Speaker 1: Guess what, Mango? What's that? Will? Did you know that
Speaker 1: the early days of Amazon dot Com they actually had
Speaker 1: this bell installed and they would ring it every time
Speaker 1: a book was sold. The employees we then rush over
Speaker 1: to see if they knew the name of the customer
Speaker 1: who had made the purchase. I mean, that's crazy. I mean,
Speaker 1: especially considering they now sell more than six items per
Speaker 1: second on their biggest days. I'm guessing they don't ring
Speaker 1: that bell anymore. Probably not, but actually it feels like
Speaker 1: they should do this as a symbol, like maybe get
Speaker 1: some intern that give them a bell and just be like,
Speaker 1: just just do your best every time in order comes in?
Speaker 1: All right, that that might be a little bit mean,
Speaker 1: but it is crazy to think just how much Amazon
Speaker 1: has grown in the past couple of decades, and how
Speaker 1: many industries they're involved in, and and the crazy things
Speaker 1: they may be up to next. So that's what today's
Speaker 1: episode is all about. Let's get started, either podcast listeners,
Speaker 1: Welcome to Part Time Genius. I'm Will Pearson and as
Speaker 1: always I'm joined by my good friend Man guesh Ticketter
Speaker 1: and the man on the other side of the sound
Speaker 1: proof glass. What did he do? He checking his stocks
Speaker 1: in the news anyway, whatever he's doing, that's our friend
Speaker 1: and producer Tristan McNeil. That's that's been so long since
Speaker 1: people check their stocks that way. But all right, well,
Speaker 1: today we're talking about Amazon dot Com, the company that,
Speaker 1: in twenty two short years has gone from this tiny
Speaker 1: garage based startup in Washington to the largest and most
Speaker 1: successful online purveyor of well, I mean, pretty much everything,
Speaker 1: and likely it feels like every week brings this fresh
Speaker 1: announcement from Amazon about some new product or venture that
Speaker 1: the company's launching, or some milestone has reached on its
Speaker 1: journey to total global domination. Right, and with all that
Speaker 1: recent news in mind, we thought it might be interesting
Speaker 1: to take a deep dive into Amazon's history and trying
Speaker 1: to get a sense of how it got so big
Speaker 1: and how much growing it could still do in the
Speaker 1: years ahead. And along the way, of course, we'll get
Speaker 1: a couple of PTG listeners on the line for a quiz.
Speaker 1: All right, So let's start from the beginning on this one,
Speaker 1: which which for Amazon was the your nineteen and that's
Speaker 1: when the founder and CEO of the company, Jeff Bezos,
Speaker 1: decided to quit his job at an investment firm and
Speaker 1: take a gamble by starting his own internet company, which
Speaker 1: is so risky. I mean this is remember the Internet
Speaker 1: was a new phenomena for most people, and buying something
Speaker 1: online was just about the shadiest, riskiest thing you could
Speaker 1: think of. Yeah, and Bezos saw the potential though, and
Speaker 1: when when he noticed the early rumblings of the impending
Speaker 1: Internet revolution while working on Wall Street. And according to him, quote,
Speaker 1: the wake up call was finding this startling statistic that
Speaker 1: web usage in the spring of was growing at a year.
Speaker 1: You know, things just don't grow that fast. It's highly unusual.
Speaker 1: And that started me about thinking what kind of business
Speaker 1: plan would make sense in the context of that growth. Well,
Speaker 1: apparently the kind that involves starting an online bookstore out
Speaker 1: of your garage, because that's what Jeff wound up doing
Speaker 1: when he founded Amazon just a year later. And you know,
Speaker 1: he wasn't sure what to name his company. The front
Speaker 1: runner name I found was actually Cadabra, which is a
Speaker 1: crib from that word abra cadabra, but that idea was
Speaker 1: scrapped when jeffs lawyer pointed out that it sounded a
Speaker 1: little too close to cadaver. That's kind of I could
Speaker 1: see how that might be an issue cadaver. So the
Speaker 1: name went from magician lingo to corpse, then to a river.
Speaker 1: So how exactly did that progression happened? Well, supposedly went
Speaker 1: with the river name for two reasons. The first was
Speaker 1: that the Amazon River is one of the largest and
Speaker 1: longest in the world, so the name has this built
Speaker 1: in connotation of scale. Uh and and the second reason
Speaker 1: was a bit more practical, like website listings for businesses
Speaker 1: were usually alphabetical back then, and Jeff wanted a place
Speaker 1: at the top of the list. So I love the
Speaker 1: idea of the alphabetical listings like that. That that happened
Speaker 1: at some point. Yeah, these have those directories, remember directory
Speaker 1: of websites. But but by the way, another name Bezos
Speaker 1: kicked around was Relentless, and while he eventually decided against it,
Speaker 1: if you type relentless dot com and your search bar,
Speaker 1: you actually get taken to Amazon. Cool. Yeah, all right, Well,
Speaker 1: well back to the company's founding. In the whole venture
Speaker 1: was Jeff's idea, but he definitely didn't get it off
Speaker 1: the ground by himself, and the initial capital for the
Speaker 1: site actually came from his parents and admittedly, they didn't
Speaker 1: really understand what their money was going toward. In fact,
Speaker 1: the very first question Jeff's dad asked after hearing the
Speaker 1: pitch for this web based bookstore was what's the internet?
Speaker 1: You know. Nonetheless, jeff parents ponied up a large portion
Speaker 1: of their life savings. I mean, this was hundreds of
Speaker 1: thousands of dollars all for their son's crazy dream of
Speaker 1: opening this invisible bookstores. They saw it. Yeah, that's so serious,
Speaker 1: unconditional love. But thankfully, Mom Potizos have done pretty well
Speaker 1: on their investment. Uh. And that's to put it mildly.
