Maybe not right now, but I wouldn't ever underestimate Bezos.
Musk and Bezos are both people I wouldn't bet against, but they're so drastically different in their styles. Musk is flashy, but gets shit done. Bezos knows how to get shit done quietly... and suddenly he's dominated and bought everything around you.
Amazon has a load of terrible products. Even their store is getting worse and worse. The fire phone was a complete flop. Amazon cloud drive and music are not at all at the same level as their competitors. Google Home is looking as though it's going to surpass the Echo.
Amazon is successful because they are fine with taking losses, only just recently making a small amount of profit compared to their scale.
Amazon can fail a lot because money for private companies is a lot more expensive and harder to get than for public companies. Musk is playing on hard mode because he wants to retain control.
Musk claims he won't take SpaceX public because public investors have short attention spans and would require profit/return too soon. Because he wants goals set out further than the next quarter, he has kept the company in the hands of like minded investors.
That may just be bloviating on his part, but it does seem at least sensible on the surface.
It means the shareholders decide who is control. This is not about having control now, it's about retaining control.
Musk doesn't want to be beholden to shareholders because their interests (profit) might not align with his objectives (Mars). Presumably Bezos does not fear any such misalignment of interests between himself and his shareholders.
You need both. A visionary alone needs the discipline that comes from having to choose which vision of many and finish it. A financial focused manager will never bet on any but the most obvious ideas and thus lose when someone else makes something work.
Ideas are easy. Implementation is hard. The least creative person has enough ideas to bankrupt even the biggest company if you start a team to implement them all as the idea occurs (a car obviously takes more people than a paper notepad, but you should expect to have all those ideas)
A visionary who never thinks about money will eventually run out, or worse bounce between ideas and never finish one. The person who only thinks about money will not invest in the things required to continue making money.
I've heard it stated that you need a visionary CEO and a close second who is a financial realist. The visionary has lots of great ideas, the financial realist reigns them in and forces the visionary to choose which vision(s) to focus on and finish; and let the others go. This works great until the visionary CEO steps down (dies, retires...), when you put the realist second in charge all the visionary projects are stopped, for a couple quarters the company makes more money, but there are no visionary things in the pipe so the company dies a slow death.
I think more failures than successes can be interpreted as a healthy appetite for product experimentation. The other option in todays world would be not to innovate except through purchases of established product families from other companies and acquisitions.
So yes the phone failed, but how about the 50 services they offer on AWS? Failures on their part are heavily publicized, but successes move along silently.
What you describe is exactly how you come to dominate retail business and become monopoly power online.
Amazon's reference point is Wal-Mart. They are in ever expanding price cutting small margin business.
Another good comparison in Microsoft in 80's and 90's. MS dominated over IBM, Apple and others several decades with sup-par product everybody hated by attacking and destroying potential competitors, not by improving products.
> They are in ever expanding price cutting small margin business.
If you sink all of your profits into expansion, then on the books you made zero profit. If you made zero profit, you pay zero taxes. This is a common tactic with farmers. They use this year's returns to buy next year's supplies. If amazon stopped growing and suddenly reaped their profits, there would be a big tax bill to go with it.
There's a middle ground: don't grow as much, and pay some taxes. Not saying it's optimal (for any party, or on any axis), but it's not like there's just this binary choice of "growth consumes all profit" and "don't grow at all."
This isn't how accounting works. You can't just buy a warehouse and expense it in year one. You have to depreciate it overtime. You can look at their FCF its about 10 billion. Their market is 50x of that. For comparison walmart is ~20 billion and they are worth half of Amazon.
That doesn't align with the actual history at all. One of the extremely well known, defining characteristics of Microsoft in the 1980s and 1990s, was releasing a weak product that they then improved substantially over several versions. Your premise is they didn't improve products as a means to conquer, when that's exactly how Windows took its market share after a horrible initial release that flopped: it got a lot better; ditto for plenty of other examples such as IE vs Netscape.
It applies to at least: MSDOS, Windows, Office and most of its products, Internet Explorer, SQL Server
In fact it was so well known that's how things worked, it was a saying that they only finally got things right by version three.
MS-NET, LAN Manager and MS/IBM joint effort with OS/2 LAN Server were all inferior to Netware. MS battled decades against Novell with inferior products and shady market practices eating their profits. Finally Novell was taken down and crumbled when networking became a core system component in PC operating systems.
