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June 21 - July 2, 2020
As measured by adoption and usage, Facebook is the most successful thing in the history of humankind.
The Four are engaged in an epic race to become the operating system for our lives. The prize? A trillion-dollar valuation, and power and influence greater than any entity in history.
Our economy and prosperity are largely predicated on others’ consumption.
Consumption has taken the place of shared sacrifice during times of war and economic malaise. The nation needs you to keep buying more stuff.
Dead man (retailer) walking begins with margin erosion—the cholesterol of retail—and ends with endless promotions and sales.
It was Harry Selfridge who coined the phrase “the customer is always right”—which at the time might have appeared weak and obsequious.
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.
People lament the job-destroying machine that is Amazon. But Walmart was the original gangster.
Bezos chose the name “Amazon” as an indicator of the scale of the flow of merchandise he envisioned. However, another name he considered (he still owns the URL) was more appropriate: relentless.com.
Amazon appeals to our hunter-gatherer instinct to collect more stuff with minimum effort.
This kind of experimentation and aggression is what the military calls the OODA loop: “observe, orient, decide, and act.”
We are witnessing the great reckoning in retail. Just as we witnessed the percentage of people working in agriculture decline from 50 percent to 4 percent in a century, we’ll see a similar drop over the next thirty years in retail.
Amazon business thinking: If we can borrow money at historically low rates, why don’t we invest that money in extraordinarily expensive control delivery systems? That way we secure an impregnable position in retail and asphyxiate our competitors. Then we can get really big, fast.
As Bezos wrote in Amazon’s first annual letter, in 1997, “Given a 10 percent chance of a hundred times payout, you should take that bet every time.”
History favors the bold. Compensation favors the meek. As a Fortune 500 company CEO, you’re better off taking the path often traveled and staying the course. Big companies may have more assets to innovate with, but they rarely take big risks or innovate at the cost of cannibalizing a current business. Neither would they chance alienating suppliers or investors. They play not to lose, and shareholders reward them for it—until those shareholders walk and buy Amazon stock.
Most boards ask management: “How can we build the greatest advantage for the least amount of capital/investment?” Amazon reverses the question: “What can we do that gives us an advantage that’s hugely expensive, and that no one else can afford?”
“Failure and invention are inseparable twins. To invent you have to experiment, and if you know in advance that it’s going to work, it’s not an experiment.”
A combination of a winner-take-all ecosystem, accelerating customer acquisition, last-mile costs, and a generally inferior (online) experience, makes pure-play e-commerce untenable.
while the world still thinks of Amazon as a retailer, it has quietly become a cloud company—the world’s biggest.
As traditional consumer marketing wanes in importance at the hands of digital, and better products emerge that consumers can discover using new tools of diligence, entrepreneurs’ ability to spin lemons into lemonade to raise ridiculous amounts of capital, position themselves as “disruptive,” and sell to an old-economy firm hysterical over its deepening crow’s feet, is the new “marketing.”
The ability to reserve something on her phone, pay later on mobile or desktop, pick it up in store, and never have to wait in a checkout line is damn near unbeatable.
Ultimately, then, why should Amazon, the king of online retail, get into multichannel retail?88 Because e-commerce doesn’t work, isn’t economically viable, and no pure e-commerce firm will survive long term.
Nobody wants to be at the mercy of Google and disloyal consumers.
The reason Jeff Bezos is advocating a guaranteed income for Americans is he has seen the future of work and, at least in his vision, it doesn’t involve jobs for human beings. At least not enough of them to sustain the current workforce.
The wealthiest man in the twentieth century mastered the art of minimum-wage employees selling you stuff. The wealthiest man of the twenty-first century is mastering the science of zero-wage robots selling you stuff.
Consumers no longer go to stores for products, which are easier to get from Amazon. They go to stores for people/experts.
Thanks to the Industrial Revolution and the rise of general prosperity, luxury, in the twentieth century, came within reach of hundreds of millions, even billions, of people.
Dying removes the icon from the inevitable judgment of everyday existence, including aging, and elevates persona to legend—ideal for a brand.
Simplicity entails sleek appearance and ease of use—when the interaction with an object sparks delight, brand loyalty increases.
Steve Jobs’s decision to transition from a tech to a luxury brand is one of the most consequential—and value-creating—insights in business history. Technology firms can scale, but they are rarely timeless.
