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Trung Phan Profile picture
@TrungTPhan
May 30, 2021 • 20 tweets • 7 min read • Read on X
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1/ Amazon's $8B+ deal for MGM strengthens Prime, its subscription bundle with 200m+ users and revenue of $20B+.

Prime is now a staple in our lives but was a total Hail Mary when it launched in Feb 2005. Incredibly, Bezos & Co. created it in a 6-week sprint.

Here's the story 🧵
2/ In the mid-2000s, Amazon was far from the behemoth we know today.

Check these market caps on September 30th, 2004:

◻️ Amazon = $17B
◻️ Best Buy = $18B
◻️ eBay = $61B
◻️Walmart = $226B
3/ The catalyst for Prime was annoyance with Amazon's existing free-shipping offer ("Super Saver Shipping").

It was too complicated:

◻️ You had to hit a min. order of $25 (which created a complicated recommendation system)
◻️ Then wait 8-10 days for the items (customers pissed)
4/ At one Oct. 2004 meeting, the idea of an "all you can eat" shipping price came up. Bezos suggested that they also bundle in "faster shipping".

One employee accidentally blurted out, "we should have it ready by the next earnings" and Bezos said “that would be a great time."
5/ The timeline coincided w/ the '04 Xmas season, when AMZN suffered major stability issues.

Despite the challenges, Bezos was fixated on the idea:"I’m going to change the psychology of people" comparing Amazon to others.

He wanted AMZN's value to be crystal clear.
6/ In the early 2000s, Costco's CEO Jim Sinegal explained to Bezos the power of memberships.

"The membership fee is a one-time pain, but it’s reinforced every time customers walk in and see 47" TVs that are $200 less than anyplace else. It reinforces the value of the concept."
7/ Bezos wanted an MVP in 4 weeks, but his team said that was impossible

In the end, he promised to delay the Amazon earnings date (and new shipping program announcement) if an MVP could be delivered in 6 weeks.
8/ The project was code-named "Futurama" and was free to poach talent from any division...in exchange, they gave out this t-shirt.

The front reads: "Futurama"
The back reads: "Shipping 6 weeks or less. Guaranteed."
9/ The secretive project pissed off a lot of people:

◻️ Other divisions randomly lost team members
◻️ Finance people worried about the economics of "unlimited free shipping"
◻️ The scalability of the program -- especially if customers LOVED it -- was a huge challenge
10/ Bezos gave the name.

He got up one meeting and said "We'll call it Prime." Marketers on the team tried to dissuade him and came up with 20 alternatives.

One employee remembers "He was so convinced Prime was the right name." (the geeks loved it b/c of "prime number")
11/ With 100hr work weeks across the team, the deadline was met.

In February 2005, Amazon Prime launched with this email.

It offered unlimited 2-day shipping on millions of items for $79/year (compared to a 2-day shipping cost of ~$10 for a book, it was a no brainer).
12/ The profitability of the project hinged on the ops team lowering the cost of 2-day fulfillment.

It became a self-fulfilling prophecy:"If customers liked Prime, the demand would go up. And because the demand would go up, we had more freedom to build new fulfillment centers."
13/ In Bezos' original plan, he wanted 2-day shipping to "draw a moat around" Amazon's customers.

Prime added to the moat over the years (there are now 30+ benefits):

2011: Amazon Prime Video
2014: Amazon Music
2015: Amazon Prime Day
2017: Whole Foods
2019: "1-day shipping"
14/ Prime members are very valuable: they spend $1500/year vs. $635/year for non-members.

For @benthompson, the Prime bundle is "churn" management" (AKA keep people in the Amazon ecosystem):
15/ The $8B+ acquisition of MGM (4k films, 17k TV shows) is the latest Amazon move to boost the media portion of its bundle:
◻️~$19B on content spend in the past 2 years
◻️$10B (over a decade) for NFL’s Thursday Night
◻️$465m for S1 "Lord of the Rings"
16/ The retention numbers for the Prime bundle are outrageous:

◻️ 64% of trials convert after a trial
◻️ 93% renew after one year
◻️ 98% renew after 2 years
17/ The launch of Prime was the start of an incredible 20-month run for Amazon that laid the ground work for its empire:

◻️ February 2005: Prime
◻️ March 2006: Amazon Web Services (AWS)
◻️ September 2006: Fulfilment By Amazon
18/ Now, lets revisit the market caps:

September 30, 2004 --> Today (change)

◻️ Amazon = $17B --> $1.6T (94x)
◻️ Walmart = $226B --> $400B (1.8x)
◻️ Best Buy = $18B --> $29B (1.6x)
◻️ eBay = $61B --> $41B (0.7x)
19/ If you liked that, def follow @TrungTPhan for other business lessons and a steady drip of dumb memes:
20/ Sources

Vox on Prime Launch: vox.com/recode/2019/5/…

Ben Thompson on the bundle: stratechery.com/2020/2020-bund…

The Hustle on MGM: thehustle.co/05282021-amazo…

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More from @TrungTPhan

Trung Phan Profile picture
Jan 16
Matt Damon and Ben Affleck on Rogan taking about how Netflix has changed filmmaking.

