a year and probably you know, thousands
• 53:12
  Speaker 1: of hundreds of thousands of dollars, paying branding firms and
• 53:15
  Speaker 1: coming up with ideas and firing them, and they basically
• 53:18
  Speaker 1: got back to Democracy Dies in Darkness, which originally they
• 53:21
  Speaker 1: had thought was kind of too dreary, uh, and then
• 53:24
  Speaker 1: ended up being perfect for the age of Donald Trump.
• 53:27
  Speaker 1: So yes, it was sort of bezos inspiration but a
• 53:31
  Speaker 1: little a little bit of well hard to call, you know,
• 53:34
  Speaker 1: that era luck, But it certainly was for the Post, right,
• 53:38
  Speaker 1: because even though Bezos did drive a remarkable turner on there,
• 53:42
  Speaker 1: they certainly did, they were fortunate by the revival of
• 53:45
  Speaker 1: interest and political news had accompanied the Trump years. So
• 53:49
  Speaker 1: it's interesting because as you read the book, it's as
• 53:52
  Speaker 1: much about Amazon the company as it is about Bezos,
• 53:58
  Speaker 1: like a bio of him. Was the intention or did
• 54:01
  Speaker 1: it just become clear you can't write about one without
• 54:04
  Speaker 1: writing about the other. I think in both books I
• 54:09
  Speaker 1: thought of them as um as. Yes, as both um.
• 54:13
  Speaker 1: I you know, since I'm working with limited access to Bezos. Um,
• 54:18
  Speaker 1: they're predominantly about the companies. But just is the main character, right,
• 54:23
  Speaker 1: And you can't when you peel back the layers of
• 54:26
  Speaker 1: the onion on most major inventions at Amazon and most
• 54:30
  Speaker 1: big strategic moves, you find you get to Jeff Bezos
• 54:34
  Speaker 1: and and a decision that he made. And this book
• 54:37
  Speaker 1: Amazon Abound is about transformation. It's it's the transformation of
• 54:41
  Speaker 1: this company into this monolith that is dominating all of
• 54:44
  Speaker 1: our life now and and our economic reality. And then
• 54:48
  Speaker 1: the accompanying transformation of Bezos right into the richest man
• 54:51
  Speaker 1: in the world, into into this figure on the public stage,
• 54:55
  Speaker 1: the evolution of a tech geek into kind of a
• 54:58
  Speaker 1: business superhero. And yeah, they're really intertwined. I think. I
• 55:02
  Speaker 1: think in some ways they function as biographies for the
• 55:04
  Speaker 1: company and for the man. So there's a quote of
• 55:07
  Speaker 1: his in the book quote you can invent your way
• 55:11
  Speaker 1: out of any box unquote, which kind of raises the question,
• 55:15
  Speaker 1: how does he see himself? Is he an inventor, Is
• 55:18
  Speaker 1: he a business founder? Is he a CEO and a leader? What?
• 55:22
  Speaker 1: What is his self identified role? Yeah, that one's easy
• 55:28
  Speaker 1: to answer because he keeps insisting and he did so
• 55:31
  Speaker 1: again in his latest shareholder letter that he's an inventor.
• 55:34
  Speaker 1: That is how he wants to be seen. And it's
• 55:38
  Speaker 1: funny because I have a colleague at Bloomberg and we
• 55:41
  Speaker 1: were talking about that and she said, you know, this
• 55:44
  Speaker 1: reminds me a little bit of Taylor Swift, who wants
• 55:46
  Speaker 1: to be seen as a songwriter, but the world kind
• 55:49
  Speaker 1: of sees her, you know, more as a singer and
• 55:51
  Speaker 1: as a performer. I think that's true with Bezos too.
