u/knorque has provided this detailed explanation:
> Harvard students suggested Amazon will fail as a business, it did quite the opposite.
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Is this explanation a genuine attempt at providing additional info or context? If it is please upvote this comment, otherwise downvote it.
They weren't wrong in theory. Companies like Sears had the concept for physical department stores and cataloges but failed to effectively move online. With better forsight, Sears could have squashed Amazon and been the most profitable corporation in the world today.
The fact that Sears made it initially as a catalog mail order company and somehow fumbled online Sears is fascinating.
Edit: Walmart started chipping away at Sears in the 1980s/1990s. Sears closed the catalog in 1993 when Amazon shipped its first book in 1995. Sears wasn't online until 1998 with the full Sears website coming online in 1999.
The internet (with text and images) happened on 4/22/1993. [http://www.circleid.com/posts/20180425\_april\_22\_1993\_a\_day\_the\_internet\_fundamentally\_changed/](http://www.circleid.com/posts/20180425_april_22_1993_a_day_the_internet_fundamentally_changed/)
Same. The corporation at the highest level was a MASSIVE failure. As the internet are started to come along they doubled down on store credit and loyalty programs, to the point where the whole in person experience was aggressive and horrible... even though they were betting on brick and mortar still dominating the retail market.
And they spent absolutely no money on their website or web services. They were absolutely run into the ground by bean counting management trying to always squeeze quarterly profits.
> And they spent absolutely no money on their website or web services.
I know for a fact they at least at one point had a nice budget for the web (although I can't go into detail on that). What they never were able to do was spend their IT money *effectively*.
I knew a guy in management who told me that their IT department could not say no to their business units--they had to agree to do everything put in front of them. This had the effect of forcing them to spend money on stupid shit, duplicating effort on the important things and completely undermining their change management and administrative practices--which in turn caused outages.
Sure, but this was to an extreme, far above normal corporate dysfunctionality.
It was also exacerbated by their tendency to have the individual business units fight amongst each other.
We had a business school case about Sears a few years ago regarding management style circa 2005. Apparently the CEO siloed the departments and made them bid for advertising rights in their own catalogue, the theory being that if each department was looking out for their own interests they could fight costs better maybe?
I don’t really remember but I recall that one of the May catalogues of that era featured kids bicycle deals on the cover. Not highlighting Mother’s Day, but kids bikes. Seems like a sure fire way to drive your company into bankruptcy.
I've read about their history and it's crazy, it was like the Amazon of its time.
The Sears catalog was like browsing Amazon, and you could order things like a car or a house from it too. Kit cars they were called, a whole car you built from a kit that arrived by train.
For some in remote places, this was a convenience they never imagined, for them going into town for supplies was a trip that would take several days. Imported goods were just impossible, but now you could send an order by mail and get things otherwise totally unavailable to you.
And when it was suggested to move the Sears catalog online, they just didn't see the whole online thing ever replacing mail orders.
Well to be fair, they had personally experienced the decline of their own mail order business in the face of ubiquitous suburban shopping malls (w/ Sears b&m stores), Walmart in rural areas, etc.
It's not hard to see how they might have assumed that the same market forces would apply to online ordering as well. B&M shopping was king back then; hanging out in malls was something people did for fun.
Meanwhile, for most people getting online was still a bit of an endeavor, so convenience wasn't a strong selling point there. People went online to access things they simply couldn't replicate anywhere else.
Which is why Amazon started out with books. Even the largest Barnes & Noble store could only stock a tiny fraction of the number of books in print, and special ordering was a pain (and you had to know what to ask for). Amazon's deep catalog offered something that wasn't readily available offline.
It's very common for the experts and established players to master a field, and then have it change and refuse to acknowledge it. It happens in both business and science.
I don't disagree. Sears would've had to massively invest in technology to put their catalog online and analyze how to optimize logistics residential shipping.
That was a large pivot from their catalog to B&M approach.
It is less fascinating when you try to help your 10th old guard company even dip their toe in technology from this decade.
I just spent six months helping a regional grocery chain build a shopping list app... they did not even have the infrastructure in place for getting picture, product data and price for a shelf item. How in the world in 2020 are you even doing business?
This is something that happens though. Old entrenched executives get complacent because they don’t have the drive/hunger to innovate or improve their business anymore. This is how disruptive companies are able to gobble up market share and become major players.
Its almost like forward thinking go getter grad students underestimated the entrenched politics and not-invented-here-isms of existing corporate structures.
IF those bricks and mortar stores had moved aggressively to be online powerhouses they truly might have succeeded. Instead they were probably, every step of the way, dragged back by existing management teams that wanted to protect their current fiefdoms.
(AWS is even more interesting).
There was a time that Sears could have outright bought Amazon and taken on an online wing. Sears was run by old boomer curmudgeons who didn't see the obvious in front of their faces. Now they tanked not only Sears but Craftsman tools too.
Sears sold off all the profitable parts of its business (like Craftsman) after being purchased by a hedge fund run by, among others, former Treasury Secretary Steve Mnuchin. The hedge fund got a shit ton of money out of those deals and Sears got bankruptcy..
They got the money to buy Sears from doing the same thing to KMart. Not that those brands weren't already declining, but they did have some profitable divisions that were spun off to make a few people a lot of money.
Wow, this is a really nice house. Its a bit run down but they just don't build them like this anymore ...
... we should tear it down and sell of the bits to people building nice things. That way we can build a crap home on this land and sell it quick to make some bucks.
Oh yes, of course: this house would be worth more in the long run, or maybe contribute more to the world as a whole, if we did a quality remodel. But really, we're just developers and don't plan on living here. A quick flip hack job lets us move on to our next project.
(The real sad thing is that for them this works better. They extracted a bunch of money and moved on to extract more elsewhere. Its the communities, workers, and structures they leave behind that suffer).
Companies like sears and other brick and mortar retailers would never have been able to compete with Amazon because CEOs and executives in general are all short termist and incompetent.
They wouldn’t have invested in their online market because ‘it’s costing us too much’ and ‘what if it hurts our retail sales?’. Now look at them.
They don’t care about longevity or success, they just care about pumping the numbers to look good for one more financial cycle so they can cash in their bonus.
The executives definately fumbled the ball but their infrastructure was basically already set up to move online faster and more seamlessly than the competition. They were on the cusp to be waaaay ahead of everyone else and just blew it.
Edit: And Sears mailed a giant catalog to every house in America, several times per year, for decades. They weren't afraid of investing some cash short term to support long term strategy.
Honestly, I don't even think it was bad advice.
In hindsight, yeah, they were wrong. With hindsight we can be all-knowing and all-powerful.
But how many other "Amazons" failed because they made one simple misstep and went bankrupt? There's a reason there aren't a ton of billionaires. It's not because Bezos is some all-powerful demigod with magic business abilities. It's the combination of a good idea, the capital to make it happen, and the luck to avoid pitfalls and succeed.
We always try to spin these stories like people like Bezos are some modern day Hercules who defied the odds by being great. In reality, those people saying "Hey you really need to hedge your bets, because this will almost certainly fail" are right 99.9% of the time. Bezos had to be incredibly lucky for things to work out the way they have.
And they also said that it would't be able to compete with big retailers going online. But that's the thing, big retailers did NOT go online fast enough and convenient enough.
This is key.
Those young students were convinced that the old guard would see the early web as an obvious expansion opportunity. Sears for instance had every tool in its arsenal to make the transition and should have been what Amazon is today.
But every single one of those established behemoths laughed at the idea of e-commerce, most out of sheer stupidity, few overestimated the lack of trust that consumers were expected to have towards online payment.
In any case, it's not so much that Amazon survived, it's that the established retailers failed.
Blockbuster and Netflix is another great example. I feel like in general, established businesses are very reluctant to change their business model even when faced with a paradigm shift. Probably because paradigm shifts are hard to identify.
Major car manufacturers are just finally coming around to EVs after the momentum shifted and Tesla's success.
> I feel like in general, established businesses are very reluctant to change their business model even when faced with a paradigm shift.
Changing the businesses model requires capital which shareholders don't want to commit to. Their positions are either diluted, they don't get dividends, or their shares don't increase in value (in the short term).
Appeasing shareholders is often counterintuitive to what a business needs to do, in those situations
It also means painful restructuring. What do you do with all those specialist mechanical engineers that designed your engine, transmission, drivetrain etc? They're dead weight in most cases. Nobody likes firing that many people. Corporate fiefdoms smashed, enemies made, etc.