Jobs understood, as none of his peers did, that whereas content, even commodity products, might be sold online, if you wanted to sell electronics hardware as premium-priced luxury items, you had to sell them like other luxury items.
Luxury insulates the Apple brand, and hoists it above the price wars raging below.
What we learn on the social network, and especially on Facebook’s subsidiary Instagram, creates ideas and desires.
Facebook gestates intent better than any promotion or advertising channel.
Facebook is a platform for strutting and preening. Users post about peak experiences, moments they want to remember, and be remembered by—their
legendary Grant Study at Harvard Medical School has borne this out. The study—the largest longitudinal study of human beings to date—began tracking 268 Harvard male sophomores between 1938 and 1944. In an effort to determine what factors contribute most strongly to “human flourishing,” the study followed these men for seventy-five years, measuring an astonishing range of psychological, anthropological, and physical traits—from personality type to IQ to drinking habits to family relationships to “hanging length of his scrotum.”11 The study found that the depth and meaningfulness of a person’s
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Seventy-five years and $20 million in research funds, to arrive at a three-word conclusion: “Happiness is love.” Love is a function of intimacy and the depth and number of interactions we have with people.
Whether or not you believe Instagram is the premier platform in its market, it’s less of a stretch to acknowledge that it may have been the best acquisition of the last twenty years.
Advertisers need Facebook much more than Facebook needs any one, or thousand, advertisers. If Ford Motor announced they were concerned with the subterfuge of our democracy and were no longer going to advertise on Facebook, the Detroit firm would be commended for their actions in the media, and the market would promptly cut 10 percent off their share price.
feels relevant in 2020
The posts that get the most clicks are confrontational and angry. And those clicks drive up a post’s hit rate, which raises its ranking in both Google and Facebook. That in turn draws even more clicks and shares. In the best (worst) cases—we see them daily—the story or clip goes viral and reaches tens or even hundreds of millions of people. And we all step deeper into our bubbles. This is how these algorithms reinforce polarization in our society. We may think of ourselves as rational creatures, but deep in our brain is the impulse for survival, and it divides the world into us vs. them.
Another reason they don’t want to be positioned as media companies is more perverse. Respectable companies in the news business recognize their responsibility to the public and try to come to grips with their role in shaping the worldview of their customers. You know: editorial objectivity, fact-checking, journalistic ethics, civil discourse—all that kind of stuff. That’s a lot of work, and it dents profits.
force Facebook to accept responsibility as the editor of the world’s most (or second most) influential media company. It would have to start making judgments between truth and lies. That would spark outrage and suspicion—the same kind that mainstream media faces. More important, by trashing fake stories, Facebook would also sacrifice billions of clicks and loads of revenue.
compares social media notifications to slot machines.51 They both deliver variable rewards: you’re curious, will I have two Likes or two hundred? You click the app icon and wait for the wheels to turn—a second, two, three, piquing your anticipation only makes the reward sweeter: you have nineteen Likes. Will it be more in an hour? You’ll have to check to find out.
When fake news activities move from sporadic and haphazard to organized and systematic efforts, they become disinformation campaigns with the potential to disrupt the foundations of governance in entire countries.
To involve humans would supposedly bring on implicit and explicit biases. But AI has biases as well. It’s programmed, by humans, to select the most clickable content. Its priorities are clicks, numbers, time on site.
Facebook has good reason not to see itself as a media company. It’s too much work and would introduce friction to growth.
The greatest threats to modern civilization have come from people and movements who had one thing in common: controlling and perverting the media to their own devices in the absence of a fourth estate that was protected from intimidation and expected to pursue the truth.
With our queries, we confess things to Google that we wouldn’t share with our priest, rabbi, mother, best friend, or doctor. Whether it’s stalking an old girlfriend, figuring out what caused your rash, or looking up if you have an unhealthy fetish or are just really into feet—we confide in Google at a level and frequency that would scare off any friend, no matter how understanding.
with Google, our queries—along with the photos, emails, and all the other data we provide—identify us as individuals with distinct problems, goals, and desires. This intelligence gives God a leg up in the advertising business. It can serve up ads that are more relevant, more benevolent—tailored to our personal happiness.
Much of marketing is the art (disguised as science) of how to best change behavior. It wants to make us buy this and not that, think of this as cool and that as lame.