• 55:54
  Speaker 1: He wants to be seen as an inventor, but you know,
• 55:58
  Speaker 1: by his admire as he will largely be seen I
• 56:01
  Speaker 1: think as an operator and an entrepreneur, a creator of
• 56:05
  Speaker 1: amazing business value, and by his critics as a monopolist. Right,
• 56:10
  Speaker 1: and the verdict is still out on this, but as
• 56:12
  Speaker 1: a as an aggregator of extraordinarily extraordinarily wealth and and
• 56:16
  Speaker 1: not yet really as a philanthropist whose contribution back has
• 56:20
  Speaker 1: been commensurate with with his um you know, accomplishment. So yes,
• 56:25
  Speaker 1: he wants to be seen as an inventor, and that
• 56:27
  Speaker 1: that might be uh, the jury is out on that
• 56:30
  Speaker 1: a little bit. So when he looks at all of
• 56:33
  Speaker 1: those accomplishments, what does he see as his lasting legacy?
• 56:39
  Speaker 1: How does he want to be remembered? With the caveat
• 56:42
  Speaker 1: that he's still a relatively young man, and is what
• 56:45
  Speaker 1: early fifties, Well, let's see, it's probably it's probably mid
• 56:49
  Speaker 1: the late fifties, right, yeah, mid fifties right now. I
• 56:53
  Speaker 1: think he wants to be seen as an inventor. I
• 56:55
  Speaker 1: think that he wants to be seen. The last investor
• 56:58
  Speaker 1: letter is really this interest thing, an impassioned defense of
• 57:01
  Speaker 1: Amazon as a contributor, as a as a generator of value,
• 57:06
  Speaker 1: and he goes one by one talking about the the
• 57:10
  Speaker 1: gross merchandise value generated by third party sellers, the salaries
• 57:17
  Speaker 1: of the third party workers, how much Amazon shareholders have benefited, um.
• 57:23
  Speaker 1: And he's really trying to reframe the debate, I think,
• 57:25
  Speaker 1: around his own wealth and Amazon's own power, and to
• 57:28
  Speaker 1: shed lights on how much value Amazon is creative. So
• 57:32
  Speaker 1: I think he wants to be seen and he wants
• 57:34
  Speaker 1: Amazon's legacy to be one that has contributed to the
• 57:37
  Speaker 1: economy and positive ways, and and and the reason why
• 57:40
  Speaker 1: he's arguing that so precipitously is because the prevailing sentiment
• 57:46
  Speaker 1: right now at least is that you know, billionaires are
• 57:49
  Speaker 1: bad and in some corners of society, of course, um
• 57:53
  Speaker 1: that they represent something untoward in the distribution of wealth
• 57:57
  Speaker 1: in our society and the widening income gap, and that
• 58:01
  Speaker 1: big tech companies have come to dominate the economy and
• 58:04
  Speaker 1: the snuff out opportunity for smaller businesses. And look, I
• 58:08
  Speaker 1: mean I try to I try to get into that
• 58:10
  Speaker 1: debate in the book. I think that's a little bit
• 58:12
  Speaker 1: of a harsh view. Amazon has made some real positive
• 58:15
  Speaker 1: contributions and and basis is I think only beginning to
• 58:19
  Speaker 1: grapple with the fact that his legacy right now is
• 58:23
  Speaker 1: very much contested and he'll have to probably spend the
• 58:26
  Speaker 1: next couple of years, you know, turning turning that around
• 58:28
  Speaker 1: and making significant contributions and changing people's mind. You have
• 58:32
  Speaker 1: to say the least, I'm trying to remember where which
• 58:36
  Speaker 1: document of there's where they might have been. In defense
• 58:39
  Speaker 1: of something that Bernie sanders Um had said, he points out,
• 58:43
  Speaker 1: we employ over a million people, with a second biggest
• 58:47
  Speaker 1: job creator in the country which actually is as good