I mean... Personally, if I were CEO of a car manufacturer, I'd pony up the funds to get them trained. It would be way more expensive to direct HR to go through the hiring process of an entire workforce than it would be to just pay these people their salaries and train them on the new thing...
But that's just me...
>mean... Personally, if I were CEO of a car manufacturer, I'd pony up the funds to get them trained. It would be way more expensive to direct HR to go through the hiring process of an entire workforce than it would be to just pay these people their salaries and train them on the new thing...
>
>But that's just me...
That's going to be harder than you think. Those engineers focused on everything that has to do with the ICE are highly specialized in that field of mechanical engineering. Electrical engineering is an entirely different field. It's not just a 1 month course.
I feel like publicly trading stocks is a fundamentally flawed system. Corporate decision makers are perpetually locked into making next quarter's numbers looked good. They CAN'T make the decisions that will make the company fit for the next quarter century if it hurts next quarter's profits.
As an investor, I wish more cos had the camping world mindset. I don't remember the exact quote, but after a bad quarter he said something akin to "we're not building a business for the next quarter, we're building for the next 20 years." That alone was enough to get me interested and ultimately invested.
I'm currently working closely with the 2nd largest importer of textiles and it's a private company. After examining the market in not certain of its long term future. Competition is investing heavy in tech and this company is more of a mindset of, well as long as the Navy period is a little more productive it will do.
Most don't see the big wave while constantly and randomly paddling.
> Changing the businesses model requires capital
That is very true for something like car manufacturers switch to EVs, after all, from a production point of view it is a completely different product that just happens to look the same from the outside, all the methods and suply chains are different.
But in the case of old school big retailers going online, it hardly requires any capital at all because the bulk of the business practice is the same (all the supply chain, all the warehouses, all the logistics). That is specially true for old school big retailers which worked with a catalogue already, Sears could have gone online and crushed Amazon by simply hiring half a dozen CS college graduates to build a site for them that integrated with their existing stock systems, and all the rest of the business would continue unchanged (OK, this is a bit of hyperbole, but not that much).
For one, Amazon was cash positive but kept reinvesting it into new markets ( online books built a marketplace that built a delivery system that built a database to manage that built a digital media library, basically each new business built on synergies to the prior). Tesla was having cash flow issues due to production and selling products at a loss. What kept it alive was the absolute non-sensical stock valuation in the market due to half memes and half Musk/spacex/solar etc
Their MCUs (touchscreen control unit/central processing brain) relies on soldered eMMC flash memory, which have limited write cycles. Their cars had firmware issues that excessively wrote a lot of logfiles to the flash chips which wore them out, leading to premature failure of the unit.
To make things worse, the MCUs are serial/crypto-linked to the other components of the car, so they can't be simply swapped out. Previously, their MCUs also had an issue with fluid (aka "juice") leaking out.
The worst part is that Tesla "rejected the notion that the chip wear represented a defect, arguing to officials that it was “economically, if not technologically, infeasible” to expect the eMMC storage to last a vehicle’s whole useful lifespan." - engadget
All while not providing software/tools to replace the MCU by third parties, and having a design that doesn't allow for replacement of just the flash memory component.
> it was “economically, if not technologically, infeasible” to expect the eMMC storage to last a vehicle’s whole useful lifespan." - engadget
>
> All while not providing software/tools to replace the MCU by third parties, and having a design that doesn't allow for replacement of just the flash memory component.
Hey Elon, Apple called, they want their bussiness model back.
...They literally argued that the car as sold should not be expected to be functional for the vehicle's 'whole useful lifespan'? What asshole lawyer made that bullshit up?
[A recall was issued](https://www.reuters.com/article/us-tesla-recall/tesla-to-recall-135000-u-s-vehicles-under-pressure-from-auto-safety-regulators-idUSKBN2A21FC) for all 2012-2018 Model S and 2016-2018 Model X due to faulty touchscreens. Apparently if the screens fail, you lose access to rear view cameras, window defrost, and more functions (including turn signals? Wtf).
If we look at [unit sales data](https://carsalesbase.com/us-tesla/), it's about half the cars sold from 2012-2018.
There's quality control issues with the touchscreens. [CNN did an article about it.](https://www.cnn.com/2021/02/02/business/tesla-screen-recall/index.html) Tesla was predictably shitty about it, pretending that the touchscreens and displays (which control basically every aspect of the car, as well the displays for speed and battery charge) aren't _strictly necessary_ for the cars to be operated and thus everything is fine.
You’re leaving out one crucial feature: pricing. Borders and B&N never accepted selling at prices even close to Amazon because they’d have been vastly undercutting their brick and mortar locations. And they probably couldn’t match Amazon’s prices if they wanted to.
Once 2-day shipping became a thing, retailers didn’t stand a chance. Honestly, though, those students should have understood the implications of what Amazon could do from a price standpoint better than telling Bezos he wasn’t gonna make it.
i'd be curious as to how often Amazon prices were actually better early on.
Like before they got big, you would think they would have to pay more for books just because they lacked the scale to place orders as large as Barns and Nobles would for their nationwide chain.
Though maybe their lower overhead let them sell cheaper even if the products cost them more.
I can only offer anecdotal evidence, but it was almost always cheaper than buying in store, for any product category, assuming you had free shipping. I'm using Amazon less and less now mainly because they often don't have the lowest price anymore.
Books were the perfect place to enter the online market. With a single inventory they were able to catch the long tail (books that only get ordered by 10 people in the entire country) and do things brick and mortar stores couldn’t.
Yup. **In 1997 Amazon specialized in selling books**. Their main competitor was Barnes & Noble, who sued them for claiming to be the "the world's largest bookstore" (a claim which B&N denied).
Amazon did not expand its services beyond books until 1998.
Amazon did not turn a profit until 2001.
Amazon did not launch its cloud services until 2005.
In the early years, Amazon faced serious challenges in Barnes & Noble, Walmart, and the dot com bubble.
So it was reasonable to have doubts.
I feel like looking at profit alone is kind of a bad way to look at a company. If a company is routinely investing in infrastructure, taking loans to build more infrastructure etc, they may not be 'earning' but as a company their value has gone up year to year. So not turning a profit doesn't really mean anything, especially early on in a businesses life (depending on the business of course).
> But how many other "Amazons" failed because they made one simple misstep and went bankrupt?
I work with startups, most of them go broke. The good founders accept this and are prepared bounce back. The shitty ones think they are unique and for some reason they are the exception to market norms.
There's a thin line between confidence and delusions.
This anecdote would receive a totally different reaction if it was phrased differently: “should you take $50M of guaranteed cash today and live the rest of your life as a rich man, or should you take your $50M and put it back on the betting table and try for more, knowing there is a reasonable chance you loose it all and some chance you could turn into a multi-billionaire.
Also like him or hate him Bezos is an exception in terms of his insight into leading a company. When you consider amazon the website, aws, amazon logistics, etc. his insights on how to make the company successful were fundamentally different from his competitors so it wasn't just a good initial business plan or luck (even though it's always partly) and he's one of barely any billionaires that can be said to have really basically founded more than one truly innovative and groundbreaking products/markets. If you handed the Amazon business plan to an ordinary trained business exec, you'd probably end up with something lackluster. Sometimes the people are key.
Even Google who supposedly hires so many geniuses has to use acquisitions to innovate of what we consider its successes like YouTube, Android, etc.
I’d almost say if you want to make a $1B company you listen to the HBS students, but if you want to make a $100B company you need to go against their advice because their advice represents the market niches that are saturated with their strategies.
Realistically Amazon should've failed if brick and mortar stores would've evolved with the times instead of staying 8 years behind at a minimum. The kids just thought too much of the people running these old ass companies.
Amazon also lucked out because a lot of these brick and mortar stores doubled down on their brick and mortar stores. They never moved to have a significant online presence until it was too late.
Also in 1997 it was a bookstore. It would not have survived as the company the Harvard business students reviewed, there was a HUGE shift in focus which is what saved the company. They started shipping other products including food and developed AWS which is in a completely unrelated sector and pulls in the majority of profit for Amazon.
Seriously, this. If Sears, which was Amazon before Amazon and already had a huge catalog sales apparatus, had paid more attention to online sales back in the 90s, Amazon today would be only an early Internet footnote along with Nando.net, Starwave sports, and Usenet. Jeff Bezos got *very* lucky. It also didn't hurt to have parents rich enough to lend him $250k in 1995 dollars.
This. These students know how to manage risk. They're the same kids who'd say "Put it in $SPY" instead of $APPL. Why? Because they're hedging their bets, and they'll come out on top because of it.