Speaker 1: I mean the site was a success from the start,
Speaker 1: and that was with zero press promotion. I mean Amazon
Speaker 1: sold books to customers in all fifty states and forty
Speaker 1: five different countries within its first month of operation. It's
Speaker 1: pretty incredible. Yeah, but it's second on. The site was
Speaker 1: making more than twenty dollars in sales per week, and
Speaker 1: that was way more than Jeff and his tiny startup
Speaker 1: team ever anticipated. Yeah. You know, I still laugh thinking
Speaker 1: about them ringing a bell with every sale in those
Speaker 1: early days. Yeah, and especially thinking about that stat we
Speaker 1: discussed earlier where peak times Amazon's annual prime day. For instance,
Speaker 1: the company sells over six items per second. Never stopped ringing. Yeah,
Speaker 1: I would be a total nightmare. Speaking of which, did
Speaker 1: you hear about that early Amazon software bug? It basically
Speaker 1: handed out free money to customers? Oh I did, I'm
Speaker 1: sorry I missed out on this. What happened a fairly
Speaker 1: There was a glitch in the program that allowed users
Speaker 1: to order a negative quality of books, and the site
Speaker 1: would end up crediting the cost of the books to
Speaker 1: the customer's credit card. I mean, Amazon's team caught onto
Speaker 1: it pretty quickly, but but it's still kind of amazing. Yeah,
Speaker 1: you know. And Amazon has always been good about identifying
Speaker 1: these hiccups in its service and quickly getting solutions in place.
Speaker 1: And one great example of this is the decision to
Speaker 1: branch out from book sales just three years after the
Speaker 1: company's launch. And don't get me wrong, I mean, books
Speaker 1: were a smart choice to start out with because they're sturdy,
Speaker 1: they're fairly uniform in shape, and all of that makes
Speaker 1: them easy to store and ship and bulk. But focusing
Speaker 1: on just one product, you know, no matter how popular
Speaker 1: or convenient it is, it puts a cap on the
Speaker 1: company's growth potential. And it left a lot of money
Speaker 1: on the table, as they saw it, and and that's
Speaker 1: ultimately why Amazon started selling other forms of media. They
Speaker 1: moved into CDs and DVDs, and they then moved into
Speaker 1: things like clothing and toys and electronics, and since then
Speaker 1: it's just about anything else. I Mean, what's baffling to
Speaker 1: me is that Amazon's like one of the few expanding
Speaker 1: e commerce sites that actually managed to survive that whole
Speaker 1: dot bomb bust, you know that are the one in
Speaker 1: the late nineties and early two thousands, and and I
Speaker 1: don't know if you remember, but like, there are so many,
Speaker 1: I think there are hundreds of online retail startups. I mean,
Speaker 1: we remember things like pets dot com and Cosmo dot com.
Speaker 1: But there was just so much hype. Yeah, and there's
Speaker 1: been all this excitement about the burgeoning online market, and
Speaker 1: investors were quick to back these fledgling companies that really
Speaker 1: had no long term plan or business model really and
Speaker 1: and then once the huge losses started mounting, they all
Speaker 1: that funding dried up and the dot com bubble burst,
Speaker 1: of course, So I'm curious how did Amazon manage to
Speaker 1: come through all of that unscathed. Well, for one thing,
Speaker 1: and this was something I really didn't know, but just
Speaker 1: looking into this that Amazon was a lot more frugal
Speaker 1: than some of the cash happy startups that were spending
Speaker 1: so much money on things like lavish office space and
Speaker 1: all these wild parties that you read about. And you know,
Speaker 1: for example, Amazon's offices used to have these makeshift what
Speaker 1: they called door desks for workers to use. According to
Speaker 1: former employee Greg Lindon, the company would quote buy a
Speaker 1: wooden door, preferably a hollow core wooden door with no
Speaker 1: whole free drilled saw, a couple of four by four
Speaker 1: by six pillars in half, bolt them to the door
Speaker 1: with a couple of scary looking angle brackets, put them
Speaker 1: in front of a programmer, and doordesk. That's what it is.
Speaker 1: But I mean, there's no way Amazon survived just by
Speaker 1: pitching pennies on a few door dusks. No, I mean,
Speaker 1: but it's not like Amazon was completely she folded from
Speaker 1: the dot com crisis either. The at one point in
Speaker 1: two thousand one, the company's stock plummeted from a high
Speaker 1: of about a hundred dollars per share to a low
Speaker 1: of just six bucks. You know, Bezos was said to
Speaker 1: have taken all of this in stride, though, I mean,
Speaker 1: he said he preferred to focus on the ever increasing
Speaker 1: cash flow that Amazon had to play with. He felt
Speaker 1: the long term opportunities afforded by this capital would secure
Speaker 1: the company's future, even if that meant profits would stay
Speaker 1: at or you know, even below zero for the time being. Yeah.
Speaker 1: Doing the research for this episode really highlighted how much
Speaker 1: more Amazon values revenue over net income. But since most
Speaker 1: of us tend to use those terms interchangeably, I just
Speaker 1: want to give a quick note about the distinction between
Speaker 1: the two. So, in a financial context, revenue is the
Speaker 1: total amount of money generated through everything the company sells, right,
Speaker 1: and net income refers to just the company's profits. So
Speaker 1: that's the amount of money that it stays after you
Speaker 1: take away you know, the company's operating costs and and
Speaker 1: all their other expenses. Yeah. So for two thousand and sixteen,
Speaker 1: just looking at the number here, Amazon earned about a
Speaker 1: hundred and thirty six billion in revenue, but it only
Speaker 1: reported two point three billion as actual profit only only time.
Speaker 1: And how depressing would that be if our business only
Speaker 1: generated two point three billion and actual profit. But you know,
Speaker 1: sometimes you'll see reports that Amazon never turns a profit
Speaker 1: despite being this huge sales juggernaut, but that's not really
Speaker 1: the case at this point. Yeah. I mean, it's true
Speaker 1: that the company didn't report a profit until six years
Speaker 1: after it launched, and even today Amazon fluctuates between losses
Speaker 1: and gains and breaking even all on a quarterly basis.