A major considerations is dealing with distracted viewers. To keep them tuned in, “you re-iterate the plot 3-4x in the dialogue because people are on their phones.”

Then, in action films, you change the ordering of climatic fights.

In traditional action films, you’d have “three set pieces” in every act (I, II, III) and each would “ramp up” (spend the big money on third set piece).

But streaming has to hook viewers within 5 minute, so the incentive is to put a major battle or action sequence much earlier.

Also, the directors have less incentive to make a film look great because so many people watch on laptops and phones.

They do say that streaming allows for more bets on risky projects since the theatre economics are geared towards IP, sequels and super-heroes.

Example: an independent film with a $25m budget would spend $25m on marketing (1:1 ratio). But since it splits box office with the theatre, the film needs to make $100m (1/2 of which is $50m) just to break even.

They’re realistic about the state of film and call it a supply-demand issue. If the demand is for at-home viewing (eg. Netflix 300m+ subs), then filmmaking approach will change to feed the algo.

When there’s demand for theatre, Damon will go team up with Christopher Nolan to make “The Odyssey”.
A similar dynamic is happening to streaming TV shows. The incentives for story arc, dialogue and character types warped thr medium.

I explain it more here: readtrung.com/p/the-case-aga…
Damon cooks.

Here is full Rogan: youtu.be/AVEZBy1uAk8?si…

Here is Hot Ones: youtu.be/yaXma6K9mzo?si… x.com/trungtphan/sta…
Read 4 tweets
Trung Phan Profile picture
Jan 15
The Economist has a great piece on strategy sportsbetting apps use to throttle smart bettors:

▫️Skilled players are “sharps” and given “stake restrictions” if they play too well (bets are capped).

▫️Rest of players called “Square”.

▫️In 2025, 4.3% of active UK accounts had a “stake factor” below the maximum bet allowance of 100%.

▫️Sportsbook will take bets with a profit margin as low as 4.5%.

▫️If they are able to do good “player-profiling” and keep the “sharps” from playing, the profit margin can reach 10-20%.

▫️As important as keeping out “sharps” is hooking “whales”, the deep-pocketed players that are willing to keep playing (and losing) large sums.

▫️Some “whales” are actually “sharps” in disguise, though. They’ll lose a bunch of bets to lull the sportsbook then put down a massive bet when they have an edge.

▫️While there is a risk of a “whale” being a “sharp”, the value of a real “whale” is so high that sportsbook will take the risk

▫️“In March 2024 PointsBet, raised its share of online sports-gambling revenue in New Jersey from 11% to 24% after wooing a single cash-spouting customer away from DraftKings.” (I can confirm that this wasn’t me).

▫️How sportsbook profile players:

> Playing on Mobile is a good sign (where majority of people play)
> Playing on PCs is a bad sign (it’s easier to compare odds and run models)
> E-wallets are a red flag (sportsbooks prefer debit direct deposit that can attach a player to a single account; e-wallet is more anonymized and players can move cash between sportsbook more quickly to shop for the best odds)
> Women bettors are a red flag (most bettors are men and “sharps” often use women to place bets)

▫️First wagers are a major tells (typical bettors go after top leagues — NFL, NBA, EPL — and do so near the start of the game).

▫️Popular bets for “squares”: who will win, scoring margins and how star player will perform (also, they love multi-leg parlays).

▫️“Sharps” go after less popular leagues and place bets as soon as odds are published, when they are most mispriced. They also go after less popular bets such as “pts in Q3” or stats from a random player (“Sharps” rarely do parlays and don’t withdrawal winnings often).

▫️One gambling consultant tells The Economist that “By the time a customer places his first bet, [sportsbooks] are 80-90% certain they know the lifetime value of the account.”

▫️”Sportsbooks look at a player’s ‘closing-line value’ — a measure that compares the odds at which he bets with those available right before a match begins. If it is consistently ahead of the market over his first ten wagers, he is highly likely to beat the book in the long run.”

▫️Sportsbook mathematically monitor players and creates a new risk score every 6-8 hours (risk score = estimate of probability that customers will wind up unprofitable).

▫️E-wallet users, women and bets over $100 are flagged. These suspicious bettors are given 30% of maximum bet (and proven sharps only allowed 1%).