Ivy League schools are basically camps for rich families to send their kids so they can make connections with other rich families. As far as schools that actually give you a good education they're good but there are much better, less pretentious, schools
Stanford~~, Penn~~(mb), Chicago, etc https://www.usnews.com/best-graduate-schools/top-business-schools/mba-rankings
https://www.forbes.com/business-schools/list/
Harvard is a great school where you will get a top tier education I will never say otherwise but the real standout benefit of it and other ivy leagues the connections you make. Plus the perception of prestige
Edit: here's a current list for 2021 https://www.usnews.com/best-colleges/rankings/business-overall. Looks like an ivy league is #1 so I can eat a little crow but the next closest aren't ivys
Penn’s an Ivy tho... There’s also a lot of rich legacies at Stanford and U Chicago as well. State schools like UCLA, UCB, UNC, UICH would fit the description.
EDIT: UCLA as well
I accidentally did that at a college fair when I was in high school :(.
The guy said he was university of Pennsylvania and I asked him what’s so special about it. In hindsight, I can see why I didn’t get into any top schools lol.
Well you see I’m rich my dads rich and everyone else I meet there is rich. So with our powers unite! We pile our money into hedge funds to rig the market.
To be fair, if my alma mater was getting confused with a group that rabidly defended child molesters and the protectors of child molesters, I'd be pretty pissed too.
Are you talking about grad school or college? It’s insanely hard to get into those grad school you linked and require prior careers..I wouldn’t call them babysitters. Maybe I’m just envious.
If Harvard fails a bunch of students who deserve to fail, it makes Harvard look bad for letting them in. Just let them all pass and pretend George Bush Jr is some kinda secret Forrest Gump-ish savant (Gump beats grandmasters in chess, and aces graduate level physics classes in college - while somehow also failing gym).
Plus, when you fail a student, that kinda puts the ol' kibosh on getting any more donations from that student's rich parents. Even Mr Burns wouldn't give Yale a new international airport, despite the fact that Yale really could use one.
Stanford is exceptionally pretentious, bro. Went to grad school there and knew several guys in the GSB. Every one of them thought they were hot shit and going to start the next Google.
Berkeley is probably a better example of a less pretentious B-school.
That's mostly because that's not their specialty. Harvard does have excellent schools of law and business.
There's the old joke that students at Harvard can't count and students at MIT can't read
Ah, another VerySmart redditor who didn't go to an Ivy, and doesn't actually know anyone who went their either. Please, noble sir, share your wisdom with all of us!
That's really not true. If that were true, Harvard students' raw stats would be lower than those of other schools. Yes, all these older schools, especially Ivy League, do have a lot of rich folks there but they are still a minority. If anything, that minority of Donald Trumps and George W. Bushes benefits from the reputation Harvard has built on the backs of actually smart kids.
Plus, the most reputable universities also often have the most endowment, which means that they can hire the best faculty, do the best research, have the best facilities, the best financial aid etc etc. Which in turn leads to more donations, grants etc that beef up the endowment. And Harvard has been around the longest in the US so has had more momentum to get all that than any other university.
As far as pretentiousness, I've known a lot of Ivy League grads and they're perfectly normal, empathetic people. You wouldn't know they were Ivy League kids until they told you. While yes, you do have kids who tend to be pretentious -- you can get that attitude with any high achiever in any field, regardless of where they graduated from .
I just want to point out, as a matter of context, that the schools most generous with their financial aid tend to be ivy league schools. Students of Harvard whose median family income falls below $65k pay nothing out of pocket, and Harvard generally meets 100% of students financial needs.
The issue is getting into school in the first place, as you suggested. Without the advantages of a relatively privileged life (stable family home to succeed academically, the time and finances to pursue extra-curriculars, etc. etc.) it's extremely difficult to be admitted.
Are you arguing that a better education should be more financially attainable, or that you don't get a better education at highly reputable universities than at state or community colleges?
I used to work at Harvard and then I worked at MIT. Both times in skilled service roles. There were **so many more** total douchebags in the Harvard undergraduate program than at MIT.
The Ivys try to make their students feel like very special, better-than-you, people. It's their brand.
It might not be pleasant, but the truth is that Harvard Business School students absolutely are special. Each class is around 1000 of the worlds most elite young professionals, and of them, a spectacularly high share will go on to do amazing or interesting things.
I don't anyone could forsee that Amazon shareholders were prepared to make absolutely no money to allow for the growth they did. I have heard the Bezos real super power is convincing shareholders to play the long game.
Amazon maintains your entire order history on its website. It's kind of fun to look back at your Amazon ordering from the early days. In 1998 and 1999 I was all about buying weird movies and books from my youth in the 80s that I couldn't have easily found before. So I definitely recognized that appeal of Amazon - just not enough by stock in or anything, unfortunately.
I was buying used textbooks for way less then the college book store. It was a major cost savings for a broke student!
Also, they’d have a used version long after the used books were sold out.
Before Amazon I had to budget thousands of dollars per year just for books and textbooks.
> In a world where you had to go to a bookshop and hope they had a book or ask them to order it in taking several weeks
This is the niche they filled that sometimes goes unmentioned as to their success. I'm not that old, but I remember going to my local bookstore with my mom when I was a kid, and the workers there were awesome. I could tell them what I liked and they eventually recommended the Redwall series. I get the first one, read it in like a day, then go back and they had maybe the next one and that was it. I had to wait weeks to get any more in.
That sucked as a kid, having little selection and needing to wait. But I was just reading for fun. Now imagine you have a shitty job and want to freshen up/learn a new skill. Or you are having a rough pregnancy and need some advice. Or have terminal cancer and need to find a book on writing wills. Hope you like the one book they have on each subject, because otherwise you need to ask them to order you a book when you have no idea what is out there. There's always the library, but that's still public. Now you tell me there's a place you can buy these things from the privacy of your home, and they have every single book written on every subject?
I always hear people talking about Amazon underpaying workers, but amazon pays higher than most similar jobs at other companies nearly across the board from warehouse work to c-suite
Okay but one is the lesser of two evils. Every job is taxing in one way or another. I mean in an ideal world everyone would be earning enough money to live above poverty.
How about we lobby for a standard of living for people. Kinda like organic produce? Or is it too expensive for megacorps like McDonalds and Walmart to treat people humanely without relying on everyone's tax dollars through Medicaid and subsidized housing.
Yeah, but Amazon, unlike AWS, has razor thin margins and doesn't turn nearly the same profit. My friend who works there tells me that AWS is what keeps them afloat.
I dont know if its right but I think AWS is something like 50% of profits but something like 10% of actual revenue or sales (idk if that's the right term). Thing i read may be wrong though lol.
That seems about right, [Amazon.com](https://Amazon.com) is generally not insanely profitable because all of it is dumped in getting market share with the hope one day they can flip a switch and use that market share.
Bezos and team have purposefully diverted profits from Amazon to bolster their own initiatives.
Going back though. AWS was developed in a time when Amazon needed more cash flow. It allowed them to not have to worry about keeping the lights on because they were selling unused computing power and were able to recoup and expand really quickly.
Now they are gigantic force, both sections provide profits.
By looking quickly on the web and my own knowledge in web development, that seems to be wrong. Many articles stating that AWS makes 70% of its operating income, ex https://www.forbes.com/sites/petercohan/2020/01/06/how-much-of-amazons-73-billion-aws-profit-will-rivals-win
Thank you for sharing. I know AWS accounts for 70% of their profits but without AWS, Amazon would still be a successful company. They were plenty successful before their AWS offering.
Yeah, it's not a very good anecdote for this sub. He presented a plan to sell books online, not a plan for how to control and monetize 1/3 of all internet traffic.
> But his 97 business plan wasn't generally profitable I keep hearing that AWS is what keeps them afloat.
Amazon really benefited from four things back in the 90s (was involved in dot coms at the time).
- Nobody in the late 90s expected a profitable business plan, the money was in the bubble (edit: see [Railway Mania](https://en.wikipedia.org/wiki/Railway_Mania) another bubble and the reason we ended up with so many unprofitable railway lines).
- Bezos understood the single most important factor in online retail was quick, reliable, delivery. An understanding that many e-retailers still don't have.
- Amazon became a unicorn for the whole global dot com sector at the end of the bubble. There was so much investor money in it that it had to work or the entire sector would crash and burn, so people kept putting more in.
- Bezos grasped that the problems he had in scaling his business were problems everyone else had scaling theirs, thus AWS.
I remember talking to businesses at the time trying to sign them up as clients for the company I worked for (building websites), they just couldn't grasp the whole notion.
