Feb 14, 2020
Microsoft's $10B deal with the Pentagon gets frozen, because of Amazon Read More Not so fast... Microsoft scored a huge win by snagging the Pentagon's $10B cloud computing contract (aka the "JEDI" deal) back in October. Cloud-competitor Amazon wasn't so pleased, so it appealed the decision in December. Now, a federal judge ordered a temporary block on JEDI in response to Amazon's lawsuit.
JEDI: Over 10 years, Microsoft would modernize/build the Department of Defense's IT in the cloud (cloud: think a Google Doc stored on the internet, vs. an OG Word Doc stored on your laptop). Microsoft's servers would store/crunch government data.
AWS: Amazon's cloud-computing giant makes up 12% of Amazon's revenue, but a whopping 63% of its profit. Amazon claims President Trump sabotaged its bid because he doesn't like The Washington Post (which Amazon CEO Jeff Bezos owns).
The DoD is America's largest employer... That means big data. And big data means big cloud cash — cash that's now on the line because of this temporary block. If the judge decides the DoD needs to reconsider its decision, Microsoft could lose the biggest cloud contract in US history.The Takeaway:Cloud is the new oil... Like oil back when everything in the economy needed to be shipped and delivered in trucks, today's economy runs on cloud computing — Companies are moving to cloud providers to store their data and manage their biz apps, instead of doing it themselves. Now cloud leaders like Amazon, Microsoft, Oracle, and IBM are increasingly fighting over these big cloud deals.
Jan 30, 2020
Amazon briefly joins the Platinum Platypus club with a record holiday Read More In the Zon... How Amazon's feeling after shipping expectations-smashing earnings. Revenue rose 21% and profits came in sweeter than expected at $3.3B. Amazon shares jumped 12% to bring its valuation over $1T (capital T). Amazon's back in the $1 trillion Platinum Platypus club. For context:
There are 1,000 Billions in 1 Trillion (whoa)
A newly-minted Platinum Platypus (a trillion-dollar company) is worth 1,000 Unicorns (billion-dollar companies)... or 35 Lyfts
Unpack the deets... Will do. Amazon's profits got pinched last quarter as it spent a lot of $$$ in its race to 1-day shipping, aggressively challenging Walmart and Target to who-has-the-shortest-ship-time. Amazon won with its SSE (Short Ship Energy).
The Cloud: Massive. Amazon's cloud Amazon Web Services (AWS) biz made up a huge 67% of its profit.
Holiday sales: Extra strong. Holiday sales rose 4.1% overall in the US, but they rose a whopping 15% for Amazon.
Prime Time: Growing. Amazon now has over 150M Prime members world-wide, up from 100M in 2018. And they're shelling out $119/year for free shipping and extra perks.
The Takeaway:How huge can huge get?... If Amazon Prime members were a country, they'd be the 9th biggest nation on Earth (sandwiched between Bangladesh and Russia). Amazon's latest earnings suggest it's not slowing down. Other tech giants like Facebook and Google are showing signs of slowing growth. Amazon's already huge, but these recent results suggest it's still speeding up (for now).
Jan 23, 2020
Amazon CEO Jeff Bezos' phone was allegedly hacked by Saudi Arabia Read More Earth's richest man and the Saudi Crown Prince... walk into a WhatsApp chat. The personal phone of Amazon CEO Jeff Bezos was allegedly hacked by Saudi Crown Prince Mohammed bin Salman (MBS). Not a headline you see every day. Let's rewind:
April 2018: Bezos and MBS exchange numbers at a dinner party in LA.
May 2018: MBS sends Bezos a Saudi tourism video over WhatsApp (stars are just like us).
January 2020: Except... not really. UN forensic analysis indicates Bezos' entire phone was likely hacked from the video (data flowing out of his phone surged by 30,000% after the vid).
Why so hacky?... Jeff Bezos has owned the Washington Post since 2013. Jamal Khashoggi was a WaPo reporter — and Saudi dissident — who MBS reportedly hated. In October 2018, Khashoggi was killed and dismembered at the Saudi embassy in Istanbul. The hack could've been an attempt to obtain embarrassing Bezos material for blackmailing purposes — using the leverage to influence the WaPo's reporting on Saudi Arabia.The Takeaway:When you dip your feet in politics... the politics rain down on you. Bezos' business is tech. But owning a news outlet also makes politics his business, dragging him into geopolitical disputes that aren't related to his main biz (and that are possible risks for Amazon shareholders). Now, Saudi media is attacking Amazon (#boycottamazonproducts was trending there), and US/Saudi tensions over Khashoggi's murder are resurfacing.
Jan 22, 2020
Amazon wants to turn your palm into a wallet — the next frontier of frictionless payments Read More Hands-on is the new hands-off... Amazon is creating check-out terminals that put your payments (literally) at the palm of your hand, according to WSJ sources. Gives "palm reading" a whole new meaning. Here's how Amazon's handy payments go down:
Palm: Amazon patented a "non-contact biometric identification system" that scans your hand.
The idea: Link your credit card to your hand print so your hangry self can breeze past the Sunday morning bagel line.
The real customer: Amazon's pitching these terminals to physical fast food spots and coffee shops that you visit repeatedly.
Credit Collab: Amazon's already working with Visa (and is in talks with Mastercard). It's also in discussions with card issuers like JPMorgan Chase, who's wondering whether to collab with a potential competitor, or risk being cut out.
