In Brad Stone’s novel Amazon Unbound, critical perspectives on the transformation of Amazon, and Jeff Bezos- Technology News, Firstpost

Nimish SawantJul 16, 2021 10:28:52 IST

On 5 July, 2021, the founder of Amazon, Jeff Bezos, stepped down as the CEO of the company. Handing over the reins to lieutenant Andy Jassy, who has been running the most profitable division at Amazon aka Amazon Web Services. Bezos will continue to remain an executive chair. This is the end of a 27-year era where Bezos went from selling books online to basically selling everything imaginable, and as a result, transforming a bunch of sectors.

Brad Stone’s Amazon Unbound is not just a sequel to The Everything Store which he wrote in 2013, but also a thorough look at just how Bezos was able to keep the innovation engine as well as the cash coffers at Amazon on an ascending curve. Unlike his first book, Stone did not have access to Bezos this time around. Apparently, featuring Bezos’ biological father in The Everything Store, closed the proverbial doors for Stone. Regardless, Amazon Unbound, documents not just the rise of Amazon during the tumultuous last decade but also contrasts it with the problems cropping up within and outside Amazon that could act as speed bumps in its journey. The book comprises 15 chapters and each of them looks in minute detail at one aspect of Amazon and its founder, bringing home the fact that Amazon is significantly more than the online e-commerce site that we are all familiar with. The book also charts the transformation of the balding formals-sporting geeky Bezos to the ‘swole Bezos’ (a name that emerged after he was photographed wearing sunglasses and a down jacket which showed off his physique)
who loves the good life and will be taking off to space in a couple of weeks.

Bezos’s personal wealth, at $211 billion (as of this week), makes him the richest person on the planet. It saw an almost 70 percent jump in the pandemic year, when a lot of people lost jobs and many Amazon warehouse workers battled workplace discrimination. As you progress in the book, you learn about all the societal costs involved in the acquisition of this wealth — escaping corporate taxes, inhuman working hours during peak sales seasons, millions of seasonal blue-collar workers made to work in unhygienic conditions during the pandemic, sidelining third party sellers by using their sales data against them and more. But one can’t ignore the many bets Amazon took early on which would blossom into money-generating entities.

Foresights galore

In one of his letters to his shareholders, Bezos wrote, “The biggest needle movers will be things that customers don’t know to ask for. We must invent on their behalf. We have to tap into our own inner imagination about what’s possible.”

Stone presents more than enough examples of Bezos’ foresight and experimental mindset which do complete justice to the “Always Day One” philosophy that most Amazonians have to live by.

“Day two is stasis, followed by irrelevance, followed by excruciating, painful decline, followed by death,” Bezos had said in an internal meeting once.

One of the best examples is how Bezos predicted that smart assistants in the form of speakers would be the next big thing. “We should build a $20 device with its brains in the cloud that’s completely controlled by our voice,” Bezos had told his team working on this super-secret project which would give rise to Alexa and the Echo line of smart speakers.

Mind you, there was no incumbent in this segment to prod Bezos to develop this. In fact, the smart speaker segment did not exist before Echo products. In the earlier decade, Bezos had taken a similar bet with Kindle after he noticed Apple taking over the digital music market with iPods and later, its smartphone. To prevent Apple from getting into ebooks, Amazon released the Kindle – at a time when Amazon was bleeding money. The bet paid off. It’s been many years since and there isn’t anything that comes close to the Kindle in terms of reading experience.

Another crystal-ball gazing was done in 2006 when Bezos thought of capitalising on the expertise that Amazon had developed in “building a stable computing infrastructure that could withstand enormous seasonal spikes in traffic”. The business which emerged from this — Amazon Web Services — is currently worth over $45 billion in revenue and one of the most profitable parts of the Amazon empire.

His decision to get into making movies and TV shows was seen with a cynical eye by a majority of his staff. But it turned out to be a smart tool in Amazon’s arsenal to attract more customers to start paying for Amazon Prime.

As Stone notes, “The truth was this: Bezos wanted Amazon to make TV shows and films. He could see that the decades-old way that TV shows and movies were produced and distributed was changing and sought a principal role for Amazon in that future.”