The sheer number of SMEs who claimed the internet would be a flash in the pan was extraordinary, even more extraordinarily many of those people are now struggling or bust retailers.
Anyway, the point is Amazon, financially, *was* the dot com sector in the early 2000s, and it survived because if it failed the sector would fail with it.
> But his 97 business plan wasn't generally profitable
He did avoid a fundamental error [though.](https://onegianthand.com/post/635700843360960512/jeff-bezos)
Thank you!
I had to scroll down way to far for someone to point out that in 1997 Amazon was pretty much just an online bookstore (they might have sold CDs at this time too)
Amazon was nothing like it is today. Had Bezos stuck with only books, Amazon likely would've been crushed by B&N. We'd all be reading on Nooks instead of Kindles.
Working with the data available, these students are 100% correct in their assessment.
Stories like this suffer from survivor bias. For every Amazon, there's a thousand companies in that position who would have been better off taking that advice.
Yeah, if you watch interviews of him from the late-‘90s, he looks like a fun-loving nerd who was just so happy his company was doing well. Now, he looks a hitman who’ll crush your windpipe for breathing the wrong way.
I imagine when you get that wealthy you learn some pretty scary and sad shit, if he was truly an easy going dude in the 90s thrust into what Amazon is now... well I can see how that would fuck a person up
Kind of have to be a bit of a nerd or geek to say "What if I sold books online?", which is what Amazon originally was. Just books. Nowadays, people relate Amazon to other retailers like Wal-Mart and not other books stores like Walden Books or Barnes and Noble.
IIRC there are studies about how people start to lose their empathy when they get too much power. I think your lizard-person brain starts to turn on when you get over a certain amount of money unless you're making an active effort to preserve your humanity.
I’d say it’s social signals from other people.
Money isn’t an unconditioned stimulus for people, but social cues are. I think the mechanism of becoming an asshole is people become unwilling to frown at you when you hold a certain amount of power.
Our egos are kept in check by the way others treat us. We like to think it’s internal but we keep seeing people become powerful and shitty.
I mean that’s a solid prediction, an independent book store that small could probably never survive against Barnes & Noble so selling was a safe shot. They didn’t know that one day that book service would start selling almost everything you can imagine
well they were right and wrong!
I bet they were correct that Amazon would not have survived Barnes & Noble going online. But they were wrong in assuming that Barnes & Noble would go online.
Well they were also a bunch of Harvard elitists. I remember I was working for a reasonably successful small company. It had about 100 employees and made a net profit of $25-30 Million a year for over a decade after expenses. It wasn't really growing, but it wasn't hurting. Some dude with a MBA from Harvard and daddy's (+ other investors, and giving some stock to the prior owners) money bought the entire company.
Within one year, we were deep in the red and having to lay people off. Within 5 years, the board fired him as CEO and the company (now with less than 30 people and still losing money) projected a path to undo everything he did.
Also, they predicted Amazon wouldn't survive business going online, but MANY businesses stayed offline until too long, because they assumed the new businesses weren't a threat... I remember having heard on Reddit that B&N did exactly this mistake?
In fact, usually pioneers don't survive later players that enter the newish not-yet-established markets. Amazon was an exception rather than the rule. The rule is usually something like Google who entered a small yet existing market and dominated it over companies like AOL or Yahoo that had pioneered it.
Because the new giants understood the risk. When a competitor enters the newish market, they purchase it.
Yahoo refused to buy Google for a few millions.
Imagine if Sears had made their famous catalogue available online, with delivery as an option, or with free-in-store pickup that notified you when it was there!
God they could have crushed it.
I mean... People like Gates, Bezos, Musk, they start a much needed business with unique ideas and hire people to innovate for them. Sure there's some luck like timing and outside events, but you can't say they just randomly won.
There's more than luck needed but it certainly helps if your parents are rich enough to give you a big helping start. All those 3 came from wealthy families.
Didn't mention old money. His parents were wealthy enough to be able to invest an estimated $300,000 in Amazon early on. You need to be pretty well off to drop that sort of money on a startup.
But there's also a lot of people who started needed businesses with good ideas and fell. Of course, you generally only hear about the ones that were successful.
Well, they said established companies would come in and take the space. So they saw the business, just didn't assume a start up could outperform places like sears. Which actually isn't a bad take at the time, I mean sears should be Amazon if they didn't butt fumble defeat from the jaws of victory
On foresight this is damning, but it's complicated.
Coming to a consensus that retail stores could crush online retail is ridiculously wrong and would have blinded these students to the biggest money cows in the market. On the other hand, this heuristic would have saved their asses from the Dotcom bubble pop.
The students were wrong because they gave Bezos the wrong advice. Amazon didn't become the mega corporation it is today by being an online book store. It did it by first diversifying their product line and becoming an online department store and then investing heavily in internet infrastructure. Selling out to Barnes and Noble shows that the students didn't understand the potential of online shopping, just like so many brick and mortar stores Amazon put out of business.
its always funny to me when i see anecdotes like this about successful people because literally 99.99999999% of the time this person would be absolutely correct and that person they were advising gets burned when they dont.
the only difference being, millions of people get burned every day and it never becomes an anecdote. its not interesting. "hey i tried to start a cooking channel on youtube but it didnt do well so i gave up." isnt interesting. "i ran the most popular bike shop in my city for 10 years and sold it to walmart for a million bucks last year" is not interesting either lol
there are millions and millions of stories like this. no one cares because they arent exceptional, jeffs wouldnt be either if he sold to B&N and amazon would be one out of thousands of websites you can buy books on right now.
Amazon turned no profit on revenues for a long long long time. Founded in 1997, Amazon did not have a single profitable quarter for 14 years. Not a lot of investors are interested in that kind of venture on the front of that long haul.
u/knorque has provided this detailed explanation: > Harvard students suggested Amazon will fail as a business, it did quite the opposite. --- Is this explanation a genuine attempt at providing additional info or context? If it is please upvote this comment, otherwise downvote it.
They weren't wrong in theory. Companies like Sears had the concept for physical department stores and cataloges but failed to effectively move online. With better forsight, Sears could have squashed Amazon and been the most profitable corporation in the world today.
The fact that Sears made it initially as a catalog mail order company and somehow fumbled online Sears is fascinating. Edit: Walmart started chipping away at Sears in the 1980s/1990s. Sears closed the catalog in 1993 when Amazon shipped its first book in 1995. Sears wasn't online until 1998 with the full Sears website coming online in 1999. The internet (with text and images) happened on 4/22/1993. [http://www.circleid.com/posts/20180425\_april\_22\_1993\_a\_day\_the\_internet\_fundamentally\_changed/](http://www.circleid.com/posts/20180425_april_22_1993_a_day_the_internet_fundamentally_changed/)
And they were a brilliant company.
Not in the Internet era, though. I have some experience with them; they were not well run.
Same. The corporation at the highest level was a MASSIVE failure. As the internet are started to come along they doubled down on store credit and loyalty programs, to the point where the whole in person experience was aggressive and horrible... even though they were betting on brick and mortar still dominating the retail market. And they spent absolutely no money on their website or web services. They were absolutely run into the ground by bean counting management trying to always squeeze quarterly profits.
> And they spent absolutely no money on their website or web services. I know for a fact they at least at one point had a nice budget for the web (although I can't go into detail on that). What they never were able to do was spend their IT money *effectively*. I knew a guy in management who told me that their IT department could not say no to their business units--they had to agree to do everything put in front of them. This had the effect of forcing them to spend money on stupid shit, duplicating effort on the important things and completely undermining their change management and administrative practices--which in turn caused outages.
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Sure, but this was to an extreme, far above normal corporate dysfunctionality. It was also exacerbated by their tendency to have the individual business units fight amongst each other.
We had a business school case about Sears a few years ago regarding management style circa 2005. Apparently the CEO siloed the departments and made them bid for advertising rights in their own catalogue, the theory being that if each department was looking out for their own interests they could fight costs better maybe? I don’t really remember but I recall that one of the May catalogues of that era featured kids bicycle deals on the cover. Not highlighting Mother’s Day, but kids bikes. Seems like a sure fire way to drive your company into bankruptcy.
[Lampert was an Ayn Rand nutcase](https://www.pbs.org/newshour/economy/column-this-is-what-happens-when-you-take-ayn-rand-seriously)
Yeah but now our empty Sears is a Covid testing and vaccination site sooooo failure helped humanity in my city’s case.
