The Everything Store: Jeff Bezos and the Age of Amazon Hardcover – October 15, 2013

"The Everything Store" was such an engaging and fascinating read, I inhaled it in less than 36 hours. (For the sake of my sleep and work schedule, I'm glad books like this don't come along too often.)As I write this review, Amazon just announced a partnership with the US Postal Service to start delivering on Sundays for Prime members in key cities. This backs up the best description I have heard of Amazon and its founder -- which, amusingly, comes from the blog of ex-Amazon employee Eugene Wei, someone who was not interviewed in this book."Amazon has boundless ambition," Wei writes. "It wants to eat global retail... there are very few people in technology and business who are what I'd call apex predators. Jeff [Bezos] is one of them, the most patient and intelligent one I've met in my life. An apex predator doesn't wake up one day and decide it is done hunting."Stock valuation aside -- you either believe or you don't, and as of this writing Bezos is clearly having a messianic moment -- "The Everything Store" is an excellent chronicle of Amazon's rise.In the book -- and I don't mean this as a criticism -- Bezos comes off as the lead character in an Ayn Rand novel. A real world John Galt or Hank Rearden, with an e-commerce twist. The immigrant step-father who taught him the value of hard work... the maternal grandfather who instilled a deep do-it-yourself attitude... the flashes of extraordinary competitiveness from an early age... the burning desire to conquer space... it all coalesces into a sense of destiny (though, of course, a good portion of this could be narrative hindsight).Steve Jobs was the last great business figure, the hero entrepreneur of our time. I think that, reputationally, Bezos will ultimately surpass Jobs -- leave him in the dust, really -- because while, what Bezos is doing is unsexy, the fundamental nature of "hard problems" that Amazon approaches and solves (on its way to eating global retail) is adding to the free market knowledge base at a tremendous evolutionary rate.One of the most intriguing and powerful things about Amazon, in my opinion, is the sheer logistical prowess of what they do behind the scenes. The coordination of supply chains, manpower, algorithmic decision making, and countless other unseen problems they have had to solve on the way to delivering "everything" in a two-day shipping window is off-the-charts impressive.To a certain degree Apple accomplished a similar behind-the-scenes feat, in that Apple's masterful ability to implement and coordinate global supply chains made it the most profitable company in the world for a time. But Apple's breathtaking profit margins always had a slightly ephemeral feel to them. You knew that someone (like Samsung or Google's Android) would eventually come along and take a bite of the Apple so to speak... whereas with Bezos' strategy, staking out the hard, grinding, low-nutrient territory of thin margins, the next competitor is going to have to get bloody in the toughest octagon of all (logistics and scale). As Bezos likes to say, "Your margin is my opportunity," which should scare the hell out of any large retailer, perhaps save Wal-Mart (and maybe even Wal-Mart too).Those who doubt Amazon's business model (myself among them in the past) have been prone to use the "switch flip" criticism, e.g. bullish investors assume Amazon will one day be able to "flip a switch" and become profitable. But I agree with Eugene Wei that this is an overly simplistic characterization of a more subtle process. In reality, Amazon is less like a company with one switch to flip and more like one with tens of thousands of individual switches, each of which can be incrementally adjusted to swing from loss to profit when the time is right. This seems far less fantastical when you picture thousands upon thousands of instances where, say, a 2% margin mark-up creates profit where previously there was break-even, and/or a simple slowdown in the prodigious rate of ongoing capital expenditure spending lets more cash flow spill over into the profit column.As for the prodigious capital expenditures, Amazon's most recent quarterly revenue figure, as of this writing, was roughly $17 billion. Bezos no doubt foresees the day when that quarterly number will hit $100 billion. On the way there, it only makes sense for him to exploit every inch of leeway he can get from Wall Street -- in terms of taking all the money and opportunity he can for long-term investment -- with the goal of scaling up the infrastructure to serve and support an order-of-magnitude larger sales base. If investors get loopy with their valuation assessments in the meantime, so be it. The vision is the thing for Bezos... just as it has always been.But getting back to "The Everything Store," my favorite thing about this book was the brutally honest nature of the flaws and the messiness of Amazon's evolution (and the evolution of Bezos himself) in the first 5-10 years or so of the company's existence.Through an excellent weave of facts, narrative anecdotes and storytelling, you get a clear picture of how Amazon surged out of the gate in the late 1990s, and then almost choked to death on hundreds of millions of dollars worth of bad acquisitions it made with "bubble money." Many dumb mistakes were made, some deservedly fatal... but Amazon survived them all, and managed to learn from them too.The evolution of Bezos as a CEO is fully apparent as well. While those who ponder Bezos today are likely to assume he stepped on the world's stage as a wise genius fully formed, in actuality he picked up many of his strong core beliefs along the course of Amazon's existence, learning through intense study of rivals and mentors from afar, like D.E. Shaw (early on) and Sam Walton and Jim Sinegal of Costco.The book is really a gift for entrepeneurs and business builders of the new generation -- like