Special: Amazon Unbound (with Brad Stone)

Brad Stone joins us to discuss the making of the modern Amazon, and how it's morphed from the "flywheel company" of The Everything Store into a set of interlocking and self-reinforcing businesses that extended both wider and deeper into the global economy than anyone ever imagined. (except perhaps Jeff Bezos) Is Amazon the Standard Oil of our time, or maybe something much, much bigger? Tune in as we dive in! Sponsors: Vanta: https://bit.ly/acquiredvantaServiceNow: https://bit.ly/acquiredservicenow26Legora: https://bit.ly/acquiredlegoraStatsig: https://bit.ly/acquiredstatsig26 More Acquired! Get email updates https://www.acquired.fm/email with hints on next episode and follow-ups from recent episodesJoin the Slack http://acquired.fm/slackSubscribe to ACQ2 https://pod.link/acquiredlpMerch Store https://www.acquired.fm/store! © Copyright 2015-2026 ACQ, LLC Topics covered: When and why Brad decided The Everything Store needed a sequelThe process of writing the book and access he got at Amazon, including S-Team executives like Dave ClarkThe evolution of Amazon's core strategy from the flywheel into a set of "interlocking and self-reinforcing businesses", and how Brad landed on that as the key theme for the bookAmazon's culture and the evolution from "Jeff-bots", and its embodiment in S-team members and company leaders beyondAmazon's investments in Video and why Bezos was ahead of the pack in realizing its strategic importance (including the rumored as-of-recording MGM deal)Amazon's secretive "Campfire" event and why Amazon does it despite its very un-Amazon price tagBrad's take on the future of three major Amazon business lines: Video, International and Marketplace / 3rd Party SellersAmazon and Bezos's intense focus on competitors, despite the "theater" of their mantra to only focus on customersThe Bezos "lapses of judgment" in 2018-19 and what it was like reporting on all the craziness around itTracking down the "voice of Alexa" Nina Rolle, and Bezos's relationship with Elon! Links: Amazon Unbound (on Amazon, natch): https://www.amazon.com/Amazon-Unbound-Invention-Global-Empire/dp/1982132612/

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

  Oh yeah, no, I mean, I've been a fan of the podcast from the early days. Oh, thank, and my gosh. We did, did we do Amazon Zappos? Uber and Didi. Uber and Didi, that's right.

• 0:10David Rosenthal?

  I don't know that I told you guys this. I booked an Airbnb just to get better wifi because the place I was living in Paris had crappy wifi. So I had this really awkward message with the host who I was like, I just want to come for an hour, but it's not what you think, I swear.

• 0:30Speaker 00

  That's funny. Just book a love hotel for podcasting.

• 0:46Ben Gilbert?

  Welcome to this special episode of Acquired, the podcast about great technology companies and the stories and playbooks behind them. I'm Ben Gilbert and I am the co-founder and managing director of Seattle-based Pioneer Square Labs and our venture fund, PSL Ventures.

• 1:00David Rosenthal?

  And I'm David Rosenthal and I am an angel investor based in San Francisco.

• 1:05Ben Gilbert?

  And we are your hosts. On today's show, we are sharing our most recent book club discussion with you all. We were fortunate enough to have repeat acquired guest Brad Stone join us to talk about his most recent book, Amazon Unbound.

• 1:21David Rosenthal?

  Brad is the best.

• 1:22Ben Gilbert?

  Yeah. This book is the successor to Brad's first book, The Everything Store. It is about everything that has happened at Amazon since 2013, including Alexa, Amazon Go, third-party sellers, well, the further development of the third-party seller ecosystem, anyway, their various grocery businesses, and of course, the activities of Jeff Bezos outside of Amazon. This episode was recorded live with our acquired LPs on the line and you'll hear some questions from them at the end. As always, if you want to become an acquired LP and be a deeper part of everything we do here, you can go to glow.fm/acquired.

• 2:03Ben Gilbert?

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• 2:22David Rosenthal?

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• 2:43Ben Gilbert?

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• 3:04David Rosenthal?

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• 3:23Ben Gilbert?

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• 3:55David Rosenthal?

  So we thought kind of a fun way to start that I don't think we've heard you do on any of the other pods you've been on yet, that I want to hear the story behind was, what's it called? Is it called the monograph page at the front of the book?

• 4:07Speaker 00

  Oh, the epigraph.

• 4:08David Rosenthal?

  The epigraph. You have two quotes, and the second one I just loved as a lifelong Steinbeck fan myself. You say, I think this is from Canary Row, "It has always seemed strange to me, the things we admire in men, kindness and generosity, openness, honesty, understanding and feeling, are the con commitments of failure in our system. And those traits we detest, sharpness, greed, acquisitiveness, meanness, egotism, and self-interest are the traits of success. And while men admire the quality of the first, they love the produce of the second." Where did you find that?

• 4:46Speaker 00

  Well, first of all, let me start with the other quote on that page is from a book called The Last Days of Night about Thomas Edison. And that one, you know, actually was an Amazon board member named Bing Gordon, who had pointed me to that novel. And that's about Edison and the system of invention, and how applicable that is to Amazon to Bezos. He has created a system of invention at Amazon, not just being an inventor, but creating the processes and the rituals and all of that. And then extended it to the Washington Post. And that was my sole quote on that page. But it's a little bit of a flowery quote. And this book, you know, I wanted readers to really think about Amazon's impact, the good and the bad, not just the system of invention, but the unanticipated consequences

• 5:31Speaker 00

  of building systems at scale. They're supposed to move fast and never break things. But in fact, with the marketplace globalizing and with the transportation network expanding, there have been repercussions. And so I was searching for that alternate quote that can bring readers into the book with two things to think about. And yeah, Canary Row was a book I had read and probably had underlined that quote and was looking back and talking to my editor, Stephanie at Simon and Schuster about it. And had just came back, returned to that quote as being this great example of maybe, you know, something that could get readers thinking about the things that we're celebrating in business figures like Jeff Bezos.

• 6:10David Rosenthal?

  It's such a perfect quote. So tell us, before we get into the content of the book and talking all about Amazon, what was the moment when you decided Everything Store needed a sequel?

• 6:19Speaker 00

  I was thinking about that and I went back to my notes and I started to do interviews for this in 2017. So that was before HQ2 was announced and before Bezos became a figure of tablet interest and obviously before some of the more recent antitrust stuff and the pandemic. So I think it was around the realization that Alexa had changed the company, the market cap had expanded so quickly, the transportation business had started and that I was still on the road doing talks about Amazon, about the Everything Store, but the story had changed.

• 6:54David Rosenthal?

  Right. Which came out in 2013?

• 6:56Speaker 00

  Right. So $120 billion market cap was at the end of 2017, probably around an $800 billion market cap. And I just felt like there was a lot of story. And you know, when you start in a book, you're also realizing that you'll be working on it for at least two or three years. And so I figured it's probably going to get better. And I had no idea, right? They kept adding other chapters. For a long time, I was thinking, how can I end this in the pandemic? And its navigation of it, I think, ended up being the encapsulation of everything that's probably great and effective about Amazon and some of the dangers of it getting so big and dominant and having so many advantages. That was crystallized during the pandemic when all of its competitors basically stopped operating.

• 7:38David Rosenthal?

  Yeah. I hadn't quite thought about this till now, but like, it's a huge opportunity cost for you to decide to write a book because you're a full-time journalist editor, you're running Bloomberg's technology team. You had to take a full sabbatical to do this, right?

• 7:55Speaker 00

  Yep. I took a couple of months off to write it. I'm fortunate in that at my perch at Bloomberg, we're working and writing and thinking about this stuff anyway. And so doing this, at least reporting it, in addition to the day job, isn't as difficult as it seems. And maybe I'm also fortunate that I'm a manager with a lot of support around me so I can kind of pull that off. But David, the one difficult thing is particularly writing about tech companies is they've changed so often. I just sometimes think about it as jumping onto a train. And you guys remember, my last book was called The Upstarts about Uber and Airbnb. I jumped and the train moved and I fell onto the tracks because it was like a month after that book came out. 2017 with Uber.

• 8:38David Rosenthal?

  Yeah.

• 8:38Speaker 00

  Yeah, the first Medium post by Susan came out alleging a discriminatory culture at Uber. And then the story started rapidly changing. And I came out with a paperback a year later that had an additional chapter on that. And, and you know, I'm proud of that book in retrospect, and it captures a moment in Silicon Valley. But it was a great illustration of just the risks of writing about companies that change so often. And had Bezos postponed his CEO resignation announcement for another quarter, that would have been a disaster.

• 9:07David Rosenthal?

  You definitely would have had to write the third book.

• 9:08Speaker 00

  Yeah. And so in this respect, on this one, I got lucky, as unlucky as I got with the upstarts, because I had time to add to the book. And I also recognized that the story I was telling in some ways was very consistent with the idea of Bezos getting more and more distant from Amazon and then move, get it, moving into a broader world and focusing on other things.