Speaker 1: But the thing to remember is that those sometimes less
Speaker 1: in stellar profit margins are all part of visas plan.
Speaker 1: Like Amazon makes a ton of money, it's just that
Speaker 1: most of that money is immediately reinvested in the company's
Speaker 1: growth and diversification, rather than being divvied up amongst its
Speaker 1: employees and shareholders or set aside for a rainy day. Well,
Speaker 1: and that's how we ended up with things like Prime
Speaker 1: Shipping and the Kindle Alexa and all these other services
Speaker 1: and gadgets that the company has developed and rolled out
Speaker 1: over the years in lieu of banking these sky high profits.
Speaker 1: So Bezos convinced the company to set aside short term
Speaker 1: income really more in favor of long term expansion, And
Speaker 1: just like the early move beyond books, the decision has
Speaker 1: definitely paid off in a huge way. Yeah, and they're
Speaker 1: all kinds of examples of that payoff. But I think
Speaker 1: Amazon's Web services division, the a WS, is probably the
Speaker 1: best one. That's the cloud computing business that Amazon started
Speaker 1: in two thousand two, right after the dot com crash,
Speaker 1: and it's really prescient these days. A WS is actually
Speaker 1: the most profitable part of the company. And if you
Speaker 1: look at it, like last year when Amazon reported the
Speaker 1: two point three billion dollars in income that you mentioned
Speaker 1: the profits from their web services that represented more than
Speaker 1: half of that take. Yeah, so so really the company's
Speaker 1: biggest money maker has nothing to do with selling or
Speaker 1: shipping physical products at all, which is just amazing to
Speaker 1: think of more than half of the company's profits coming
Speaker 1: from a part of the company that most people really
Speaker 1: don't even know exists or understanding exactly what it is.
Speaker 1: And so for our listeners who might be going a
Speaker 1: little cross side at the mention of web services and
Speaker 1: cloud computing, you know, here's a little bit of an explanation.
Speaker 1: So to just think about these companies that maybe startups
Speaker 1: or even bigger companies, and they know that as they grow,
Speaker 1: they're going to need new servers, they're going to need
Speaker 1: to equipment all to be able to manage the you know,
Speaker 1: a bigger online business. But it's hard to predict exactly
Speaker 1: how quickly you're going to grow, and if you were
Speaker 1: having to buy these servers in every piece of equipment
Speaker 1: to predict that each time, it can get extraordinarily expensive.
Speaker 1: And so to be able to just use Amazon Services
Speaker 1: and Amazon servers saves them a ton of money and
Speaker 1: allows them to grow at exactly the rate they need
Speaker 1: to grow. Yeah, but what's interesting that isn't just like
Speaker 1: small companies and startups that are taking advantage of this arrangement,
Speaker 1: like big companies actually use it too. And if you
Speaker 1: look at the client list, it's like Netflix, Instagram, Spotify, Airbnb.
Speaker 1: They all rely on a w S servers for their power,
Speaker 1: and even the government's partnered with a WS like did
Speaker 1: you know the cia A uses them? I mean they
Speaker 1: owe much of its computing power to a customize cloud
Speaker 1: on the AWS servers that most of the division's one
Speaker 1: million plus customers represent for profit businesses, but there are
Speaker 1: also about eighteen thousand nonprofits, five thousand schools, and close
Speaker 1: to two thousand government agencies to wow, and you know,
Speaker 1: all that attention and profitability has caught the attention of
Speaker 1: these other mammoth companies who now want in on this
Speaker 1: cloud computing industry. You've got place like IBM and Microsoft
Speaker 1: and Google. They've all started investing tons of money into
Speaker 1: growing their competing services. Of course, a WS has poised
Speaker 1: to make a record setting sixteen billion dollars in revenue
Speaker 1: this year. The other guys have a long way to
Speaker 1: go if they have any chance at trying to catch
Speaker 1: up with Amazon, which is exactly how Amazon likes that,
Speaker 1: I'm sure. I mean, they've made a habit of getting
Speaker 1: out in front of the competition when it comes to
Speaker 1: emerging tech and infrastructure, and that's to the chagrin of
Speaker 1: all these rival companies and traditional brick and mortar stores. Yeah,
Speaker 1: why don't we talk a little bit about some of
Speaker 1: the other innovations that have given Amazon a leg up
Speaker 1: over the years, and including a few on the horizon
Speaker 1: that do raise some serious questions about things like consumer privacy. Yeah, definitely,
Speaker 1: But why don't we get a listener on the line
Speaker 1: for a quiz first? All right, so Ango, we've got
Speaker 1: a brilliant listener on the line right now, and I
Speaker 1: know we're going to be doing today's quiz about Amazon
Speaker 1: because of the episode today. But the reason we've actually
Speaker 1: got today's guest on the phone is because he called
Speaker 1: into our Fact hotline with a terrific story related to
Speaker 1: our Sugary Serials episode. So, Jeffrey Nichols, welcome to Part
Speaker 1: Time Genius. Well, thank you for having me. All right, So, Jeffrey,
Speaker 1: we we really need you to share with our listeners
Speaker 1: what you told us and your voicemail. So it turns
Speaker 1: out that you actually won a grand prize from a
Speaker 1: box of wheaties almost thirty years ago. Is this right?
Speaker 1: That that is correct? I had forgotten about it until
Speaker 1: you got to the end of the Sugary Cerial episode
Speaker 1: when you were discussing the prizes and how they had
Speaker 1: to start putting. They couldn't put them in the actual
Speaker 1: bag of cereal, and it was in the bag between
Speaker 1: that and the box. And then I stopped in my
Speaker 1: tracks while I was walking my dog and realized I
Speaker 1: won one of those. And so, needless to say, I
Speaker 1: had the Facebook you guys instantly and then lo and
Speaker 1: behold you guys enjoyed by doing that and had me
Speaker 1: leave the message on the fact. Yeah, but you got
Speaker 1: you gotta tell everyone what you want because it's crazy. Um,
Speaker 1: So there was there was a box of Walter Payton Wheatie's,
Speaker 1: which I imagine was probably procured in the fall, because
Speaker 1: that's that's when they're playing football, and Walter Payton was
Speaker 1: still a demigogue at that time. And I months and
Speaker 1: months later, I the box of cereal was still there.
