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If you want to get a better understanding of how Jeff Bezos "built the scaffolding around his mind" that is Amazon I highly recommend The Everything Store -
> I think its very apples to oranges to compare Uber's subsidies with Amazon's infrastructure spend.

Yet you are comparing them. My point was exactly that comparing these are apples and oranges. And it is a matter of obviousness because you seem to think it's obvious that Amazon's "moat" was an obvious moat whereas Uber doesn't have a moat at all.

I'm not even saying Uber has found their absolute moat either. I'm saying a lot of analysis we take for granted was never obvious when the companies were in their early days.

Youtube's model was never obvious either (and still not obvious in terms of profitability) yet they managed to near monopolize the online video sector. You could say the same thing about Youtube. They didn't know how to make money, and they just kept bleeding money. So bad that they had to sell themselves. Yet they have built something valuable, and someone wanted to buy them to use as a very important strategic asset.

Who knows what will happen to uber but I don't think it's so bad that they will obviously fail. It's more like 50/50. They do provide great value to people, and I am sure they are doing whatever they can to create what you call a moat, just not visible to you. I still stand by the fact that Amazon's "moat" was never obvious until recently.

If you really think it was as easy as "Amazon was spending money purchasing real things so they were actually accumulating value, compared to Uber", you should read this book

There were so many points in Amazon's history where everybody mocked them and criticized them just like you're doing right now for Uber. For example at one point everyone thought a decentralized marketplace (eBay) was the future and Amazon will die off because eBay never kept inventory, which came with a lot of benefits such as high margin and low operating cost, not to mention people used to say "eBay is the true internet marketplace, Amazon is just a web1.0 company and won't survive in the world where every sale happens online peer to peer".

So basically what you're referring to as a moat now was actually considered the biggest weakness for Amazon at one point in history.

Cshelton · 2015-08-17 · Original thread
If you haven't read this book, The Everything Store: Jeff Bezos and the Age of Amazon, and you want to know how Amazon has worked from day 1, it's a good place to go. It straight up tells you the culture at Amazon, starting from day 1.

I'll even include the Amazon link =p

nikcub · 2014-09-06 · Original thread
> Costco comes to mind

That isn't a coincidence. According to[0] "The Everything Store"[1], the latest biography of Amazon, Bezos picked up the model for Amazon retail from Costco founder James Sinegal.

The first aspect was "value trumps everything" - where prices would be slashed and net margins thin. The second was the subscription model - Bezos learned that 70%+ of Costco's profit was from the membership fees. It was easier to charge a membership fee once and offer lower prices than it was to attempt to spread your profit margin across products and into the pricing.

Amazon slashed its prices and adopted the thin margin model in the future and then implemented Amazon Prime.

"The Everything Store" is a decent read, easy to flick through and some interesting cases and anecdotes within it. Ignore the negative reviews and give it a read if you haven't already.



umsm · 2014-05-23 · Original thread
Does this article still make sense if you click on this:

And notice that the book IS AVAILABLE?

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