After backing a series of award winning films and web series, Prime is on track to adapt JRR Tolkein’s The Lord of the Rings, which is being touted as its answer to Game of Thrones. With the recent acquisition of MGM Studios for $8.45 billion, Amazon has established itself as a mainstream player in the movie business, whether it agrees to that segmentation or not. One thing Amazon did miss out on, was a chance to acquire Netflix early in its growth phase.

Expensive mistakes forgiven

But not everything Bezos thought about was a billion dollar idea. The Amazon Fire Phone, for which Bezos himself gave a keynote address (trying to ape Jobs, but failing considerably) bombed to such an extent that Amazon had to underwrite $170 million worth of phones already manufactured. But the team which made this phone wasn’t reprimanded. In fact, Bezos asked the team lead to promise him that he wouldn’t lose sleep over this debacle. Bezos was all in for taking risks, even if it came at an expensive cost to the company.

Another major miss on Amazon’s part was not moving fast in India. This led to two former Amazon employees, Sachin Bansal and Binny Bansal, going on to create Flipkart which is now owned by American retailer, Walmart, and is the only worthwhile competitor to Amazon India. But having burnt its hands with its China launch, Amazon took many lessons and proceeded to gradually increase its presence in India from 2012 onwards. Amit Agarwal is still at the helm and India operations have attracted multiple rounds of billion dollar investment from the mothership.

It can be seen in many instances of Amazon’s history — money was always available for wacky ideas. Such as the time Bezos, after learning that burger patties had meat from different cows, came up with the idea of having ‘single cow burgers’. These burgers would have meat only from one animal. This was a short-lived project, but it was executed nonetheless despite how impractical it sounded.

The larger takeaway is that Amazon wasn’t afraid of taking risks, despite not really having made any profits. Some of the bets played off splendidly, such as AWS. One can only wonder if Amazon would be this confident of taking bets, post 2010, if it didn’t have the cushion provided by the AWS revenues.

As Amazon revenues rose, so did Bezos’ personal wealth. This allowed him to pursue some of his personal projects such as Blue Origin, a space startup which Bezos founded. After moving on as Amazon CEO, Bezos is expected to spend more time on Blue Origin and his space ambitions. As the global conversations got more climate conscious, Bezos also announced a $10 billion Earth Fund. But the most interesting personal investment that Bezos made, has to be the one to do with the acquisition of an ailing national newspaper.

Saving The Post and picking a fight with Donald Trump

Stone gives the complete lowdown on how Bezos got to acquiring The Washington Post (The Post), a newspaper that was bleeding money, and flipped it into a revenue-generating media powerhouse within years. It’s baffling how Bezos used the same Amazonian principles to run a journalistic entity. To date, Bezos has stayed away from interfering in any journalistic decisions taken by the paper. One does come across stories critical of Amazon in The Post, with the right disclaimers. But there are many instances in the book, where you get the sense that Bezos did try to get some leverage out of the unfortunate murder of Jamal Khashoggi, a columnist with The Post. Khashoggi was killed on the orders of the Saudi crown prince Mohammed bin Salman for his critical writing on the human rights abuses in Saudi Arabia.

Another area of concern due to The Post’s journalism was placing both Bezos and Amazon in the cross-hairs of former US President, Donald Trump, who left no chance to call Bezos all sorts of names. Stone speculates that it was Trump’s dislike for Bezos that resulted in Amazon losing a military cloud computing contract, worth $10 billion over ten years, to Microsoft. None of this had any effect on The Post’s journalism.

But even as The Post’s turnaround story elevated Bezos’ largesse, as Amazon was growing bigger there were other major problems knocking at its doors.

Criticism of Amazon

In its quest to maximise profits and reduce overheads, Amazon rode roughshod over basic human decency on many occasions. One anecdote that Stone shares in his book is the refusal by Amazon to install central air conditioning in one of its older warehouses despite rising temperatures in the area. It was only after reports of some of this warehouse’s workers collapsing and being taken to nearby hospitals were splashed in the news, that Amazon finally gave the go ahead for installing air conditioners.

