I had to read this one again it was so good. Second order thinking and avoiding the "static equilibrium" mentality is so important and rare. Reminds me of Vox's oral history of Amazon Prime. One exec predicted fast shipping would create a sea of red ink. Bezos: "You aren't thinking correctly." The resulting demand surge would enable more fulfillment centers and lower costs. To paraphrase Bezos, the VCs weren't thinking correctly.
Second order thinking also applies to the public investor side. Amazon acquired Kiva systems for a price that didn't make sense. To make Kiva exclusive to Amazon would destroy ~50% of revenue. If they kept non-amzn customers it was cheaper to remain a customer not an owner. The answer to this strategic conundrum was Amazon was planning a massive expansion of fulfillment centers that would more than justify the acquisition price.
I had to read this one again it was so good. Second order thinking and avoiding the "static equilibrium" mentality is so important and rare. Reminds me of Vox's oral history of Amazon Prime. One exec predicted fast shipping would create a sea of red ink. Bezos: "You aren't thinking correctly." The resulting demand surge would enable more fulfillment centers and lower costs. To paraphrase Bezos, the VCs weren't thinking correctly.
https://www.vox.com/recode/2019/5/3/18511544/amazon-prime-oral-history-jeff-bezos-one-day-shipping
Second order thinking also applies to the public investor side. Amazon acquired Kiva systems for a price that didn't make sense. To make Kiva exclusive to Amazon would destroy ~50% of revenue. If they kept non-amzn customers it was cheaper to remain a customer not an owner. The answer to this strategic conundrum was Amazon was planning a massive expansion of fulfillment centers that would more than justify the acquisition price.