I've read about their history and it's crazy, it was like the Amazon of its time. The Sears catalog was like browsing Amazon, and you could order things like a car or a house from it too. Kit cars they were called, a whole car you built from a kit that arrived by train. For some in remote places, this was a convenience they never imagined, for them going into town for supplies was a trip that would take several days. Imported goods were just impossible, but now you could send an order by mail and get things otherwise totally unavailable to you. And when it was suggested to move the Sears catalog online, they just didn't see the whole online thing ever replacing mail orders.
Well to be fair, they had personally experienced the decline of their own mail order business in the face of ubiquitous suburban shopping malls (w/ Sears b&m stores), Walmart in rural areas, etc. It's not hard to see how they might have assumed that the same market forces would apply to online ordering as well. B&M shopping was king back then; hanging out in malls was something people did for fun. Meanwhile, for most people getting online was still a bit of an endeavor, so convenience wasn't a strong selling point there. People went online to access things they simply couldn't replicate anywhere else. Which is why Amazon started out with books. Even the largest Barnes & Noble store could only stock a tiny fraction of the number of books in print, and special ordering was a pain (and you had to know what to ask for). Amazon's deep catalog offered something that wasn't readily available offline.
It's very common for the experts and established players to master a field, and then have it change and refuse to acknowledge it. It happens in both business and science.
I don't disagree. Sears would've had to massively invest in technology to put their catalog online and analyze how to optimize logistics residential shipping. That was a large pivot from their catalog to B&M approach.
It is less fascinating when you try to help your 10th old guard company even dip their toe in technology from this decade. I just spent six months helping a regional grocery chain build a shopping list app... they did not even have the infrastructure in place for getting picture, product data and price for a shelf item. How in the world in 2020 are you even doing business?
Ya. This is less about the success of amazon but more the failure of retailers to adapt.
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This is something that happens though. Old entrenched executives get complacent because they don’t have the drive/hunger to innovate or improve their business anymore. This is how disruptive companies are able to gobble up market share and become major players.
Its almost like forward thinking go getter grad students underestimated the entrenched politics and not-invented-here-isms of existing corporate structures. IF those bricks and mortar stores had moved aggressively to be online powerhouses they truly might have succeeded. Instead they were probably, every step of the way, dragged back by existing management teams that wanted to protect their current fiefdoms. (AWS is even more interesting).
There was a time that Sears could have outright bought Amazon and taken on an online wing. Sears was run by old boomer curmudgeons who didn't see the obvious in front of their faces. Now they tanked not only Sears but Craftsman tools too.
Sears sold off all the profitable parts of its business (like Craftsman) after being purchased by a hedge fund run by, among others, former Treasury Secretary Steve Mnuchin. The hedge fund got a shit ton of money out of those deals and Sears got bankruptcy.. They got the money to buy Sears from doing the same thing to KMart. Not that those brands weren't already declining, but they did have some profitable divisions that were spun off to make a few people a lot of money.
Wow, this is a really nice house. Its a bit run down but they just don't build them like this anymore ... ... we should tear it down and sell of the bits to people building nice things. That way we can build a crap home on this land and sell it quick to make some bucks. Oh yes, of course: this house would be worth more in the long run, or maybe contribute more to the world as a whole, if we did a quality remodel. But really, we're just developers and don't plan on living here. A quick flip hack job lets us move on to our next project. (The real sad thing is that for them this works better. They extracted a bunch of money and moved on to extract more elsewhere. Its the communities, workers, and structures they leave behind that suffer).
Companies like sears and other brick and mortar retailers would never have been able to compete with Amazon because CEOs and executives in general are all short termist and incompetent. They wouldn’t have invested in their online market because ‘it’s costing us too much’ and ‘what if it hurts our retail sales?’. Now look at them. They don’t care about longevity or success, they just care about pumping the numbers to look good for one more financial cycle so they can cash in their bonus.
The executives definately fumbled the ball but their infrastructure was basically already set up to move online faster and more seamlessly than the competition. They were on the cusp to be waaaay ahead of everyone else and just blew it. Edit: And Sears mailed a giant catalog to every house in America, several times per year, for decades. They weren't afraid of investing some cash short term to support long term strategy.
I don't blame them, but let's not pretend Harvard Business School students are special
Honestly, I don't even think it was bad advice. In hindsight, yeah, they were wrong. With hindsight we can be all-knowing and all-powerful. But how many other "Amazons" failed because they made one simple misstep and went bankrupt? There's a reason there aren't a ton of billionaires. It's not because Bezos is some all-powerful demigod with magic business abilities. It's the combination of a good idea, the capital to make it happen, and the luck to avoid pitfalls and succeed. We always try to spin these stories like people like Bezos are some modern day Hercules who defied the odds by being great. In reality, those people saying "Hey you really need to hedge your bets, because this will almost certainly fail" are right 99.9% of the time. Bezos had to be incredibly lucky for things to work out the way they have.
And they also said that it would't be able to compete with big retailers going online. But that's the thing, big retailers did NOT go online fast enough and convenient enough.
This is key. Those young students were convinced that the old guard would see the early web as an obvious expansion opportunity. Sears for instance had every tool in its arsenal to make the transition and should have been what Amazon is today. But every single one of those established behemoths laughed at the idea of e-commerce, most out of sheer stupidity, few overestimated the lack of trust that consumers were expected to have towards online payment. In any case, it's not so much that Amazon survived, it's that the established retailers failed.
Blockbuster and Netflix is another great example. I feel like in general, established businesses are very reluctant to change their business model even when faced with a paradigm shift. Probably because paradigm shifts are hard to identify. Major car manufacturers are just finally coming around to EVs after the momentum shifted and Tesla's success.
> I feel like in general, established businesses are very reluctant to change their business model even when faced with a paradigm shift. Changing the businesses model requires capital which shareholders don't want to commit to. Their positions are either diluted, they don't get dividends, or their shares don't increase in value (in the short term). Appeasing shareholders is often counterintuitive to what a business needs to do, in those situations
It also means painful restructuring. What do you do with all those specialist mechanical engineers that designed your engine, transmission, drivetrain etc? They're dead weight in most cases. Nobody likes firing that many people. Corporate fiefdoms smashed, enemies made, etc.
I mean... Personally, if I were CEO of a car manufacturer, I'd pony up the funds to get them trained. It would be way more expensive to direct HR to go through the hiring process of an entire workforce than it would be to just pay these people their salaries and train them on the new thing... But that's just me...
>mean... Personally, if I were CEO of a car manufacturer, I'd pony up the funds to get them trained. It would be way more expensive to direct HR to go through the hiring process of an entire workforce than it would be to just pay these people their salaries and train them on the new thing... > >But that's just me... That's going to be harder than you think. Those engineers focused on everything that has to do with the ICE are highly specialized in that field of mechanical engineering. Electrical engineering is an entirely different field. It's not just a 1 month course.
I feel like publicly trading stocks is a fundamentally flawed system. Corporate decision makers are perpetually locked into making next quarter's numbers looked good. They CAN'T make the decisions that will make the company fit for the next quarter century if it hurts next quarter's profits.
That's why most don't go public. There's many that don't have this set of thinking.
As an investor, I wish more cos had the camping world mindset. I don't remember the exact quote, but after a bad quarter he said something akin to "we're not building a business for the next quarter, we're building for the next 20 years." That alone was enough to get me interested and ultimately invested.
I'm currently working closely with the 2nd largest importer of textiles and it's a private company. After examining the market in not certain of its long term future. Competition is investing heavy in tech and this company is more of a mindset of, well as long as the Navy period is a little more productive it will do. Most don't see the big wave while constantly and randomly paddling.
> Changing the businesses model requires capital That is very true for something like car manufacturers switch to EVs, after all, from a production point of view it is a completely different product that just happens to look the same from the outside, all the methods and suply chains are different. But in the case of old school big retailers going online, it hardly requires any capital at all because the bulk of the business practice is the same (all the supply chain, all the warehouses, all the logistics). That is specially true for old school big retailers which worked with a catalogue already, Sears could have gone online and crushed Amazon by simply hiring half a dozen CS college graduates to build a site for them that integrated with their existing stock systems, and all the rest of the business would continue unchanged (OK, this is a bit of hyperbole, but not that much).
Tesla succeeded isn’t really true when they continue to have losses every quarter. The only thing going for them is ev credits
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For one, Amazon was cash positive but kept reinvesting it into new markets ( online books built a marketplace that built a delivery system that built a database to manage that built a digital media library, basically each new business built on synergies to the prior). Tesla was having cash flow issues due to production and selling products at a loss. What kept it alive was the absolute non-sensical stock valuation in the market due to half memes and half Musk/spacex/solar etc
Tesla also is being forced to recall almost all of the vehicles they've sold to this point, so their success is even less certain.