• 9:29Ben Gilbert?

  Well, just to frame how much has happened since the first book, I was reading my copy of Amazon Unbound, and a friend said, what is that? And I was like, oh, it's the second book by Brad Stone on Amazon. And he was like, he already wrote the book on Amazon, right? And I was looking at the date that the Everything Store came out, and Amazon has created over a trillion and a half dollars of market cap since you released the first book.

• 9:52David Rosenthal?

  Oh, my God.

• 9:53Speaker 00

  Crazy. It's crazy. And, and that's just the numerical representation of it. The Kindle company became the Alexa company. AWS was a cipher in 2013. The company revealed the financials in 2015, and the world recognized how good of a business that was. The marketplace became global and on and on. Amazon entered India. I have a chapter about that in the book. And Mexico and the high profile battle with the Trump administration, the Jedi contract, HQ2, the advertising business really germinated over the past few years. The Prime Video and Amazon Studios business and Bezos's neck deep involvement in that.

• 10:34Speaker 00

  In some ways, maybe the momentum and some of the ideas were there back in 2013, but certainly it's all become very public and shaped the perception of Amazon ever since.

• 10:45David Rosenthal?

  I don't know if listeners would agree or if you would agree. I felt to a certain extent like Everything Store was, it was kind of like the liar's poker or the social network of Amazon. I don't think you intended it to be like a cautionary tale in the same way that those books were. But for me at least, like I read that book and I was like, this is an amazing company. It Doubled, tripled, quadrupled my admiration for the company and drew me to it as a shareholder. Did you feel that way in the company, whatever they felt initially? Did they see that they got applicants who started coming to the company being like, I read the everything store, I want to work here?

• 11:20Speaker 00

  I do take a little bit of pride in the fact that people can come to both these books and take a lot of different things out of it. And critics will come out of it, the first book and then Amazon Unbound with, you know, dockets full of evidence that they have for the next attack on Amazon. And fans of the company or employees at the company might find in it a flattering portrayal. But my goal is really just to tell a good story. Yeah, I'm an Amazon customer. I mean, I don't think I would be writing two books about the company if I didn't on some level admire the entrepreneurship. And I also find plenty of cause for concern in some of their anti-competitive tactics and some of the ways in which they've administered the marketplace.

• 12:03Speaker 00

  Or they build these transportation networks without really controlling them or employing the workers and how there are repercussions there. But I don't feel like I'm a critic and I hopefully I'm not a hagiographer. And it's not an old school Silicon Valley book of the, you know, how this triumph was accomplished, but it's really, I try to tell the warts and all story and then hope different people can take different things out of it.

• 12:27Ben Gilbert?

  Well, I'd finished it. I came in right under the finish line yesterday. I definitely felt like toward the end, your description of how the company did through COVID and basically what they did for the world was really well balanced. And that was the thing that definitely hit me the most in your skill as a author of something that is currently unfolding is both looking back and saying, here's the things that they really screwed up during COVID. And they seem pretty unabashed about, but balancing that with the fact that between AWS and the incredible logistics networks they've built, we're all way better off over the last year for them existing.

• 13:05Speaker 00

  I think that is easier than it looks because in the moment, everyone is telling a really simplistic version of that story. You have critics inside and around the company, particularly in the organized labor movement, that are simply looking for the missteps and to characterize the company as irresponsible and putting employees at risk and obscuring the toll. And that's obviously not true. They're human beings at Amazon and they did their best during the pandemic amid incredibly challenging circumstances. And then on the other side, you have Amazon wrapping itself up in the mantle of the pandemic hero who made no missteps and did everything by the book and were virtually perfect and are unfairly maligned.

• 13:45David Rosenthal?

  You had the Jay Carney quote in the book that I think you said like, I'm confident when the short term and long term histories are written, no one will have done more for the world than Amazon here.

• 13:53Speaker 00

  Right. And so just purely, you know, talking to everyone and figuring out what they did. They hired some world famous virologists to counsel them, but they got lost in the confusion of March 2020 and they did make some mistakes and they did fire the whistleblowers. And there were lots of employees and executives who left the company and felt that was just wrong. And so talking to as many people as I could and combining their accounts and looking at both sides and trying to navigate the real story instead of the partisan stories that emerged over the last year and a half. That's basically the formula.

• 14:26Ben Gilbert?

  I'm curious what your relationship with Amazon was as you were writing this because I think you made it pretty clear that you didn't actually speak with Jeff, but I imagine there's lots of conversations with Amazon PR and of course, many departed and current executives. How does that dance go?

• 14:42Speaker 00

  When I approached them in 2017 or maybe 18, when I first told them about it, they were pretty receptive, almost as if they had maybe had been anticipating it or at least anticipating that somebody would do the update to the everything store.

• 14:56David Rosenthal?

  They could see the sales data. They were going to launch their own first party version.

• 15:00Speaker 00

  Yeah, exactly. The Amazon basics.

• 15:04Speaker 00

  I had sent Bezos a couple of notes explaining what I wanted to do and asking, of course, for access to him. They assigned a PR person to me and they basically said, you know, after a while that they would give me access to anyone I wanted to talk to at the company and they would see about Bezos toward the end. And so I did labor under the perhaps false hope that I would break down his reluctance and get him to talk. And in the end, it didn't happen. And I would just point to the recent history and his reluctance to really engage in a meaningful way with any kind of journalist over the past few years and to address the challenges and tension points in Amazon history. When he's done it,

• 15:46Speaker 00

  it's always been about the broader things. Blue Origin or the Washington Post. He's talked to fellow billionaires or an Amazon employee or his brother. In the end, even though I did harbor some hopes, maybe it wasn't all that surprising that he's not willing to sit for a Steve Jobs like end of career retrospective. Plenty of time. Yeah, he's got time. But the other thing is, I don't feel like the book suffered because of that. He's incredibly disciplined. He tells the same stories. They're like polished little stones that he's crafted over the years. And I've heard them all. And frankly, I could probably recite them all.

• 16:20David Rosenthal?

  I don't know. To me, I thought it was almost better that you didn't, A, because you didn't get, you knew what he would have given you if you had, but B, I thought one of the coolest things about this book that I don't remember as much being in the everything store was the access you had to the S team. I feel like we really got the stories of Dave Clark, some of the other folks that most people don't know about, but have had huge impacts.

• 16:45Speaker 00

  So people probably don't know who Dave Clark is. He's now the CEO of the retail business. So one of the most powerful executives at Amazon, and he grew up in the sort of operations and fulfillment part of the business. And, you know, is obviously a genius and great at building big systems. And he devised and executed the whole transportation arm, Amazon logistics. And one of the interesting revealing things that I found in my research was his original boss at Amazon, or one of his first bosses, became his like best friend and was the best man at his wedding. And then he gets promoted over that guy. And when that executive leaves Amazon to go to Target, Dave Clark basically has Amazon sue him.

• 17:26David Rosenthal?

  Yeah, that was the most heartbreaking moment in the book.

• 17:29Speaker 00

  Yeah, and they never talk again. And right there, encapsulated perfectly, is Amazon's ruthless, relentless, business-focused, competitive mindset where relationships and empathy don't really factor into it. I don't want to say that there's a little bit of a heartlessness or a lack of empathy that goes into this empire building, but okay, I did just say that. And right there was illustrated, he sued his best man. And he's one of the now, you know, most successful executives, most prominent executives at Amazon, sitting there trading tweets with Bernie Sanders and other Amazon critics.

• 18:07Ben Gilbert?

  How do you think about, given the fact that, I mean, this is Dave Clark, this isn't Jeff Bezos, this is an employee who rose up through the ranks, who was indoctrinated with the Amazon culture, clearly bleeds into his personal life because he severed ties with his best man. That's completely outside the scope of a business relationship. How do you think about your comments that you had made in the everything store around Jeff Bots in the current day? And does that apply in this situation?

• 18:34Speaker 00

  Well, I actually dropped that terminology. You know, I wanted to stand on its own and be fresh, in part because even though I was sort of kidding about that in the first book, well, Bezos, you know, Mackenzie mentioned that in her one-star review, I think. And there were definitely executives who took it really way too personally. But I do make the same point. I think at the end of that chapter on Dave Clark and operations, I say that he had demonstrated in some ways, some of the Bezos ideals, you know, the work and the company over everything else. And, you know, not a lot of empathy, consensus building is really subjugated to getting to the right answer and doing what's best for the company and the customer. And so in some of these actions towards his fellow friend, Clark

• 19:17Speaker 00

  had illustrated a little bit of Bezos's philosophy. So maybe I said it without just using the phrase.

• 19:24David Rosenthal?

  Oh, you know, it's funny, all the Jeff pots. I don't think the liar's poker analogy is super apt. Like, everything store is its own thing. But that was one of those things to be where it's like, Mackenzie at least got so offended by that and probably Amazon and Jeff did too. But there's another side of that where you're like, yeah, if you're going to come to Amazon, you're going to be in charge of something. And you get to be Jeff for something. There's something appealing in that too, right?

