The Four: The Hidden DNA of Amazon, Apple, Facebook, and Google

by Scott Galloway

But by 2016, business media was bemoaning the end of an American institution.

Forty-four percent of the value of U.S. malls was in just a hundred places, and sales per square foot dropped 24 percent in the past decade.

A mall’s health is more a reflection of the local economy than the format itself. Suburban blight h...

However, many still thrive—particularly those that have a...

Getting our stuff at the lowest possible price was now more important than any specific company, sector, or even the health of the broader community.

The era also saw a new generation of retail infrastructure technology, including the first barcode scanner,

Until the sixties there were laws against retailers offering discounts for bulk purchases.

Lawmakers correctly feared this would put thousands of local stores out of business.

cheap, not only in today’s dollars, but in 1962 dollars—a staggering achievement and a testament to a cut-throat race to the bottom.

The value proposition was clear and compelling: when you shop at Walmart, it’s similar to getting a promotion—you get a better life,

Walmart was the great leveler.

But most consumers don’t want to be equal; they want to be special.

And a sizable fraction of the consuming population will pay a premiu...

That fraction also tends to be the consumers with the most...

Hence the rise of specialty retail, which enabled mostly affluent consumers to focus on an exclusive brand or product regardless of price.

Many of these specialty retailers almost seamlessly transitioned into the era of e-commerce, as many had cut their teeth on direct-mail catalogs and were facile with data and fulfillment.

Rather than spending money on advertising, The Gap invested in store experience, becoming the first lifestyle brand.

gave a generation of Americans the sense that they had “arrived.”

Bezos saw a technological shift, then used it to reconstruct root and branch the entire world of retailing.

E-commerce would be a shadow of itself, had Bezos not brought his vision and focus to the medium.

In the 1990s, e-commerce was a shitty, unrewarding business for almost every pure-play firm (it still is).

Hype does not equal sales. Retail may have never been, on a risk-adjusted basis, a good business.

There is a finite amount of capital invested in each sector, and Amazon’s vision and execution has soaked up the preponderance of that investment.

The result is a once-populous sector that is being ravaged and depopulated by a single player.

Because we live in a culture of consumption, the natural traject...

So, when the planets align and a new concept works, it can scale rapidly and create tremendous value f...

The difference this time is that this value has been created with unprecedented speed by a single company, because, being virtual, Amazon can scale to hundreds of millions of customers, and scale across almost every retail industry, without the traditional drag of having to build brick-and-mortar stores and hire thousands of employees.

On Amazon, Bezos realized, every page can be a store and every customer a salesperson.

And the company could grow so fast that there wouldn’t be any corners left for competi...

In the first dot-com boom, Jeff Bezos was just another Wall Street escapee with a computer science degree who’d become enamored with the promise of e-commerce.

But his vision and maniacal focus would set him head and shoulders above the rest.

Brands are two things: promise and performance.

An industry—book reviewing—emerged to identify what books were worth eating/reading, bypassing the diligence of curation offered by a store.

Bezos realized reviews could do the hard work of retailing for him.

Customers do the marketing, for free. Amazon could call on the internet’s less lame attributes:...

As the years passed, broadband began to offer shades of nuance, and gatherers showed up,

willing to browse, weigh options, and take their time.

Bezos knew he could migrate to things people weren’t used to buying online ...

To outrun competitors and reinforce the core value of selection, Amazon introduced Amazon Marketplace, letting third parties fill in the long tail.

Sellers got access to the world’s largest e-commerce platform and customer base, and Amazon was able to balloon its offerings without the expense of additional inventory.

Amazon Marketplace now accounts for $40 billion, or 40 percent...

Sellers, content with the massive customer flow, feel no compulsion to invest in reta...

Meanwhile, Amazon gets the data and can enter any business (begin selling products themselves) the moment...

Amazon appeals to our hunter-gatherer instinct to collect more stuff with minimum effort.

The need for stuff is real: stuff keeps us warm and safe. It allows us to store and prepare food. It helps us attract mates and care for our offspring.

And easy stuff is the best stuff, because it consumes less energy and gives you time to do other important things.

Without capital-hungry stores, Bezos could invest in automated warehouses. Scale is power, and Amazon was able to offer prices no br...

He offered deals—to loyal customers, to authors, to delivery companies, to resellers agreeing to run ads on their own websites. He d...

It also helped that, for the better part of Amazon’s first fifteen years in existence, traditional retail CEOs were apt to remind people that e-commerce only accounted for 1, 2, 3, 4, 5, 6 . . . percent of retail.

There was never a concerted effort to respond to the threat until Amazon had enormous fangs and unlimited capital—it was too late.