The scorched earth society: The Everything Store by Brad Stone

September 4, 2014 by · Leave a Comment 

The Everything Store: Jeff Bezos and the Age of Amazon. Brad Stone; $20.00 paper 978-0-316-21928-0, 394 pp., Back Bay Books

The_Everything_StoreTry this: open a new window in your browser, and type in the URL Relentless.com. Note the website you are redirected to.

Relentless was one of the working names Jeff Bezos was toying with for what eventually became Amazon.com. Another potential name for the site was MakeItSo.com, a reference to the catch-phrase of Captain Jean-Luc Picard from Star Trek: The Next Generation. These two monikers are typical of the polarity that exists within the Amazon CEO, at least as he is portrayed in Brad Stone’s book about the internet giant’s “origin story.” Reading The Everything Store, the impression one gets of Bezos is one part cutthroat businessman, one part technogeek futurist.

Both aspects of Bezos’ personality have been important to Amazon’s survival, though it is the ruthlessness that cuts through Stone’s portrait most persistently. Bezos recognized earlier than most people the significance of the internet, and its potential as a disruptive force across a broad spectrum of industries. He chose books as a launching pad because books are “pure commodities,” though Stone points out that Amazon soon diversified, moving first into music and DVDs, then later into toys, jewellery, and other areas, each time with the same aggressive, take-no-prisoners approach to doing business.

During the 1999 Christmas shopping season, for example, one Amazon buyer discovered that stock of a particular Pokémon product, which was especially popular that year, had been depleted in the company’s warehouse; she sent employees out to buy up stock from their competitors, going so far as to avail themselves of the online Toys R Us free shipping offer. “Because they were so new to the e-commerce space,” Stone quotes the Amazon buyer as saying, “they really did not have the tools to alert them to us wiping out their inventory until it was too late.”

Years later, in an attempt to outbid Walmart in the sale of an internet company that owned the lucrative website Diapers.com, Amazon artificially drove down the price of diapers online, engaging in what Stone refers to as a “Khrushchev-like willingness to take the e-commerce equivalent of the thermonuclear option in the diaper price war.”

And when Bezos decided to dive into the choppy waters of e-reading by developing the first Kindle, he told the executive in charge to “proceed as if your goal is to put everyone selling physical books out of a job.”

That single-minded determination, coupled with an absolute refusal to countenance fools or naysayers, is responsible for much of Amazon’s success, including its ability to weather the financial storm created when the dot-com bubble burst in 2000. “They have an absolute willingness to torch the landscape around them to emerge the winner,” says one anonymous commenter quoted by Stone. Elsewhere, Rick Dalzell, one of Bezos’ key collaborators for much of Amazon’s history, says of the CEO, “What is amazing to me is that he is bound only by the laws of physics. He can’t change those. Everything else he views as open to discussion.”

Stone provides a remarkably even-handed overview of Amazon and its CEO, though he pulls no punches in describing a corporate culture that is frequently as remorseless with its own workers as with the industries it targets. Its owner, who Stone makes clear is inseparable from the ethos of the company he oversees, is so frugal that he famously posted ambulances outside his warehouses in the stiflingly oppressive heat of summer rather than pony up for air-conditioning. Stone describes the vein that pops out in Bezos’ forehead when he is about to launch into one of his volcanic rages (which Amazon employees have come to term “nutters”), and provides a list of “greatest hits” – the savage public putdowns he inflicts on his subordinates. (These include gems such as “If I hear that idea again, I’m gonna have to kill myself,” and “Are you a lazy or just incompetent?”)

People employed in book publishing – an industry Bezos takes great glee in disrupting (“eviscerating” might be a more accurate word) – will no doubt feel a large measure of satisfaction in reading Stone’s account, which depicts a company that is at best amoral, and callous about the collateral damage left in its wake, though this satisfaction should be tempered, at least somewhat, by a recognition of how slow they were to wake up to the existential threat Amazon posed to them.

Their willingness to jump on the digitization bandwagon by scrambling to meet Bezos’ blithely unrealistic demands for ebooks with which to stock his new Kindle store was predicated upon the notion that digital books would be the saviour of an industry that was feeling pinched by low profit margins and the steady erosion of sales from brick-and-mortar bookstores (due, in no small part, to the steep discounts negotiated by Amazon). They were astounded when Bezos then turned around and announced that he would be pricing digital new releases and bestsellers at a flat rate of $9.99.

A strong storyteller, Stone takes his readers through this material, and its fallout – the accusations of collusion on the part of the Big Six U.S. publishers; the American Department of Justice antitrust suit against those publishers and Apple – in a manner that reads more like a thriller than an economics text.

But there is also the inescapable reality that this story is still evolving, and Stone’s book ends just at the point when the narrative may be changing. Amazon’s recent contretemps with Hachette Book Group, putatively over ebook prices (once again), has resulted in pushback in the form of an open letter objecting to Amazon’s policies and practices. That letter, signed by more than 900 authors (including such brand names as Stephen King, John Grisham, James Patterson, Donna Tartt, and Nora Roberts), has proven troublesome for the company that built its reputation on the backs of those very authors.

One of the key ironies arising out of a reading of Stone’s book involves an early section describing a long-shot bet made by Bezos in the early days of the company. The brazen CEO decided to discount the fourth volume of J.K. Rowling’s massively popular Harry Potter series by 40 percent and to offer expedited delivery. The gamble paid off, and Amazon was rewarded with hefty media coverage and a slew of newly loyal customers. In the current farrago with Hachette, which involves heavy-handed tactics such as delaying shipping on the publisher’s titles and removing pre-order buttons in certain cases, one of the books affected is the new mystery by Robert Galbraith. Galbraith, you may recall, is the pseudonym of J.K. Rowling.