Amazon's dementor kiss

I have a confession to make. I’ve never read any of Jeff Bezos’ annual letters.

A psychological analysis shows a bad case of attention deficit disorder and my dislike for some opportunistic methods Jeff employed in building the Amazon empire.

The other day, however, I did read Andy Jassy‘s first letter to shareholders. In truth, Siri read it to me, and another truth, I was captivated.

I’m not impressed with their vision -- many can do it if provided with cheap-money and little accountability. What I am is blown over by the sheer breadth of their investment into moving the goalposts for everyone else - all in the service of a domination ambition.?

Let’s be real, Amazon is a Corporation -- and those are usually intended to generate value for a shareholders through profit. But Amazon's first mover position found a misguided venture capital focused Wall Street will empower them to skip the line and offer consumers something for nothing.

I am not bashing their razor thin profit margins - I'm bashing their neglect of profit-taking for purposes of annihilation.

Amazon positions their vision of the future as a noble quest to reinvent every aspect of every industry. It’s not noble. It’s opportunistically succeeding in dragging industry leaders to their death in the world of shareholder expectations and market forces.?

Amazon has become the master of the tail wagging the dog. Amazon is very much like Standard Oil, had Standard as a policy, lost money on their core businesses, just to generate a profit on the barrel making business. (I won’t address the anti-trust issues, I’m just drawing a correlation between Standard Oil and its various sub-businesses and Amazon).

Companies who compete with Amazon and their goalpost moving as well as customer expectation mission-creeping, need to fight back. Undress this wolf from its clothing that is intended to make it look noble and on a disinterested quest to make the world a better place.?

But know this. "Fight" is an action verb. While it is one thing to resist giving into the "kiss" as in following the goal post moving, a reactive approach is way too passive.

Consumers always want something for nothing, but you, the competitor, you don't have Amazon's quarterback arm. You need to win in the trenches, becuase you have responsibility to demanding shareholders. You can't always just throw a go-route.?

It’s self-assessment time. Do you really think that you can provide money losing services just to capture customers who can bolt as soon as you raise your prices back to sustainable levels? If you think that’s the case stay tuned to companies such as Gopuff, Getir, Fridge no More and Buyk - some of whom are no longer with us, and others that are soon to join them. It just doesn’t work. Amazon is the exception.

Isaac Newton taught us that what goes up must come down. While it seems that Amazon is defying gravity and physics itself, have no fear, its time will come.?

But just waiting is not enough. The only way to fight back is to deliver outsized value profitably. What Target has achieved with its e-commerce/store integration was no way razzle-dazzle. It didn’t involve drones, 10 minute delivery or some other fancy new technology. It involved solid common sense value creation. The same applies to you. If you want to successfully compete with Amazon, and if you’d like to chip away at the Amazon behemoth to uncover a house of cards that can collapse under its own weight -- don't chase their business model. Companies have been emulating Amazon unsuccessfully for years, and we all know the definition of insanity. Look inward!

I strongly suggest that you read Andy Jassy‘s letter, or rather let Siri read it to you. Let yourself be as speechless as I was. Learn from the amazon leadership and company building principles that Amazon has put in place, and take sometime to be impressed.

Then ask yourself how a company with heavy losses in at least half the company and a desire to grow, grow, grow, despite unprofitable ventures, can survive when it starts encountering real competition?

Amazon isn’t flourishing because it has an amazing business model. Amazon is flourishing because the rest of the marketplace has tried to play their game and continue to fail. They aren't succeeding on their own - their competitors are feeding them. What do you think happens when competitors siphon away customers profitably? Academically, it would seem that the free money train would slow.

YOUR innovations are not what Amazon says that they are. Innovations are initiatives that YOUR customers find useful and YOU can monetize. How to find them? Well, they can be found among the traditionally disregarded ideas that YOU have deemed too risky to implement. They are not the ideas that Amazon dictates and seem to risky not to implement.

Amazon flourishes by sucking the life out of copycat competitors who reside in a profit driven marketplace. Amazon‘s business model is as predatory as their innovations are remarkable. They are at best a study in a self-supporting not-for-profit laboratory, of which the parts are greater than their sum.?

Which part of Amazon will you salvage?