This is a really amazing and clever idea on Amazon's part: Taking a system or technology that you've already built and are maintaining, and make it accessible to others as a platform. Then continue using that platform as if you were a/the best customer.
They did it with AWS, they've done it with their retail business, and now they're probably going to do it with AmazonFresh/WholeFoods. It makes a lot of sense, and it offers them a lot more flexibility to use the platforms they build in other ways too.
He's basically saying that Amazon is a big logistics company. Except he calls it meat as a service.
It's an interesting take. But it is also how many analysts thought that Walmart would kill grocery stores. I personally don't think that Amazon will fare much better than Walmart... shopping for groceries is fundamentally harder online, and Amazon hasn't demonstrated any magic that makes that easier.
Amazon has found their way to cornering the one property that is not influenced by fashions and whims: scarcity. Both in a logistical and economical sense, they have been pushing the envelop on all corporate levels, from AWS to fresh produce.
To me, most of the "new and more agile" companies are cargo-culting the optimization paradigm, focussing on time-saving and convenience as if the more basic needs were already met. In that case, they are fighting for customer attention because the customer has attention to spare. Amazon however moved so deeply into the consciousness of the household (and, on HN, our work environments) that people are perfectly fine with Amazon being a conglomerate - since they literally deliver. Heh.
> that people are perfectly fine with Amazon being a conglomerate
What is this supposed to mean? Is there supposed to be something inherently not-fine with a conglomerate? If conglomerates survive because they're better able to deliver goods and services more efficiently then great.
As another comment pointed out[1], we are surrounded by conglomerates.[2] Other conglomerates that have delivered things people love include, but limited to, Toyota; Yamaha; Mitsubishi; Wesfarmers; 3M; Alhpabet; Honeywell; Berkshire Hathaway. The list is expansive.
While prices are low, another aim of governments should be to keep wages high enough to maintain a standard of living. I think the fear around Amazon isn't that it is going to all of a sudden raise the price of goods from Whole Foods, but that they will reverse the employee friendly aspects of the company. When prices are low but wages aren't high enough to guarantee that people can take advantage of those lower prices, inequality is exacerbated.
There is another side of that which I've noticed as an American expat. If one country or industry decides to keep wages high, there are at least two effects.
1. The minimum required experience is also increased. You see this in industries where it's very difficult for new blood to break into because the minimum required experience/skill level is above an "entry level" position because the pay expectations of the industry require a certain degree of skill and experience going in.
2. Companies outsource. They seek to maximize profits, which means reducing costs, which means paying those with low demands for work that's good enough.
I actually moved out of the US for work because I found that I had better opportunities outside the US than in it. Not higher-paying (those would be in the US), but opportunities to build work experience from nothing, which I didn't see an option for in the US as a fresh college grad with a journalism degree looking to break into software engineering. I've been working outside the US for ~3 years now and although there have been challenges it's changed my life and career for the better. YMMV.
> While prices are low, another aim of governments should be to keep wages high enough to maintain a standard of living.
Incomes, maybe; wages are a lever on incomes, but not the only one (and a potentially problematic one because pushing too hard on them depresses employment while driving up wages for the still-continuing, worsening inequality), and should not be focused on as a primary goal.
> another aim of governments should be to keep wages high enough to maintain a standard of living
Disagree. The aim of government should be to enable the elimination of every single job while also enforcing a fair distribution of wealth. Wage regulation is a traditional capitalist approach to solving this problem. There are other approaches which might need to be tried in the coming decades..
Yeah even before seeing that list (which was much longer than I had expected), I could name Berkshire, the mega-food groups, the mega-media groups, Koch Industries, and General Electric as conglomerates.
> users said they would be taking their business from Amazon and returning to Diapers.com—which, other users pointed out, was no longer possible
I have a hard time taking this seriously. "Lock-in" is just a sunk cost, it's more about the psychology of switching than an actual problem. If they went through all the pain of figuring out AWS's XML formats then they shouldn't have any trouble with another cloud service...
I'm increasingly wary of the "sunk cost fallacy" argument. For reasons which are difficult to articulate clearly, but the upshot is that I don't think SCF gives full weight to the issues involved, at least in some instances.
One aspect of this is risk. Whatever your present course is, you've greately reduced your uncertainty regarding it. A new course of action may involve a great deal of unrealised and unrecognised risks. That is, your costs are understated, and your benefits are overstated. Particularly with complex situations.
Well, when a company has various activities, the direction/management decides that a company must focus on a single activity ("focus on a single trade and be expert in it, delegate the rest" is then their motto).
Then when a company has a single activity and is an expert in it, the direction/management decides that a company must have diverse activities, be it vertical integration to decrease the costs, or horizontal integration to reduce competition, or just invest/acquire in totally unrelated sectors to eliminate risk.
And then back to step one, and so on.
The only constant goals in all this seem to be:
1. to justify firing employees and lowering working conditions;
2. to generate artificial activity for all the direction/business/finance sector, so that they always feel both useful and powerful.