• 19:49Speaker 00

  I think what I originally was riffing on with that term was how he so effortlessly alluded difficult questions back when he gave interviews. And then I noticed that when I would talk to like an executive like Steve Kessel, who was running the Kindle business and then started to run the physical retail business, that he had the same method for evading questions. And that was the origin of the Jeff Bot idea, that they were just so also skilled in the same exact way of speaking publicly and not saying anything.

• 20:17Ben Gilbert?

  When David and I were reading it, we were talking about this beforehand. The big sort of aha moment of this book, at least in my opinion, was that this concept of like interlocking and self reinforcing businesses. Whereas in the previous book, it was very clearly the Amazon flywheel. And we've all seen the diagram a zillion times at this point. How did you sort of come to that realization of the self reinforcing businesses as the sort of point that you want to drive home this time?

• 20:44Speaker 00

  It might've been in the chapter on Prime Video. It just seemed like for a long time, even employees and some board members and investors at Amazon didn't understand Bezos's infatuation with Hollywood and his investment in video and almost saw it as sort of a personal weakness or midlife crisis or a digression or a diversion. But as with all these things, so often Bezos is just simply sort of ahead of the pack in thinking about it. And, you know, it was this idea that Prime was a two day shipping club. And then it was a one day shipping club. But the reality is that fulfillment centers are outside, you know, every major American city. And shipping really seizes to be a differentiating factor. And Prime would have to be something more, it would have to be a content club.

• 21:30Speaker 00

  And so the way in which Prime Video feeds into Prime and reinforces the retail business, and Prime Video is in some ways a consumer application of AWS because it's streaming and sitting on Amazon servers. And the same with Alexa, it being a consumer application of AWS. And that's how Jeff conceived it with that first email to executives, a $20 computer whose brains are in the cloud, controllable by voice. And it also goes back to one quote from the Everything Store where he said to Tim O'Reilly, "We don't have many big advantages, so we have to weave a rope of smaller advantages." And that's the way Bezos thinks and the way he's encouraging his executives to think. What are you doing for the cloud business?

• 22:11Speaker 00

  What are you doing for Alexa? Getting everyone to go and exploit the assets and advantages Amazon has. And so you've got this set of really opaque and hidden connections between all these businesses that is at the center of how Amazon operates. And while they'll probably really resist mightily any effort or suggestion that they should break up.

• 22:34Ben Gilbert?

  Actually, I want to put a pin in antitrust for one second and ask this question sort of in a different way, which was, when I heard you were writing this book, I made the comment to David that the Everything Store is a pretty clean narrative. It's one idea. It's e-commerce, starting with books, becoming everything. It's the Everything Store and it's the story of this maniacal guy who's going to pull that off. And for this one, I was like, oh, my God, Amazon has done so many random things, and many of them have become very big businesses. And they're not a conglomerate like Berkshire Hathaway because the S-team is much more than capital allocators. They're not just sending money to the head office. These businesses really do, as you would later coin, interlock. And I just think

• 23:14Ben Gilbert?

  it's so fascinating that they occupy this middle ground between a classic conglomerate and what you would think of that they sort of, a normal business should just go into near adjacencies, where it's like, well, let's expand and address a very similar market. Whereas Amazon has taken the strategy of, we're going to go after completely different markets and find ways to link them together at the same customer. It's just a super unique structure.

• 23:39Speaker 00

  Well, they do both, right? I mean, there's for every satellite, Project Kuiper, where they're going to get into internet access if they can ever launch these satellites. There's the physical retail initiative, the Amazon grocery stores that'll also function as e-commerce distribution centers and pick and pack. In addition to using their AI strength, you know, use the GoStore technology to do cashierless checkout, there is some sort of far field business expansion at the same time as they do kind of leach out into adjacent markets.

• 24:11Ben Gilbert?

  Do you think there's any advantage to AWS and the retail business being under the same roof at this point?

• 24:16Speaker 00

  Totally. Yeah. Retail is the biggest customer of AWS. It's the first customer. You know, AWS is going to have a beta tester for every new service. It'll get to scale very quickly and enjoy the economies of scale because Amazon Retail would be a big, big customer. And then on the retail side, I would assume they're going to sort of, you know, pay in quotes, more of a wholesale price for the cloud instead of a retail price, and then have the biggest and the best cloud provider behind them at moments of intense traffic during a pandemic or in the holiday season.

• 24:52David Rosenthal?

  We did an LP show a couple of weeks ago with Oliver Sharp from Highspot about customer, you know, leg growth and customer suggested it's like, yeah, the number one customer is right there in the same building.

• 25:02Speaker 00

  Just really quickly, in the device business with the whole goals to and the video business to intensify the relationship with the Amazon customer is built atop, you know, AWS. Things like Alexa are possible because the brains are sit in the Amazon data center and are constantly being upgraded.

• 25:20David Rosenthal?

  You mentioned this in the book, and I'd heard this before, that Amazon Retail ran on Oracle. Does it still, in addition to AWS? Did you find out if that's still the case, or have they totally transitioned off to Oracle now?

• 25:35Speaker 00

  They made a big fuss online when Jeff Wilkie went and ripped out the last Oracle server or use in Amazon Retail. I think that was a couple of years ago. They were, they were very proud of it. And that was part of the, you know, the longstanding devolution of the relationship between the two companies.

• 25:52David Rosenthal?

  Yeah, well, and everything that was to come. Okay. So on those threads, the long-term, the interlocking businesses and video in particular, one thing I've been watching, following Amazon for a long time, been a shareholder for a long time, have lots of friends there. I had no idea that this campfire thing happened and that it started in 2010, way before video and Hollywood and all like, tell us more about this campfire thing. And for people who haven't read the book yet, it's, well, you can tell it by.

• 26:24Speaker 00

  Yeah. And thank you, David. That's one of those things that I feel like I got in the book and I was proud of, and it took a lot of detective work and not a lot of people picked up on it. This has been mentioned a couple of times in the press, but basically for the last 10 years, at least before the pandemic, Bezos was hosting this secretive event, first in Santa Fe, among the kind of literary elite, and then it migrated to Santa Barbara more and moved in the direction of the Hollywood elite. And so Oprah and Shonda Rhimes and, you know, every celebrity you can imagine is invited, they're flown in private jets, their families are invited.

• 27:01David Rosenthal?

  This is so not Amazon.

• 27:03Speaker 00

  No, it's not. And that's why no one ever knew, or it was never reported, who actually paid for this. And I went into it thinking that, that actually Bezos paid for it personally because it's so not unfrugal. They get bags of swag and their hotel rooms, the kids, when the kids come, they're given an individual counselor.

• 27:20David Rosenthal?

  It's like Sun Valley, the Allen and Company Conference.

• 27:23Speaker 00

  Combined with a TED, because they'll bring in speakers and a networking event, their hikes, there's a beach club, they rent out a whole hotel and beach club in Santa Barbara.

• 27:34Ben Gilbert?

  They had Michael Lewis come speak that one year.

• 27:37Speaker 00

  I've got a bunch of the guests and the attendees in the book.

• 27:40David Rosenthal?

  When, when are we get, are we getting our invites for next year?

• 27:43Speaker 00

  I am hoping for mine. But in fact, as I looked into it, Amazon pays for it. And Bezos always, he brought his family, called it the best part of his year. He loved it. And it was essentially, you had to almost put this, you know, first the literary community and then the entertainment community, bring them into Amazon's orbit, get to know people, strengthen the relationships. And yeah, showed how important that was to him as he was thinking, you know, more about Prime being a bundle of, of important content than that, not just a shipping program.

• 28:12David Rosenthal?

  Yeah, I was blown away. Like, everything about that just seemed so anti-Amazon to me, and that it started in 2010.

• 28:20Speaker 00

  It really is a symbol of its evolving ambitions because it was very much a literary weekend. And you would have big-name authors. George R.R. Martin would be the center of attention. You know, actually, he probably would still be the center of attention.

• 28:34David Rosenthal?

  Well, Bezos, as you said in the book, he wants his Game of Thrones, right?

• 28:37Speaker 00

  He wants his Game of Thrones, right. And maybe if they purchase MGM in the next couple of days, they'll have their James Bond at least.

• 28:45Ben Gilbert?

  All right, listeners. Now is a great time to thank our longtime friend of the show, ServiceNow. If you are running a large enterprise, AI agents are likely spread across every team, and deploying them is no longer the hard part.

• 28:59David Rosenthal?

  Yeah. The hard part is knowing what permissions they have, what employees are using them for, or what decisions AI is making. AI security for an enterprise at scale is not a small concern. Like, the risks are real.

• 29:13Ben Gilbert?

  Exactly. And the challenge with AI is governing it, securing it, measuring it, and making sure that it actually delivers value. That is why ServiceNow built the AI Control Tower.

• 29:23David Rosenthal?