Stone also goes to great lengths to qualify the allegation that Amazon studies the third-party seller data and then eventually cuts them out by selling similar products under Amazon Basics or its own in-house brands. Many sellers who waxed eloquent about Amazon, are now vociferously against Amazon’s policies which don’t give them much power. This is an issue that is being scrutinised by regulators. Amazon officially denies these allegations, but one former employee who worked for Amazon had this to say: “We would look at what our competitors were doing and sometimes copy it exactly, or just semi-customise it and throw a label on it. All along I was told there was a firewall, and then I learned it was a sort of a ‘wink wink’.”

Jeff Bezos, the human

All through the book, reading anecdotes of Bezos’ drive makes one wonder if this guy displayed any human emotions or shortcomings at all.

Stone delivers on that front in the second half of the book, where one can read about how Elon Musk’s success in space projects and acquiring tax holidays when he set up Gigafactories would drive Bezos mad. He was jealous to the point that he would start reprimanding his teams by making comparisons with Musk.

The most human aspect of the business leader comes forth in the aftermath of the National Enquirer expose which brought to light Bezos’ affair and eventually led to the dissolution of his marriage to MacKenzie Bezos. The American magazine had published compromising photos of Bezos and his girlfriend, TV personality Lauren Sanchez, while they both were still married to their respective partners.

In a team meeting immediately after this, Bezos addressed this sticky issue by asking his team this: “Raise your hand if you think you’ve had a harder week than I’ve had,” followed by a laugh. He may still have been in the functional business leader mode, but you do see that he had his flaws, like any other human being. In the aftermath of the National Enquirer saga, Bezos had put out a Medium post which hinted that Enquirer’s source was the Saudi government which had hacked Bezos’ phone. Stone clears the air on that front by speaking to the actual source himself.

Stone does manage to balance the superman Bezos with the more human Jeff to some extent. One could argue that it would have been more effective had he got access to Bezos during the writing of this book. But it doesn’t take anything away. He did have access to Andy Jassy, the successor to Bezos. I felt that Stone could have done a better job of discussing a bit on how the transition will happen and how involved would Bezos still be.

The challenges facing Jassy

Unlike Satya Nadella taking over Microsoft and transforming its fortunes, Jassy is in the same position as Tim Cook was when he took over Apple – an impressive profitable company which he helped to reach record heights.

2020 was a blockbuster year for Amazon with its profits reaching an all time high and its market cap crossing $1.5 trillion. Bezos is departing on a high and all eyes will now be on how Jassy takes Amazon to newer milestones. If his 18 years at Amazon Web Services are any indication, Jassy has demonstrated his excellence. But will that be enough at this juncture in Amazon’s journey?

Unlike in the innocent growing up years of Amazon, Bezos is departing at a time when regulators are scrutinising every move Amazon is making. Bezos himself has appeared twice in front of the US Senate Committee alongside other Big Tech peers from the Silicon Valley such as Google’s Sundar Pichai, Facebook’s Mark Zuckerberg and Apple’s Tim Cook. With regulators in the US as well as the EU looking at Amazon, Jassy will have the additional responsibility of treading carefully along these waters while ensuring Amazon’s ascent. It’s a tricky inheritance in that sense. Also, it doesn’t help matters when the Federal Trade Commission is now headed by 31-year old Lina Khan. It was Khan’s 93-page Yale Law Journal article, “Amazon’s Antitrust Paradox” during her student days, that prompted the Senate questioning Bezos about Amazon’s monopolistic practices. It wouldn’t be surprising to see Jassy face government scrutiny soon.

Stone has delivered a stellar sequel that’s a joy to read. It is a business book, in the sense that it tracks Amazon’s rise from an $80 billion company in 2010 to a trillion dollar empire in 2020. It is also biographical as the rise of Amazon is unimaginable without the constantly innovative mindset of its founder, Jeff Bezos. And just like Stone’s last book, The Upstarts, the most promising aspect of Amazon Unbound is how it voices the sociological problems that ruthless, profit-chasing big tech firms give rise to. I am hoping Stone revisits the company again for the post-Bezos book.

As things stand at the moment, it will be interesting to see how Jassy manages the transition in not just the post-Bezos Amazon but also the many businesses of Amazon in a post-Covid world.