The Four

image building as a leading-edge company. Shareholders love these
stories; it makes them feel like they’re part of an exciting adventure.
Plus, every once in a while, they actually pan out—and when they do,
Amazon has the fuel (capital) to pour on the spark and start a
firestorm that sears the competition. The overlooked lesson here,
other than having a shit-ton of capital, is the willingness to perform
infanticide on initiatives or products that aren’t working, thus freeing
up capital (in Amazon’s case, human capital) to start new crazy
initiatives.
My experience in traditional firms is that anything new is seen as
innovative, and the people assigned to it, like any parent, become
irrationally passionate about the project and refuse to acknowledge
just how stupid and ugly your little project has become. As a result,
traditional companies not only have less capital to invest but fewer
swings at the plate. Amazon demonstrates real discipline around not
ramping investment until they know something is working. For all the
hype over the last three years about Amazon’s entry into brick-and-
mortar retail, the sum of their efforts is around two dozen stores. They
haven’t found a format they feel they can scale.
Bezos, like any great leader, has the ability to explain a crazy idea
in a way that makes it seem less crazy but practical. Wait, that’s
obvious—how did we not think of that? The really crazy shit isn’t
stupid, it’s “bold.” Yeah, a floating warehouse sounds crazy the first
time you hear of it. Now, ponder the cost of leasing and running a
traditional terrestrial warehouse. What are its biggest expenses?
Proximity and rent, respectively. Now, think again about a floating
warehouse. Not so crazy, right?