Comment by ChuckFrank | Hacker News Reader

Comment by ChuckFrank | Hacker News Reader

Why is Bezo able to take risks into new territories? Because "we can analyze quantitatively rather than to have to make intuitive judgments." What's so great about this type of business model is that it does not rely on luck throughout the process. It only relies on luck at the front end of the risks, minimizing the risk throughout the enterprise. Bezo is the current king of data driven decisions, and I think that over time it's enabled Amazon to not only pass it's many competitors (buy.com / half.com / yahoo.com / google products etc.) but also quickly overcome dis-advantages. Compared to the amazing roll of luck, insight, cunning, and high risks / high rewards culture of Apple, Amazon is really the company to emulate. Without Jobs, can Apply keep it's streak alive? No one is certain. It sometimes feels that with each not product Apple is betting the company. That's certainly what people were saying about the ipad. And that's what makes watching Apple so thrilling. Without Bezos, Amazon appears to be poised to continue it's great leadership. Watching Amazon might not be as thrilling, but the details are simply spectacular. While Jobs may get the accolades, I think think that Bezos deserves the crown.

While I support the endorsement of Amazon's data-driven culture and strategy, I don't think it's fair to describe Apple as its opposite. Apple is not the gut-driven, "bet the company" firm that the general public seems to think it is. Its bets are very data-driven, albeit not quite as real-time-data-driven as a company like Amazon's, whose business model allows for more real time data in the first place.

In broad strokes, I think I'd describe the two companies this way: Amazon innovates through optimization of new markets, while Apple innovates through creating new markets. This isn't a wholly fair description of either company, and as we know, there are exceptions in either direction. But that's the business model of the two companies at a 30,000-foot glance.

As you've hinted, probably the best way to differentiate the strategies of the two companies is on the risk/reward dimension. Amazon operates on a risk-minimization model, while Apple is risk-seeking in favor of outsized rewards. This is partially because Apple is still a hardware company (for now, at least), and it needs to keep reinventing its products to stay ahead of the commoditization of hardware.

"Amazon innovates through optimization of new markets, while Apple innovates through creating new markets"

Well said.

Amazon has created new markets. The article mentions Kindle and AWS. The ebook reader and ebooks did not (really) exist before Kindle. Same with AWS.

True. There are exceptions to the statement I made, which is why I pointed out that it's not wholly fair. In fact, Amazon's entire existence can in many ways be said to have been the creation of a new market.

Even still, I think it's fair to say that Amazon primarily innovates these days through rapid and extensive iteration, especially on its consumer side.

I've sent it to some of my coleagues an article menting this ("Steve Jobs does customer development" [1]). Still, people refused to accept any evidence that getting facts is better than going with your gut.

This is the problem with people that don't believe in facts: they don't believe in the fact that this belief is bad for them.

[1] http://venturehacks.com/articles/jobs-customer-development

The full quote: Ninety-plus percent of the innovation at Amazon is incremental and critical and much less risky. We know how to open new product categories. We know how to open new geographies. That doesn’t mean that these things are guaranteed to work, but we have a lot of expertise and a lot of knowledge. We know how to open new fulfillment centers, whether to open one, where to locate it, how big to make it. All of these things based on our operating history are things that we can analyze quantitatively rather than to have to make intuitive judgments.

In other words, you can measure things after they become variations on a theme, because you know what to measure, and you can measure them against past successes and failures. They've minimized the "nova" in innovation. When something is truly new, like the first time Amazon opened a new product category or a new fulfillment center, quantitative analysis isn't as helpful. "Stuff is up 12%, and crap is down 5%." "Is that good or bad?" "I dunno."

What you seek is the history of the Ferengi.

"Without Jobs, can Apply keep it's streak alive? No one is certain."

From what I've heard though Amazon does have a very WWJBD culture. It's unclear how that will play out once he's no longer a part of the company.

I expect it would play out fine. If people are asking WWJBD and answering it themselves (and fairly well) then I'd say the culture will survive long after Jeff leaves.

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