I published a book by that title [The Everything Store] in October 2013, right into the grip of the world's growing fascination with Amazon. It was an attempt to explain a classic modern business story—how the impresario of online books had fought off near ruin and upended not only retail but digital media and enterprise computing.
There were generally positive reviews and a few infamous negative ones. "I wanted to like this book," wrote MacKenzie Bezos in a one-star brickbat posted to Amazon.com. She alleged factual inaccuracies, a "lopsided and misleading portrait of the people and culture at Amazon," and criticized my characterization of Bezos's disciples, who channeled his maxims and leadership style, as "Jeff Bots." Later, I also learned that Bezos was upset with how I had handled tracking down his biological father, the now-deceased Ted Jorgensen, a man who had left his family when Bezos was a toddler and did not know what had become of his son until I visited him forty-five years later.
At the time I thought I had written the comprehensive book on Amazon's rise. But then a strange thing happened. In 2014, Amazon released the first Echo, a voice-activated speaker running the virtual assistant Alexa. The product was a hit, and over the next five years the company sold more than a hundred million devices, initiating a new wave of voice-connected computing and eliminating the odor of Amazon's previous failure in consumer gadgets, the Fire Phone. Amazon was moving from its customers' doorsteps to their living rooms, with access to their broad range of requests and questions, and potentially their most intimate conversations.
At around the same time, Amazon's AWS division expanded its line of database services to lure large enterprises and government agencies into that ethereal future of enterprise computing known as "the cloud." Amazon reported AWS's financial results for the first time in the spring of 2015, shocking investors with its profitability and growth, only to generate another round of feverish enthusiasm for Amazon's stock.
A few years later, Amazon opened its first prototype Amazon Go physical retail store in Seattle, using artificial intelligence and computer vision so customers could walk out of the store and be automatically charged rather than checking out with a human cashier. The company also expanded geographically, pushing into India, Mexico, and other countries, at massive expense and in direct competition with the largest company in the world by sales: Walmart. Meanwhile, its investments in Hollywood, via Amazon Studios, yielded critical hits like Transparent, The Marvelous Mrs. Maisel, and Jack Ryan, along with a few notorious bombs, like Woody Allen's Crisis in Six Scenes. It put Amazon right behind Netflix in the race to redefine home entertainment for a new age.
While all this was unfolding, Amazon was also reinvigorating its older businesses. Amazon Marketplace, where independent sellers hawked their wares on Amazon.com, exploded with a surge of low-priced products (including counterfeits and knockoffs) manufactured in China. In 2015, the total value of the products sold on the marketplace surpassed the value of the units that Amazon sold itself on its own site. Amazon acquired the organic supermarket chain Whole Foods Market in 2017, saving the iconic American grocer from an unwelcome incursion by activist investors, and boosting its own ineffectual efforts to crack the food business.
Amazon also remade its delivery operations, lessening its reliance on partners like UPS with its own network of sortation centers, drivers, and cargo aircraft branded with the Amazon Prime logo. And it revived its advertising business, embedding ads in its search results just as Google had pioneered a decade before to Amazon's annoyance, generating a profitable new revenue line for the company.
The Amazon that I had written about was worth nearly $120 billion at the end of 2012. The company's market capitalization touched a trillion dollars for the first time in the fall of 2018—eight times more valuable in less than six years—and returned to surpass that threshold, apparently for good, in early 2020. My Amazon had under 150,000 employees. By the end of 2020, it had an astounding 1.3 million employees. I was writing about the Kindle company, but this was now the Alexa company. Also, the cloud company. And a Hollywood studio. And a video game maker, robotics manufacturer, grocery store owner—and on and on.
While Amazon seduced investors and customers, it also moved to the center of an acrimonious political struggle that had the potential to redefine free market capitalism. Its vocal critics believed that such brazen accumulation of wealth and power had a significant cost, exacerbating income inequality and stacking the odds against workers and locally owned businesses.
"Today's big tech companies have too much power—too much power over our economy, our society, and our democracy," wrote Senator Elizabeth Warren at the debut of her unsuccessful bid for the White House in 2019. "Amazon crushes small companies by copying the goods they sell on the
Amazon Marketplace and then selling its own branded version." She urged that Jeff Bezos's meticulous creation be forced to spin off Zappos and Whole Foods Market and be stamped into smaller parts.
This excerpt is from the paperback edition.
Monday we begin the book The Power of Conflict: Speak Your Mind and Get the Results You Want by Jon Taffer.