Saturday, November 2, 2013

Brad Stone’s ‘Everything Store’

Project Fargo was even more ambitious: a proposal to fill a warehouse with one of every product ever manufactured. “This is the most critical project in Amazon’s history,” Bezos is said to have declared. It wasn’t, but it gives you a sense of the man’s penchant for grandiose ideas.

These “fever dreams,” as employees called them, bring to mind Jorge Luis Borges’s sublime story “The Library of Babel,” in which the writer describes a “total” library — a huge stockpile of every possible arrangement of a 25-symbol alphabet in 410-page books with 40-line pages and 80-letter lines. The idea is classic Borges, evoking a sense of the infinite despite the easily calculable (if still mind-numbingly large) number of books. Somewhere in there, his narrator observes, “there must exist a book that is the . . . compendium of all other books, and some librarian must have examined that book; this librarian is analogous to a god.”

Well, Bezos is the god in Stone’s story, and definitely one of the vengeful and punishing sort, at least when it comes to those who have worked for him, those he has competed against and those who thought, mistakenly, they were in some sort of partnership with him. (That leaves his family, whom we’re told he loves dearly.)

Stone obviously admires his subject, but it’s hard to tell if he likes him. For that matter, it’s hard to tell if anybody likes him. Worth $27 billion, Bezos still makes employees pay for parking and for a time posted private ambulances outside warehouses during heat waves instead of ponying up for extra air-conditioners. It comes across loud and clear just how painful working anywhere near Bezos seems to have been over the years, despite halfhearted attempts by employees to recast a total lack of empathy as some sort of trick of leadership: one of his “gifts,” they say, is “to drive and motivate his employees without getting overly attached to them personally.” Is that a gift? It may be in actual war, but I’ll bet soldiers in the Middle East get more than free Gatorade and an extra 10 minutes of break time a day when the temperature tops 100 degrees.

It’s always lonely at the top, though, isn’t it? That’s where Bezos finds himself in 2013, less than 20 years into the building of a $140 billion company that has 200 million active customers. He has to be super­human on some level, as the mere reading of his story makes you feel exhausted on his behalf. Even Zeus would have had trouble fighting so many simultaneous battles on so many fronts: against Wall Street naysayers, Barnes & Noble, Wal-Mart, Apple, eBay, Google, the book publishing industry, Netflix, state-tax collectors and the like.

There are those who draw nourishment from conflict, and Bezos does appear to revel in outwitting even his best partners. The publishing industry, for example, still doesn’t quite know how it willingly gave him the sword with which he would slice off its head. And Stone only hints at this one, but it’s a doozy: despite Amazon’s assurance to some manufacturers that it will reduce prices below suggested retail only to stay true to its lowest-price guarantee, “mysterious third-party sellers” tend to show up on the site with conveniently lower prices, which Amazon then matches with a “What else can we do?” shrug. What else? Here’s one suggestion: Confirm that those third-party suppliers are indeed what they claim they are and not, say, Amazon itself.

It’s amazing how much has happened at a company so young. First, Bezos pretty much proved the power of the “long tail.” Then he kick-started online affiliate marketing, paying other Web sites to send customers his way. Next: 1-Click, which proved that the odds of our buying something online increase significantly when you save us five seconds. Are we really that impatient? Don’t ask Bezos, who might respond with one of his notorious (and, truth be told, often humorous) put-downs: “Does it surprise you that you don’t know the answer to that question?”

The list goes on: Amazon Marketplace, Amazon Prime, Kindle, Amazon Web Services, Amazon Instant Video. If that sounds like enough to monopolize one man’s attention, you’re wrong. Bezos also runs his own venture capital business and has been an early investor in Google, Twitter, Uber and Business Insider, among others. Then there’s his recent acquisition of a little journalistic outlet you might have heard of: The Washington Post.

Some of his achievements are awesomely complicated — like Amazon’s profitable effort to solve the “system of polynomial equations” that allows for the most efficient delivery of customer orders from one or more of the company’s dozens of fulfillment centers. But Stone’s long tenure covering both Bezos and Amazon (first at Newsweek, then at The New York Times and now at Bloomberg Businessweek) gives his retelling a sureness that keeps the story moving swiftly, even in passages where Amazon’s ever-present (and apparently intentional) internal chaos threatens to spill out onto the pages of the book itself.

Stone does know when to provide a breather with entertaining anecdotes about Amazon’s competitive jujitsu. For instance: During the 1999 holiday season, the managers of Amazon’s fledgling toy division were worried they wouldn’t be able to meet surging demand for Pokémon toys. So they bought out the entire Pokémon inventory of the Toys “R” Us Web site, which shipped it to Amazon free. Amazon surely sold the toys at a loss. But guess who had happier customers that year?

Bezos deserves his place in the pantheon of businessmen. Yet Stone also makes a great case for him as a replacement for Bill Gates as head of the Army of Geek Billionaires. This is a guy who has made decisions using a “regret-minimization framework” and whose love of “Star Trek” is such that he considered naming Amazon MakeItSo.com, a reference to one of Captain Picard’s signature lines. Even before he founded Blue Origin, a personal project aimed at enabling “private human access to space,” his high school girlfriend told reporters in the 1990s that “the reason he’s earning so much money is to get to outer space.”

Stone makes much of Bezos’ prescience, which no doubt seems to be more finely tuned than most people’s. Bezos long ago figured out the trick to a kind of experimentation Samsung uses against Apple in the smartphone wars. Whereas Apple finely calibrates its new product designs, Samsung makes one of every size, color and shape imaginable and sees which end up selling. Amazon does the same sort of thing. That’s not predicting the future, however, that’s placing a bet on every horse in the race. Still, you’ve got to give it to Bezos: It’s also the surest way to make sure you’re holding the winning ticket every time.

Finally, let’s not forget how many of Bezos’ competitors seem unable to predict the present, let alone the future. Publishers were shocked when he sandbagged them with $9.99 e-book pricing in 2007. Where had they been? Stone points out the paradox of a book about Bezos being published by one of the companies Amazon’s rise has threatened. But it’s all in keeping with the story of the “everything store,” which ultimately resembles an Escher drawing: these days, all retail roads do appear to begin and end with Amazon.

Duff McDonald’s latest book is “The Firm: The Story of McKinsey and Its Secret Influence on American Business.”

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