Yes, there's actually absolutely nothing special about what Amazon is doing.
It's GM buying Hughes or Perot. Or Berkshire buying company xyz. Or GE buying its hundredth company. Or Walmart getting into xyz category. Or Google buying Nest & Boston.
The sensationalism is courtesy of Bezos nearing the richest person on earth status combined with Amazon's increasing pervasiveness in the US economy. It's the hot new new story of the moment to write sensationalism around, spin up some fear, whatever, gotta drive those clicks. It has so many angles to play on, it has even got Trump courtesy of the Trump/Bezos feud, what more could they ask for.
Ship avocados green and they survive, but aren't ripe the day of delivery, or until 2-3 days later. Ship them almost ripe so that they arrive ripe, and they will be bruised and nasty, unless they pack them in an avocado sleeve that keeps them from rolling around.
Done right, it has the potential to be a better avocado experience, because so many morons molest avocados, digging their grubby fingers into them and bruising the poor thing. And it's the next person who can't see this who buys the bruised avocado. All those brown spots in an avocado? Those are finger squeezes. Stop avocado rape!
There's a lot of problems with shipping produce direct to customer, sight unseen, and maybe a few benefits. But I gotta say even 10 years ago Fresh Direct in NYC was doing a genius job of it.
Interestingly, the article suggested that Amazon, in being both the distributor and the cloud provider, may be able to increase their advantage by exploiting information they hold on competitors.
It's exciting to be an engineer at Amazon because of the broad range of business problems it tackles and how easy it is to move among teams. If you want to pivot into video streaming, cloud computing, data science, etc., you can easily find a mentor. It makes me feel like personal ambition is my only limit (which is both daunting and exciting).
I don't know what the fetish is with Amazon. The article is ridiculous in suggesting Amazon putting Walmart out of business when it only started making real money in 2016. Amazon made $2B in 2016 and $0.6B in 2015, lost $0.2B in 2014. Walmart made $13B last year... but the article says Amazon is the one with the better mouse trap and "impervious to the natural life cycle of a conglomerate"? huh?
With the toxic culture, Amazon is going to go Uber someday. The Whole Foods acquisition is probably the start of Amazon taking a step too far.
Amazon has made real money for years, they just have reinvested it. Comparing Amazon to Uber is silly, they're an established business and leader in multiple markets.
[+] [-] stirlo|8 years ago|reply
[+] [-] nitemice|8 years ago|reply
They did it with AWS, they've done it with their retail business, and now they're probably going to do it with AmazonFresh/WholeFoods. It makes a lot of sense, and it offers them a lot more flexibility to use the platforms they build in other ways too.
[+] [-] Spooky23|8 years ago|reply
It's an interesting take. But it is also how many analysts thought that Walmart would kill grocery stores. I personally don't think that Amazon will fare much better than Walmart... shopping for groceries is fundamentally harder online, and Amazon hasn't demonstrated any magic that makes that easier.
[+] [-] arvidkahl|8 years ago|reply
To me, most of the "new and more agile" companies are cargo-culting the optimization paradigm, focussing on time-saving and convenience as if the more basic needs were already met. In that case, they are fighting for customer attention because the customer has attention to spare. Amazon however moved so deeply into the consciousness of the household (and, on HN, our work environments) that people are perfectly fine with Amazon being a conglomerate - since they literally deliver. Heh.
[+] [-] TheSpiceIsLife|8 years ago|reply
What is this supposed to mean? Is there supposed to be something inherently not-fine with a conglomerate? If conglomerates survive because they're better able to deliver goods and services more efficiently then great.
As another comment pointed out[1], we are surrounded by conglomerates.[2] Other conglomerates that have delivered things people love include, but limited to, Toyota; Yamaha; Mitsubishi; Wesfarmers; 3M; Alhpabet; Honeywell; Berkshire Hathaway. The list is expansive.
1. https://news.ycombinator.com/item?id=14592612 2. https://en.wikipedia.org/wiki/List_of_conglomerates
[+] [-] bogomipz|8 years ago|reply
What do you mean by this? What exactly is scarce?
[+] [-] unknown|8 years ago|reply
[deleted]
[+] [-] noobermin|8 years ago|reply
[+] [-] indigochill|8 years ago|reply
1. The minimum required experience is also increased. You see this in industries where it's very difficult for new blood to break into because the minimum required experience/skill level is above an "entry level" position because the pay expectations of the industry require a certain degree of skill and experience going in.
2. Companies outsource. They seek to maximize profits, which means reducing costs, which means paying those with low demands for work that's good enough.
I actually moved out of the US for work because I found that I had better opportunities outside the US than in it. Not higher-paying (those would be in the US), but opportunities to build work experience from nothing, which I didn't see an option for in the US as a fresh college grad with a journalism degree looking to break into software engineering. I've been working outside the US for ~3 years now and although there have been challenges it's changed my life and career for the better. YMMV.
