Wednesday, April 9, 2014

A fascinating look behind the scenes at

Two articles about have stirred my curiosity in recent days.  They're interesting enough in and of themselves, but even more so in the light of a discussion about Amazon - in comparison to Google and other hi-tech firms - that was never supposed to be revealed in public.  Let's look at the articles first, then at the 'behind-the-scenes' view.

The first article, from Forbes, is headlined 'Inside Amazon's Idea Machine: How Bezos Decodes Customers'.  Here's a brief excerpt.

More than a century ago another legendary retailer, Chicago’s Marshall Field, championed the fatalist’s slogan: “The customer is always right.” Bezos, perhaps more than anyone, has taken that mantra into the digital era, incrementally cracking one of the business’s great mysteries: figuring what customers want before the cash register rings and then making those insights pay off. In an era when high-flying tech companies outdo each other with worker perks, no-frills Bezos is proving the potency of another model: coddling his 164 million customers, not his 56,000 employees.

Jeff Bezos’ managers at Amazon find him formidable enough. But the figure that overwhelms their lives goes by the internal nickname “the empty chair.” Bezos periodically leaves one seat open at a conference table and informs all attendees that they should consider that seat occupied by their customer, “the most important person in the room.”

There's more at the link.

The second article, at Teleread, builds on the Forbes article along similar lines:  'For Jeff Bezos, customer convenience is king'.

Every time Amazon does anything out of the ordinary, pundits are quick to jump all over it and claim the company has jumped the shark and the End Times are nigh. They said that back when Amazon first came out with the Kindle—which proceeded to revolutionize the struggling e-book market and give Amazon such monopoly power in the e-book world that the big six publishers had to collude illegally to get it to stop. And they just keep saying it. What are they thinking—that if they keep on predicting Amazon will go down the tubes, sooner or later they’re bound to be right?

As a company, Amazon is doing amazingly well. It might not be showing much of a profit in terms of earnings per share, but it just keeps on getting bigger and bigger, pouring all of its money back into further development so it can get even bigger than that.

What, do people seriously think Amazon runs at a razor-thin margin because it can’t earn enough money to make a profit? Does anyone really believe that in any sense other than wishful thinking? If that were the case, would Amazon be such a problem to all its competitors and some of its suppliers at this point? If Jeff Bezos ever wants to turn a huge “profit,” all he has to do is flip a switch to slow down building out for a while, and suddenly Amazon will have more money left over than it knows what to do with.

Again, more at the link.

How does Amazon do it?  Part of the answer was revealed - inadvertently - by an information technology specialist, Steve Yegge, who used to work at Amazon and is now at Google.  He published a major-league rant on an internal network at Google, intending it for colleagues only, but mistakenly published it for all the world to see.  He took it down almost at once, but a colleague preserved it and has re-posted it.  It's seriously interesting for technology workers and IT specialists.  Here's a very brief excerpt from his very long (and sometimes profane) rant.

I was at Amazon for about six and a half years, and now I've been at Google for that long. One thing that struck me immediately about the two companies -- an impression that has been reinforced almost daily -- is that Amazon does everything wrong, and Google does everything right. Sure, it's a sweeping generalization, but a surprisingly accurate one. It's pretty crazy. There are probably a hundred or even two hundred different ways you can compare the two companies, and Google is superior in all but three of them, if I recall correctly.

. . .

But there's one thing [Amazon does] really really well that pretty much makes up for ALL of their political, philosophical and technical screw-ups.

. . .

Amazon [has] transformed culturally into a company that thinks about everything in a services-first fashion. It is now fundamental to how they approach all designs, including internal designs for stuff that might never see the light of day externally ... There are without question pros and cons to the SOA approach, and some of the cons are pretty long. But overall it's the right thing because SOA-driven design enables Platforms.

That's what Bezos was up to with his edict, of course. He didn't (and doesn't) care even a tiny bit about the well-being of the teams, nor about what technologies they use, nor in fact any detail whatsoever about how they go about their business unless they happen to be screwing up. But Bezos realized long before the vast majority of Amazonians that Amazon needs to be a platform.

You wouldn't really think that an online bookstore needs to be an extensible, programmable platform. Would you?

Well, the first big thing Bezos realized is that the infrastructure they'd built for selling and shipping books and sundry could be transformed an excellent repurposable computing platform. So now they have the Amazon Elastic Compute Cloud, and the Amazon Elastic MapReduce, and the Amazon Relational Database Service, and a whole passel' o' other services browsable at These services host the backends for some pretty successful companies, reddit being my personal favorite of the bunch.