myself, ahem cough cough -- in the manner it lays bare the luck, the guts, and the serious mistakes that are inevitably made on the way to forming a world-class enterprise.The other thing that really came through is the sheer ruthlessness of Bezos. (No doubt this is what got Mackenzie Bezos riled up -- what spouse wants to see their husband portrayed as a tyrant?) But as the book points out, there is a reason why so many of the great builders in tech -- Gates, Ellison, Jobs and so on -- all had that same ruthless character to them. Building and scaling a world-dominating business is hard. As in really, really hard. When you are trying do something on that kind of scale, with that level of competitiveness, you are not just fighting against cut-throat competitors. You are also fighting against entropy and mediocrity, that pull of ordinary results, ordinary outcome (as opposed to extraordinary) that holds back every ambitious endeavor in the same manner the NASA shuttle is held back by gravity. It takes something special to get off the launching pad, let alone into orbit.The fact that Bezos can be extremely ruthless, even cold-blooded, in pursuit of his vision, will not gain extra points with much of his audience. (No doubt a reason Amazon itself wants to tone that side down.) But investors should be glad for this trait, and it's a trait that benefits capitalism on the whole too. When a strong player legitimately uses skill and efficiency to best a weaker player in the marketplace, costs are lowered as such that customers benefit, and other businesses can learn from the strong player's pioneering example.The final chapters of the book showed Amazon at its most ruthless by far. I had no idea the level of wargame strategy that had occurred in the purchase of Zappos. The Quidsi (diapers.com) acquisition was simultaneously even more brilliant and brutal. You do not, not, not want to be in head-to-head competition with Amazon. It is here where I stop and whisper a small prayer of thanks to the free market gods that my own career path does not involve selling commodity-type retail products.I had reason to examine my own motives as to why I enjoyed this book so much. I am a trader, not a retailer. While I have plans to lead and scale a business to large (perhaps even very large) size, it has nothing to do with traditional retail really. So why was this book so fascinating? Perhaps for the sheer cultural value of what Bezos represents and what he has accomplished. Here is a guy who started out smart, talented and exceptionally bold, and had the chutzpah to act on a wildly ambitious vision and see it through every step of the way. Learning and stumbling as he went, sometimes screwing up royally, but always pulling in the errors and coming back from the brink... having laid the architecture more than a dozen years ago to sustain a vision ten times bigger (or maybe even 100 times).The broader inspirational lesson from the Amazon story, I think, is the reaffirmation of what's possible when motivated dreamers decide to work harder, work smarter, and break traditional molds all at the same time. You really can execute on a compelling vision. You really can get a team together and, with the help of that team, accomplish a hundred or a thousand times more than you ever could running solo. You really can practice patience and boldness -- no coincidence "bold" is one of Bezos' favorite words -- and in so doing apply an Art-of-War like strategic nous to flanking and beating your rivals. Big and exciting things can be done in this world.

So, I just finished reading "The Everything Store" by Brad Stone.I am not a fan of elaborate and long-winded reviews about whether a book is worth reading or not.I'll make it easy for you - this one is. It's a good read as a business book, as a tech book, and it is helpful if you're interested in Seattle history.I'll go into more detail below if you're reading what the "self absorbed internet troll" Robby Delaware thinks.*If you're like most people who peruse reviews, I hope this helps. I was contemplating writing a too-cool-for-school review that mentioned the time I thought I ran into Bezos in Ballard on the sidewalk in back of the BofA building. But I didn't....Now for some of my self absorbed ramblings. This isn't what I liked about the book, more about what I found surprising. The author himself acknowledges that this is one of the first complete histories of the company, and I would wager that there will be an afterword to future releases of this book.I've been looking forward to the release this book for some time. I downloaded it as soon as it was released for Kindle.I began reading this book in a sort of unusual way. I began reading it by kind of keeping a mental checklist in my own mind. I was curious if the author, who has covered Amazon for a long time, would omit certain things. The book is clearly biased towards Amazon and Bezos - which isn't surprising and doesn't diminish the appeal of the book. Still, I couldn't help but think that portions of the book were clearly written by someone who wasn't familiar with Seattle culture and by someone who didn't quite view events the same way that many other people did.I took notes while reading the book, and here's a list of things that I found surprising about the book while I was reading it:I was very surprised that a number of relatively small controversies since 2008 didn't make it into this book. I believe that the absence of these stories is unfortunate, and won't help those seeking a full understanding of the company.Amazon, since the rise of social media, has become the source of a number of controversies that I like to call "Twitter worthy." Many of you may recall stories like Amazon Japan selling whale meat, or a pedophile self-publishing an e-book how-to guide, or the remote removal of Orwell books from Kindle readers for DRM reasons, or the deranking of Gay and Lesbian literature.While these