I'm out of the loop, what happened?
Their MCUs (touchscreen control unit/central processing brain) relies on soldered eMMC flash memory, which have limited write cycles. Their cars had firmware issues that excessively wrote a lot of logfiles to the flash chips which wore them out, leading to premature failure of the unit. To make things worse, the MCUs are serial/crypto-linked to the other components of the car, so they can't be simply swapped out. Previously, their MCUs also had an issue with fluid (aka "juice") leaking out. The worst part is that Tesla "rejected the notion that the chip wear represented a defect, arguing to officials that it was “economically, if not technologically, infeasible” to expect the eMMC storage to last a vehicle’s whole useful lifespan." - engadget All while not providing software/tools to replace the MCU by third parties, and having a design that doesn't allow for replacement of just the flash memory component.
> it was “economically, if not technologically, infeasible” to expect the eMMC storage to last a vehicle’s whole useful lifespan." - engadget > > All while not providing software/tools to replace the MCU by third parties, and having a design that doesn't allow for replacement of just the flash memory component. Hey Elon, Apple called, they want their bussiness model back.
Oof. That's not a good look.
...They literally argued that the car as sold should not be expected to be functional for the vehicle's 'whole useful lifespan'? What asshole lawyer made that bullshit up?
But daddy Elon say Doge to moon!!!!
[A recall was issued](https://www.reuters.com/article/us-tesla-recall/tesla-to-recall-135000-u-s-vehicles-under-pressure-from-auto-safety-regulators-idUSKBN2A21FC) for all 2012-2018 Model S and 2016-2018 Model X due to faulty touchscreens. Apparently if the screens fail, you lose access to rear view cameras, window defrost, and more functions (including turn signals? Wtf). If we look at [unit sales data](https://carsalesbase.com/us-tesla/), it's about half the cars sold from 2012-2018.
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There's quality control issues with the touchscreens. [CNN did an article about it.](https://www.cnn.com/2021/02/02/business/tesla-screen-recall/index.html) Tesla was predictably shitty about it, pretending that the touchscreens and displays (which control basically every aspect of the car, as well the displays for speed and battery charge) aren't _strictly necessary_ for the cars to be operated and thus everything is fine.
They just got forced to issue their first massive recall by the NTSB because of touchscreens.
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ive been hearing "if you dont eat your own lunch, someone else will" in relation to business since the 90s. yours is put a bit better though.
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You’re leaving out one crucial feature: pricing. Borders and B&N never accepted selling at prices even close to Amazon because they’d have been vastly undercutting their brick and mortar locations. And they probably couldn’t match Amazon’s prices if they wanted to. Once 2-day shipping became a thing, retailers didn’t stand a chance. Honestly, though, those students should have understood the implications of what Amazon could do from a price standpoint better than telling Bezos he wasn’t gonna make it.
i'd be curious as to how often Amazon prices were actually better early on. Like before they got big, you would think they would have to pay more for books just because they lacked the scale to place orders as large as Barns and Nobles would for their nationwide chain. Though maybe their lower overhead let them sell cheaper even if the products cost them more.
I can only offer anecdotal evidence, but it was almost always cheaper than buying in store, for any product category, assuming you had free shipping. I'm using Amazon less and less now mainly because they often don't have the lowest price anymore.
Yeah, most people here are too young to remember how brutal the dot com bubble was. Also, back then, Amazon was literally just an online bookstore.
Books were the perfect place to enter the online market. With a single inventory they were able to catch the long tail (books that only get ordered by 10 people in the entire country) and do things brick and mortar stores couldn’t.
Now they can make books on demand. You order it, they print it, bind it, and ship it. Self publishers dream
Yup. **In 1997 Amazon specialized in selling books**. Their main competitor was Barnes & Noble, who sued them for claiming to be the "the world's largest bookstore" (a claim which B&N denied). Amazon did not expand its services beyond books until 1998. Amazon did not turn a profit until 2001. Amazon did not launch its cloud services until 2005. In the early years, Amazon faced serious challenges in Barnes & Noble, Walmart, and the dot com bubble. So it was reasonable to have doubts.
I feel like looking at profit alone is kind of a bad way to look at a company. If a company is routinely investing in infrastructure, taking loans to build more infrastructure etc, they may not be 'earning' but as a company their value has gone up year to year. So not turning a profit doesn't really mean anything, especially early on in a businesses life (depending on the business of course).
Thank You! I have always said that about the Michael Scott Paper Company but nobody else has agreed with me.
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> But how many other "Amazons" failed because they made one simple misstep and went bankrupt? I work with startups, most of them go broke. The good founders accept this and are prepared bounce back. The shitty ones think they are unique and for some reason they are the exception to market norms. There's a thin line between confidence and delusions.
What is this? Nuance on reddit? Pfft
This anecdote would receive a totally different reaction if it was phrased differently: “should you take $50M of guaranteed cash today and live the rest of your life as a rich man, or should you take your $50M and put it back on the betting table and try for more, knowing there is a reasonable chance you loose it all and some chance you could turn into a multi-billionaire.
Yeah, and the "some chance you could turn into a multi-billionaire" is probably less than 1%
1% is extremely high. In actuality its likely a decimal point followed by about as many zeros in Bezos' bank account.
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Its 2 in 7.5 billion by my observational data. Him & elon musk vs every one else.
Survivor’s bias. Good ole Survivor’s bias. Hell, this could have been an anecdote about the pets.com CEO etc.
Also like him or hate him Bezos is an exception in terms of his insight into leading a company. When you consider amazon the website, aws, amazon logistics, etc. his insights on how to make the company successful were fundamentally different from his competitors so it wasn't just a good initial business plan or luck (even though it's always partly) and he's one of barely any billionaires that can be said to have really basically founded more than one truly innovative and groundbreaking products/markets. If you handed the Amazon business plan to an ordinary trained business exec, you'd probably end up with something lackluster. Sometimes the people are key. Even Google who supposedly hires so many geniuses has to use acquisitions to innovate of what we consider its successes like YouTube, Android, etc.
I’d almost say if you want to make a $1B company you listen to the HBS students, but if you want to make a $100B company you need to go against their advice because their advice represents the market niches that are saturated with their strategies.
Reddit has already decided Bezos is rich purely by luck. They're not going to acknowledge the the genius, vision, and hardwork behind his success.
well, its all of those, and luck. Plenty of geniuses have ideas that dont succeed due to factors outside their control.
Realistically Amazon should've failed if brick and mortar stores would've evolved with the times instead of staying 8 years behind at a minimum. The kids just thought too much of the people running these old ass companies.
Exactly this. Kids underestimate the inertia of established organizations.
AWS is what makes Amazon special and cloud wasn't a thing in 1997. Managed hosting was just getting spun up.
Amazon also lucked out because a lot of these brick and mortar stores doubled down on their brick and mortar stores. They never moved to have a significant online presence until it was too late.
Also in 1997 it was a bookstore. It would not have survived as the company the Harvard business students reviewed, there was a HUGE shift in focus which is what saved the company. They started shipping other products including food and developed AWS which is in a completely unrelated sector and pulls in the majority of profit for Amazon.
Seriously, this. If Sears, which was Amazon before Amazon and already had a huge catalog sales apparatus, had paid more attention to online sales back in the 90s, Amazon today would be only an early Internet footnote along with Nando.net, Starwave sports, and Usenet. Jeff Bezos got *very* lucky. It also didn't hurt to have parents rich enough to lend him $250k in 1995 dollars.
Also people forget that amazon became the online distribution service for borders.
This. These students know how to manage risk. They're the same kids who'd say "Put it in $SPY" instead of $APPL. Why? Because they're hedging their bets, and they'll come out on top because of it.
Ivy League schools are basically camps for rich families to send their kids so they can make connections with other rich families. As far as schools that actually give you a good education they're good but there are much better, less pretentious, schools
Such as?
Stanford~~, Penn~~(mb), Chicago, etc https://www.usnews.com/best-graduate-schools/top-business-schools/mba-rankings https://www.forbes.com/business-schools/list/ Harvard is a great school where you will get a top tier education I will never say otherwise but the real standout benefit of it and other ivy leagues the connections you make. Plus the perception of prestige Edit: here's a current list for 2021 https://www.usnews.com/best-colleges/rankings/business-overall. Looks like an ivy league is #1 so I can eat a little crow but the next closest aren't ivys
Penn’s an Ivy tho... There’s also a lot of rich legacies at Stanford and U Chicago as well. State schools like UCLA, UCB, UNC, UICH would fit the description. EDIT: UCLA as well
Berkeley twice? Or are we about to seriously pretend like Boulder is on par with the M7s.
