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Amazon.com Get Big Fast by Robert Spector

Amazon.com Get Big Fast[tk add link] by Robert Spector tells the story of Jeff Bezos and how he built Amazon into the world's biggest store with a revolutionary business model that changed the world. My favorite part about this book is that the book was written in 2000, so Amazon was already relatively succesful at this point and Bezos was already a billionaire, but this was still way before things like AWS, Prime, Blue Origin's public launch etc.

Recently I've found with biographies it's more interesting and informative for me to read the stories about succesful people before they reached their current level, it also helps to avoid the narrative fallacy. Gates[tk add link] by Stephen Manes and Paul Andrews is another such book. I actually started reading Gates and decided to pause and read Get Big Fast instead because I feel like Bezos and Amazon's story is more relatable and applicable to the curent state of tech entreprenurship and my goals at the moment.

Pre-Amazon: Bezos in high school, Princeton, Startups and DE Shaw

  • Bezos has always been fascinated and driven to take humanity to space, his high school girlfriend, Ursular Werner (tk confirm name) accurately predicted blue origin [tk find quote and page]

  • Funny game he played with high school girlfriend, basically it was like a scavenger hunt

  • Seems to be attracted to smart women, his high school girlfriend was a valedictorian and his ex-wife went to Princeton

  • Plot twist: Jeff Bezos High school girlfriend is an attorney in the antitrust division of the United States Justice Department [9] [tk tweet this as a standalone]

  • His decision to switch from Physics to Electrical ait's more of an evolhe was the 2nd smartest person in his mathematics class at Harvard (the 1st smartest person is a NY attorney know If I recall correctly). I recall a joke a professor once made that: "It's a shame Bill Gates hadn't gone into academica, he could have really made something of himself."

  • When looking to switch jobs, Bezos told corporate headhunters that he was looking for "second-phase automation" tech companies, "first phase" is doing the same thing that people already do but just in a more efficient manner e.g. barcode scanners or point-of-sale systems, while second phase fundamentally changes how business is done, "it's more of a revolution than an evolution" Bezos says. [16]

DE Shaw

  • A lot of people describe Jeff Bezos as charismatic, which I found surprising I don't mean that in a rude way, but for some reason my biases cause me to asusume that people as smart as Jeff Bezos lack social skills. I guess the truly smart people realize that technical skills will only get you but so far, emotional intelligence is necessary to complete the package[Ursula Werrner, Page 7, Brian Marsh, Page 18]

  • I noticed that all the companies he worked for were at the bleeding edge of technology and they were mostly early stage companies or small "intra-startups" within established companies:

  • Similar to my decision to work for a machine-learning, biotech startup because I believe the combination of those 3 fields (machine learning + biotech + startups) are increasingly important parts of our future

  • "DE Shaw is a very smart guy. He's one of the few people I know that has a fully developed left brain and a fully developed right brain." Jeff Bezos on his former boss. I always remember this quote because it describes the type of intelligene I aspire to hav [18]

Origins of Amazon

  • Jeff Bezos tried to make a busines plan on how big he thought the company would get and he underestimated by a factor of 10
  • Everyone knew Bezos was smart, but it wasn't as obvious then, the true level of his genius was appreciated post-facto, probbly mostly due to the success of Amazon
    • Part of this is due to our society ascribing wealth to intelligence, part of it is that the more successful you are, the more opportunities and access to information you have, further accelerating your personal development and knowledge graph.

Venture Capitalists

  • Jeff Bezos was able to use his network to get VCs like Kleiner Caufield Bryers to invest and got John Doerr on the board
    • John Doerr tried to get Michael Dell on the board
  • General Atlantic passed because the valuation was about $30 million more than they were comfortable investing in
  • GA Partner, Rajamaratna rationalized saying "investment discipline we win some we lose some", that is smart rationalization because it prevents you from dwelling in Regret
    • However, it should probably be a moment of self-reflection that if you think a company is going to succeed, if it wins or loses, that extra $30 million you are negotiating over won't make a difference either way
  • Jeff Bezos was able to own about 40% of the company because he didn't raise too much capital