Throwing money against to superior product from smaller competitor until you can eat their lunch is proven tactic.
The guy who does 100 things and wins at 10 still comes out above the guy who does 2 things and wins at 2. This is despite the previous guy having a failure rate of 90% and latter guy having a success rate of 100%.
Well, he also has his stock in a company with a P/E ratio of 257.38, that's one very large bet. Cranking up earnings is clearly possible, but Amazon is also showing signs of imploding as for example people simply don't trust fulfilled by Amazon to mean anything.
The Kindle is good and Echo is great. Every other hardware product they've ever made has been complete dogshit, which is why the packaging for most of them advises buyers to set them on fire.
The newer kindles are kinda shitty for the consumer, much better for Amazon no doubt.
The switch to touch screen and adverts all over your library & store is really jarring. So much so that my tech friends now just buy second hand kindle 4s when their old ones break.
It's possible that library lock in will stop them migrating away from kindles when the supply of kindle v4s runs out but not I think certain.
If so, point them to Calibre. While I currently use the Kindle app to read my books, I have made it my "policy" to on each purchase ensure that I am still able to break the DRM and store a backup copy in a non-DRM'd format. The moment that changes, I'll stop buying Kindle books.
Some purists would prefer to avoid buying DRM'd products in the first place (and I do when I have an alternative), but this is "second best" to me - I'll tolerate easily breakable DRM, but not one I can't remove.
The upside is reduced lock-in - it may affect usability (the Kindle app is still the best reader app I've used for Android as well - if anyone has recommendations for any actually usable ebook reader Android apps I'm all ears) but I know I can read all my books on any device, using free/open apps.
Calibre, as I mentioned [1]. I don't know if I should link directly to DRM removal tools here, but if you search for DRM plugins for Calibre they're readily available.
A while back I stopped using kindle and migrated my library to epubs. Apple's ibooks reader is much better and I didn't find much benefit out of eink devices. With ibooks you can sideload your own epubs, so it isn't much of an issue. Adobe reader also has a good reader mode for pdfs. Also I have iCloud library for my sideloaded books, so it's all cloud synced.
The only real benefit of kindle is the library selection and prices. The ereader software itself is mediocre.
I agree with that last point. Beyond that the reader and the store could be better integrated. It's surprisingly difficult to, say, find out if any of my ten favorite authors has released a book since the last one I read.
I don't mind the touch screen. I very much do mind ads, but you can pay $20 more to not have any. If anyone says they don't like ads but isn't willing to pay slightly more money to not have any, then I have to question their sense of priorities.
>Amazon is successful because they are fine with taking losses, only just recently making a small amount of profit compared to their scale.
I thought this tired narrative was almost over? For decades Amazon chose to invest in infrastructure and logistics.
Now they're "making a small amount of profit compared to their scale"? Who's at that same scale setting the bar for profit? Remember that "scale" doesn't equal revenue.
I think Amazon cloud is a mixed bag of excellent and terrible.
I love EC2 but not a big fan of their other more advanced services. I tried Azure, Digital Ocean, GCE... for IaaS and they just didn't have the same richness of features and flexibility as EC2.
The vast majority of SpaceX's current success is attributable to government funded research and experiments (the entire space program for the last several decades) and government funding (currently) that Musk is taking advantage of. They don't have more mishaps because the innovations they're undertaking are small relative to the existing body of research and experiment, and built on a solid foundation that already exists.
It's popular in some circles (not directed to your comment, here) to lionize Musk as some exemplar of how the government sucks and to promote privatized space exploration but that's just not in line with reality as it actually is.
The vast majority of government research for space launches was done by the Nazis. Everyone has access to that and NASAs research, yet...
SpaceX is currently launching space shuttle sized payloads for a price that is over 40 times less than the shuttle, and less than half the cost of other private competitors, and at a cadence none of them have ever achieved.
Re-use is the key launch technology of the future and its greatest and only commercial application has been done by SpaceX.
> The vast majority of government research for space launches was done by the Nazis
The extreme majority of government research for space launches has occurred since 1950. The extraordinary resources put into the US space program, including the research necessary, makes the Nazi efforts look hilariously trivial by comparison.