Speaker 1: I poured it in in this plastic envelope, her plunked
Speaker 1: in the bowl and you know, we've all had that
Speaker 1: happened a million times. But for whatever reason, I opened
Speaker 1: it up and it said you won, and I uh.
Speaker 1: I was still living at home because I was a teenager,
Speaker 1: and I and I yelled up to my mom and
Speaker 1: you're never gonna believe this, but we won the grand prize,
Speaker 1: which turned out to be a thousand dollars cash and
Speaker 1: a week in Aspen slash Snowmac with the Phil and
Speaker 1: Steve Mayer, who were the greatest Olympic American skiers of
Speaker 1: all time at that point. And so it just it
Speaker 1: was happening. It was falling at the end of what
Speaker 1: was my spring break of I guess would have been
Speaker 1: the spring of eighty nine, my senior year, And so
Speaker 1: my mom flew and I flew up to Colorado and
Speaker 1: the most bizarre aspect of this whole uh contest was
Speaker 1: that I was the only person who won the contest
Speaker 1: by accident. And what do you mean? Well, I didn't
Speaker 1: realize that, because why would I I was only teen
Speaker 1: and a half years old. But there's a whole subculture
Speaker 1: in America apparently who everything that they eat and consume
Speaker 1: and where and do is because of no purchase necessary. Um.
Speaker 1: They have these big ledgers filled um from front to
Speaker 1: back and top to bottom with every contest that they
Speaker 1: are currently uh entered in, and and that's how they live.
Speaker 1: It was the bizarre I mean, of all of the winners,
Speaker 1: they were all looking at each other's ledgers to see
Speaker 1: where they were in proximity to everybody else's occupations. But
Speaker 1: so I was the only person who skied, and so
Speaker 1: Phil Mere and I just skied all day every day
Speaker 1: and ask them because all of the other Grand Prize
Speaker 1: players they were all back in their hotel room working.
Speaker 1: I do love that you actually one of the Grand Prize.
Speaker 1: That sort of restores some faith in these serial prizes
Speaker 1: for me, because you know, you always see these massive
Speaker 1: prizes and you don't think anyone's actually winning them. So
Speaker 1: I'm glad to know you want it. Yeah, it was,
Speaker 1: I mean it was. It was very cool and in
Speaker 1: just so look, I mean it was as cool to
Speaker 1: have one as it was to find out that there
Speaker 1: is a subculture. Um he was to say it was funny.
Speaker 1: When the topic of the thousand dollars cash came up,
Speaker 1: my mother quickly reminded me as to who bought the cereal,
Speaker 1: So that's who was also pocketing the thousand dollars cads. Well,
Speaker 1: that is a great story and actually gives us an
Speaker 1: idea for a future episode on that subculture. But for
Speaker 1: today's episode, since we're focused on Amazon, we're going to
Speaker 1: have a related quiz. Now, angle what what quiz are
Speaker 1: we having Jeffrey play today? So we're playing a game
Speaker 1: called one star movie Reviews and this all comes from
Speaker 1: the great Twitter account Amazon movie Reviews, which is which
Speaker 1: is hilarious. And so there's actually a review on there
Speaker 1: for Tooth Fairy Too that I was looking at starring
Speaker 1: Larry the Cable Guy, I think, and so the review says,
Speaker 1: I have kids, they wanted to watch it. Sometimes I
Speaker 1: wish I didn't have kids. One star my favorite on
Speaker 1: there's actually this five star review on the site. It's
Speaker 1: for boss Baby, and it just reads, quote, this movie
Speaker 1: saved my marriage five stars. That's pretty incredible. All right, So, Jeffrey,
Speaker 1: we're going to read you some reviews from the site there,
Speaker 1: and all you have to do is tell us what
Speaker 1: movie they're referring to you. Ready to play? Alright? Review
Speaker 1: number one, there were no wolves in this movie? One star.
Speaker 1: So what two thousand thirteen movie featuring Leonardo DiCaprio are
Speaker 1: we talking about. I would have to say The Wolf
Speaker 1: of Wall Street. Yeah, that's right. So they're actually a
Speaker 1: similar one star reviews for The Accountant, which says not
Speaker 1: enough accounting in this movie, and Cars, which simply says,
Speaker 1: I see enough cars in real life. All right, all right,
Speaker 1: you're one for one, Jeffrey, here we go. Number two.
Speaker 1: What Nickelodeon cartoon about an intrepid Mexican girl who loves
Speaker 1: to travel got the following review? Hate it? Who lets
Speaker 1: their three year old go on adventures with just a
Speaker 1: monkey for supervision? I would have to say Dora the Explorer.
Speaker 1: Absolutely your two for two? All right too for two?
Speaker 1: Question number three, This classic Judy Garland movie features some
Speaker 1: monkey talk as well. There's a one star review that reads,
Speaker 1: flying monkeys, that's too far fetched. I would certainly hope
Speaker 1: they were referring to the Yeah, of course, and I
Speaker 1: love that, like evil witches and a tin man and
Speaker 1: a talking line are all within the realm of possibility.
Speaker 1: But somehow flying monkeys are a step too far. Alright.
Speaker 1: Question number four, You're doing great so far. This review
Speaker 1: starts quote, I've never seen penguins dance. This propaganda film
Speaker 1: is meant to deprive of us of tuna. What movie
Speaker 1: about dancing penguins which shares its name with an old
Speaker 1: cab callaway song? Are we talking about? That would be
Speaker 1: happy feats? Yeah, you're right, a four for four. Nice job.