  Yep. AI Control Tower gives enterprises a single place to see, manage, govern, and optimize AI across the entire business. And it works with any AI, not just theirs. Every device on your network, every permission across every system, every AI agent visible and secure in one place.

• 29:40Ben Gilbert?

  And ServiceNow can do this because they've spent more than 20 years building the operational backbone of the enterprise. The workflows, governance, approvals, security controls, and institutional knowledge that power how work actually gets done across IT, HR, customer service, finance, and security.

• 29:56David Rosenthal?

  ServiceNow already runs more than 100 billion workflows annually, and trillions of transactions for more than 85% of the Fortune 500. So when companies need a place to govern AI at enterprise scale, they're building on a platform at the center of how their business already operates.

• 30:13Ben Gilbert?

  And in a future that isn't going to be one AI, it's going to be thousands of AI agents working across every function of the company. But the question is, who's managing them all?

• 30:22David Rosenthal?

  So if you're trying to turn AI ambition into real business outcomes and make it work safely, securely, at scale, go check out servicenow.com/acquired and tell them that Ben and David sent you. So three individual business lines. I want to get your take on since you've studied them so deeply. Let's start with video. There's now been, what do we think, 10, 20, 30, 40 billion dollars of capital from Amazon sunk into video easily. Good use of capital, jury still out, because there's no way to know this from Amazon's financial reporting.

• 30:56Speaker 00

  When you think about how valuable Prime is to the whole Amazon ecosystem and the fact that, yes, shipping is receding is the centerpiece, as I said, you know, and the direction that entertainment is going in and the fact that Amazon wants to be the everything store and right, the DVD shelves disappeared. This is the future of entertainment. They tend to also move in these directions and then figure out how to monetize them later. And so only now we're seeing the emergence of IMDb TV, which, you know, is a horrible name for anything, but is this streaming service that is alongside Prime Video and is free, but supported by ads. And, you know, and now you've got this massive advertising business, I think, $6 billion in the last quarter. Well, that's the other category.

• 31:41Ben Gilbert?

  Quarter to $6 billion a quarter business. That's like 100% margin.

• 31:46Speaker 00

  Yeah, right. Exactly.

• 31:48David Rosenthal?

  Yeah, that's one of the business lines. I don't need your take on whether it's good or not. Like, it's obviously good.

• 31:53Speaker 00

  That's why in the book, I call it that chapter, the gold mine in the backyard, because it was there and they kind of turned it on. And so the more programming and content they add to that, the larger the video ad component of that becomes. And so it's just another act of business building. On its own, it's valuable, and then it ties into the Amazon ecosystem in these really interesting ways and then drives the central retail flywheel.

• 32:18David Rosenthal?

  Okay, so that's video. International, you devote a few chapters to this and A, they screwed up China, just like eBay back in the day. Unclear if any Western company ever would have won there in e-commerce, probably not. Then India and LatAm that you talk about too. Another business line that they have sunk untold billions into, you know, the scene of Bezos wanting to ride in on the elephant and he has to settle for the flatbed truck to deliver the check to his team.

• 32:47Ben Gilbert?

  That's in India, right?

• 32:47David Rosenthal?

  In India. Yep. What's the state of those businesses?

• 32:52Speaker 00

  So India, I think they've built a big business there. It wouldn't surprise me if it was still unprofitable, although I think the international part of the income statement in the last quarter was profitable for one of the first times. But India strikes me as still probably a money losing proposition, in part because the political climate there has become so hostile to international companies. The Modi coalition has become nationalist and they're protecting the mom and pop shops that make up that economy. And so Amazon's had to operate as a pure marketplace business and really has been restricted with some of its workarounds, like investing in the largest sellers on its marketplace. But it's invested in Prime Video and TV shows and movies there and changed

• 33:37Speaker 00

  the way people shop, particularly in the larger cities. And now, of course, everything has been thrown into chaos by COVID-19. I wouldn't call that a failure. It's still like a bit of massively expensive work in progress. And I quote Bezos in the book as saying, "The future of the world is the United States, China, and India. We need to succeed in two out of three." So they're not taking no for an answer.

• 34:00David Rosenthal?

  Well, and the interesting thing in India is it does seem like the game is still afoot because Flipkart, to my mind, I hadn't thought about this till reading the book, totally screwed up by selling to Walmart. Like, if Flipkart were still an independent Indian national company, absolutely the Modi regime, to my mind, would be putting their fingers on the scale.

• 34:20Speaker 00

  It would be where Reliance is right now. It's the homegrown champion. And I think I quote a Flipkart, maybe board member investor in the book as saying, "If there was a mistake to make, we made it."

• 34:32David Rosenthal?

  There's also, you had the great quote too. I don't know that you had a name on it, but it was an S team member said, "We didn't know if we were going to get it right in India, but we knew Walmart was going to get it wrong."

• 34:42Speaker 00

  Exactly. And then you have Reliance, who's now an offline conglomerate, who's now trying to be the national e-commerce champion. And yet, as we know from experience, moving an expertise in physical stores into the online channel is not easy. And it's really a completely different business. And in some ways, it's really disruptive. So yeah, that's a game in progress. And then I tell a story in Mexico, in part for two reasons. One, they tried to launch in Mexico without Google. And it was a great illustration of how concerned Bezos and Jeff Wilkie were about Amazon's reliance on Google and how they spent billions of dollars every year to advertise and acquire customers via search. And so they launched in Mexico without search advertising and it doesn't work.

• 35:27Speaker 00

  Their numbers are upside down because they're trying to acquire customers with billboards and conventional ads. And it's super expensive and ultimately unproductive. So they turn on Google advertising. And then the second reason that was interesting was it's a tragic story, but they hired the CEO of their business in Mexico, who ends up getting fired from the company and then is accused of having his wife assassinated and then goes on the lam and has never been seen since.

• 35:56David Rosenthal?

  And you had coffee with him in San Francisco?

• 35:59Speaker 00

  Before he hired the assassins. I had absolutely no idea. And, you know, to me, it was an interesting look. I mean, I don't want to read too much of it, but you know, they hired the guy and they had him run their business in Mexico. And obviously he turned out to be an unsavory character. You know, there was a little bit of interesting judgment and who knows, maybe unforeseeable. But that was a story that ended in like really hard to believe tragedy.

• 36:26David Rosenthal?

  Totally.

• 36:27Ben Gilbert?

  It is staggering that that nugget is in this business book. And like, we haven't even gotten to the whole sort of 2018, 2019 saga and Jeff's personal life. But like, you're reading this, it's not by any means dry. It's one of the most interesting companies in the world, written in this thriller-like way, but it's a business book. And then you hear that anecdote and you're like, I'm sorry, what? Did you have to hold yourself back from wanting to like dig in further to that as a drama?

• 36:55Speaker 00

  A little bit. I mean, I did dig in further and that, and you know, and sort of had to measure it because it is so startling and different in tone and in content. I felt like it was interesting and I think it was relevant. And the kicker was of that whole section was how Amazon had to turn off Google AdWords after the assassination. Because the news story kept popping up and they hear like, it was just so interesting and showed the strange interdependence between the two companies.

• 37:25Ben Gilbert?

  Well, this is like a place where I really wanted to ask this question because we were talking a lot about Flipkart. It became very obvious to me, reading this book, that Jeff Bezos does indeed care about competition in addition to the customer. And it's this famous anecdote, and I've heard it quoted to me by a thousand startup founders over the years, saying, "Oh, I don't pay attention to the competition because Jeff Bezos doesn't, and I'm only worried about my customer." And like, sure, but how would you, after diving in as deep as you have, how would you massage how he actually looks at competition and when to pay attention to it and when not to?

• 38:04Speaker 00

  Whatever they say is disingenuous about that, right? And it's theater.

• 38:09David Rosenthal?

  But Brad, it's a leadership principle.

• 38:11Speaker 00

  Right. Of course, we pay attention to them, but we studied them, but we just don't obsess over them. We obsess over customers. And you know, Bezos comes to India in 2014, and Flipkart's got billboards, you know, lining the road from the airport, and he's there studying their methods. And they launch Big Billion Day, and then he insists on launching a sort of celebration of India's space program the next day, and he wants to make a splash with the elephants, you know, and it's all very explicit. And, you know, the Google story in Mexico, there's another part of the book where he authorizes Prime Now, you know, and a real foray into grocery delivery and fast two-hour delivery because Google is launching Google Express. And at some point, they're launching it in Seattle, his

• 38:56Speaker 00

  backyard. And this was an opportunity that he thought would be there for him down the road. And suddenly, he saw, you know, Google moving after it. And this was a land grab. I don't hold it against them. Like, it's, it all seems like good business to me. But yeah, the idea that they've got a higher ideal that puts them above or beyond focusing on competitors is definitely not true.

• 39:17David Rosenthal?

  To that moment and this competitive dynamic of Bezos, I don't think you wrote this in the book, but was Prime Now also partially response to Instacart? And I can't ignore the irony of both Instacart and Flipkart being founded by former Amazon engineers who were like, we should do this. And then Amazon was like, we're not going to do this. And then they go do it and raise billions of dollars and Amazon's like, we're doing it.