▫️High-skilled players will often get a “beard” to bet on their behalf. Most sportsbooks ban this practice but it is widespread.

▫️Safest “beards” are close friends and relatives because you can mostly rely on them to pay out any winnings. The “beards” try to look like degens (playing at 3am, bet non-stop and doing ridiculous parlays) before placing a winning bet.

▫️The most effective strategy for “sharps” is “whale-flipping”. Find a losing gambler, then ask to put a (likely) large winning bet amongst their pool of guaranteed losers.

▫️Once “sharps” max out the people they can use as “beards”, they tap professional networks called “movers”. These “movers” employ a bunch of “mules” who can put down bets on the behalf of the network. Low-end movers charge 10-20% while high-end movers charge 50% of winnings.

***

Lots other great details here: economist.com/christmas-spec…Image
On a related note, I wrote on how slot machines make $10B+ a year in Las Vegas (~70% of all casino gaming revenue).

The history, psychology and design of the device…which went from a throwaway game to the industry’s “cash cow” and “gambling’s crack cocaine.”readtrung.com/p/the-ludicrou…
x.com/trungtphan/sta… x.com/trungtphan/sta…
Read 4 tweets
Trung Phan Profile picture
Nov 19, 2025
Satya Nadella on why Microsoft Excel has been so durable after 40 years:

> the power of lists and tables
> the malleability of the software (“a blinking canvas”)
> spreadsheet software is Turing complete (“I can make it do everything”)
> it’s the world’s most approachable programming environment (“you get into it without even thinking your programming”)
fantastic pod ep: Image
throwback!
Read 4 tweets
Trung Phan Profile picture
Jul 28, 2025
The invention of bánh mì is a combination of climate, trade and urban layout of Saigon in late-19th century designed by French colonist.

When the French captured the area in 1859, most economic activity in the region took place along the Saigon river.

The population built makeshift homes tightly bundled by the river banks. Outgrowth from this eventually lead to narrow alleyways between many buildings that is trademark of the city (the Khmer named the region Prey Nokor then French renamed it Saigon and then it was renamed to Ho Chi Minh City in 1976 after end of Vietnam War).

Over decades, the French created European street grids and built wide Paris-type boulevards in the city to funnel commerce to larger markets (also make the city easier to administer).

It was at these markets that French baguettes were introduced and traded.

Bánh mì bread is known for being flaky and crispy on the outside while fluffier on inside (so god damn good).

Two features of Saigon helped create this texture:

▫️Climate: The heat and humidity in Southeast Asia leads dough to ferment faster, which creates air pockets in bread (light and fluffy).

▫️Ingredient: Wide availability of rice meant locals added rice flour to wheat flour imports (which were quite expensive). Rice flour is more resistant to moisture and creates a drier, crispier crust.

Fast forward to the 1930s: the French-designed street layout is largely complete. Now, the city centre has wide boulevards intersected by countless narrow alleyways.

The design was ideal for street vendor carts. These businesses were inspired by shophosue of colonial architecture to sell all types of goods as chaotic traffic rushed by.

Vietnam has some of the most slapping rice and soup dishes, but many people on the move in the mornings wanted something more portable and edible by hand.

Bánh mì was traditionally upper class fare but it met the need for on-the-go food.

Just fill the bread with some Vietnamese ingredients (braised pork, pickled vegetable, Vietnamese coriander, chilies) along with French goodies (pate).

Pair it with cà phê sữa đá (aka coffee with condensed milk aka caffeinated crack) and you’re laughing.Image
Image
Image
Image
Haven’t lived in Saigon for 10+ years but ate a banh mi every other day when I did.

While there, I also sold a comedy script to Fox (pitch: “The Fugitive meets Harold & Kumar set in Southeast Asia”).

It never got made but fun story to retell: readtrung.com/p/im-making-a-…
Classic episode Image
Read 4 tweets
Trung Phan Profile picture
Jul 26, 2025
the most underrated winner of the AI boom is the 15,000 person Caribbean island of Anguilla (which has a GDP of ~$320m) Image
The research team is happy to announce that we’ve played our part contributing to Anguilla’s windfall.

We also paid $99 to GoDaddy to see if we could secure one more .AI domain. Bearly.AIImage
Polynesian island Tuvalu has an even smaller population (10,000)!!
Read 4 tweets
Trung Phan Profile picture
Jun 8, 2025
someone used Veo3 to make Moses as a YouTuber live-streaming the Exodus
accent does change at end: reddit.com/r/ChatGPT/s/bO…Image
On-demand history vids like this in few years with Google Veo very plausible.

I previously wrote on YouTube as greatest athletics learning machine ever…could get souped up: readtrung.com/p/youtube-the-…
Read 4 tweets

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