Speaker 1: Let's see if you can bring it home with the
Speaker 1: last one and go five for five. Question number five,
Speaker 1: This review disappointedly sums up the movie quote one star,
Speaker 1: the boat sinks. What movie are we talking about? That
Speaker 1: would be tight hand? That's amazing, Jeffrey. So you went
Speaker 1: five for five, which gets you an official part Time
Speaker 1: Genius Certificate of Genius along with the part Time Genius
Speaker 1: t shirts. So congratulations, thank you. You're listening to part
Speaker 1: Time Genius and we're talking about the innovative thinking and
Speaker 1: breakthrough technologies that have made Amazon one of the fastest
Speaker 1: growing and most ubiquitous companies in history. And just how
Speaker 1: prevalent is Amazon exactly? According to a report out earlier
Speaker 1: this year from Walker Sands Communication, an astounding eighty four
Speaker 1: percent of US consumers have bought something from Amazon in
Speaker 1: the past. Unbelievable and as far as consumer basis go,
Speaker 1: that's just about as good as you could possibly get.
Speaker 1: It's pretty much everyone. Yeah, And and part of the
Speaker 1: reasons so many people buy from Amazon is that the
Speaker 1: company has gotten so good at selling what you want,
Speaker 1: I mean sometimes even before you know it. Yeah, it's true.
Speaker 1: And they've really set the bar in terms of predictive
Speaker 1: analytics and targeted marketing. For example, they have this super
Speaker 1: comprehensive filtering engine that can analyze everything from what you've
Speaker 1: purchased in the past to what's currently in your online
Speaker 1: shopping car to things like which items you've searched for
Speaker 1: the most. And your information then gets cross reference with
Speaker 1: that of other users. And as we've talked about, this
Speaker 1: is eighty four percent of America, so it's a ton
Speaker 1: of people. So the company can recommend products that other
Speaker 1: people have bought when shot upping for the same things
Speaker 1: that you have. And just like with impulse buys near
Speaker 1: registers at grocery stores, that power of suggestion goes a
Speaker 1: long way toward making you spend more on Amazon, especially
Speaker 1: when it's customized to this degree. Investipdia reports that Amazon's
Speaker 1: personalized recommendation system snags the company as much as an
Speaker 1: extra thirty percent and revenue every single year. Oh man,
Speaker 1: we're such cheap, but but you kind of have to
Speaker 1: admire how much thought and effort goes into the design
Speaker 1: of the platform. I mean, even if it is optimized
Speaker 1: to suck every dollar out of your wallet. Like you
Speaker 1: know that one click ordering button that Amazon has. Not
Speaker 1: only is that this in house invention meant to increase
Speaker 1: impulse buys and limit the lag between purchases and shipments,
Speaker 1: but it's also a patented feature that Amazon licenses to
Speaker 1: other companies. So you know, for for instance, anytime you
Speaker 1: buy a song or movie or whatever on iTunes with
Speaker 1: one click ordering, not only does Apple make money, but
Speaker 1: Amazon sharing in that profit too. Yeah, it really is
Speaker 1: amazing to think about this. And of course they're cloud
Speaker 1: computing business that we talked about, where you know, another
Speaker 1: company's ability to function and and even make money, it
Speaker 1: becomes dependent on giving Amazon a cut of these profits.
Speaker 1: It's really clever how they've worked out all of these
Speaker 1: ways of making money from other companies sales. Yeah, and
Speaker 1: Amazon's not shy about capitalizing on another company's money making
Speaker 1: schemes either. Just last month, Walmart announced I would start
Speaker 1: testing a delivery service in which it's workers would enter
Speaker 1: customers homes by way of a smartlock, and then they
Speaker 1: drop off the packages or even unload grocery items directly
Speaker 1: into the fridge or freezer. And now just a few
Speaker 1: weeks later, Amazon's one up them by launching their own
Speaker 1: in home delivery service in thirties seven cities. I mean,
Speaker 1: should should we actually feel bad for Walmart year for once?
Speaker 1: I don't know if I'm going to go that far
Speaker 1: with I mean, it's the one time they were actually
Speaker 1: ahead of the curve, even if by only a month.
Speaker 1: And then along comes Amazon and one ups though. But yeah,
Speaker 1: not that I'm really rooting for either of them in
Speaker 1: this case. That there's something about granting a giant company
Speaker 1: this unfettered access to my home that I'm not sure
Speaker 1: I'm ready to buy into. Just yet I totally get that,
Speaker 1: and to be fair, it's not a meritless idea. So
Speaker 1: this company called August Home, Inc. Did a study last
Speaker 1: year and found that approximately eleven million Americans had packages
Speaker 1: stolen off their doorsteps in two thousand and sixteen. But
Speaker 1: you're right, this new kind of delivery service has already
Speaker 1: raised a lot of eyebrows due to privacy concerns, even
Speaker 1: with the promise of cameras that livestream the whole delivery process.
Speaker 1: I mean, the service isn't guaranteed to take off for
Speaker 1: either company, but I'd say Amazon has a better chance
Speaker 1: of making it all work. Yeah, and this seems especially
Speaker 1: true here. I mean, Amazon could theoretically take the idea
Speaker 1: beyond simple delivery of packages. I mean, they already have
Speaker 1: this home and business services section of the site and
Speaker 1: it kind of works like task Grabbit, except all the
Speaker 1: services you can buy and schedule are handled by real professionals.