stories in an of themselves aren't the kind of stories that are likely to make it on the front page of a newspaper like the Wall Street Journal, these stories will be remembered. One of the only times I ever saw a DRM issue discussed on television was a segment I watched on a cable news show in 2009 about the kid in Minnesota whose Orwell books (and notes) were remotely removed.Why are these stories important, and why do they matter for Amazon? It's simple, because Amazon has grown so large and so global, obscure controversies become easier to understand and even easier to pin on a single retailer. Plus, you've got to feed the twitter beast.Remember the gay/lesbian deranking scandal in 2009? Didn't a hacker do it? Didn't the hacker claim that pulling the urls of gay/lesbian themed books was very easy, and that used an automated script to flag each one as adult? Didn't the hacker claim that he did it for very specific political reasons, and that if you're going to do something like that for political reasons - it's only natural to target Amazon?You see what I'm getting at. There's always been little stories like this - but in an age of twitter and Drudge the smallest story about a holocaust themed board game that one, solitary, third party seller offered can blow up in a spectacular manner.That was the controversies - I was also a little dismayed by how little space was given to Amazon's overall role in the life of Seattle, and I was shocked by how little of a role the Nisqually earthquake played in the narrative of the story.Why is the Nisqually earthquake important? Well, first off, the book claims the earthquake measure 6.9 on the richter scale. I don't believe that's correct - it measured 6.8. Why quibble over something so minor? I believe, strongly, that when future writers look back at the history of Seattle and Amazon's role in city life, the Ash Wednesday earthquake will play a much larger role than anyone who didn't experience it can imagine.That earthquake, which wasn't even that large, trashed a lot of Seattle's commercial real estate. It wasn't just Amazon's PacMed building - there are still boarded up buildings in the city of Seattle today. It is my belief that Paul Allen's South Lake Union project (which had been resounding defeated by Seattle voters during the "commons" debate years earlier) would not have proceeded if it had not been for that earthquake. Which company has dived head first into the transformation of South Lake Union? You guessed it, Amazon.I used to hanging out in the late 90s in South Lake Union. You know who occupied South Lake Union in the late 90s? Dudes who lived in vans, that's who. I went back to that same exact area in 2011 and the place was virtually unrecognizable.This isn't Apple building a UFO shaped HQ in a California suburb that already resembles a golf course combined with the set of "Logan's Run." The project to transform South Lake Union is like Robert Moses on ten lattes - a massive transformation of an urban environment - with Amazon at the center.I could go on about this. About how the book neglected to mention the 1999 WTO conference, when newspaper columnists berated that the "black clad" protestors were "raging against the dot-coms in their own backyard as much as they were against global trade."Or I could mention the recent Seattle Times series from the Blethen family that snootily noted that Bezos is the least engaged civic leader in a city that hosts the majority of America's richest people. But, I won't. You get the picture. I don't think the book covered Amazon's tangled relationship with the city that well.Two other small points - and then I'll stop yakking.The book mentioned Pelago (where I spent seven months as a contract tester) as having been engaged in a mobile search project. I don't think that description is entirely correct. Yes, search was important, and yes, i'd heard that somehow people had or hadn't been asked by Google to come aboard.Still, I remember being told (even as a lowly contract tester) several times - "you might have heard this start-up is about location, email notifications, and tying coupons and deals together. It's not about that. You're not getting it."What's the old saying that was used during the Clinton impeachment trial? "When they say it's not about the sex, it's about the sex!"Pelago might had a lot of energy focused on mobile search - but it was basically an attempt to be a location-based Groupon before Groupon. It's infrastructure fit so well with what Groupon wanted to do that it (surprise!) folded into Groupon.Why did the book make so little mention of the relationship between Groupon and Amazon? Seattle tech blogs like GeekWire are regularly filled with stories of Groupon poaching Amazon executives. Both the rise of Groupon and their quirky and endearing first CEO wouldn't have been possible without Amazon and the existence of Bezos. Wall Street wouldn't have allowed it.One final point before I get off my soapbox. The very end of the book mentions a woman who worked for seven months at Amazon trying to get the company to embrace social media more broadly. Talk about understatement of the year.I've been continually amazed at the haphazard and lazy approach of both Amazon and Apple to social shopping. If Bezos isn't a big fan of music (grabbing assorted cds off a shelf without even looking to see what they are) I'm going to guess he doesn't use or see much need in using social media for shopping - which is a shame, since the Kindle is such a perfect platform for doing this.The @Author program was a great idea - but with zero follow up. The twitter feed hasn't been updated since February.The purchase of Goodreads looks like buying your way out of the problem.Anyways, I could write more. Amazon's a fascinating company, that I have a variety of opinions about. Purchase this book. You won't regret it.*You have to refer to yourself in the third person to be truly self absorbed.