The Four

equity, but they approach risk differently than many tech firms that
have seen their death. They live for today and acknowledge that great
success only comes with significant, even existential, risk.
There is a survivor bias that plagues old-economy CEOs and their
shareholders. My nightmare job is the “invisible until you fuck up”
position. These jobs are everywhere: IT, corporate treasurer, auditor,
air traffic controller, nuclear power plant operator, county elevator
inspector, TSA officer. You’ll never be famous, but you have a small,
and terrifying, chance of being infamous. CEOs of successful old-
economy firms have a similar bias—they are “rich until they fuck up.”
CEO pay has become so crazy that on a risk-adjusted basis, you’re
better off staying out of traffic, logging your six to eight years, and
retiring rich. However, if you google “biggest mistakes in business
history,” the majority of results are risks that firms failed to take, such
as Excite and Blockbuster passing on acquiring Google and Netflix,
respectively.
History favors the bold. Compensation favors the meek. As a
Fortune 500 company CEO, you’re better off taking the path often
traveled and staying the course. Big companies may have more assets
to innovate with, but they rarely take big risks or innovate at the cost
of cannibalizing a current business. Neither would they chance
alienating suppliers or investors. They play not to lose, and
shareholders reward them for it—until those shareholders walk and
buy Amazon stock.
Most boards ask management: “How can we build the greatest
advantage for the least amount of capital/investment?” Amazon
reverses the question: “What can we do that gives us an advantage
that’s hugely expensive, and that no one else can afford?”
Why? Because Amazon has access to capital with lower return
expectations than peers. Reducing shipping times from two days to
one day? That will require billions. Amazon will have to build smart
warehouses near cities, where real estate and labor are expensive. By
any conventional measure, it would be a huge investment for a
marginal return.
But for Amazon, it’s all kinds of perfect. Why? Because Macy’s,
Sears, and Walmart can’t afford to spend billions getting the delivery