Speaker 1: You know, things like house cleaning and lawn care or
Speaker 1: even furniture assembly can all be arranged through Amazon. So
Speaker 1: with this new smart log program, you know, that kind
Speaker 1: of stuff could be set up through Amazon without you
Speaker 1: needing to be there. The service is performed. I do
Speaker 1: have to men, it's all a little bit creepy and
Speaker 1: still a little too new for me to get behind
Speaker 1: this completely. But but you're right, if anyone can sell
Speaker 1: the concept to the public, it would definitely be Amazon. Yeah,
Speaker 1: and they managed to float some pretty off putting ideas
Speaker 1: so far, but just look at what they've managed with
Speaker 1: Alexa and Amazon Echo. Right twenty years ago, when the
Speaker 1: company came on the scene, it would have been this
Speaker 1: unthinkable prospect that people would live within ever present virtual
Speaker 1: assistant that kept this constant thread of like what you
Speaker 1: were listening to and every word you said. But now
Speaker 1: about three million different people use the voice control of
Speaker 1: Alexa service every month, and that numbers only set to
Speaker 1: rise as the company expands the Echo line. Yeah, and
Speaker 1: as you remember that that Alexa was originally this standalone
Speaker 1: company that did web analysis and web analytics, if you
Speaker 1: remember that, and Amazon bought it for two d and
Speaker 1: fifty million dollars back in and they ended up sitting
Speaker 1: on this software for about sixteen years, not knowing exactly
Speaker 1: what they were going to do about it, and then
Speaker 1: they finally rolled it out as this very different than
Speaker 1: this home assistant and entertainment center. That's so crazy. I
Speaker 1: actually forgotten that that Alexa was where you go to
Speaker 1: UM to check other websites and what traffic they were getting.
Speaker 1: But but you know, as cool and sci fi concept
Speaker 1: as like this AI assistant is, it's actually got nothing
Speaker 1: on the actual robots that Amazon uses. And that's why
Speaker 1: I have to mention another Amazon acquisition that's only recently
Speaker 1: started to pay off for the company. In two twelve,
Speaker 1: Amazon bought a robotics company called Kiva for three quarters
Speaker 1: of a billion dollars, and today the Kiva robots are
Speaker 1: a big part of the picking and packing process that
Speaker 1: goes on at Amazon's enormous fulfillment centers. So these robots, like,
Speaker 1: what what do they do? Exactly? Well, the way it
Speaker 1: usually works is that whenever an order comes through an
Speaker 1: Amazon a human worker called a picker has to navigate
Speaker 1: those endless aisles of merchandise to find the specific bins
Speaker 1: that contain the ordered items. And now, of course, the
Speaker 1: computer tells the picker which aisles and bins to check.
Speaker 1: But with so many orders coming in each day and
Speaker 1: so many different items to choose from, filling orders can
Speaker 1: still be this tiring, time consuming task. In fact, most
Speaker 1: pickers walk as many as like fifteen miles during a
Speaker 1: single shift. Wow. Yeah, I know. Those Amazon warehouses are
Speaker 1: just huge. I remember seeing this fact that you know,
Speaker 1: if you if you added up all the square footage
Speaker 1: of these Amazon warehouses, it makes up something like seventeen
Speaker 1: New Hampshires Orthoning. Imagine how many delawares. That is, so
Speaker 1: many delawares. But but all right, so I just want
Speaker 1: to make sure I understand this. So they so, actually
Speaker 1: they have robots that are dexperous enough to pick the
Speaker 1: items out of bins. That seems remarkable. No they don't.
Speaker 1: So that so the Kiva robots don't even have arms.
Speaker 1: So pictures something more like an enormous roomba that scoots
Speaker 1: around really close to the ground at about five miles
Speaker 1: per hour. So, rather than sending human pickers on this
Speaker 1: like massive route through these labyrinthine warehouses, a kiva root
Speaker 1: brings all the needed items right to them. But the
Speaker 1: kivas don't carry the items individually. Instead, they rolled beneath
Speaker 1: these vertical columns that hold merchandise spins and then extend
Speaker 1: themselves upwards using hydraulics like keebas can actually towed up
Speaker 1: to seven pounds on their backs. So once they've located
Speaker 1: the column that contains the correct item, they just simply
Speaker 1: carry it back to the human worker, who can then
Speaker 1: pick out the item needed to fill the order. Wow
Speaker 1: like that you keep saying human worker anyway? You know? Actually,
Speaker 1: as a as a side note, speaking of human workers,
Speaker 1: there was one program totally unrelated to this, but I
Speaker 1: read about this program called camper Force. Have you heard
Speaker 1: about this before? The Amazon uses it to staff its
Speaker 1: warehouses during the holiday season because it's so much busier
Speaker 1: during that time, they just need temporary workers. And so basically,
Speaker 1: the company invites these nomadic r V e rs to
Speaker 1: set up shop near their facilities and come work as
Speaker 1: seasonal hires there. The program has its own logo, which
Speaker 1: is a silhouette of an RV speeding along with amazon
Speaker 1: smile logo on its side. I kind of love that
Speaker 1: it's it's it's a little strange, but yeah, it's kind
Speaker 1: of an interesting model. So I thought we could take
Speaker 1: a look at where Amazon is headed next and how
Speaker 1: they might convince us to let them wedge a little
Speaker 1: deeper into our personal lives. Okay, so what's on the
Speaker 1: horizon for Amazon. Well, in the immediate future, there's the
Speaker 1: new second headquarters that the company has been talking about
Speaker 1: building somewhere outside of its home base of Seattle. And
Speaker 1: while we could talk about what the five billion dollar
Speaker 1: investment could mean for the company or what the jobs
Speaker 1: will do for the local economy, I think it would
Speaker 1: be way more fun to talk about some of the
Speaker 1: ridiculous things cities have done to get Amazon to look
Speaker 1: their way. Yeah. I do love thinking about these kinds
Speaker 1: of things. In fact, one of the silliest promotional tactics
Speaker 1: I've read about, or maybe least effective, Okay, from my
Speaker 1: own hometown of Birmingham, and apparently part of what was
Speaker 1: dubbed this bring a to b campaign, and the city
Speaker 1: set up two giant replicas of Amazon's dash buttons. Those
Speaker 1: are those, you know, doorbell looking gadgets that let you
Speaker 1: reorder a certain produ with a single press of the button,
Speaker 1: except in this case, whenever residents pressed the big prop
Speaker 1: buttons instead of ordering more detergent or whatever, it would
Speaker 1: send one of six hundred different pregenerated tweets to Amazon's Twitter.