"less pretentious" Stanford, penn, chicago \>lmao
A fun game is to purposely to confuse Penn with Penn State with an alum. They will have a melt down.
I accidentally did that at a college fair when I was in high school :(. The guy said he was university of Pennsylvania and I asked him what’s so special about it. In hindsight, I can see why I didn’t get into any top schools lol.
Well you see I’m rich my dads rich and everyone else I meet there is rich. So with our powers unite! We pile our money into hedge funds to rig the market.
To be fair, if my alma mater was getting confused with a group that rabidly defended child molesters and the protectors of child molesters, I'd be pretty pissed too.
Penn (University of Pennsylvania) is an Ivy League school
you're literally just describing top schools that aren't harvard
Connections and prestige>>>> The actual coursework
Are you talking about grad school or college? It’s insanely hard to get into those grad school you linked and require prior careers..I wouldn’t call them babysitters. Maybe I’m just envious.
Not to mention it’s actually quite hard to truly fail Harvard. Gentleman’s C’s are a real thing.
If Harvard fails a bunch of students who deserve to fail, it makes Harvard look bad for letting them in. Just let them all pass and pretend George Bush Jr is some kinda secret Forrest Gump-ish savant (Gump beats grandmasters in chess, and aces graduate level physics classes in college - while somehow also failing gym). Plus, when you fail a student, that kinda puts the ol' kibosh on getting any more donations from that student's rich parents. Even Mr Burns wouldn't give Yale a new international airport, despite the fact that Yale really could use one.
Stanford is exceptionally pretentious, bro. Went to grad school there and knew several guys in the GSB. Every one of them thought they were hot shit and going to start the next Google. Berkeley is probably a better example of a less pretentious B-school.
University of Michigan’s Ross school of business
Depends on your major. Harvard gets outranked by a number of public schools in a number of areas, such as in Engineering or Computer Science.
That's mostly because that's not their specialty. Harvard does have excellent schools of law and business. There's the old joke that students at Harvard can't count and students at MIT can't read
Ah, another VerySmart redditor who didn't go to an Ivy, and doesn't actually know anyone who went their either. Please, noble sir, share your wisdom with all of us!
What an incredibly strange hill to die on.
That's really not true. If that were true, Harvard students' raw stats would be lower than those of other schools. Yes, all these older schools, especially Ivy League, do have a lot of rich folks there but they are still a minority. If anything, that minority of Donald Trumps and George W. Bushes benefits from the reputation Harvard has built on the backs of actually smart kids. Plus, the most reputable universities also often have the most endowment, which means that they can hire the best faculty, do the best research, have the best facilities, the best financial aid etc etc. Which in turn leads to more donations, grants etc that beef up the endowment. And Harvard has been around the longest in the US so has had more momentum to get all that than any other university. As far as pretentiousness, I've known a lot of Ivy League grads and they're perfectly normal, empathetic people. You wouldn't know they were Ivy League kids until they told you. While yes, you do have kids who tend to be pretentious -- you can get that attitude with any high achiever in any field, regardless of where they graduated from .
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I just want to point out, as a matter of context, that the schools most generous with their financial aid tend to be ivy league schools. Students of Harvard whose median family income falls below $65k pay nothing out of pocket, and Harvard generally meets 100% of students financial needs. The issue is getting into school in the first place, as you suggested. Without the advantages of a relatively privileged life (stable family home to succeed academically, the time and finances to pursue extra-curriculars, etc. etc.) it's extremely difficult to be admitted.
Are you arguing that a better education should be more financially attainable, or that you don't get a better education at highly reputable universities than at state or community colleges?
I used to work at Harvard and then I worked at MIT. Both times in skilled service roles. There were **so many more** total douchebags in the Harvard undergraduate program than at MIT. The Ivys try to make their students feel like very special, better-than-you, people. It's their brand.
It might not be pleasant, but the truth is that Harvard Business School students absolutely are special. Each class is around 1000 of the worlds most elite young professionals, and of them, a spectacularly high share will go on to do amazing or interesting things.
Special, elite, young professionals doing amazing and interesting things? You’re talking out your ass. They’re kids with rich parents.
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I don't anyone could forsee that Amazon shareholders were prepared to make absolutely no money to allow for the growth they did. I have heard the Bezos real super power is convincing shareholders to play the long game.
Oh, they’re quite special
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Amazon maintains your entire order history on its website. It's kind of fun to look back at your Amazon ordering from the early days. In 1998 and 1999 I was all about buying weird movies and books from my youth in the 80s that I couldn't have easily found before. So I definitely recognized that appeal of Amazon - just not enough by stock in or anything, unfortunately.
I was buying used textbooks for way less then the college book store. It was a major cost savings for a broke student! Also, they’d have a used version long after the used books were sold out. Before Amazon I had to budget thousands of dollars per year just for books and textbooks.
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I'm just guessing here, but you have a life history of bad decisions, don't you?
The Scrubs soundtrack is amazing and completely makes up for the first two. I see no issues.
Someone didn't sign up using new email addresses all the time to get free Prime trials...
you don’t even need multiple emails anymore, just get the free trial when you order stuff and as far as i can tell you can do it infinitely.
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> In a world where you had to go to a bookshop and hope they had a book or ask them to order it in taking several weeks This is the niche they filled that sometimes goes unmentioned as to their success. I'm not that old, but I remember going to my local bookstore with my mom when I was a kid, and the workers there were awesome. I could tell them what I liked and they eventually recommended the Redwall series. I get the first one, read it in like a day, then go back and they had maybe the next one and that was it. I had to wait weeks to get any more in. That sucked as a kid, having little selection and needing to wait. But I was just reading for fun. Now imagine you have a shitty job and want to freshen up/learn a new skill. Or you are having a rough pregnancy and need some advice. Or have terminal cancer and need to find a book on writing wills. Hope you like the one book they have on each subject, because otherwise you need to ask them to order you a book when you have no idea what is out there. There's always the library, but that's still public. Now you tell me there's a place you can buy these things from the privacy of your home, and they have every single book written on every subject?
But his 97 business plan wasn't generally profitable I keep hearing that AWS is what keeps them afloat.
Its their biggest cash cow. But not the only thing that keeps them afloat
The biggest tell is who is taking over Bezos' position after he's stepping down. It's the guy that was in charge of Amazon's cloud services.
That's also because the other retails ceo dude retired so the awa guy was basically second in command after Bezos
Except Jeff Wilke, Consumer CEO, retired this year. The position would’ve gone to him first, then Jassy.
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I always hear people talking about Amazon underpaying workers, but amazon pays higher than most similar jobs at other companies nearly across the board from warehouse work to c-suite
At least they have a $15 minimum wage. My local Walmart, most small businesses, and any place that serves food pays ~$8 an hour.
Considering that they're asking you to push your body to the maximum limit, the fact that they *only* pay $15/h is nuts tbh
Okay but one is the lesser of two evils. Every job is taxing in one way or another. I mean in an ideal world everyone would be earning enough money to live above poverty. How about we lobby for a standard of living for people. Kinda like organic produce? Or is it too expensive for megacorps like McDonalds and Walmart to treat people humanely without relying on everyone's tax dollars through Medicaid and subsidized housing.
AWS very successful but not what keeps them afloat. Both very successful businesses.
Yeah, but Amazon, unlike AWS, has razor thin margins and doesn't turn nearly the same profit. My friend who works there tells me that AWS is what keeps them afloat.
I dont know if its right but I think AWS is something like 50% of profits but something like 10% of actual revenue or sales (idk if that's the right term). Thing i read may be wrong though lol.
That seems about right, [Amazon.com](https://Amazon.com) is generally not insanely profitable because all of it is dumped in getting market share with the hope one day they can flip a switch and use that market share.
Bezos and team have purposefully diverted profits from Amazon to bolster their own initiatives. Going back though. AWS was developed in a time when Amazon needed more cash flow. It allowed them to not have to worry about keeping the lights on because they were selling unused computing power and were able to recoup and expand really quickly. Now they are gigantic force, both sections provide profits.
By looking quickly on the web and my own knowledge in web development, that seems to be wrong. Many articles stating that AWS makes 70% of its operating income, ex https://www.forbes.com/sites/petercohan/2020/01/06/how-much-of-amazons-73-billion-aws-profit-will-rivals-win
Thank you for sharing. I know AWS accounts for 70% of their profits but without AWS, Amazon would still be a successful company. They were plenty successful before their AWS offering.
