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Comment by tres | Hacker News Reader

Funny how this comes on the heels of aggressively expanding their workforce and trying to leverage themselves in a hundred different directions...

Maybe it's just me and my confirmation bias at work, but it seems that the core value proposition that Amazon provided -- high value, low margins on products -- has been eroding before our eyes.

Seems so much like the transition Microsoft made... too much focus on "synergies" and leveraging... not enough on keeping the bilges dry and the engine running.

It's funny... Fred Brooks wrote about this in 1975... and we're still making the same mistakes forty years later. There are real limitations to how quickly any organization can grow. Even awesome companies who are excellent at building organizations -- places like like Amazon and Microsoft -- can't organize this law of software development away.

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> Seems so much like the transition Microsoft made... too much focus on "synergies" and leveraging... not enough on keeping the bilges dry and the engine running.

The companies that just keep the bilges dry and the engine running are the ones that we love, but they’re gone because they got made irrelevant. Or they got absorbed into something larger. Microsoft has a bunch of failed initiatives (Windows Phone, Zune) plus a bunch of successful ones (Azure, Xbox, Office 365).

If you’re up for classic books like Brooks check out The Innovator's Dilemma. You have to try to expand in a hundred different directions because you don’t know which one of those hundred directions will be relevant next decade, and you have to be unafraid of cannibalizing your core business because if you don’t eat yourself then someone else will eat you instead.

Thanks for the recommendation!

I think the hard part is to walk the line between stagnation & over-expansion. This is a dilemma we all face in organizations large and small as well as individually.

Building systems and processes (a.k.a Habits) that allow us to assume and integrate some new set of "stuff" without having to think about them (so we can move on to the next new "stuff") are what sets these companies apart; Amazon has been brilliant at this; however, from my perspective, looking at all the high-rise office buildings going up, it seems like maybe Icarus has flown too high...

But again, I could be building a narrative to fit my preconceived ideas... I'm definitely no authority here. Maybe this is just another blip... I think more troubling to me is the overall degradation in quality of the things I have formerly taken for granted in Amazon -- the quality of the products and ratings.

The Innovator's Dilemma is certainly not about synergies between products. By its conclusion, it's worthless to try to diversify within the same structure, you'd better create a new company and turn the old one into a holding.

Why would you think it’s about synergies? I’m not sure why you would think it’s about synergies. Or why it would be “worthless to try to diversify within the same structure.”

Summarizing the book here would be a bit of a disservice—but one of the points of the book is that there are economic reasons why companies focus on their most profitable core products, and there are economic reasons why that kind of focus can result in the company collapsing when the market moves forward. This isn’t some kind of imperative—the book isn’t saying, ”therefore, you should create a new company.” It’s more descriptive, “this is how big, successful tech companies can suddenly fail.”

> Or why it would be “worthless to try to diversify within the same structure.”

The book has 2 chapters on that single point. And repeats it everywhere else.

On synergies, the OP post was about it, not about disruption.

This seems like a bit of an overreaction. Amazon has had big outages before (particularly at AWS), and they invariably solve the problem and move on. As someone else observed, events like this are mainly notable because of how infrequently they happen.

I think that would seem relevant to me if this was the first time amazon.com had been unavailable. Or the first time any big website has gone down.

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