• 39:41Speaker 00

  No, it was in that, in that chapter, it's not just Google Express. It's Instacart and their successive fundraising rounds. And sometimes it's a story in the Wall Street Journal or the Times or Bloomberg that catches their eye. And there's a competitive response. And yeah, certainly Instacart, the fact that this was a former employee had to hit them hard. And they tried to copy it. I talk about what Prime Now was at the beginning and one element of it, which they called Copperfield, was an effort to basically do the same thing as Instacart, kind of syndicate offline, physical retailers and use their shelves as fulfillment centers and deliver those with contractors to people's homes. And what they found when they tried to emulate Instacart is that no grocery store was going to work with Amazon.

• 40:25Speaker 00

  That would be madness, particularly since in a very Amazon-like way, they also had this Amazon Fresh experiment happening in Seattle and by that point, probably San Francisco and LA. That seemed like this big mortal threat to the grocery stores. Well, little did they know, Amazon Fresh at the time was kind of a disaster, you know, and wasn't really being expanded, but Instacart had the benefit of being a technology platform for other grocery stores, whereas Amazon was kind of doing both, a little bit of 3P and 1P. And so they even went to Whole Foods back in 2015 and got told no, which, you know, was interesting and precipitated a little bit the relationship down the line.

• 41:03David Rosenthal?

  There was a fun little moment that just reminded me of in the book. I think you either wrote or implied that John Mackey at Whole Foods reached out to Bezos, either through Bloomberg or after having seen something in Bloomberg.

• 41:19Speaker 00

  Right. The companies had been circling each other. Activist investors were kind of publicing Whole Foods Market. My colleague at Bloomberg, Spencer Soper, wrote an article that suggested that Amazon had considered buying Whole Foods in the past, you know, which they had. And that was a precipitating event to Mackie saying, maybe we should pick up the phone and call these guys, maybe Amazon's our way out. And then I've got the name of whoever this was in the book, and I'm not going to be able to remember it. But somebody who was advising Mackie was, had been active in democratic politics and called Jay Carney, and that precipitated the deal.

• 41:51Ben Gilbert?

  Fascinating. It was like one of David and my first big episodes. I woke up, saw the news, we texted each other and said, oh, my God, we have to do this. We have to cover Amazon and Whole Foods, even though we've never done like a live on the scene thing before. And that was, of course, nowhere, not a part of the narrative at that point in history. So it's just cool to hear it unearthed.

• 42:08David Rosenthal?

  Yeah. Okay, so the third business line I want your opinion on is not the OG OG, but pretty close, the first kind of pillar, the stool of Amazon is Marketplace. You know, I'd always assumed that like, this is an unassailable, unbelievable business, you know? Even put AWS aside, which on its own should be a fang company. US Marketplace also on its own should be a fang company. You paint kind of a dark picture of what's going on with Marketplace right now. What's your take? Tell us more.

• 42:40Speaker 00

  Well, they made a series of very logical choices over the years, which unlocked a tremendous amount of opportunity and growth. In fact, one of the big questions I had going into the book was how does retail growth, you know, of a 20-year-old company start to re-accelerate? Right? That seems to defy the laws of company gravity. You know, the bigger you are, the slower you grow. And so what exactly happened there in 2015, 2016 that GMV kind of takes off? Yeah, I remember looking into it and talking to former members of that team. And essentially, again, back to the competition point, they are quote unquote inspired. Their eyes opened by two companies.

• 43:21Speaker 00

  One, Alibaba is expanding AliExpress with this idea that the sellers who have learned how to sell on Alibaba in China could now reach customers in the US and Europe. You know, that was a seductive idea. I think got the attention of Amazon executives. But in fact, I think, except for maybe parts of Europe, it really hasn't worked out that well. But in any event, that was sort of one inspiration. And there were, there was internal communication among Amazon executives that I cite in the book. You know, expressing fear that maybe Jack Ma would like reduce fees to nothing in an effort to expand outside China.

• 43:55David Rosenthal?

  Which is normal in China e-commerce as we see on acquired.

• 43:58Speaker 00

  Exactly. And then, you know, the other inspiration was wish.com conducting a kind of geographic arbitrage, getting sellers in China and other countries to sell to the West with really low fees, no name brands, generic products, sometimes low quality and weeks long wait shipping times. But nevertheless, huge selection and really low prices and was raising money in Silicon Valley and kind of taking off. And so Bezos looks at his, you know, his lieutenants and says, you're on this, right? And that was like, that's all they need. It's like the sly nod from the Godfather. And so, you know, they open up marketplace, they basically reduce all the friction to selling from China to the

• 44:40Speaker 00

  rest of the world. You know, they're translating from Mandarin, it's self-service, you know, sign up, sell anywhere. They're aggregating product in the ports and shipping it at low cost to the West. They're storing items in Amazon fulfillment centers. They're making it really easy for cross-border commerce to happen. And that sounds great. And it was great.

• 45:00David Rosenthal?

  Great for consumers. I mean, and the business is booming in terms of revenue.

• 45:05Speaker 00

  And by the way, Amazon has seen that if you offer a curated selection of branded items at a high price, a very orderly store in say shoes, and then you A B test that with a disorderly selection of unbranded products at low prices with extensive selection and even low quality, actually customers still gravitate to the chaos and the large selection of the low prices. So they knew what customers wanted and the corporate compass at Amazon is always pointed to what customers want. So again, good for customers. And then every seller in the West is suddenly blown out of the water by a wave of competition from overseas. Sellers who aren't paying the same taxes, who don't have the same labor costs,

• 45:49Speaker 00

  who are close to, or in some cases are the manufacturers, no brands, no markups on prices. And then also, you know, a group of sellers in that community that are playing hardball, you know, are wearing black hats.

• 46:02David Rosenthal?

  Yep, stealing IP or all sorts of stuff.

• 46:04Speaker 00

  Butts with the reviews.

• 46:05David Rosenthal?

  Oh, man, the number of times, I don't know about everybody listening or you, but like the number of times I get a little card on stuff I order from Amazon now saying, write a review and email it to us at this address and, you know, we'll send you something.

• 46:18Speaker 00

  And when you read about exploding hoverboards or, you know, sneakers that are self-destructing after the second wear or out and out fraud, it's because Amazon built these systems and scaled them and in an Amazon-like way ran them with algorithms and software and not a lot of, you know, human care and curation because they were moving quickly and setting up these systems and trying to globalize the marketplace and, you know, before Alibaba or Wish or anyone else.

• 46:45Ben Gilbert?

  Yeah, I thought that was a really interesting point that you made that was like, sure, there's this big problem with counterfeiting and IP theft and, you know, factory selling direct, even though really it's someone else's product. But let's even put that aside for a minute. There's a sort of legitimate battle going on between Chinese manufacturers with lower cost structures who are willing to play by the rules and are willing to build legitimate brands. I think Anchor is the, the brand that you cited that made like the phone chargers and all sorts of like gadgets. And they just have a dramatically lower cost structure than the American brand that they're selling against because everything about the company is China based. And as long as they can ship them to American customers, they can always undercut on the third-party seller marketplace.

• 47:29Speaker 00

  Stephen Yang, the CEO of Anchor, says to a Western seller named Bertie Thompson, who's, who's the CEO of Plugable, which is in the same business accessories. And he says to him at one point, you know, in a very kind way, because Steven's a nice guy. He says, Bernie, we're going to run you over just because, you know, this acknowledgement that you really can't compete. And Steven and Anchor, they have the manufacturing relationships and they have an underlying cost advantage. But I went back to a lot of the sellers who, over the years, had been mentioned in Bezos' investor letters to take their temperature and like, here they are in the letters as the evangelist for Amazon Marketplace. And I thought, after many years, what would their tune be?

• 48:13Speaker 00

  And all of them had become disgruntled because of exactly what we're talking about. And yeah, one of them had that great quote, "I feel like I was invited for Thanksgiving dinner and I was the turkey."

• 48:24David Rosenthal?

  This was the moment, I mean, for me, like, again, unapologetically, a huge Amazon fanboy, up until that moment, I was like, yeah, yeah, yeah, but it's good for customers. It's good for customers. It's good for customers. And then when you went to every single person, every single seller that Amazon had championed in the past, and every, even the guy that was sort of reluctant, like, you could tell, like, he was pretty pissed off, he just didn't want to say it.

• 48:45Speaker 00

  But I will say that Bernie Thompson is one of those sellers who was mentioned in the investor letter, this guy that Stephen Yang of Anchor said, "I'm going to run you over." And Plugable, among all those guys, still is doing well. He's still selling on Amazon. He, it's not, he wasn't as embittered, although he did bring some arguments to Amazon to try to get them to change some policy. And look, sellers are being aggregated right now. You guys have probably heard about this, you know? So there's obviously opportunity on the marketplace. You know, they're being rolled up by bigger players.

