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10 tweets,
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1/10 Studying mistakes of omission starting with Amazon bear thesis by Prof Bruce Greenwald back in 2013 (>5x since)
“They have gone into every variety of retail: TV sets against Walmart and Best Buy, who have better distribution economics”
“They have gone into every variety of retail: TV sets against Walmart and Best Buy, who have better distribution economics”
2/10 “they decided it wasn’t big enough a challenge, and went after Oracles and IBMs in cloud computing, [unclear competitive advantage], as if it wasn’t enough, they decided to go after Apple in devices business”
3/10 “looks to me like a company that makes no reported profit, that is trying to buy growth in all areas because it has no competitive advantage, the growth is going to be value destroying, not value-creating”
4/10 Greenwald’s arguments were reasonable. So what insights did we need to buy Amazon back in 2013? True that it had poorer economics vs. scaled offline retailers initially, but what if they kept growing in scale?
5/10 What about e prime flywheel that kept reinforcing growth in scale tt over a long enough horizon it offered consumers beyond what traditional retailers were offering. Stepping out of a specific vertical analysis, understanding Bezos’ vision to provide value above and beyond..
6/10 ..what traditional retailers were offering that could keep users coming back (across global mkts) was likely an insight that few understood when Amazon was trading at <$300 back in 2013. So how do we arrive at that insight back in 2013?
7/10
1)Always keep an open mind, ever more important as we grow older, since we become less receptive to new things and more prone to missing disruptions.
2)Put yourself in Bezos’ shoes, invert the perspective, understand what he thinks before deciding what you think.
1)Always keep an open mind, ever more important as we grow older, since we become less receptive to new things and more prone to missing disruptions.
2)Put yourself in Bezos’ shoes, invert the perspective, understand what he thinks before deciding what you think.
8/10 Why is he doing what he is doing despite being at a “competitive disadvantage” vs. traditional retailers? Does his reasoning/vision make sense? Is it really better, a disruptive differentiating experience/product?
9/10 Analysing frm this perspective could help remove some legacy bias we have, either because we appreciate moats of incumbents or are simply dismissive of a new way of doing things that we are not accustomed to. It is easy to call Bezos a genius when all is obvious on hindsight
10/10 Looking forward, perhaps keeping an open mind and inverting our perspectives can prevent us from getting blindsided by our ingrained views of today’s industries, help catch potential multi-baggers and avoid future losers
