your goal is to be the largest online
and you are
retailer in the world beyond that what's
the goal
well our mission is earth's most
customer-centric company i don't know
what that means well
i'll give you an example um
right after world war ii mauritius the
guy who founded sony
set as the mission for sony that they
were going to make japan known for
quality
you have to remember this was a time
when japan was known for
uh cheap copycat products
and morita-san said he didn't say we're
going to make sony known
for quality he said we're going to make
japan known for quality he chose a
mission for sony that was bigger than
sony
and when we talk about earth's most
customer centric company
we have a similar idea in mind
we want other companies to look at
amazon
and see us as a standard bearer for
obsessive focus on the customer as
opposed to
obsessive focus on the competitor so
that's one of the reasons
we work on differentiated products it's
one of the reasons we take a long-term
viewpoint on things you can't really do
the right thing for customers if you're
short-term
oriented and if you're going to invent
new things you've also got
to be able this goes along with
long-term orientation you've got to be
willing to endure
a lot of criticism you know if you're
going to put kindle is a good example
if you're going to put your back into
reinventing
a 500 year old industry
some folks are going to get ornery
it was also feared at one time those
people who
had your stock that once walmart
for example got serious about being
online they're gonna blow you away
why didn't that happen well i think it's
because we did a good job for our
customers
so you know we have you go back in time
and we've been called amazon.toast
right i remember amazon.com amazon.bomb
you know this is all like in the first
three years of our existence
and it that's part of what i'm talking
about
the willingness to be misunderstood if
you're going to do things
we lay out what we're doing and we tell
people
you know how we think about things like
i'm saying to people
you know the the ipad is not a kindle
killer
i'm very clear about that but it doesn't
keep people from writing
that and i very clear about why it's a
totally differentiated device it's 139
dollars
works in bright sunlight you can read
with one hand it's so light and the
battery lasts last
month for 139 why wouldn't you want a
device like that
okay let me go back to the walmart issue
though what was it that made you
able to sustain a challenge from a the
world's greatest retailer
obsessive customer focus on but how do
you focus on the customer better than
they focus on the customer
uh well we i mean they're pretty good at
focusing on the customer too but we're
very differentiated in how we do it and
so our approach when you if you
if you think about our retail business
which i think is what you're asking
about here
the really three things that we know
that's the hardest sole of your business
well
especially relative to the walmart
question i think that's the key
it's selection low prices
and fast convenient reliable delivery so
that the shipment side
and so wait wait so walmart doesn't have
low prices
fast and convenient delivery
i would claim that amazon has
much broader selection in many cases
if i i don't want to be overly bold in
my claim but the online model
gives us significant cost structure
advantages that lets us have even lower
prices
than physical stores selling online
well sometimes they have them they do
have
umbrella problems sometimes where they
they they don't want to compete against
themselves
online versus offer but at walmart with
all of the volume that it buys
it's purchasing power therefore gives it
the ability to offer lower prices
well doesn't that give them an advantage
they ought to be able to translate
because their purchasing power is bigger
than your purchasing power
is it not i wouldn't i i think in a lot
of the product categories
uh that ship sailed a long time ago
meaning what meaning that we have the
purchasing pilot we can compete with
anyone we have the volume
relationships with suppliers that
playing field has been leveled okay if
you'd asked me that question you know 10
or 15 years ago right
i'd have agreed with you that and that
that would challenge you to overcome but
even then
we don't our profitability is not our
customer's problem
we don't take the point of view that
we're going to price
products you know at a particular margin
for ourselves
we say we're going to price products
competitively
and if that means on that product that
we lose money
that's okay because we need to take care
of the customer earn trust and we'll
figure out over time and if we can if we
find we can't ever make money with that
product we'll stop selling it
but we don't want to we're not going to
make customers
pay for any of our inefficiencies
if you see whatever you lose money on
the kindle
every new business that we have ever
invested in
we have it has taken years most
businesses have either no
impact on our financials for the first
five to seven years
or a negative impact on our financials
for the first five to seven years and we
do a lot of new things
the company is is very healthy
financially
um we're we're doing very well
and it's it's an outcome of customer
obsession
so you know when when we were
amazon.toast
that was because barnes and noble had
you know this is we only had a hundred
and
when we were declared amazon.toast i
think we had 150 employees
barnes noble had 30 000 employees and
somebody wrote an article that said you
know
amazon has had a great two-year run
but now the big boys have shown up and
they're going to steamroll them
and you know we had a all hands meeting
i
called all 150 employees together i said
look
because everybody's worried every
employee has read the amazon.toast
article
every mother of every employee has read
the amazon.toast article and has called
and said father mother
new york are you okay and so we had an
all hands meeting and i said look
um you should wake up worried terrified
every morning but don't be worried about
our competitors because they're never
going to send us any money anyway
let's be worried about our customers and
stay heads down
focused and so i you know
there these are big most of these are
big markets another way to answer your
your question about competitors and
walmart
is they said look they can succeed
fabulously
and it won't stop us from succeeding
these retail markets
are huge so we can we
it often doesn't make sense for us to
think of it as a pitched battle
you know sometimes um people think about
business as it's kind of like a uh
a sporting event there's a winner and a
loser it's not a zero-sum game it
usually isn't
i i'm sure there are cases where but
most often
industries succeed so i can tell you i
think e-commerce
is succeeding and the way we think about
it nobody else has to fail
for us to do well i think e-books is
like that i think they're going to be
many winners
i think e-books is going to be a huge
industry well there are many competitors
now i mean you've got barnes and noble
is one of them
sony is another now and they'll be both
another but i have a list
of 50 competitors that we could walk
through i mean you know all over the
world doing different things
and our focus is going to be you know
what we'll
try to pay attention to those
competitors but we're not going to
obsess over them we're going to obsess
over readers
and that because those are the people
who are buying that device and we're
going to make
and it's not just a business for us it's
a mission for us and missionaries build
better products
what is jeff bezos thinking about today
in 2010
that we might not know anything about
that he thinks may be a reality
in 2013 or 2015. where is the one of the
things
is our the amazon web services business
now there is a business that probably is
not this is amazon cloud stuff yes
and that there's a business that's
growing you know it's in a hyper growth
phase it's already a significant
business
that's a business that probably is not
getting as much
attention does it play in the cloud
business now well amaz in the
infrastructure part of it which is the
part that we play in amazon is by far
the leader right
and uh you know it started mostly with
startup companies but now it's big
enterprises adopting
the best analogy i can give you for this
is it's like the electric grid
so instead of you know right now big
companies build their own data centers
and they
buy their own servers and they put it in
it's a lot of capex there's a lot of
price of admission you have to if you're
going to operate a data center
you have to do it well but it doesn't
differentiate you from your competitors
it doesn't
it's just a price of admission and so
what we do
at amazon web services is we sell
compute by the hour we sell compute by
the drink
and it's just like buying electricity
off the grid instead of having your own
power manufacturing your own power
generating plant
