Amazon became the most valuable public company in the world for the first time in its 24-year existence earlier this week. Any company that reaches such heights has had a remarkable journey. What’s brought Amazon there is both incredibly complicated and yet so simple.
Think back to when we first met Amazon in the mid-1990s. It was but a humble online book retailer. Even then it had constructed a super-clear vision for how it would operate. Just look at the first three sentences it used to describe itself in its filing to go public in 1997:
Amazon.com is the leading online retailer of books. Since opening for business as “Earth’s Biggest Bookstore” in July 1995, the Amazon.com bookstore has quickly become one of the most widely known, used and cited commerce sites on the World Wide Web (the “Web”). Amazon.com strives to offer its customers compelling value through innovative use of technology, broad selection, high-quality content, a high level of customer service, competitive pricing and personalized services.
It doesn’t start off with an “owners’ manual” for shareholders as Google did in its S-1 (“Google is not a conventional company. We do not intend to become one.”). Nor does it offer up any sort of manifesto like Facebook’s “The Hacker Way.” No, Amazon got down to how it was going to beat you and if it were to file to go public today, even though it is far, far more than a bookseller, that line would hold up perfectly.
Tech companies tend to oversell their missions. While Amazon has some of the loftiest ambitions, it’s all business. In the current environment, that’s one of its greatest strengths.
Whereas Google set itself up for scrutiny with its old “Don’t be evil” tagline, Facebook shrouded itself in the noble cause of connecting the world, and Apple only wanted you to “think different,” Amazon has never offered up any sort of ethos to the world. In that way, Amazon is almost…more pure. Really, it’s perhaps the greatest capitalist machine we’ve seen. It may obfuscate the details but it doesn’t put on airs about what it’s doing.
Bezos has talked about the virtues of the “flywheel,” where low prices attract customers, which can lead to economies of scale, which leads back to attracting more customers and so on. That’s merely a legitimate business strategy. The closest the current richest man on earth has come to pitching slogans is declaring that he wants Amazon Prime to be such a good deal that people would be “irresponsible” for not subscribing. Sure, his annual shareholders’ letters can be full of MBA speak (“I believe we are the best place in the world to fail” and “it’s always Day 1“), but no capitalist is perfect.
In retrospect, it’s pretty amazing how we’ve treated Amazon. It destroyed countless booksellers, including the mass chains that we chided for taking out our treasured local shops, and upended the entire publishing industry. We still got feel-good profiles like 60 Minutes’ 1999 “Nerd of the Amazon” segment on CBS. Walmart has been dragged for destroying mom-and-pop stores for decades; Amazon is one of the most beloved brands in the US.
The joy of being mission agnostic
Amazon isn’t immoral from what we can discern (though some of its warehouse workers may disagree). Rather, it’s much closer to amoral. If you believe capitalism is unequivocally good, Amazon should be your ideal. When it was ready to look for what it called a second headquarters (a glorious oxymoron), it essentially opened it up to public bidding. Basically any US municipal or state economic development body would have been remiss to not make a play. Indeed, 238 bids were submitted. Critics were quick to say this was all a charade to see how sweet of a deal it could get out of the three or four places it would seriously consider. Meanwhile Amazon gained access to invaluable data from all the other bidders, on everything from infrastructure planning to city demographics. That’s probably worth incurring a few hurt feelings at city hall.
A big theme out of Silicon Valley last year was how employees who joined companies with the assurance they would be making the world a better place were holding their employers to that standard. More than 4,000 Google employees signed a petition and a dozen resigned in protest over the company’s involvement in developing technology for the Pentagon’s Project Maven. The company ultimately decided it wouldn’t renew the contract following the backlash. Microsoft’s leadership similarly faced pushback (paywall) from its employees over work it does for US Immigration and Customs Enforcement (ICE). While stopping short of saying it would cease such work, the company at least said it was “dismayed” by the separation of children from their families at the border.
Now, contrast that with how the head of Amazon Web Services (AWS), Andy Jassy, responded to an employee question over the sale of its facial-recognition software, Rekognition, to agencies like ICE: “We feel really great and really strongly about the value that Amazon Rekognition is providing our customers of all sizes and all types of industries in law enforcement and out of law enforcement.” There are more comments around the question, but they mostly amount to: We’re fine with what we’re doing and it’s good business. AWS is fiercely competing for a $10-billion cloud-computing contract from the Department of Defense and it’s no coincidence that one of its two new headquarters will be just a mile down the road from the Pentagon. Employee concerns aren’t about to derail this business.
Then there’s Bezos himself. With an estimated net worth of $135 billion, he is by far the richest person in the world (though that could change with his pending divorce). And while a number of his multi-multi-multi billionaire peers have committed to giving away the bulk of their wealth over their lifetime, the soon-to-be 55 year old has barely begun to dip his toes into philanthropy. Rather, he is planning to convert his Amazon “lottery winnings” into funding for space travel. The message seems clear for now: It’s his money and he’ll do with it as he pleases.
Nothing to see here
Amazon has steamrolled its way to becoming an $800-billion company. Here’s its next trick: Amazon wants to fade from your life without ever leaving it. It wants to reduce all the friction from commerce. It wants you to walk around your home and tell Alexa what you want. It wants you to simply press a button by your washing machine when you’re low on detergent. It wants its couriers to stealthily leave packages in your home when you’re not there. It wants you to walk into a store, take what you need and leave. It wants to send you things you didn’t even know you needed. It revolutionized online shopping with one-click checkout and two-day delivery. Next is no click and nearly instantaneous. There’s no backlash if there’s nothing to really think about.
None of this is to say that there aren’t threats to Amazon. The company’s unfettered growth and entry into new markets has caught the attention of those concerned with competition. The president of the United States is reported to be “obsessed” with proving Amazon is a monopoly and has repeatedly tied the Washington Post’s tough coverage of his presidency to Bezos’ ownership of the publication.
In response to concerns over its ability to influence markets, an Amazon spokesperson said: “We operate in a diverse range of businesses, from retail and entertainment to consumer electronics and technology services, and we have intense and well-established competition in each of these areas.”
No policies targeting Amazon appear to be in the works. Still, having your name bandied about as an antitrust concern in Washington isn’t a good thing. Meanwhile, Amazon has been pumping more and more money into its lobbying efforts, both to win business and to ward off unfavorable legislation.
That pursuit of growth—and its mercilessly competitive spirit—has also put Amazon in some dubious positions. As it ramps up its ad business, it will be serving two parties: the consumer and the advertiser. Whose interests will it put first? Amazon has also rapidly expanded the stable of products it makes itself, pitting it against the outside manufacturers who sell on its platform. That has regulators around the world concerned, reports Axios.
Perhaps the greatest threat is that of perception. So far, Amazon has emerged relatively unscathed from numerous negative stories about its tough corporate culture (paywall) and the working conditions in its quickly multiplying warehouses. Its influence has become so great that it’s even changing how economists think about inflation. There are no indications that its influence will wane anytime soon, which should only bring a harsher spotlight on the role it plays in our lives and society.
Someday, though, Amazon might need to stand for something other than just being Amazon.
Update [Jan. 14]: This post has been updated to include a statement from Amazon.