• 58:50
  Speaker 1: a time as any to talk about what he did
• 58:53
  Speaker 1: with the fifteen dollar an hour um increase. This this
• 58:59
  Speaker 1: was just a brilliant jiu jitsu in response to I
• 59:04
  Speaker 1: think Bernie Sanders haranguing uh Bezos. He figured out pretty quickly, Hey,
• 59:10
  Speaker 1: this is paying more money is a giant competitive advantage
• 59:14
  Speaker 1: to us. Tell us about how he raised the minimum
• 59:18
  Speaker 1: wage at at Amazon to fifteen right, and we should
• 59:23
  Speaker 1: we should note I mean a lot of a lot
• 59:25
  Speaker 1: of these moves by Amazon, as welcome as they are,
• 59:29
  Speaker 1: our our reaction reactions, and the fight for fifteen dollars
• 59:34
  Speaker 1: an hour, it's something that starts ten years ago among
• 59:38
  Speaker 1: among big companies and fast food chains. UM employee strikes
• 59:43
  Speaker 1: lots of pressure, and Amazon is growing by leaps and
• 59:47
  Speaker 1: bounds over the past few years, becoming a more and
• 59:50
  Speaker 1: more prominent employer. The lens of public scrutiny is on
• 59:54
  Speaker 1: their relationship with their employees, and at a certain point,
• 59:57
  Speaker 1: I think they realized that they're going to have to
• 59:59
  Speaker 1: get a head of it, and and they do have
• 1:00:01
  Speaker 1: the resources to get ahead of it in a way
• 1:00:03
  Speaker 1: that perhaps some of its competition UM Walmart and the
• 1:00:07
  Speaker 1: like do not, and so they they raise their their wage.
• 1:00:11
  Speaker 1: And sorry, one other thing baries that as they're hiring
• 1:00:14
  Speaker 1: more and more people, um, you know, hundreds of thousands
• 1:00:17
  Speaker 1: of people in their for filming centers at a time
• 1:00:20
  Speaker 1: of economic prosperity and tightness in the labor market, I
• 1:00:23
  Speaker 1: think they realized they need to sweeten the pot for
• 1:00:26
  Speaker 1: for workers to even just fill those for filming centers,
• 1:00:29
  Speaker 1: particularly during the holidays. And so fifteen dollars an hour.
• 1:00:32
  Speaker 1: It's a recruiting mechanism. It's a strategic weapon to to
• 1:00:36
  Speaker 1: bludgeon their competitors over the head who can't match the rate.
• 1:00:40
  Speaker 1: And then it's a little bit of a of a
• 1:00:42
  Speaker 1: defense um to the for the activists and the politicians
• 1:00:46
  Speaker 1: like Bernie Sanders who are criticizing Amazon's relationship with their employees. Yeah,
• 1:00:51
  Speaker 1: he went away for a little while. Eventually he started
• 1:00:53
  Speaker 1: coming back at Bezos, but for a while he was
• 1:00:57
  Speaker 1: pretty satisfied. Let's let's talk about on another jiu jitsu
• 1:01:02
  Speaker 1: that was so brilliantly played. Um. Laurence Sanchez's brother got
• 1:01:08
  Speaker 1: access to a variety of texts and then went about
• 1:01:12
  Speaker 1: selling them to the National Enquirer. He claimed that he
• 1:01:17
  Speaker 1: had a nude selfie of quote unquote below the belt
• 1:01:21
  Speaker 1: selfie that turned out not to be so true, and
• 1:01:26
  Speaker 1: Bezos just completely up ended what looked like being trapped
• 1:01:32
  Speaker 1: in a box. Tell us a little bit about that
• 1:01:36
  Speaker 1: incredible escaping act. Yeah, right, this is this is one
• 1:01:41
  Speaker 1: of those episodes that I couldn't quite believe I was
• 1:01:43
  Speaker 1: I was going to be writing about. Um, Bezos has
• 1:01:46
  Speaker 1: tangled with the National Enquirer. You mentioned Laurence Snchez, his
• 1:01:50
  Speaker 1: brother delivering um, delivering those text messages to the paper. Um.
