THE NATIONAL ENQUIRER HAS engaged in behavior so lowly and unscrupulous that it created a seemingly impossible storyline: the world’s richest billionaire and a notorious labor abuser, Amazon CEO Jeff Bezos, as a sympathetic victim.Read More
Ever since Amazon came to dominate internet retailing; there has been a mantra that profits are irrelevant (in the short to medium term) if you can rapidly gain market share. In certain sectors with massive addressable markets, this may be true, but how many billion-dollar dog-walking apps does the world need? How many supposedly ‘disruptive’ industries are simply taking a current industry, adding a bit of marketing flair, maybe an app to the front end and then massively subsidizing users to gain market share, generating explosive revenue growth along the way. If you give a product away for dramatically less than your cost, of course people will migrate to your product.Read More
Amazon’s HQ2 spectacle, featuring civic leaders across the country happily debasing themselves—personally, politically, and economically— in a futile quest to attract the beneficence of Jeff Bezos, is just the most extreme example of a corporate con job that goes on all the time. Big companies can force cities and states to compete in a zero-sum game of offering them tax breaks and other incentives in order to locate or relocate facilities.
All of this is nothing but a transfer of wealth from public to private coffers. To companies, this is just free money. Billions of dollars from heaven.
By banning this insulting robbery of the public till outright, business will continue building, and investing, and locating, and relocating. They do all those things in order to make more money. Companies create jobs because they need work done in order to make money. They are not charitable activities. They do not need a bribe. They are playing on the desperation of desperate places in order to rip us all off. That should not be legal.
“Such is the world of user acquisition in tech today: as growth becomes increasingly expensive, somebody must be footing the bill for all of this wasteful spending. But who?”
“The first, as you might guess, are early stage funds’ limited partners, particularly the future limited partners that invest into the next fund. Their money, after all, is what pays the VC’s newly trumped up management fee: marking up Fund IV in order to raise money for more management fees out of Fund V, and so on, is so effective because fundraising can happen much faster than the long and difficult job of actually building a business and creating real enterprise value. It might take seven to ten years to build a company, but raising the next fund happens in two or three years.”
“The antidote is two-fold. First, we need to return to the roots of venture investing. The real expense in a startup shouldn’t be their bill from Big Tech but, rather, the cost of real innovation and R&D. The second is to break away from the multilevel marketing scheme that the VC-LP-user growth game has become.”
Amazon’s complicity may still be under the radar, but it is all the riskier now that Bezos has publicly defended working with the Pentagon on matters others wanted nothing to do with. His quote about senior leadership making “the right decisions” could easily become the soundbite for a story about government excess going unchallenged by the private sector.
Bezos tries to paint this with a broad brush by contending that major companies must not walk away from the U.S. government over politics. Amazon is going down a risky path. They say that if you lie down with dogs, you get up with fleas.
Deafeningly silent, however, is Khashoggi’s own boss – Washington Post owner Jeff Bezos, who has yet to issue any sort of statement. Perhaps Bezos has refrained from issuing a statement due to a lucrative deal to set up data centers in Saudi Arabia – a plan announced last year.
Amazon also has an office in Riyadh for Souq.com, the Middle Eastern e-commerce company that it acquired last year for $580 million.
Chamath Palihapitiya, a venture capitalist and owner of the Golden State Warriors, put a name to it: Amazon, he told an audience of fellow investors, “is a multitrillion-dollar monopoly hiding in plain sight.”
Economists have recently begun to document a link between corporate concentration and rising inequality. Dominant companies, they’re finding, are funneling the spoils to a small number of people at the top. And by reducing the number of their competitors, these companies are also making it harder for workers to get a fair wage and for producers to get a fair price. A particularly troubling data point in this research is the loss of a long-standing pathway to a middle-class life: starting a business. The number of new firms launched each year has fallen by nearly two-thirds since 1980, and many economists believe that corporate power is to blame.
For the many low wage Amazon workers — both full time and temporary — set to receive a raise thanks to the just announced boost in minimum pay to $15/hour, the news is certainly a big plus. It should also be noted that had Amazon not been subject to intense scrutiny and criticism from the likes of Bernie Sanders and others, Jeff Bezos never would have responded with such an aggressive move. That said, if you think a little beyond the surface level about why he’s doing this now and what his real motives are, it becomes clear nobody should take this move at face value.Read More