This is a collection of the most interesting passages I read in books and articles on a daily basis. It spans many disciplines, including art, artificial intelligence, cognitive psychology, behavioral economics, finance, leadership, marketing, neuroscience, startups, and venture capital.
I occasionally add a personal note.
“Moving ads to the top of search pages was the game changer,” said an Amazon computer scientist who worked on the ad business. “Sponsored products would be nothing close to what it is today if that decision wasn’t made, and Jeff was the one who signed off on it.”
This is a classic case of defending the status quo. Here’s a simple way to tell if that’s what you’re doing: imagine for a second that milk was a new product, designed to take on existing beverages made from hemp, oats or nuts. Defending oat milk against the incursion of cow milk is pretty easy.
The author could point out the often horrific conditions used to create cow milk. “Wait, you’re going to do what to that cow?” They could write about the biological difficulty many people have drinking it. Or they could focus on the significant environmental impact, not to mention how easily it spoils, etc.
Or imagine that solar power was everywhere, and someone invented kerosene, gasoline or whale oil.
Bezos and other Amazon executives wanted the whole effort to move even faster. They set “S-team goals” such as requiring the team to grow product selection by a certain amount. Around five hundred such goals were established inside Amazon and approved by the leadership committee at the end of every calendar year, establishing the most important metrics for each business unit at the company. Teams that owned those goals were required to supply frequent updates on their progress and explanations if they fell behind schedule. It was a crucial way that the S-team managed a sprawling amalgamation of loosely affiliated business units.
Herrington’s memo pointed out that Walmart, Carrefour, Tesco, Metro AG, and Kroger were the world’s five largest retailers at the time. “All of them anchor their customer relationship in groceries,” he wrote. If Amazon’s retail business was going to grow to $ 400 billion in gross merchandise sales, it needed to transform a model based on infrequent shopping for relatively high-priced goods to more regular shopping for low-priced essentials. In other words, if the company was going to join the ranks of the biggest retailers, the S-team had to figure out a way to profitably sell supermarket items. If they didn’t, Amazon was going to be vulnerable to rivals who already enjoyed the shopping frequency and cost advantages of the grocery model.
2019: 49 percent of the top ten thousand largest sellers on Amazon were based in China, according to Marketplace Pulse, a research firm that monitors the site.
The group on the fashion leg visited an apparel factory that was making $ 9 sport coats for the retailer Abercrombie & Fitch, which then sold them at retail for $ 500. The same factory was also selling the coats with a different button pattern directly online for $ 90—and still making a fat profit.
“It was unbelievable what we saw,” Faricy said. “We realized that people charging ten to fifty times what products actually cost to make, based on a brand name, wasn’t going to last and consumers would be the winners.”
The perennial debate inside Amazon was pitting the quality of products versus the quantity. The fights often had to be arbitrated by Faricy’s boss, senior vice president Sebastian Gunningham, or by Bezos himself. Both leaned heavily toward expanding the breadth of selection as fast as possible. “Jeff and Sebastian’s view was that all selection is good selection,” said Adrian Agostini, a longtime marketplace executive. “They wanted rules in place: don’t offend, don’t kill, don’t poison. Other than that, you take what you get and let customers decide.”
“We do not charge more because we can’t figure out how to make it cost less. We invent to make it cost less.”
Human intelligence is the brain’s ability to learn a model of the world and use it to understand new situations, handle abstract concepts, and create novel behaviors, including manipulating the environment
With the benefit of hindsight, Hykes believes that Docker should have spent less time shipping products and more time listening to customers. “I would have held off rushing to scale a commercial product and invested more in collecting insight from our community and building a team dedicated to understanding their commercial needs,” Hykes said. “We had a window in 2014, which was an inflection point and we felt like we couldn’t wait, but I think we had the luxury of waiting more than we realized.”