Speaker 1: So what kind of stuff were they're tweeting Amazon? Well,
Speaker 1: some of the messages were just little factoys about the
Speaker 1: city's quality of life, and others had bits of trivia,
Speaker 1: you know, like how Michael Jordan briefly played for the
Speaker 1: Birmingham Barons during his stint as a baseball player, And
Speaker 1: I don't know. Most of them were these corny, kind
Speaker 1: of flirty messages, like one of them says, um, Amazon,
Speaker 1: we got a hundred percent match on bumble, want to
Speaker 1: go on a date? Or I'd retreat that. Or here's
Speaker 1: one that I actually find kind of offensive. It says, uh,
Speaker 1: we are Chipotle and those other cities are Taco Bell Amazon. Yeah,
Speaker 1: I don't like that one thing. All right. Well, I'm
Speaker 1: not sure why the city thought bombarding Amazon with annoying
Speaker 1: tweets would be the way to lock them down, but
Speaker 1: either way, it's my hometown. So I'm pulling for you, Birmingham. Well,
Speaker 1: with two d thirty eight cities and regions across both
Speaker 1: the US and Canada vying for the chance to be
Speaker 1: Amazon's new hometown, I mean, there's some steep competition. So
Speaker 1: so one of the things Calgary is doing and I
Speaker 1: didn't even realize Calgary was up for this, but they've
Speaker 1: hung this two under foot banner outside Amazon's current Seattle headquarters.
Speaker 1: That says, quote, hey, Amazon, not saying we'd fight a
Speaker 1: bear for you, but we totally would. That's actually kind
Speaker 1: of awesome. All Right, I'm changing the team Calgary here,
Speaker 1: but you know, Mago, I thought we could switch gears
Speaker 1: and and talk for a minute about Whole Foods. Obviously,
Speaker 1: this was a big, big acquisition for them recently, and
Speaker 1: and particularly because Amazon now has the ability to do
Speaker 1: something that they didn't have before, and that was to
Speaker 1: access this brick and mortar world. Yeah, and and where
Speaker 1: a few months past Amazon's thirteen point seven billion dollar buyout.
Speaker 1: But there's still a lot of unanswered questions about what
Speaker 1: shape the new partnership will take. I mean, prime Member
Speaker 1: is now going to discount a Whole Foods and some
Speaker 1: of the stores have a stack of Amazon at goes
Speaker 1: for sale by the entrance. But obviously there's potential there
Speaker 1: for something much more interesting, right, And there's been all
Speaker 1: kinds of speculation about whether Amazon will just gut the
Speaker 1: stores and use them as these urban or suburban distribution hubs,
Speaker 1: or maybe force Whole Foods to adopt the model of
Speaker 1: the Amazon Go prototype grocery stores. These are the ones
Speaker 1: where you know the company has been testing out the
Speaker 1: possibility of minimizing human contact in their stores, and sensors
Speaker 1: just keep track of the items that you grab and
Speaker 1: automatically charge the total. It goes directly to your Amazon
Speaker 1: account once you head for the exits there. Yeah, and
Speaker 1: that could definitely happen down the line. But I'm looking
Speaker 1: forward to pressing a button at my desk, watching a
Speaker 1: drone pick up an avocado for me, marring it on
Speaker 1: my phone, and then having a helicopter up to my
Speaker 1: office where I can reach out the window and plug
Speaker 1: it from the sky. I'm sure that's going to happen
Speaker 1: one day. Actually, I did come across this thought experiment
Speaker 1: from a Texas design firm called Argo Design, and some
Speaker 1: of the concepts weren't too far off from what you
Speaker 1: just describe. So they try to imagine what a potential
Speaker 1: Amazon Foods might look like when paired with new and
Speaker 1: emerging technology. So one of the ideas was that these
Speaker 1: new echo fridges could be built with these exterior facing
Speaker 1: doors that a delivery driver or maybe a flying drone
Speaker 1: like you dreamed of, could access from the outside. And
Speaker 1: the idea was that one side of the fridge would
Speaker 1: belong to the consumer and would store all of his
Speaker 1: or her food products, while the other side would house
Speaker 1: a rotating assortment of suggested products that Amazon swaps out
Speaker 1: once or twice a day. So if you wanted to
Speaker 1: buy that bag of grapes or those heirloom tomatoes, all
Speaker 1: you'd have to do is slide them over to your
Speaker 1: side of the fridge and they'd be purchased automatically, And
Speaker 1: if there was nothing on sale that you wanted, you
Speaker 1: just leave it all being Amazon would haul it over
Speaker 1: to your neighbor or something to see if he was
Speaker 1: That sounds equal parts amazing and horrifying, And it's almost
Speaker 1: like the mini bar you don't want. It's tear tempting,
Speaker 1: and the communians is obviously great, but getting the jar
Speaker 1: of all is that my neighbors have rejected. That kind
Speaker 1: of turns me off just a little bit. Yeah, well,
Speaker 1: it is a little unsettling to think about. But with
Speaker 1: drones and in home deliveries already on the table, you know,
Speaker 1: sharing a fridge with Amazon may not be outside the
Speaker 1: realm of reason. There was actually one idea from Argo
Speaker 1: Design that I really thought was very very interesting, and
Speaker 1: you know, it's kind of their take on the sharing
Speaker 1: economy model that's been popularized by companies like Uber and Airbnb.
Speaker 1: And so basically, talented home cooks could prepare meals to
Speaker 1: sell in their community. So how does Amazon play a
Speaker 1: role here? So they would provide them with some high
Speaker 1: tech tupperware containers to pack the food in, and then
Speaker 1: each of these special containers would include this mass spectrometer
Speaker 1: to do things like detecting allergens and pathogens and the
Speaker 1: prepared meals. And this way Amazon and the aspiring chefs
Speaker 1: could sidestep the f d A and the whole packaged
Speaker 1: food industry, yeah, while still ensuring that their home cooked
Speaker 1: meals were safety eat. I mean, that's an awesome idea,
Speaker 1: but that one actually might be outside the realm of reason.