• 1:01:56
  Speaker 1: He you know, he thought he was trying well, the
• 1:01:59
  Speaker 1: cup was sort of conducting their relationship out in the open,
• 1:02:03
  Speaker 1: and you know, for whatever reason, he decided that he
• 1:02:06
  Speaker 1: wanted to try to get ahead of it. He was
• 1:02:09
  Speaker 1: also he was also paid quite well by the Inquirer
• 1:02:12
  Speaker 1: for the information. And UM, it's it's almost impossible to
• 1:02:18
  Speaker 1: believe Bezos. Um. Well, it's a really complicated saga. UM.
• 1:02:23
  Speaker 1: I don't know how far you want me to go back.
• 1:02:24
  Speaker 1: But the the Inquirer was very susceptible to accusations that
• 1:02:29
  Speaker 1: they had political motives, and Bezos and his representatives had
• 1:02:32
  Speaker 1: had been floating the possibility that they were doing the
• 1:02:35
  Speaker 1: work for the Trump administration to embarrass Bezos as an
• 1:02:38
  Speaker 1: owner of the Washington Post, and in the negotiations, um,
• 1:02:43
  Speaker 1: the Inquirer essentially was threatening Bezos with the release of
• 1:02:48
  Speaker 1: all of this, these these embarrassing photos, saying you have
• 1:02:52
  Speaker 1: to stop accusing us of having political motives. It wasn't
• 1:02:55
  Speaker 1: politically motivated at all, simply a good story. And then
• 1:02:58
  Speaker 1: Bezos turns around and publishes told his emails um and
• 1:03:01
  Speaker 1: suggest that there were political motives and suggests that studies
• 1:03:04
  Speaker 1: were involved, and then sympathies swing to his side. It
• 1:03:08
  Speaker 1: was this brilliant move. If people remember that episode at all,
• 1:03:11
  Speaker 1: they probably think Bezos did the right thing. And as
• 1:03:15
  Speaker 1: I untangled it, I sort of at least I concluded
• 1:03:18
  Speaker 1: that there weren't political motivations, so the Staudies weren't involved.
• 1:03:22
  Speaker 1: They may have hacked Beazos' phone. We kind of don't know,
• 1:03:25
  Speaker 1: but it was. It was simply a sort of brilliant
• 1:03:27
  Speaker 1: pr master master stroke, and they edited the Inquirer ended
• 1:03:32
  Speaker 1: up getting fired. Um, you know, and I think we
• 1:03:36
  Speaker 1: we That was my excerpt in Bloomberg Business Week, and
• 1:03:40
  Speaker 1: the cover line was Bezos wins again. And of course
• 1:03:42
  Speaker 1: because he did right and this is one where by
• 1:03:45
  Speaker 1: all measures, he should have been embarrassed, and he kind
• 1:03:48
  Speaker 1: of came out on top the New York Post with
• 1:03:51
  Speaker 1: another memorable headline, Bezos exposes Pecker, referring to David Pecker
• 1:03:58
  Speaker 1: was the editor of the UM Inquirer and had already
• 1:04:04
  Speaker 1: been under pressure because of the catching killed deals they
• 1:04:08
  Speaker 1: had done to protect Donald Trump UM and were some
• 1:04:13
  Speaker 1: I don't remember what the problem was. I guess that's
• 1:04:15
  Speaker 1: a violation of campaign finance laws. And he was sort
• 1:04:20
  Speaker 1: of in limbo with the Southern District. Is that what
• 1:04:23
  Speaker 1: took place there? Yeah, they had a non prosecution agreement
• 1:04:27
  Speaker 1: with the Southern District of New York that required am I,
• 1:04:31
  Speaker 1: the company that operated the National Inquirer, to to to
• 1:04:35
  Speaker 1: be a good citizen, to not break the law, to
