People have a bad habit of treating what exists now as something eternal.
We see it in our politics. We see it most surprisingly in business.
About a decade ago I began writing about the “Cloud Czars,” the five companies building the standards-based factories from which 21st century computing applications would spring. A $1 billion/quarter investment was table stakes for Apple, Microsoft, Google, Amazon, and Facebook (the artists now known as Meta).
I used the term because owning a cloud made the Czars the Internet’s landlords. Their low costs meant everyone had to do business through the Czars. It was going to last forever.
Right? Right.
Turns out, not so much. Meta never let anyone else use its cloud. Apple did the same. Businesses were left with Google, Amazon, and Microsoft, whose stocks rose to dizzying heights in this decade. Then came Oracle, the 2010’s biggest screwup, which fought a war with open source that open source won. Then came the data center specialists, REITs like Equinix and former Bitcoin plays like Coreweave, all anxious to build and rent Nvidia chips. (I’ve already written about that business.) Also, Elon Musk.
So much for the market being eternal.
Above them all, at least for me, was Amazon. Amazon was the first to rent its data centers. It treated AWS the way it treated its warehouses. It was infrastructure. Renting it, for money to build more of it, just made sense. Back when I called this A-Clue.Com, it was the most brilliant move ever.
So, WTF?
Why Amazon Fell
Amazon fell because founder Jeff Bezos became a follower. Amazon began producing me-too products and services as he became more interested in making himself a God than in giving a shit about the fate of the world.
Alexa is second rate. The Prime streaming stick is still getting beaten in the U.S. market by Roku. The Kindle reading division lost its way so badly Barnes & Noble was able to get back into the book business. AWS sometimes talks a good game, but its tools are meh.
There were so many other missed opportunities. Pharmacy. Banking. Financial services. Amazon piddles around in all these areas, but it doesn’t lead anywhere.
The biggest disappointment, for me anyway, is the store. When Doug McMillon became CEO of Walmart in 2014, they were so far behind Amazon it was a joke. But he turned it around, by figuring out what people wanted and giving it to them.
It turned out that what people wanted was a river of merchandise, not a stream, selling at the lowest possible price, and the flexibility to have it sent or pick it up. What people also wanted was the ability to buy in bulk at those same low, low prices. (Sam’s Club is the poor man’s Costco.) They wanted everything, from salad greens to big screen TVs, and they wanted brand names. It was also great that they could see humans when they had problems.
How Walmart Won
By making delivery and pick-up into standard features of the store, Walmart caught up. Amazon piddled away its leadership by relying on customers to tell it specifically what they wanted, leading to thin streams of requests and a long tail of merchandise. They also encouraged their own clients to compete against them, so every time an Amazon reseller disappoints, there’s another customer lost to Amazon.
It’s true that Amazon now has higher sales than Walmart. But that includes AWS, Prime Media, and a vast international division Walmart can’t match. Still, Walmart was just $2 billion behind Amazon in total revenue last quarter, and is now worth $1.05 trillion, almost half the $2.2 trillion Amazon is worth, for all its past advantages. Walmart is where America shops, not Amazon.
What a fucking waste.
Doesn’t mean it’s hopeless.
How Amazon Could Turn It Around
First, fire Andy Jassy and put a human being in charge, someone who treats people like people, who cares about what they think, and who acts on their demands.
I mean a serious manager who knows not just how to build a team but how to work inside one, and who treats everyone who works for them as an associate, not just a cost.
Do I have a name in mind?
Well, Doug McMillon just retired. He is still just 59. That’s only a year older than Jassy.
You may not be able to get McMillon. He may be ill, he may be tired, he may just want to enjoy his life. If you can’t get McMillon, get someone like him. Look around.
Next, act like the Justice Department broke you up. Separate divisions with a strong leader in charge of each. A merchandiser at the store. An expert on logistics at the warehouses. An entertainment executive at Prime. Even a book editor at Kindle, and a computer visionary at AWS. Make them stars, and make sure we know their names.
Each should be measured by how much customers like what they offer. Listening to customers, channeling their needs into what you do, is the key to success. It was once the key to Amazon, when Jeff Bezos had hair.
The one thing I know from a lifetime covering businesses is that if you’re not growing, you’re dying. I got my first credit card from Sears. My first PC said IBM on it. I remember AT&T, General Electric, Wang Labs, Silicon Graphics, and hundreds of others. I remember when Yahoo dominated the Internet.
Even Amazon can die. Just keep doing what you’re doing.