They're a private company the same way any company that is effectively funded by government contract is. Technically it's true, but they haven't demonstrated actual viability in the private market (much less profitability). And the achievements you note have little or nothing to do with their status as a private company and almost everything to do with taking advantage of government research from the past half-century.
> the achievements you note have little or nothing to do with their status as a private company and almost everything to do with taking advantage of government research from the past half-century
I'm generally for private enterprise, and It seems rather questionable to me to say that everyone who takes any Government money under any circumstances is equivalent. Musk has indeed taken a lot of Government money, and more importantly IMHO hired a bunch of people who got their experience in space and rocketry at NASA, but does that make him more or less private than, say, Lockheed-Martin or the other usual contractors?
I would say that the aerospace companies doing cost-plus contracting for loosely defined projects with fuzzy requirements and no prospect for sustainable private operations are in a very different business than companies that do fixed-price contracts with the Government for specific services with an eye towards capturing a private market in the future. The cost-plus guys are IMHO government agencies in all but name, plus some fat paychecks and kickbacks going to a few connected people. The fixed-price guys are IMHO normal private companies that happen to contract with the Government for their normal profitable services sometimes. I don't think it makes much difference if the first business that funded initial development was all government contracts - the private market for launch services is real, and SpaceX has a plan for making a profit in it and is progressing towards capturing a solid market share in it.
You are quite right that the space launch industry and the technology it uses wouldn't exist without government research and funding. That's perfectly true.
But it's also true that without Musk there would currently be no prospect of significant rocket component reuse for another generation. Rocket launch costs would be double or triple what they currently are. It also seems very likely now that within my lifetime we will see launch costs to orbit close to 100th what they were just a few years ago. Some of us think that's a good thing.
A graph of the improvement in rocket technology from 1945 to now would look like a hockey stick early on, levelling off more or less flat for the last 40 years. Musk has bent that curve back up into a hockey stick shape again.
I'd argue that Musk, using the facade of "Private Market Hero", has made government spending on research in this area palatable enough (again) to make progress. Sure, he's a key personality, but it's not like he's accomplishing these things outside of the context of being heavily funded and guided by the government.
So what? Do none of the achievements of the engineers that drove the US space programme through the last century 'count' because they were government funded? What a bizarre world view.
As it happens none of the re-usability programme (Grasshopper, the drone ships, etc) was actually funded by the government. That came from around a billion dollars of private capital investment. Musk talked about this in a TED talk.
Most kinks of space travel were worked out in the '60s and spacex is pushing for reliability specifically, not for payload capacity - coincidentally that's where they're pushing the envelope and getting most of the failures.
Not really. In the 60s we basically verified that certain rocket and engine designs work and that we could go beyond earth orbit. Creating a reliable, long lasting and reusable space rocket/vehicle is, in my opinion, orders of magnitude more difficult. Just look at the Space Shuttle failure as an example of trying to do space on the cheap. Also, remember it took about 5% of the US GDP in the 60s to put men on the moon. I believe in Musk but trying to make space cheap is just simply a difficult problem and one I wished we funded more.
A reliable, long use rocket is not exactly new either. Delta II first launched in 1989, 153 launches, 151 successes. There will be another launching this fall for JPSS-1.
SpaceX also operates at a seemingly breakneck speed because they've taken a lot of production in-house. A lot of places contract out in order to get things manufactured, and that takes a lot of time and money because you're going back and forth instead of being able to directly take a design and go to a technician for manufacturing.
I thought amazon was also a bubble of some kind, relying on aggressive growth to swallow the market and then change it's policies because it's unsustainable ?
Musk seems a little more down to earth (sic) here.
Amazon didn't turn a profit for years because they were heavily reinvesting in more/better infrastructure (their "fulfillment centers") and services. One of the biggest services out of this reinvestment is AWS, which AMZN built for AMZN, and then realized it was such a good product they started selling it to others (also part of Bezos' ethos and their large initial costs: if you can't sell your internal tools to other people, you shouldn't be using it)
However, Amazon is making a profit these days, and is still growing, so I think it's sustainable.
Uber, meanwhile, is/has been subsidizing many/most rides with VC money in order to get market share, which is an entirely different thing and more in line with your perception.
Musk and Bezos are both people I wouldn't bet against, but they're so drastically different in their styles. Musk is flashy, but gets shit done. Bezos knows how to get shit done quietly... and suddenly he's dominated and bought everything around you.