• 1:04:37
  Speaker 1: play by the rules. And so when the Washington Post
• 1:04:40
  Speaker 1: and Gavin de Becker Bezoss representative started insinuating that the
• 1:04:45
  Speaker 1: Inquirer was doing the work of the Trump administration to
• 1:04:48
  Speaker 1: embarrass Jeff Bezos, UM, you know that was that was
• 1:04:52
  Speaker 1: sensitive for for am I, and Pecker wanted wanted the
• 1:04:56
  Speaker 1: Dylan Howard, the under the Inquiry to kind of settle
• 1:04:59
  Speaker 1: settle settled the matter. That's just an incredible story. And
• 1:05:04
  Speaker 1: I guess the the lesson is, if you're in the
• 1:05:07
  Speaker 1: business of challenging wealthiest people in the world with lots
• 1:05:10
  Speaker 1: of resources, you probably don't want to do it while
• 1:05:13
  Speaker 1: you're on double secret probation is probably a bit. There's
• 1:05:17
  Speaker 1: a line from the Wire that I love in this
• 1:05:20
  Speaker 1: in this context, if you come at the King, you
• 1:05:22
  Speaker 1: better not miss And they came at the King and
• 1:05:27
  Speaker 1: they missed. Before we get to our favorite questions, I
• 1:05:30
  Speaker 1: have to ask you some recent news that came out
• 1:05:34
  Speaker 1: after the book was published. What do you make of
• 1:05:37
  Speaker 1: this eight point four billion dollar purchase of MGM. Is
• 1:05:43
  Speaker 1: this about Amazon Prime or is this about Bezos getting
• 1:05:48
  Speaker 1: to hang with Hollywood Royalty. Well, you can hang with
• 1:05:53
  Speaker 1: Hollywood Royalty without MGM. It's about intellectual property. It's about
• 1:05:57
  Speaker 1: the vault of franchisees, the deep. The MGM has James Bond,
• 1:06:02
  Speaker 1: the Rocky Series, Legally Blonde, et cetera, RoboCop um. Amazon
• 1:06:07
  Speaker 1: is facing the likes of Disney Plus and an Apple.
• 1:06:12
  Speaker 1: Um you know, not just Netflix, Paramount, Peacock Network and
• 1:06:17
  Speaker 1: and franchises are are going to be a big differentiator.
• 1:06:21
  Speaker 1: UM In addition, we talked about the advertising business and
• 1:06:24
  Speaker 1: with MGM, Amazon gets this vault of this catalog of
• 1:06:29
  Speaker 1: archival programming. They can funnel all that into Prime video
• 1:06:33
  Speaker 1: and into another streaming service I m DBTV, which is
• 1:06:36
  Speaker 1: it's free to use and it's supported by advertising, and
• 1:06:40
  Speaker 1: and this is like, this is these are table stakes
• 1:06:43
  Speaker 1: now in the new streaming wards being able to mint
• 1:06:45
  Speaker 1: franchises and have very deep catalogs of libraries of archival programming.
• 1:06:51
  Speaker 1: Really interesting. All right, for our last regular question, I'm
• 1:06:54
  Speaker 1: just gonna throw a curveball at you and say congratulations
• 1:06:59
  Speaker 1: on winning the Amazon Whole Food sweep steaks. Okay, I
• 1:07:05
  Speaker 1: love this story. Yeah, thank you Berry. Um, I is
• 1:07:10
  Speaker 1: that correct? Yes, I'm working on this book and I
• 1:07:14
  Speaker 1: got a call telling me that I won a Whole
• 1:07:17
  Speaker 1: Food sweep stakes and I had never entered any but
• 1:07:20
  Speaker 1: apparently if you use your Amazon credit cards and a
• 1:07:22
  Speaker 1: Whole Foods, who got entered in? And what are the
• 1:07:25
  Speaker 1: chances I won? And I thought it was a fraud.