• 49:16David Rosenthal?

  Thrasio and the like.

• 49:18Speaker 00

  Yeah, and what, but Plugable has like constantly changed their product mix and kept bringing out new things and innovating. And, and so that's the key, right? Someone who was selling stand-up paddleboards five years ago and still wants to be selling stand-up paddleboards today in the same way, you know, that's commerce, that's capitalism, it's globalization, plus Amazon on top, it's, it's not going to be possible.

• 49:41David Rosenthal?

  The conclusion I kind of came to was like, there's a problem there in marketplace. I do think Amazon will probably fix it enough in their Amazon way. And I'm not too worried about Amazon, but it did make me think, A, Not that I'm a shareholder or anything, but less bullish on the Thrasio type model and aggregating sellers. Like you were a commodity before and now you're a super commodity. And like, whatever your cash flow dynamics are today is not going to be what they are tomorrow. And two, just, you know, also more bullish on the Shopify and arming the rebels thesis too, existing alongside Amazon.

• 50:17Speaker 00

  I agree with that. Yeah, Amazon's doing so much now and serving so many constituencies that the brand holder who wants no part of this frontier chaos. And, you know, wants to sell directly, you know, and have a relationship with their customers. Shopify is, you know, serving that need and Amazon kind of can't do it all.

• 50:36Ben Gilbert?

  For anyone listening to the show right now, we're live on the line with a bunch of our, our LPs live. So we want to get to some questions that they have, but we have to touch on the, as David has it in quotes here, the Bezos lapse of judgment in the 2018 and 19 timeframe. And there's so much stuff that you said in the book that I don't think that we need to rehash, but I did have one question for you, which was of all of the things that you found about the helicopter flying and the helipads of part of HQ two. And the insane like leak from Lauren Sanchez's brother that was happening simultaneous with the hack from MBS and the Saudi Arabian involvement.

• 51:17Ben Gilbert?

  Like, you know, you can't make this stuff up. Was there anything that was like original insights that you had found where you're like, oh my gosh, this hadn't been uncovered before?

• 51:27Speaker 00

  No, I mean, I think there's a lot in there. I mean, you mentioned the helipads, right? The idea that, yeah, the request for helipads in Long Island City and Crystal City that were part of HQ two, that instituted a political backlash in New York. That Amazon claimed was really just a normal, ordinary corporate request for aerial access and that Bezos, you know, not only-

• 51:50Ben Gilbert?

  For a company that doesn't own helicopters.

• 51:52Speaker 00

  Right. Except that Bezos, you know, what I found out, not only was he seeing Lauren Sanchez, who's a helicopter pilot, but he has taken helicopter lessons at the time.

• 52:00David Rosenthal?

  We gotta stop for a second. Like, what is up with that? Like, the dude himself almost died in a helicopter accident. Like, obviously, there's Kobe. Like, does he not get that people die in helicopters?

• 52:10Speaker 00

  And he's, he's flying them. And although I looked for the pilot's license and I couldn't find it in any, any database, but I do know that he took lessons. And I found that he had personally bought a Bell helicopter and that Lauren Sanchez's company had also registered a new Bell helicopter at the same time. So my hypothesis, he bought his and hers Bell Textron state of the art helicopter. So anyway, there's a lot. I mean, there's a lot in there.

• 52:37Speaker 00

  You know, the, while the yacht, the fact that he's building this super yacht, three mass schooner with an accompanying support yacht for the helicopters, that's all fresh in the book. That took a lot of sleuthing. And then, you know, little aspects of the three way fight between the National Enquirer, Bezos and his representatives. And, you know, Michael Sanchez trying to clear his sullied name. Then you had MBS, you know, and that really had nothing to do with the whole thing. Yeah, I mean, people can go read it. It's chapter 13 in the book. There's the Business Week excerpts. It's a tangled, strange, bizarre hall of mirrors saga.

• 53:15Ben Gilbert?

  It's an unbelievable chapter, even if you, you feel like, ah, you know, I know a lot of these, this story, I'm not going to read that. Go buy the book and read chapter 13. It is a such a crazy story, completely on its own. And do I have it right? That his phone via WhatsApp was hacked by Mohammed bin Salman? And that was very likely exfiltrating data, but that has nothing to do with how the public found out about the affair.

• 53:44Speaker 00

  The second part is right. It had nothing to do with the National Enquirer story, which was supplied. The evidence filed in the voluminous court cases amply showed the evidence was supplied by the brother. But I would say that there's just ambiguity around whether the Saudis hacked his phone. There was a study done by a consulting company that Bezos's private investigator hired. There's a lot of skepticism in the cybersecurity community about that study and what they found. So I don't know, and I don't know that we'll ever know. And what's unfortunate is that the Saudi bots on Twitter have kind of taken what I wrote in that book to launch another wave of attacks against Bezos, you know, saying that he improperly accused them. So the interesting thing is that there is obviously real enmity, you know,

• 54:28Speaker 00

  from the Saudi government and the Crown Prince and their agents against the Washington Post and against Jeff Bezos. So that is unequivocally true. And the question of whether they employed Pegasus software and hacked his phone. It's also true, by the way, that MBS was sending in very curious texts.

• 54:44David Rosenthal?

  Yeah, that was suspicious.

• 54:46Speaker 00

  But wait, I just wanted to say one other thing, Ben. I just remembered you asked, you know, what was new? And I'll just sort of like at a distance refer. You remember that the center of this whole thing was whether the Inquirer had acquired explicit photographs?

• 55:01David Rosenthal?

  Yes.

• 55:02Speaker 00

  Yes, the selfie, we'll just leave it there. And the fact that they never had it, what they had was a photograph that Michael Sanchez had taken from an escort website and passed off as an explicit photograph of the richest man in the world. And that was one you just can't, you cannot make up. It was funny, in retrospect, all of these parties were battling over a photograph that actually didn't exist.

• 55:27David Rosenthal?

  It's unbelievable. We could do a whole nother podcast that is not a business podcast about this. But I do want to ask them, maybe just a meta question. What was it like reporting that? You were kind of going behind the scenes of this story and sources. And you're a journalist yourself, you have sources. Obviously, you know, the sanctity of sources and you're trying to report on this. Meanwhile, like, there's all sorts of legal ramifications here. People could be going to jail. Like, what was that like?

• 55:56Speaker 00

  David, I'm not going to lie, it was awesome.

• 56:00Speaker 00

  I'm a business journalist. We're writing about deals. We're writing about business people who tend to be scripted and disciplined and boring. And so to write about explicit selfies and Saudi agents and hacks and tabloid journalists and double crossing sibling betrayal. Oh, it's great.

• 56:20David Rosenthal?

  That's awesome. That's awesome.

• 56:23Ben Gilbert?

  All right. Last question before we sort of open it up to the floor, Brad, is have you heard from Amazon or Jeff or anyone in the book since publishing? And have you gotten any more recent feedback than what you actually wrote in the book?

• 56:38Speaker 00

  Not anything official. And I think they, having maybe learned from the aftermath of the everything store, have realized that to respond publicly would only add oxygen to the fire. As much as I might hope for a Dave Clark tweet, or a Bezos Instagram retort, or even praying to the heavens, another Mackenzie review, or a Lauren Sanchez review, that would be awesome. I have a feeling that is not forthcoming. And then, you know, informally, it's the feedback's all been good. It feels like a, you know, a factual account and well told. And so that's really informal reaction. Obviously, nothing from Bezos, nor do I expect to. The response so far that I've gotten has been favorable.

• 57:18Ben Gilbert?

  That's great. All right, listeners. Now is a great time to talk about a new partner of ours here on Acquired, Logora, the agentic operating system that is redefining how the world's best legal teams work.

• 57:33David Rosenthal?

  Yep. It's sort of obvious that AI is going to completely change the legal industry. I bet most of you listening have dropped a contract into some sort of AI chatbot out there. Logora took that insight and asked the question, what if you really built something with that power from the ground up for the legal industry?

• 57:50Ben Gilbert?

  So the founders did exactly what great founders do, operate with obsessive customer focus. They embedded inside a massive law firm for months. They sat with the lawyers just watching how the work really gets done.

• 58:05David Rosenthal?

  And that's how you get features that customers love like tabular review, where you drop in a folder of hundreds of contracts and it pulls every key term into a grid a lawyer can actually work with. Legora's bet here is interesting. Since it lets each lawyer handle more complexity, any given person can increase the quality of their work and do higher value work. And this means that the pie can grow even as each individual task takes less time.

• 58:29Ben Gilbert?

  And they recently launched Legora Agent, offering greater intelligence and performance. The agent lets lawyers set an objective. Then it can handle the planning and the execution and delivery of the final product. Legal teams get to maintain full control and transparency since they're still involved where judgment is required.

• 58:48David Rosenthal?