(tk the following should also be a Twitter thread)

  • Some of my rules of thumbs with the most exciting companies to work for:

    • The best companies to work for are companies where the founder is still involved in day-to-day management and operations
    • Where the founders have a controlling stake in the decisions made in the company
  • The most exciting companies make make contrarian, non-consensus decisions

  • Very hard to do that when decisions are made by committee and there isn't someone with long-term skin in the game

  • Inb4 "but what about exception X,Y and Z. This isn't always true",

yes, this is a generalization, and there are many examples but I still think it's a useful mental model to have for approximating company innovativeness

Also, doesn't have to be the founder, but there needs to be a single (or small group of) decision-makers with long-term skin in the game

Epistemic status: "strong opinion loosely held"

I'm 80% confident think the aformentioned thread is true 80% of the time.

However, I reserve the right to change my mind at any time without notice.

Amazon IPO

  • Frank Quattrone was chosen amongst 5 investment banks as a lead underwriter for the Amazon IPO
  • Interesting because there was a point in undergrad where a lot of my classmates interned his company, Qatalyst partners.
  • Ironically, a lot of them were the ones in the software engineering and business dual degree program. I also had coffee chats with some people that interened Qatalyst. It seemed like the closest culture fit to a tech company meets investment banking and I like both technology and investing.
  • I decided I should probably just work for an actual tech company

Interesting Nicholas Hanauer quote: "He's got the disciplined to be focused long term, and the discipline to say to himself, the employees, and the shareholders, 'if you're looking for quick returns, don't look here. We're trying to do something extraordinary and we're investing for the future...[Bezos is] the most single-mindedly focused person I'e ever met. I worry about what he's going to be like when he's 50. [230] [tk add book quote]

  • Especially ironic because you the reverse has happened Bezos is like Lebron and wine, they are both getting better with age.

  • It's also interesting listening to all the internet pundits that were opining on wether or not Amazon would be succesful etc.

  • Most companies are competitor focused, not customer focused. There's an interesting quote from Barnes and Nobles where they say that the only reason that they're offering online is because Amazon is doing it.

Think about, they're reason for going online isn't because Amazon has shown them that their is strong customer demand.

They went online because that is what Amazon did.

A lot of companies and people think this way. They don't think from first principles about what will help them reach their goals. They reason by analogy, precedent and social norms. "X might be better for me but no one I know is doing X, everyone is doing Y, let me do Y then.".

This competitor-focused behavior in all avenues of line : launching a new product, picking a school, career, dating, travelling, music etc.

  • Henry Blodget quote about how Amazon actually creates demand. [203] [tk include photo]

  • This is why I think being overly competitive is a losing mindset. Like Peter Thiel Said "competition is for losers"

  • If the Book market in 1990 is $100 M, And Amazon sells $50M in books in 1991, its not necessarily that they took share from Barnes and Nobles, Borders etc.

  • Amazon made book buying so easy that people who weren't buying books before started buying books

  • Important takeaway for me with Atila:

$6.1 Billion in scholarships awarded every year( College Scholarships Statistics, 2015–16 National Postsecondary Student Aid Study (NPSAS:16) Student Financial Aid Estimates for 2015–16: First Look)

I don't think hmm, Atila is in a $6 billion market, I need to . My mental model is, if we made it super easy for anyone to start a scholarship. Could we grow that to a $10 billion market and then even bigger

This is also a good mental model for life. Avoid playing games where there's a fixed prize and a fixed winner. See finite and infinite games by James Carse for more on this

Interesting anecdote about Amazon's cash operating cycle [90]

Nerdy detaiL; When you think of the state of the internet in 1994, it's amazing that [57-62]

Narrative economics: most CEOs share a story about how profitable their company will be.

Jeff Bezos sells the opposity story: "We Will not be profitable and it will be great" [XIX] (tk, link to great companies tell stories)

Compare Amazon IPO to Present day IPOs [167]

Amazon vs Barnes and Noble [169]

Intersting insight: Opportunity to sell the backlist [174]

Recruiting and handling PR mistakes [221]

Find quote about barnes and Nobles CEO saying he's only goint into online because of Amazon