• 1:07:28
  Speaker 1: It sounds like a telemarketing scam totally. And I and
• 1:07:33
  Speaker 1: I think, Okay, I'm gonna I'm gonna look into this
• 1:07:35
  Speaker 1: because somebody's abusing you know, the Amazon name, and I
• 1:07:38
  Speaker 1: find out that it's real, and of course I didn't,
• 1:07:41
  Speaker 1: I didn't accept it. But it was just so peculiar.
• 1:07:46
  Speaker 1: I mean, what what are the what are the chances
• 1:07:48
  Speaker 1: I could be eating you know, free and whole foods now,
• 1:07:50
  Speaker 1: But sadly my journalistic obligations prevented me from accepting it.
• 1:07:56
  Speaker 1: That's pretty hilarious. All right, Let's jump to our favorite
• 1:07:59
  Speaker 1: questions that we ask all of our guests. And let's
• 1:08:03
  Speaker 1: start with and I asked this to everybody, not just
• 1:08:06
  Speaker 1: to you. What are you streaming these days? Give us
• 1:08:08
  Speaker 1: your favorite Netflix and Amazon Prime shows? Interesting? Let's see, Um,
• 1:08:15
  Speaker 1: we just started Halston this is the you and McGregor
• 1:08:20
  Speaker 1: fashion thing on Netflix. We're only one episode in my
• 1:08:25
  Speaker 1: I'll reserve judgments on that. Um. The Michael Douglas series
• 1:08:30
  Speaker 1: Comisky Method, so they just did season three. I've loved
• 1:08:35
  Speaker 1: that show. The opening of the first episode at the
• 1:08:38
  Speaker 1: funeral is just totally hilarious. Um, and I haven't been
• 1:08:46
  Speaker 1: watching a lot of TV. So those are the two
• 1:08:48
  Speaker 1: right now. UM. I tried, I have I have young daughters,
• 1:08:53
  Speaker 1: teenage daughters. I tried to introduce one to a classic film,
• 1:08:57
  Speaker 1: rain Man over the weekend the great Dustin Hoffman films,
• 1:09:02
  Speaker 1: and she wanted to watching halfway halfway through. UM, so
• 1:09:06
  Speaker 1: I don't know, maybe maybe you know, it's not it's
• 1:09:11
  Speaker 1: not as moving for for the younger generation. My experience
• 1:09:15
  Speaker 1: is that the younger generation can't enjoy the pacing which
• 1:09:20
  Speaker 1: is so much slower. I mean, unless you go to
• 1:09:23
  Speaker 1: something like the front page or bringing up baby. The
• 1:09:27
  Speaker 1: pacing of movies from the fifties, sixties, seventies, eighties are
• 1:09:31
  Speaker 1: just so much slower than you know, how how rapid
• 1:09:35
  Speaker 1: the jokes come and how fast explosions come. Today it's
• 1:09:39
  Speaker 1: a different era and and they don't have the tolerance
• 1:09:43
  Speaker 1: for that. I think that might be true, and in
• 1:09:46
  Speaker 1: the exactly the same way as I rejected the movies
• 1:09:50
  Speaker 1: of my parents generation. I'm now and there's receiving rooms. Yeah, no,
• 1:09:55
  Speaker 1: it's it's everything is accelerating. Let's let's talk a little
• 1:09:58
  Speaker 1: bit about your career and ment yours who helped guide
• 1:10:01
  Speaker 1: and shape your career? Well? Um, I think probably the
• 1:10:06
  Speaker 1: most influential with Stephen Levy, um, technology writer at at
• 1:10:10
  Speaker 1: Newsweek Magazine. UM. He has written great books about Apple
• 1:10:15
  Speaker 1: and Facebook and Google. And seeing him work and the
• 1:10:18
  Speaker 1: way he writes was always very inspirational to me. Um
• 1:10:22
  Speaker 1: George Hackett was an editor of mine at Newsweek magazine.
