Brad Stone's The Everything Store: Jeff Bezos and the Age of Amazon (2013) won the 2013 Financial Times and Goldman Sachs Business Book of the Year Award which is a superlative achievement. This book, however, is not like other FT-Goldman Sachs award winners such as Raghuram Rajan's Fault Lines (2010) or Abhijit Banerjee and Esther Duflo's Poor Economics (2011) which were more formal and academic. Stone's book reads more like a popular yarn, something that Walter Isaacson would be proud to write.
I am a fan of value investing and I read this book because many value investors are looking at Amazon as - hold it! - a value play. This seems paradoxical, what with Amazon being a loss-making company for most of its 20 year life. Even now, the profits seem to be coming from Amazon Web Services and not the book business. So what do value investors find attractive about Amazon? The attraction probably lies in Jeff Bezos' long term thinking and Amazon's capacity for innovation.
Computer scientist Alan Kay has said, "It's easier to invent the future than to predict it." This quote fits perfectly well the path that Amazon has trodden thus far.
Some of the innovations of Amazon are: the Associates program; the Bookmatch feature which allowed customers to rate books and receive suggestions about books; the Similarities feature that grouped customers with similar purchasing histories and found books that appealed to each group; the Amazon Sales Rank feature that gave authors, artists and publishers an idea of how they were doing; the Shop the Web feature that enabled comparison shopping; Marketplace where other sellers were invited to advertise on Amazon's own book pages; free shipping to customers who bought beyond a certain dollar amount; Super Saver Shipping which lured people into placing bigger orders; Look Inside the Book and Search Inside the Book - attempts to emulate physical bookstore experience; and finally Amazon Web Services and the various Kindle versions.
I was amazed to learn that through Amazon Web Services Amazon pioneered the concept of cloud-based computing and only then Google and Microsoft jumped into the fray.
The book wonderfully describes the type of creative destruction that Amazon indulged in. It is one thing to talk about the ruthlessness of capitalism and creative destruction in an abstract vein and another to experience it (albeit vicariously) in this book. Amazon was directly responsible for the downfall of Circuit City, Borders, Best Buy and Barnes & Noble. (Circuit City, by the way, was listed as an excellent company in Jim Collins' Good to Great (2001)).
Like it or not, we are living in an Amazon age and it cannot be ignored. A friend of mine, a local bookstore owner, dismisses Amazon as a Ponzi scheme and it remains to be seen whether Amazon is just that.
I am a fan of value investing and I read this book because many value investors are looking at Amazon as - hold it! - a value play. This seems paradoxical, what with Amazon being a loss-making company for most of its 20 year life. Even now, the profits seem to be coming from Amazon Web Services and not the book business. So what do value investors find attractive about Amazon? The attraction probably lies in Jeff Bezos' long term thinking and Amazon's capacity for innovation.
Computer scientist Alan Kay has said, "It's easier to invent the future than to predict it." This quote fits perfectly well the path that Amazon has trodden thus far.
Some of the innovations of Amazon are: the Associates program; the Bookmatch feature which allowed customers to rate books and receive suggestions about books; the Similarities feature that grouped customers with similar purchasing histories and found books that appealed to each group; the Amazon Sales Rank feature that gave authors, artists and publishers an idea of how they were doing; the Shop the Web feature that enabled comparison shopping; Marketplace where other sellers were invited to advertise on Amazon's own book pages; free shipping to customers who bought beyond a certain dollar amount; Super Saver Shipping which lured people into placing bigger orders; Look Inside the Book and Search Inside the Book - attempts to emulate physical bookstore experience; and finally Amazon Web Services and the various Kindle versions.
I was amazed to learn that through Amazon Web Services Amazon pioneered the concept of cloud-based computing and only then Google and Microsoft jumped into the fray.
The book wonderfully describes the type of creative destruction that Amazon indulged in. It is one thing to talk about the ruthlessness of capitalism and creative destruction in an abstract vein and another to experience it (albeit vicariously) in this book. Amazon was directly responsible for the downfall of Circuit City, Borders, Best Buy and Barnes & Noble. (Circuit City, by the way, was listed as an excellent company in Jim Collins' Good to Great (2001)).
Like it or not, we are living in an Amazon age and it cannot be ignored. A friend of mine, a local bookstore owner, dismisses Amazon as a Ponzi scheme and it remains to be seen whether Amazon is just that.
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