The other big realization he had was that he can't always build the right thing. I think Larry Tesler might have struck some kind of chord in Bezos when he said his mom couldn't use the goddamn website. It's not even super clear whose mom he was talking about, and doesn't really matter, because nobody's mom can use the goddamn website. In fact I myself find the website disturbingly daunting, and I worked there for over half a decade. I've just learned to kinda defocus my eyes and concentrate on the million or so pixels near the center of the page above the fold.

I'm not really sure how Bezos came to this realization -- the insight that he can't build one product and have it be right for everyone. But it doesn't matter, because he gets it. There's actually a formal name for this phenomenon. It's called Accessibility, and it's the most important thing in the computing world.

The. Most. Important. Thing.

More at the link.

In a follow-up post, Mr. Yegge acknowledged that he hadn't intended to publish his rant for public viewing, but commented that Google hadn't acted against him in any way for his criticism of their way of doing things.  He offered some very interesting insights into Jeff Bezos as a person, and as a business leader.  Again, here's a short excerpt.

Bezos is so goddamned smart that you have to turn it into a game for him or he’ll be bored and annoyed with you. That was my first realization about him. Who knows how smart he was before he became a billionaire -- let’s just assume it was “really frigging smart”, since he did build Amazon from scratch. But for years he’s had armies of people taking care of everything for him. He doesn’t have to do anything at all except dress himself in the morning and read presentations all day long. So he’s really, REALLY good at reading presentations. He’s like the Franz Liszt of sight-reading presentations.

So you have to start tearing out whole paragraphs, or even pages, to make it interesting for him. He will fill in the gaps himself without missing a beat. And his brain will have less time to get annoyed with the slow pace of your brain.

I mean, imagine what it would be like to start off as an incredibly smart person, arguably a first-class genius, and then somehow wind up in a situation where you have a general’s view of the industry battlefield for ten years. Not only do you have more time than anyone else, and access to more information than anyone else, you also have this long-term eagle-eye perspective that only a handful of people in the world enjoy.

In some sense you wouldn’t even be human anymore. People like Jeff are better regarded as hyper-intelligent aliens with a tangential interest in human affairs.

But how do you prepare a presentation for a giant-brained alien? Well, here’s my second realization: He will outsmart you. Knowing everything about your subject is only a first-line defense for you. It’s like armor that he’ll eat through in the first few minutes. He is going to have at least one deep insight about the subject, right there on the spot, and it’s going to make you look like a complete buffoon.

Trust me folks, I saw this happen time and again, for years. Jeff Bezos has all these incredibly intelligent, experienced domain experts surrounding him at huge meetings, and on a daily basis he thinks of shit that they never saw coming. It’s a guaranteed facepalm fest.

More at the link.

I found all four articles fascinating.  Read together, they offer a rare glimpse into the fast-moving world of Internet commerce, and how businesses have to rebuild themselves in new and non-traditional ways if they're to survive in the modern world.  All four are highly recommended reading.



Rolf said...

It all sounds great... until you realize he's training people, his customers, to be dependent, to think as last-second, non-robust consumers. Just-In-Time manufacturing took all the "slack" out of the supply chain, making it more vulnerable to disruptions because there IS no "stock on hand," and he's doing his best be build into "the people" at the very end of the chain a "order it when you need it mentality, a nearly "anti-prepper" mentality. It's one of those things that works very well.... until it doesn't, and then it fails catastrophically.

It is an idea that mixes badly with your post on the time between major wars.

Peter said...

@Rolf: In one sense, you're right. On the other hand, that's the society in which we live today. Those of us with enough sense to recognize its shortcomings can take steps to rectify them in our own lives . . . but we can't live others' lives for them. They've got to make their own choices, and kill their own snakes.

The 'system' will undoubtedly come to a grinding halt if the supply chain dries up. However, that's the reality we're dealing with. It's up to us to make sure that our personal 'supply chains' are a bit more robust.

George Anders said...

Nice post. Thanks for the link to the Forbes piece. I'd recommend Bezos's annual letters to shareholders, too. They're not quite as jokey or as generally applicable as Warren Buffett's, but they do allow for some interesting glimpses into what Bezos thinks is new and intriguing. I think there's another one due out in a few weeks.