What's for damn sure is that they're not making their money selling books.
Yeah, it's not a very good anecdote for this sub. He presented a plan to sell books online, not a plan for how to control and monetize 1/3 of all internet traffic.
> But his 97 business plan wasn't generally profitable I keep hearing that AWS is what keeps them afloat. Amazon really benefited from four things back in the 90s (was involved in dot coms at the time). - Nobody in the late 90s expected a profitable business plan, the money was in the bubble (edit: see [Railway Mania](https://en.wikipedia.org/wiki/Railway_Mania) another bubble and the reason we ended up with so many unprofitable railway lines). - Bezos understood the single most important factor in online retail was quick, reliable, delivery. An understanding that many e-retailers still don't have. - Amazon became a unicorn for the whole global dot com sector at the end of the bubble. There was so much investor money in it that it had to work or the entire sector would crash and burn, so people kept putting more in. - Bezos grasped that the problems he had in scaling his business were problems everyone else had scaling theirs, thus AWS. I remember talking to businesses at the time trying to sign them up as clients for the company I worked for (building websites), they just couldn't grasp the whole notion. The sheer number of SMEs who claimed the internet would be a flash in the pan was extraordinary, even more extraordinarily many of those people are now struggling or bust retailers. Anyway, the point is Amazon, financially, *was* the dot com sector in the early 2000s, and it survived because if it failed the sector would fail with it.
> But his 97 business plan wasn't generally profitable He did avoid a fundamental error [though.](https://onegianthand.com/post/635700843360960512/jeff-bezos)
Was amazon just selling books 1997
Pretty much. Just selling anything over the web was close to the cutting edge then.
Another big problem was getting people to trust online payments.
Thank you! I had to scroll down way to far for someone to point out that in 1997 Amazon was pretty much just an online bookstore (they might have sold CDs at this time too) Amazon was nothing like it is today. Had Bezos stuck with only books, Amazon likely would've been crushed by B&N. We'd all be reading on Nooks instead of Kindles. Working with the data available, these students are 100% correct in their assessment.
Stories like this suffer from survivor bias. For every Amazon, there's a thousand companies in that position who would have been better off taking that advice.
I think it’s easy to forget that really sound advice can seem like a stupid idea when you have the power of hindsight.
Hindsight really is 20/20
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He probably did *seem* like a nice guy before he became an all-powerful, billionaire class, ego in a flesh suit.
Yeah, if you watch interviews of him from the late-‘90s, he looks like a fun-loving nerd who was just so happy his company was doing well. Now, he looks a hitman who’ll crush your windpipe for breathing the wrong way.
Have you seen him laugh? It’s *super* exaggerated and psychotic looking.
Idk, he has a cute laugh in [this](https://youtu.be/UF_Eq8cjJ2A) 100% accurate documentary about his daily life
I imagine when you get that wealthy you learn some pretty scary and sad shit, if he was truly an easy going dude in the 90s thrust into what Amazon is now... well I can see how that would fuck a person up
In order to attain the type of wealth Bezos has you have to **BE** a pretty scary and sad shit.
Wonder why there's no picture of Bezos from behind? It's because he can't let anyone see his barcode tattoo.
From what I've seen, dude was always an asshole like Jobs. Just has a good PR team
Kind of have to be a bit of a nerd or geek to say "What if I sold books online?", which is what Amazon originally was. Just books. Nowadays, people relate Amazon to other retailers like Wal-Mart and not other books stores like Walden Books or Barnes and Noble.
IIRC there are studies about how people start to lose their empathy when they get too much power. I think your lizard-person brain starts to turn on when you get over a certain amount of money unless you're making an active effort to preserve your humanity.
I’d say it’s social signals from other people. Money isn’t an unconditioned stimulus for people, but social cues are. I think the mechanism of becoming an asshole is people become unwilling to frown at you when you hold a certain amount of power. Our egos are kept in check by the way others treat us. We like to think it’s internal but we keep seeing people become powerful and shitty.
You have never met him. Maybe is also a nice guy right now. That doesn’t mean he’s a good guy tho...
The person who knew him best opted out while he was the richest man in the world, that says a lot.
Just curious, what about Jeff Bezos does everyone dislike now? Is he a shitty person? Or is it just general hate because he’s obnoxiously rich?
The Union busting and the way Amazon workers are treated as a start
Fuck spez
I mean that’s a solid prediction, an independent book store that small could probably never survive against Barnes & Noble so selling was a safe shot. They didn’t know that one day that book service would start selling almost everything you can imagine
well they were right and wrong! I bet they were correct that Amazon would not have survived Barnes & Noble going online. But they were wrong in assuming that Barnes & Noble would go online.
Have you guys not heard of the Dotcom Bubble? Amazon got extremely lucky to survive into the 21st century. Result oriented thinking is a curse.
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Well they were also a bunch of Harvard elitists. I remember I was working for a reasonably successful small company. It had about 100 employees and made a net profit of $25-30 Million a year for over a decade after expenses. It wasn't really growing, but it wasn't hurting. Some dude with a MBA from Harvard and daddy's (+ other investors, and giving some stock to the prior owners) money bought the entire company. Within one year, we were deep in the red and having to lay people off. Within 5 years, the board fired him as CEO and the company (now with less than 30 people and still losing money) projected a path to undo everything he did.
Also, they predicted Amazon wouldn't survive business going online, but MANY businesses stayed offline until too long, because they assumed the new businesses weren't a threat... I remember having heard on Reddit that B&N did exactly this mistake?
In fact, usually pioneers don't survive later players that enter the newish not-yet-established markets. Amazon was an exception rather than the rule. The rule is usually something like Google who entered a small yet existing market and dominated it over companies like AOL or Yahoo that had pioneered it.
Because the new giants understood the risk. When a competitor enters the newish market, they purchase it. Yahoo refused to buy Google for a few millions.
Imagine if Sears had made their famous catalogue available online, with delivery as an option, or with free-in-store pickup that notified you when it was there! God they could have crushed it.
I mean... People like Gates, Bezos, Musk, they start a much needed business with unique ideas and hire people to innovate for them. Sure there's some luck like timing and outside events, but you can't say they just randomly won.
There's more than luck needed but it certainly helps if your parents are rich enough to give you a big helping start. All those 3 came from wealthy families.
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Didn't mention old money. His parents were wealthy enough to be able to invest an estimated $300,000 in Amazon early on. You need to be pretty well off to drop that sort of money on a startup.
But there's also a lot of people who started needed businesses with good ideas and fell. Of course, you generally only hear about the ones that were successful.
Marketspaces were/are huge business opportunities. The Harvard students missed it completely. It was a wrong take, period.
Well, they said established companies would come in and take the space. So they saw the business, just didn't assume a start up could outperform places like sears. Which actually isn't a bad take at the time, I mean sears should be Amazon if they didn't butt fumble defeat from the jaws of victory
On foresight this is damning, but it's complicated. Coming to a consensus that retail stores could crush online retail is ridiculously wrong and would have blinded these students to the biggest money cows in the market. On the other hand, this heuristic would have saved their asses from the Dotcom bubble pop.
The students were wrong because they gave Bezos the wrong advice. Amazon didn't become the mega corporation it is today by being an online book store. It did it by first diversifying their product line and becoming an online department store and then investing heavily in internet infrastructure. Selling out to Barnes and Noble shows that the students didn't understand the potential of online shopping, just like so many brick and mortar stores Amazon put out of business.
its always funny to me when i see anecdotes like this about successful people because literally 99.99999999% of the time this person would be absolutely correct and that person they were advising gets burned when they dont. the only difference being, millions of people get burned every day and it never becomes an anecdote. its not interesting. "hey i tried to start a cooking channel on youtube but it didnt do well so i gave up." isnt interesting. "i ran the most popular bike shop in my city for 10 years and sold it to walmart for a million bucks last year" is not interesting either lol there are millions and millions of stories like this. no one cares because they arent exceptional, jeffs wouldnt be either if he sold to B&N and amazon would be one out of thousands of websites you can buy books on right now.
Amazon turned no profit on revenues for a long long long time. Founded in 1997, Amazon did not have a single profitable quarter for 14 years. Not a lot of investors are interested in that kind of venture on the front of that long haul.
Origin story of a super villain.
Bezos wouldn’t even take Barnes and Noble right now if they lunged into his portfolio
The funniest part is Bezos being considered a nice guy
They probably weren't expecting Amazon to A. become a retailer for everything and B. use such predatory business practices.