• 1:10:26
  Speaker 1: He was he was quite influential and just a great,
• 1:10:28
  Speaker 1: great editor. And then um at Josh Turangle, the former
• 1:10:32
  Speaker 1: editor of Business Week who brought me over from from
• 1:10:34
  Speaker 1: the New York Times, and the way he managed people
• 1:10:37
  Speaker 1: and his story sensibility, the way he really refreshed business Week.
• 1:10:41
  Speaker 1: When Bloomberg bought it was was wonderful to watch. What
• 1:10:46
  Speaker 1: are some of your favorite books and and what are
• 1:10:48
  Speaker 1: you reading right now? Let's see, I'm reading Cast, the
• 1:10:55
  Speaker 1: wonderful book by Isabel Wilkerson just about um, you know,
• 1:11:01
  Speaker 1: how we view racial and income divisions in the in
• 1:11:04
  Speaker 1: the United States. That's that's been really eye opening. I
• 1:11:08
  Speaker 1: feel like my reading has been eclipsed by self promotion
• 1:11:11
  Speaker 1: and book promotion over the past a few weeks. So
• 1:11:15
  Speaker 1: I feel like I'm really looking forward to this summer
• 1:11:18
  Speaker 1: when I get to maybe read some of the other
• 1:11:20
  Speaker 1: excellent books that have that have come out this year.
• 1:11:22
  Speaker 1: I read the novel Clara and the Sun by A.
• 1:11:25
  Speaker 1: Kazoo Is Shiguru, which um you know who wrote Remains
• 1:11:30
  Speaker 1: of the Day is just such a wonderful author. And
• 1:11:33
  Speaker 1: this book is about it's a sort of science fiction
• 1:11:36
  Speaker 1: future where people can take home home robots, and it
• 1:11:40
  Speaker 1: is it is such a moving novel. I actually read
• 1:11:43
  Speaker 1: it and then immediately reread it, And so that is
• 1:11:45
  Speaker 1: a book I heartily recommend. What sort of advice would
• 1:11:49
  Speaker 1: you give to a recent college grad who was thinking
• 1:11:52
  Speaker 1: about a career in either investment finance or or journalism
• 1:11:57
  Speaker 1: or both? Right, well, I would have absolutely no advice
• 1:12:01
  Speaker 1: on the investment finance side of things, very that that
• 1:12:05
  Speaker 1: might be more your per view than mine. Um on journalism,
• 1:12:09
  Speaker 1: after maybe waving my hands, uh, you know, at them
• 1:12:13
  Speaker 1: to get them to reconsider if they were really determined,
• 1:12:19
  Speaker 1: I would um, I would. I would encourage young journalists
• 1:12:22
  Speaker 1: to kind of find their lean, you know, find something
• 1:12:25
  Speaker 1: that they're passionate about and interested in, to go deep
• 1:12:28
  Speaker 1: on um and to sort of master the expertise in
• 1:12:33
  Speaker 1: and then to just be persistent. This business is all
• 1:12:36
  Speaker 1: about persistence and being there after everyone else has left,
• 1:12:40
  Speaker 1: and going a little deeper and asking that last question
• 1:12:43
  Speaker 1: and digging into another box of files when you feel
• 1:12:47
  Speaker 1: like you're exhausted and want to drop. And that's that's
• 1:12:50
  Speaker 1: the key to this business. Right, it's not rocket science.
• 1:12:53
  Speaker 1: We don't we don't need PhDs to do it. But
• 1:12:55
  Speaker 1: often it's just sheer curiosity and persistence and absorption and obsession, right.