  And Legora works where you already work. You can use it within Microsoft Word while redlining or drafting. The early Legora numbers essentially speak for themselves. When they have a head-to-head pilot with their top competitor, they win 70% of the time. Legora now has over 100,000 lawyers on the platform from 1,200 legal teams in 50 countries. And crazily, they went from 1 million to 100 million in ARR in about 18 months.

• 59:18Ben Gilbert?

  Truly insane numbers. And that is the real test. Plenty of things demo well, but the question is whether a busy associate actually reaches for it during crunch time, or whether a partner trusts it before going into a conversation with a major client. If your legal team wants to check it out, whether you're a law firm or you're in-house at a company, you can learn more at legora.com/acquired and just tell them that Ben and David sent you. All right, well, anyone, anyone want to kick us off here with the first question? Logan, I see your hand raised.

• 59:49Speaker 03

  Yeah, obviously give a plug for the book. Read the book, loved it. Thank you for coming on. So my question is related to Nina Rolle. The Voice of Alexa, and the question's more on the journalistic approach. Basically, can you go into more detail, or whatever detail you can provide that you didn't include in the book, on how you were able to, I don't know if this is the right phrase, hunt Nina Roldan. She, it sounds like none of the parties involved can confirm that she is the voice of Alexa. So I was curious if you can basically say how you were able to confirm to the degree of confidence that you put her name in the book. How did you find out that she was Alexa and what was that process?

• 1:00:25Speaker 00

  Yeah, thank you, Logan. Definitely love talking about this. It was in the first book, I tracked down Bezos's biological father. You know, unfortunately, there were no more long lost relatives to hunt down in this one. So I thought, well, what, you know, what secrets are there to unearth? And if you remember, Logan, the, um, the voice of Siri a couple of years, way back, maybe like 2012 was, was unveiled. And it was a woman named Susan Bennett, who actually hadn't even known, maybe early on, that she was the voice of Siri. Like, it was a data set that she had recorded for another company that had been acquired by Siri, um, and then acquired by Apple. And so, you know, I knew and I remembered that, you know, that these synthetic voices start out with voice actors

• 1:01:09Speaker 00

  or actresses reciting yards and yards of scripts. And then the AI takes that and produces a voice. And so, yeah, I just put finding Alexa as one of my challenges for the book. And then it was like, understanding, you know, where these voices come from. There's really only a couple of studios that do it. There's one in Atlanta that produces Siri called GM Voices. And just networking through employees, former employees and people in the community, I found out that it was likely GM Voices that did Alexa. And then networking around GM Voices, I had some candidates and I went to their websites. And when I got to Nina Rolly, rhymes with trolley, her website, you know, she had a bunch of voiceover clips that she had done in the past.

• 1:01:52Speaker 00

  I remember one was for Mott's applesauce, I think. And, you know, just playing it, I could tell. And I played it for my daughters and they were like, yeah, that sounds familiar. And, um, you know, and then I called her and she said, you know, she couldn't talk to me. And that wasn't it. I did sort of know and had confirmed that it was her beforehand, just through networking. And then when Amazon wouldn't talk about it and she wouldn't talk about it, I had a pretty good signal.

• 1:02:16Speaker 03

  Awesome. Thank you. I'll leave it at that.

• 1:02:17Speaker 04

  Thanks, Logan. All right, Ben Grinall. Super interesting book. Last week I was part of another book club and it was for Working Backwards. So two great Fridays in a row. You've done so much reporting on Amazon and really dug deep. So two-part question. One, what is Amazon missing from their business model? Like, what is a new opportunity or revenue stream that they haven't pursued, which they could? And what's something that you think they should drop that they're currently doing?

• 1:02:47Speaker 00

  Did you ask the working backwards guys this question?

• 1:02:49Speaker 04

  Well, side note, so it was like an eight-person book club and Wilkie came to it. Very different conversation.

• 1:02:56Speaker 00

  Okay, this is gonna challenge me. What is the thing that's missing? Hard to imagine what the missing pieces are, right? In the Amazon quilt of businesses, right? Because they are sort of doing everything right now. You know, I'm inclined to say like the super, the physical grocery opportunity was one that I think they were just laid on, you know, while they bought Whole Foods. And then they've been waiting to perfect this ghost store technology. I think they, they're, they're viewing technology as a differentiator. The cameras on the ceilings and the, and the weights on the shelves, the idea that you can bypass the cashier is, is their big, you know, selling point for these stores. But I don't know, personally, like, I don't think that's a really big impediment, you know, waiting in line for a couple of minutes and checking

• 1:03:40Speaker 00

  your phone before you leave. I mean, maybe I'm wrong about that. I just feel like perfecting that, which has been a super expensive 10-year-plus process, has slowed them down when it comes to entering physical retail in a big way. And, you know, maybe without that obsessive focus on finding a, you know, a way to enter the market with a distinctive technology solution, they could have moved faster on physical retail and the opportunity of supermarkets.

• 1:04:05Speaker 04

  Yeah, wasn't it $10 billion or something you said in the book?

• 1:04:08Speaker 00

  I don't know that I had a number, but I definitely had some sources saying that it was the biggest single investment in Amazon history, at least alongside China as the biggest capital investment, the ghost store. And then the second thing is, what are they doing that they should drop?

• 1:04:22Speaker 04

  Yeah.

• 1:04:24Speaker 00

  That's a tough one. The AWS service recognition, the image recognition service and AI services, they have been selling to corporate customers, but also police and government authorities. They have suspended that. They suspended it for a year after the outcry and anxiety about image recognition. And now I think they've suspended it in perpetuity. There's just deep societal discomfort about the bias in those algorithms and the way in which police authorities have historically used them. So that's an easy one for me to grasp onto and say, maybe this suspension of selling recognition to governments should be following Google and other companies and actually really abandoning the technology. Very cool.

• 1:05:06Ben Gilbert?

  Ooh, I have a sort of an answer to that, that I'm curious if Brad thinks is an answer. And it's been a really long time since we covered this on Acquire. But Brad, do you think the Zappos acquisition was value creative in a big way for Amazon? Or has that just been a stagnant business?

• 1:05:21Speaker 00

  It's a little bit like the acquisition of diapers.com, which was a little bit after it, in terms of neutralizing a competitor and then allowing it to run autonomously, maybe learning from it a little bit, but then pursuing their own strategy. And Amazon's never slowed down in terms of selling shoes or expanding the selection of shoes and apparel on its own site. So in terms of value creation, maybe it hasn't been positive, but in terms of neutralizing a competitor and slowing its growth down and blocking the capital markets or a competitor from acquiring it and posing a real competitive threat, it's been successful. And the exact same thing with diapers.com.

• 1:06:02Speaker 00

  Mark Lory did How I Built This on NPR over the weekend, where he tells the whole bitter story of being acquired by Amazon and feeling like they closed some avenues for Quidsy. And so this is why regulators and lawmakers now think, wish that the FTC had taken a harder look at those acquisitions.

• 1:06:23Ben Gilbert?

  All right, let's do Brad Romney next.

• 1:06:25Speaker 05

  I'm curious for your thoughts on which elements of Amazon's innovation flywheel would you identify as being subtle, yet impactful? And which elements could you potentially separate from the more, maybe less savory elements of the Amazon culture that we reported on?

• 1:06:45Speaker 00

  That's a good question, Brad. You might stump me with that one. I mean, I think that Bezos is central to the innovation process at Amazon. As much as they like to talk about a culture of invention and decentralized teams, when you peel back some of the biggest ideas at Amazon, it tends to start with an idea from Bezos, like that Alexa email, and then his sort of maniacal attention to it and sponsorship within the company. You know, and I think it's a long-term challenge for Amazon because, you know, Jassy, for all his skills as an operator, you know, and he's been amazing at AWS, I don't think is capable of, you know, wheeling off and emailing a new business idea in the way that Bezos is. And then as the founder, you know, and the CEO, Bezos just brought a level of magic

• 1:07:30Speaker 00

  to his, you know, sponsorship of these ideas. And it was a combination of inspiring employees and terrifying them, you know, and getting them to jump through hoops and jump over high bars. And he walks out of meetings, I have that anecdote in the book where he believes the Alexa team isn't collecting data fast enough and he walks out of the meeting and they come up with the AMP program to go and bring Alexa out secretly into the world to collect data. Those are the kind of like heroic entrepreneurial feats he can inspire. You can't bottle that up, right? Because there's one Jeff Bezos, and it really often comes to having someone who's inventive and creative, but also, you know, has the fortitude to, you know, and a little bit of

• 1:08:13Speaker 00

  the guts and the resources to make these huge investments and try them, and also to fall flat on his face. One theme in the book, I think, is Bezos is willing to be embarrassed, right? He humiliates himself with the Fire Phone and then launches Alexa a couple of months later. And he, you know, risks embarrassment and is embarrassed by the Lauren Sanchez saga. And yet maybe doesn't really have the gene, you know, that he cares that much about, or he's at least willing to risk the humiliation. And it turns out that maybe it's the susceptibility or allowing yourself to fail and fail really publicly, that's also kind of key to the innovative process.

