Book Summary — The Everything Store

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1 paragraph summary:

An incredible read about the beginnings of Amazon all the way to the current day — how it started, the marketplace, rise of the internet, engineer poaching, involvement of Google, invention of the Kindle (took a long time!), AWS and how it came to be — incredibly history book of such important moments.

On top of that so many awesome lessons from Amazon:
- Acquisitions — how many failures Bezoes had, until he regrouped then became ruthless (the Zapos story is crazy)
- Ruthlessness — the behaviour that was acceptable — shouting and swearing — so hard to imagine in the current day and age
- Tax Avoidance — and how Amazon structured it all to be insanely frugal walking down the line of illegal on workers and tax treament

And of course so much more!

Regret Framework

Use the “regret minimisation framework” to decide the net step to take.

When you are in the thick of things, you can get confused by small stuff. I know when I was eighty that I would never, for example, think about why I walked away from my 1994 Wall Street bonus right in the middle of the year at the worst possible time. That kind of thing just isn’t something you worry about when you’re eighty years old. At the same time, I know that I might sincerely regret not having participated in this thing called the Internet which I thought was going to be a revolutionising event. When I thought about it that way… it was incredibly easy to make a decision.

Competitors

Look, you should wake up worried, terrified every morning, but don’t be worried about our competitors, because they’re never going to send us any money anyway. Let’s be worried about our customers and stay heads-down focused.

Stock Fluctuations

Bezos scrawled “I am not my stock price” on the whiteboard and instructed everyone to ignore the mounting pessimism. You don’t feel 30% smarter when the stock goes up, so when the stock goes down you shouldn’t feel 30% dumber.

He quoted Buffett: “In the short term, the stock market is a voting machine. in the long term, it’s a weighing machine.”

The Amazon Flywheel

Lower prices led to more customer visits.

More customers increased the volume of sales and attracted more commission-paying third-party sellers to the site.

That allowed Amazon to get more out of fixed costs like fulfilment centers and website servers.

This greater efficiency then enabled it to lower prices further.

Feed any part of this flywheel and it accelerated the loop.

Communication is Bad

Communication is a sign of dysfunction. It means people aren’t working together in a close, organic way. WE should be trying to figure out a way for teams to communicate less with each other, not more.

Bezos then vowed to run Amazon with an emphasis on decentralisation and independent decision-making.

Two Pizza Teams

The entire company would restructure itself around what he called “two pizza teams”. Employees would be organised into autonomous groups of fewer than ten people — small enough that, when working late, the team members could be fed with two pizza pies. These teams would be independently set loose on Amazon’s biggest problems.

Powerpoint vs Write ups

Powerpoint is a very imprecise communication mechanism. It is fantastically easy to hide between bullet points. You are never forced to express your thoughts completely.

Bezos announced that employees could no longer use such corporate crutches and would have to write their presentations in prose, in what he called narratives. The S Team debated with him over the wisdom of scrapping powerpoint but Bezos insisted. He wanted people thinking deeply and taking the time to express their thoughts cogently. “I don’t want this place to become a country club. What we do is hard. This is not where people go to retire.”

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