• 1:13:02
  Speaker 1: I mean I have become over the past decade sort
• 1:13:06
  Speaker 1: of obsessed with understanding how Amazon works and what drives
• 1:13:11
  Speaker 1: Jeff Bezos, um, you know, and what's good about it,
• 1:13:14
  Speaker 1: what's bad about it? And I think you need that
• 1:13:16
  Speaker 1: kind of absorption, of an obsession of curiosity to succeed
• 1:13:20
  Speaker 1: as a journalist today. And our final question, what do
• 1:13:23
  Speaker 1: you know about the world of journalism today? You wish
• 1:13:27
  Speaker 1: you knew when you were first getting started twenty plus
• 1:13:31
  Speaker 1: years ago, years ago. I mean, it's just just such
• 1:13:36
  Speaker 1: a different environment. I guess I wish I had known
• 1:13:38
  Speaker 1: how rapidly things would change. You know. I spent the
• 1:13:43
  Speaker 1: first ten years in my career as I as I
• 1:13:45
  Speaker 1: said earlier in the conversation that Newsweek, magazine and Newsweek
• 1:13:50
  Speaker 1: does exist, and magazines of course exists, but that kind
• 1:13:54
  Speaker 1: of media organization no longer does. Um. There there was
• 1:13:58
  Speaker 1: a whole class of journal who labored in the salt mine,
• 1:14:02
  Speaker 1: so to speak, um, not really reporting and writing, but
• 1:14:06
  Speaker 1: researching and and and performing support functions. Um, and then
• 1:14:11
  Speaker 1: every week would be a desperate competitive scramble to get
• 1:14:14
  Speaker 1: your articles in the magazine. And I actually think I
• 1:14:18
  Speaker 1: learned a lot from that. But um, there's no replacement
• 1:14:23
  Speaker 1: for writing and publishing and repeating and reporting and getting
• 1:14:26
  Speaker 1: out into the world. And and those are the kinds
• 1:14:29
  Speaker 1: of skills that are rewarded in today's journalistic environment. And
• 1:14:33
  Speaker 1: so I think I might wish that if I was
• 1:14:36
  Speaker 1: able to foresee the way in which the media climate
• 1:14:38
  Speaker 1: would change that I had been, that I would have
• 1:14:41
  Speaker 1: been a little bit more productive in my earlier, earlier years,
• 1:14:45
  Speaker 1: where where like success at a big magazine, just being
• 1:14:48
  Speaker 1: at a big magazine like like news Week, seemed like
• 1:14:51
  Speaker 1: a career accomplishment on its own. But of course, you
• 1:14:54
  Speaker 1: know that world no longer exists. We have been speaking
• 1:14:57
  Speaker 1: with Brad Stone. He is the author of Amazon Unbound,
• 1:15:01
  Speaker 1: Jeff Bezos and The Invention of a Global Empire. Thanks
• 1:15:04
  Speaker 1: Brad for being so generous with your time. If you
• 1:15:07
  Speaker 1: enjoyed this conversation, well be sure and check out any
• 1:15:10
  Speaker 1: of our previous almost four hundred interviews we've done over
• 1:15:14
  Speaker 1: the past seven years. You can find those at iTunes, Spotify,
• 1:15:19
  Speaker 1: wherever you get your podcasts. We love your comments, feedback
• 1:15:23
  Speaker 1: in suggestions right to us at m IB podcast at
• 1:15:27
  Speaker 1: Bloomberg dot net. You can sign up for my daily
• 1:15:31
  Speaker 1: reads at rit Halts dot com. Check out my weekly
• 1:15:34
  Speaker 1: column on Bloomberg dot com slash Opinion. Follow me on
• 1:15:38
  Speaker 1: Twitter at rit Halts. I would be remiss if I
• 1:15:41
  Speaker 1: did not thank our crack staff that helps put these
• 1:15:44
  Speaker 1: conversations together each week. Rolie Volmer is my audio engineer.
• 1:15:50
  Speaker 1: Atico val Bron is our project manager. Michael Boyle is
• 1:15:55
  Speaker 1: my producers slash booker. Michael Batnick is my head of research.
• 1:16:00
  Speaker 1: I'm Barry Rihults. You've been listening to Masters in Business
• 1:16:04
  Speaker 1: on Bloomberg Radio