Speaker 1: That's true, I mean, at least at this point. But
Speaker 1: I do appreciate the positivity behind it. And you know,
Speaker 1: sometimes if it was, like all the tech that's aimed
Speaker 1: at convenience does make us feel a little more isolated again,
Speaker 1: So there was something about this that was just nice
Speaker 1: to see an application that would encourage people to eat
Speaker 1: locally and also maybe meet their neighbors. I thought the
Speaker 1: founder of the design firm, expressed it pretty well. And
Speaker 1: a quote that he said, it says, maybe, rather than
Speaker 1: keeping us away from each other, stronger data systems could
Speaker 1: help us get closer to each other over time. Well,
Speaker 1: I like that heartwarming sentiment. But you know what else
Speaker 1: brings us all together, a good old fashioned fact off,
Speaker 1: let's do it all right, I'll start us off here.
Speaker 1: So you want to know a good way to get
Speaker 1: a building named after you on the Amazon campus be
Speaker 1: the first person to have purchased a book from Amazon.
Speaker 1: It sounds it's hard to do that again, Yeah, it
Speaker 1: sounds like a riveting book too. It was purchased by
Speaker 1: software engineer John Waynewright, and the name of the book
Speaker 1: was flew with concepts and creative analogies and I'm not
Speaker 1: done with the title and then goes on computer models
Speaker 1: of the fundamental mechanisms of thought and uh so after
Speaker 1: buying that years later, Jeff Bezos decided to name a
Speaker 1: building after him, And that title just feels like clickbait. Yes,
Speaker 1: speaking of Jeff Bezos, did you know that if you
Speaker 1: call the Amazon service desk you might actually get Ahold
Speaker 1: of Visos himself. So every Amazon employees required to spend
Speaker 1: a couple of days every two years answering customer calls,
Speaker 1: and apparently he really enjoys it. It kind of reminds
Speaker 1: you of Steve Jobs answering customer email, That's what I
Speaker 1: was gonna say. It reminded me of that as well.
Speaker 1: I remember seeing seeing that story about that. Well, another
Speaker 1: Visos fact here. You know, he's got this problem of
Speaker 1: trying to figure out what to do with his billions
Speaker 1: and billions of dollars. Poor guy, I mean, trying to
Speaker 1: figure this out. Well, he is finding some interesting ways
Speaker 1: to spend some of his money, and one of those
Speaker 1: ways is building this ten thousand year clock. So the
Speaker 1: clock apparently ticks once a year, and the century hand
Speaker 1: moves ahead once every one hundred years. And because you
Speaker 1: know every cool hawk needs a cuckoo, that that happens
Speaker 1: every thousand years, and apparently the clock is supposed to
Speaker 1: be like a symbol of long term thinking. I guess
Speaker 1: I like that. I mean, I hope it's just not
Speaker 1: a like traditional tiny cuckoo, but something spectacular. Um, did
Speaker 1: you know that a book about Lin apparently helped keep
Speaker 1: Amazon in business in the early days, So, as we
Speaker 1: both know, from our e commerce herees. But when you're
Speaker 1: a bookseller, you buy books from distributors and you typically
Speaker 1: can't buy a single copy. You have to buy them
Speaker 1: in bulk, like ten or so books at a time.
Speaker 1: But in the earliest days, Amazon didn't need ten copies
Speaker 1: of every book. So Amazon figured out a loophole. When
Speaker 1: they needed a book, they'd order one copy of the
Speaker 1: book that they wanted to have on hand, and then
Speaker 1: nine copies of this really obscure book on liking that
Speaker 1: was always out of thoughts, pretty hilarious. So I do
Speaker 1: wish they had realized that and be like, there's such
Speaker 1: demand for this liking book, we need to bring it back.
Speaker 1: That's awesome. Well that, you know, that may have prevented
Speaker 1: them from losing a lot of money at that point,
Speaker 1: But many years later, in two thousand thirteen, Amazon showed
Speaker 1: just how much money it could lose in less than
Speaker 1: an hour. When the Amazon dot Com site went down
Speaker 1: for only forty minutes. The company apparently lost close to
Speaker 1: five million dollars in that brief period. That's about a
Speaker 1: hundred and twenty thousand dollars each minute. That's insane. So,
Speaker 1: as you know, there have been stories over the years
Speaker 1: of Amazon employees and fulfillment centers not always being the happiest.
Speaker 1: And there are actually some funny stories about how various
Speaker 1: employees have decided to protest or communicate their unhappiness. So
Speaker 1: one funny one involves an employee back in two thousand
Speaker 1: and six in the Kansas fulfillment Center. So he'd arrived
Speaker 1: every day for work, but then wasn't clocked as doing
Speaker 1: any work. It turns out he'd kind of built himself
Speaker 1: this fourt in the middle of a bunch of empty palates.
Speaker 1: He was then able to use products that were for
Speaker 1: sale to make himself right at home, so he made
Speaker 1: himself bed, He tore out pictures from books to decorate
Speaker 1: the walls he'd built around him, and he had food
Speaker 1: to snack on. And get this, when they figured out
Speaker 1: what the guy was doing, can you believe they fired him?
Speaker 1: What shocking? All right, well, I have to admit of
Speaker 1: fact that is that of heard is probably worthy of
Speaker 1: today's trophy. So I'm going to give it to you. Congratulations, Mango,
Speaker 1: Thank you so much, and thank you all for listening.
Speaker 1: Don't forget if you have any great facts about Amazon
Speaker 1: that we missed. Let us know at one eight four
Speaker 1: four pt Genius or emails at part Time Genius at
Speaker 1: how stuff works dot com. Thanks so much for listening, Kay,
Speaker 1: thanks again for listening. Part Time Genius is a production
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