• 1:08:51Ben Gilbert?

  Brad, it does seem also, just to chime in here, that founders get more leeway from the street. Like Bezos is the guy that made this happen. So therefore, he's got a lot of rope, not just from the board, but like, what activist shareholder is going to come in and try and say he's not doing a good job? But you could see the successor, whoever comes in, you know, or we know who comes in, but like, future non-founder CEOs, they get much shorter leash from investors.

• 1:09:17Speaker 00

  Totally. And when you think about like what Doug McMillan, or, you know, the CEO of eBay, or even the CEO of Target have to deal with in terms of managing the street quarter to quarter, and never really being able to go and have four lousy quarters so that you can, you know, have the potential of building something more promising down the line. And Amazon can do that whenever they want. It's not just because Bezos is the founder. It's because he's stuck around, but because he called the shots, right? With the first shareholder letter, he said, this is how he's going to run his business. And then he has reproduced that letter every year and said, it's still day one and repeated it all like a mantra. And, you know, and he's bought himself the leeway and the flexibility to do it.

• 1:09:59David Rosenthal?

  Real quick on that, you more than allude to this in the book, but um, there's a real rivalry between Elon and Bezos. Is there, is there any more that didn't make it into the book that you found on that?

• 1:10:12Speaker 00

  I mean, you know, I talk about in the book how they met early on a couple of times, you know, that Elon tried to tell Jeff that some of his technical decisions were wrong, you know, that they had really different philosophies. Bezos was constraining his investment at Blue Origin and wanted to keep the team small and wanted to start with suborbital space. And then Elon comes and does it all 10x, gets government contracts and commercial contracts to pay for everything. And, you know, Bezos has kind of left as a straggler, something that he's really not accustomed to being in second place. Yeah, I mean, I think the rivalry is real. It's super entertaining to see Elon exchange, you know, barbs with Jeff over Twitter, and sometimes vice versa. And it'll be interesting to see whether Bezos commits

• 1:10:56Speaker 00

  more of his time to Blue Origin now that he's retiring as CEO and, and tries to rescue it. I do think that that company is a little bit dysfunctional in terms of, you know, Bezos owning it, operating it from afar, trying to keep its headcount small, but then really in pursuit of space, exchanging directions abruptly, hiring aerospace folks from companies like Honeywell, and changing the culture on a dime. And then investing a billion dollars worth of his returns from Amazon stock every year and turbocharging it. And that kind of, you know, change of pace, I think, has yielded some dysfunctional outcomes. But look, the story there might change. And in the next couple of weeks, they say they're going to go, New Shepard's going to fly paying tourists

• 1:11:38Speaker 00

  to suborbital space. And maybe that'll be a big triumph and create some momentum. But right now, they're sort of years behind all their projects and promises. And a lot of these new contracts, like the moon, Blue Moon contract, they're losing to SpaceX.

• 1:11:52Ben Gilbert?

  Josh Gutman, let's go to you next.

• 1:11:55Speaker 06

  Yeah, I was kind of curious because like, there's the time between the Everything Store and Amazon Unbound. Amazon started acquiring way more companies than they previously had. This was in a period where the company was much bigger, too. So that in some ways, the acquisitions look smaller, like on paper, like in hindsight, even Whole Foods, if you think about in terms of like market cap now, feels like pretty insignificant. What has changed internally at Amazon for how they think about acquiring companies and kind of like, what kind of made the cut for you in terms of like, what was worth talking about from an acquisition point of view?

• 1:12:26Speaker 00

  I do tell the Kiva story in one of the chapters on operations. And to me, it was, it was a Dave Clark call. It was the epitome of Amazon in terms of trying to, you know, automate systems and take humans out of the equation. It was a little bit of a ruthless move in that they negotiated the thing over many years and tried to suppress its growth, and then bought it, and then made a promise to the Kiva founders that they could sell it externally, and then reneged on that promise. And it allowed the super scaling, the fulfillment centers, and made them, you know, incredibly more efficient. And then it also furnished Dave Clark with some like leadership credentials that allowed him to continue to grow inside the organization. So I think you're right, Joshua, in that

• 1:13:09Speaker 00

  I did take a little bit of a light pass on Twitch, definitely on Ring. I did not do much. Part of it was just streamlining the story and, you know, and trying to shoehorn everything into a narrative without too many digressions. And also while keeping Jeff Bezos at the center of the action, that was like the main narrative challenge of the book. But, you know, Amazon might acquire MGM in the next couple of days. And like, I always thought that Amazon's ability to acquire companies was going to get severely curtailed because of all this antitrust scrutiny. And, you know, We'll see what happens, but it seems like that's an asset that they'll easily be able to buy and then increase their output of movies in their catalog.

• 1:13:51Speaker 00

  So yeah, but you're describing one of the challenges I had in figuring out what to include, what not to include, how to keep things moving in this book that covers the entire arc of Amazon history and all these characters that populate it.

• 1:14:04Ben Gilbert?

  Brad, to wrap, where can listeners buy the book?

• 1:14:07Speaker 00

  Well, Ben and David, it turns out that you can get it at your friendly, local neighborhood bookstore. You can certainly pick it up at Barnes and Noble, or if you must resort to it, it is available from Amazon itself as an ebook, as a hardcover, or as an audible audiobook.

• 1:14:25Ben Gilbert?

  That's great.

• 1:14:26David Rosenthal?

  You need to set up shop in your garage there, selling it out the front door.

• 1:14:29Speaker 00

  Exactly, or I'll be selling it on my street corner this weekend.

• 1:14:32Ben Gilbert?

  And there's a couple of parts that you actually read in the audible, if I was hearing right.

• 1:14:38Speaker 00

  I do, I do, I do the introduction.

• 1:14:40Ben Gilbert?

  And the acknowledgements, that had to be you too, right?

• 1:14:42Speaker 00

  Which frankly is probably about as much as anyone wants to hear me reading. There's a reason professionals do it, which I've learned.

• 1:14:52Ben Gilbert?

  That's great. Well, thank you so much. Anywhere else listeners should find you on the internet or follow you or anything like that?

• 1:14:58Speaker 00

  I'm at Brad Stone on Twitter.

• 1:15:00Ben Gilbert?

  That's great. Well, really appreciate it. LPs, thank you for joining us today. Great questions. And Brad, best of luck.

• 1:15:08Speaker 00

  Thank you, guys.

• 1:15:10Ben Gilbert?

  Cheers.

• 1:15:11David Rosenthal?

  All right, listeners. Now is a great time to talk about one of our favorite companies, Statsig.

• 1:15:18Ben Gilbert?

  Yes, there is a reason why the best product teams rely on Statsig, whether they are iterating on their core product features or shipping AI-powered experiences at scale.

• 1:15:28David Rosenthal?

  Yep. In the crazy speed of today's AI world, shipping fast is just table stakes now. It's basically trivial to build and deploy your app constantly. The real advantage is how quickly you learn what changes actually created value for customers, and how fast you can use that signal to guide what you ship next.

• 1:15:49Ben Gilbert?

  This is where Statsig comes in. It brings experimentation. Feature flags and product analytics into one unified system so teams can ship safely, test rigorously and directly link what they changed to how users actually behaved.

• 1:16:01David Rosenthal?

  So if you want to make learning your competitive advantage, whether you're building new AI experiences or just evolving your existing core product, go to statsig.com/acquired to get started.

• 1:16:12Ben Gilbert?

  All right, listeners, that is all we have for you today. Thank you for tuning in. Obviously, you heard where you can find Brad on the internet, where you can buy the book. And if you do buy the book, you should go leave a review. I know Brad would greatly appreciate it. And it is years of shutting yourself in a room and working through this crazy process. And so we should all go and and help Brad sort of get the most out of this incredible story that he has unearthed. So go leave him a review.

• 1:16:41David Rosenthal?

  Totally. I left a review. I was very excited. I put a photo of my copy of the book with all my notes on it.

• 1:16:48Ben Gilbert?

  Whoa.

• 1:16:48David Rosenthal?

  And I aim to be the top reviewer for all the books that I review. I think.

• 1:16:53Ben Gilbert?

  I think you are on Seven Powers.

• 1:16:54David Rosenthal?

  I'm number one on Seven Powers.

• 1:16:56Ben Gilbert?

  Yeah.

• 1:16:56David Rosenthal?

  Yeah. It's all because of the image. So when you leave a review, put a photo in there.

• 1:17:02Ben Gilbert?

  Growth hack. All right. Well, listeners, we really appreciate it. As you heard at the top of the show, if you want to join the next one of these, you should become an LP. That's acquired.fm slash LP. We are hanging out in the Slack. That is free to join. Everybody can join. You don't have to be an LP to do it. That is acquired.fm slash Slack. So come talk about the news of the day with us. And if you liked this episode, share it with a friend, subscribe from the podcast player of your choice. And with that, listeners, we'll see you next time.

• 1:17:31David Rosenthal?

  We'll see you next time.