[+] [-] dragonwriter|8 years ago|reply
Incomes, maybe; wages are a lever on incomes, but not the only one (and a potentially problematic one because pushing too hard on them depresses employment while driving up wages for the still-continuing, worsening inequality), and should not be focused on as a primary goal.
[+] [-] bottled_poe|8 years ago|reply
Disagree. The aim of government should be to enable the elimination of every single job while also enforcing a fair distribution of wealth. Wage regulation is a traditional capitalist approach to solving this problem. There are other approaches which might need to be tried in the coming decades..
[+] [-] tpeo|8 years ago|reply
That's not even close to being true. How does someone get a job on a supposedly reputable newspaper writing such daft shit?
https://en.wikipedia.org/wiki/List_of_conglomerates
[+] [-] TheSpiceIsLife|8 years ago|reply
Investors, we have been repeatedly told, want smaller, nimbler, more focused companies."
Who's we? If, by investors, they mean a fairly specific subset of investors, namely Venture Capitalists* and Angel Investors, then yes.
But otherwise, no. People aren't bailing out of established conglomerates. Not that I'm aware of.
[+] [-] hkmurakami|8 years ago|reply
[+] [-] dredmorbius|8 years ago|reply
https://books.google.com/ngrams/graph?content=conglomerate&y...
The concept is an old one, dating to the late 19th century. In the 1960s and 1970s, the new phenomenon was the "multinational corporation".
https://books.google.com/ngrams/graph?content=multinational%...
[+] [-] didibus|8 years ago|reply
[+] [-] smilbandit|8 years ago|reply
[+] [-] Mathnerd314|8 years ago|reply
> switching costs are high
> Amazon’s platform lock-in
> users said they would be taking their business from Amazon and returning to Diapers.com—which, other users pointed out, was no longer possible
I have a hard time taking this seriously. "Lock-in" is just a sunk cost, it's more about the psychology of switching than an actual problem. If they went through all the pain of figuring out AWS's XML formats then they shouldn't have any trouble with another cloud service...
[+] [-] dredmorbius|8 years ago|reply
One aspect of this is risk. Whatever your present course is, you've greately reduced your uncertainty regarding it. A new course of action may involve a great deal of unrealised and unrecognised risks. That is, your costs are understated, and your benefits are overstated. Particularly with complex situations.
[+] [-] wott|8 years ago|reply
Then when a company has a single activity and is an expert in it, the direction/management decides that a company must have diverse activities, be it vertical integration to decrease the costs, or horizontal integration to reduce competition, or just invest/acquire in totally unrelated sectors to eliminate risk.
And then back to step one, and so on.
The only constant goals in all this seem to be:
1. to justify firing employees and lowering working conditions;
2. to generate artificial activity for all the direction/business/finance sector, so that they always feel both useful and powerful.
[+] [-] danvoell|8 years ago|reply
[+] [-] adventured|8 years ago|reply
It's GM buying Hughes or Perot. Or Berkshire buying company xyz. Or GE buying its hundredth company. Or Walmart getting into xyz category. Or Google buying Nest & Boston.
The sensationalism is courtesy of Bezos nearing the richest person on earth status combined with Amazon's increasing pervasiveness in the US economy. It's the hot new new story of the moment to write sensationalism around, spin up some fear, whatever, gotta drive those clicks. It has so many angles to play on, it has even got Trump courtesy of the Trump/Bezos feud, what more could they ask for.
[+] [-] cmurf|8 years ago|reply
Done right, it has the potential to be a better avocado experience, because so many morons molest avocados, digging their grubby fingers into them and bruising the poor thing. And it's the next person who can't see this who buys the bruised avocado. All those brown spots in an avocado? Those are finger squeezes. Stop avocado rape!
There's a lot of problems with shipping produce direct to customer, sight unseen, and maybe a few benefits. But I gotta say even 10 years ago Fresh Direct in NYC was doing a genius job of it.
[+] [-] starstorm312|8 years ago|reply
[+] [-] frogfuzion|8 years ago|reply
[+] [-] creepydata|8 years ago|reply
[+] [-] ImaginaryIP|8 years ago|reply
[+] [-] cylinder|8 years ago|reply
Would they buy a large automotive dealership group? Or is that not analagous?
[+] [-] cakedoggie|8 years ago|reply
[+] [-] baybal2|8 years ago|reply
More like all Japanese conglomerates look these days (Marubeni, Mizuho, Mitsui etc) Except, the topmost structure is not likely to be publicly traded.
[+] [-] seoseokho|8 years ago|reply
[+] [-] appleiigs|8 years ago|reply
With the toxic culture, Amazon is going to go Uber someday. The Whole Foods acquisition is probably the start of Amazon taking a step too far.
[+] [-] icebraining|8 years ago|reply
[+] [-] unknown|8 years ago|reply
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