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Book Review: The Everything Store

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The-Everything-StoreThe Everything Store: Jeff Bezos and the Age of Amazon, written by Brad Stones, is one of the best business books I have read. It gives a graphic detailed picture of both Amazon's visionary driver, Jeff Bezos, and all the steps that created the company. Each of these steps, the challenges, the ups and downs, can be instructive case studies.

Jeff Bezos is an ex–"Wall Streeter." He started at Bankers Trust, then went to DE Shaw. There he was directed to the Internet, and to the Everything Store. He combined the two in a start-up in a converted garage. The push was to "Get Big Fast." The Amazon start-up illustrates the benefits of a positive cash flow model. Customers paid with credit cards, while Amazon paid its distributors every few months. Early on, the company became "customer obsessive," which it continues to do to this day.

Bezos is described as "having a fierce competitive streak and need to beat his adversaries" and as being "manic driven." The company is "relentlessly driven and disruptive, as well as calculating and ruthless," "missionary and mercenary." Amazon's "culture is enormously competitive, and it begins with Bezos." Because of Amazon's need for success, it's not surprising that it has not been a easy company for which to work. Executive turnover is high. Bezos has "enormously eviscerating assessments of employees."

Amazon has grown partly by ignoring the Wall Street focus on steady quarterly earnings growth. In some ways Amazon is an old fashioned product and customer driven, and in others is expansionary, innovative and disruptive. There has been a pattern of a "deluge of spending and widening losses." Bezos got caught up in the Dot-com era, and was saved by a CFO who did a $672 million bond offering, resulting in $1 billion in cash. This is a dramatic example of the importance of cash in a fast growth business, especially when it looked like management chaos would overwhelm the company.

The addition of each new product category to the Amazon website platform brought a host of problems, and management challenges. The Kindle came from Jeff Bezos' "vision of a mainstream electronic reader at an affordable price." The Kindle jumped out ahead of competitors. The Amazon Web Services business came out of Bezos' concern that Amazon would become a "consistently marginal retailer." "We reinvent our way out."

Amazon is a company where the founder continues as hands-on CEO. This is "to ensure that potential problems are addressed and that the customer value is always heard inside Amazon." This is in contrast to the many growth companies where the founder is unable to handle managing the increasing size and competitive threats. For investors, it raises the succession question, and begs the thought, "where would Amazon be without Bezos?"

The Everything Store is such richly researched and detailed book that no review can begin to completely cover. NYSSA members should buy the book, and spend considerable time studying it.

–Bill Hayes

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