It's getting out of hand... How far is too far when it comes to convenience? This hand-scanning thing would just shave down the time it takes you to pull out your phone or plastic (honestly, cool if you're shopping while on a jog). Your palm-info would still have to be transmitted and processed. Is saving a few seconds worth giving up more personal info to Big Tech?The Takeaway:If money talks, spending screams... More info on your shopping habits could mean better targeted ads — and tech can charge advertisers more $$$ for that. It also means actionable info on what you actually splurge on, which Amazon could use to stock its ecommerce site. That's why Big Tech is pushing deeper into customers' wallets:
Amazon: Launched Amazon Pay and checkout-less Amazon Go stores
Apple: Shipped Apple Pay for mobile and its own Apple titanium credit card
Google: Has Google Pay and will begin offering checking accounts this year
Dec 23, 2019
Rivian's massive 4th fundraise of 2019 could make electric trucks mainstream (with help from Amazon) Read More “Cute Tesla”... (new bumper sticker for Rivian drivers). The electric pickup truck startup snagged $1.3B in fresh money from T. Rowe Price and existing investors like Ford and Amazon. That cash will facelift an old Mitsubishi plant in Normal, Illinois (great name) to start mass-ish producing e-pickups in 2021. Here's America's State of the Car (and their value by market capitalization):
Detroit's Big 3: GM ($53B), Ford ($37B), Fiat-Chrysler ($29B — FYI, Chrysler merged with Fiat in 2009... and is mega-merging with Peugeot right now).
Electric's Big 2: Tesla ($72B) and Rivian (somewhere between $5B-$7B — it's still private, so we don't know its valuation for sure).
Cars cost more than coders... App-based tech startups raise tens or hundreds of millions of dollars to hire programers and install kombucha taps. But Rivian raises money in the billions to build factories, fill them with high-tech robots, and hire engineers. All those costs are why fundraising for hardware cars is bigger than for software tech.The Takeaway:You want traction? I’ll show you truction... Venture capitalists, Ford, and Amazon had invested a huge $2.2B in Rivian already. To get this extra $1.3B, Rivian probably had to show them some traction — evidence that it's worth investing more into. How about this truction:
Amazon announced an order in September for 100K Rivian electric delivery vans — Bezos needs them to achieve Amazon’s “Climate Pledge.”
Those will be delivered from 2021-2030 — they'll become both steady revenues and rolling billboards for Rivian as Amazon delivers packages nationwide.
Dec 18, 2019
Alexa has new orders from Amazon: Start making money Read More First comes puberty, then comes paying rent... Tech follows a similar path — Growth 1st, profits 2nd. Facebook focused its first 5 years on growth, and only started selling ads in 2012. Amazon Alexa grew in its first years to reach 100M Alexa-enabled devices worldwide, selling Echos and Alexa software for near nothing. Now it's time for Part 2: Make money.
10K Amazonians are on Team Alexa... According to reporting from The Information, ten-thousand employees must now figure out how to squeeze $$$ out of your awkward Alexa commands — because the voice assistant only brought in $1.4M in revenues for Amazon this year (that's a measly $140 per employee). Here are some of Amazon's ideas:
Premium content?: If you order Spotify through Alexa, could Amazon take a cut of that subscription?
Premium skills?: If you ask Alexa to "translate Spanish homework," could Amazon charge your parents for that feature?
"Hey, famous person": This one's already happening — Alexa can adopt the voice of Samuel L. Jackson for 99 cents. More A-list celebs coming soon for $5.The Takeaway:It’s not 100% clear Alexa is a success... Amazon's plan was to disseminate Alexas across every corner of the country to hook people on Amazon Prime (and possibly get them voice shopping on Amazon). But that "vcommerce" feature hasn't taken off (at all). The fact that Amazon is now trying to make revenue directly from Alexa could be a signal that it failed its original purpose: Make money indirectly for Amazon.
Dec 10, 2019
Amazon appeals the Trump administration's $10B "JEDI" contract (which Microsoft won) Read More Bezos pulled a Belichick... tossing the ol' red flag and demanding that the ref review the play. The Trump administration granted Microsoft an aggressively lucrative contract to manage the Defense Department's critical digital data in the cloud. Big loss for Amazon:
Huge: The US Department of Defense is America's largest employer, with over 3M employees/contractors handling enourmous amounts of computer files.
Sensitive: Storing sensitive military data is high-stakes stuff (think secret docs outlining strike targets or secret dinner menus for military mess halls).
Lucrative: $10B over 10 years. That's a lot, even for Amazon (its AWS cloud computing division made $26B in revenue last year).
Unfair call?... Analysts expected Amazon Web Services to win the deal because it boasts the biggest cloud in cloud computing — what Kleenex is to tissues, AWS is to fancy digital storage. But it didn't.
Amazon claims that President Trump sabotaged its bid because he doesn't like The Washington Post, which Amazon CEO Jeff Bezos happens to own.
Amazon's asking a judge to rule the contract unlawful, since military spending shouldn't be influenced by personal beef.
Best-case scenario for Amazon: The judge forces the administration to reconsider the contract.
The Takeaway:Let's talk about business ethics, baby... From insider trading to condoning sexual harrassmant, the answer is no to all (always). Those aren't ethical dilemmas — there's no gray area. But Amazon's situation smacks personal values against legal profit opportunities. It's the type of ethical challenge that dominates Big Tech right now.
Should Google — the leader in information transparency — let China block search results that its government doesn’t want its citizens to see?
Should Amazon — if its employees oppose drone strikes — let the government use its servers for controversial military attacks?
Nov 14, 2019
Nike breaks up with Amazon, deciding everything should happen at Nike.com Read More (Gasp). Wait. (Gasp)... Amazon doesn't take rejection well. But it just got dumped by Nike. It's ending the 2-year relationship and moving out because it doesn't want to sell its gear on Amazon.com anymore.
We smelled this ghosting before it happened... Nike CEO Mark Parker was replaced by eBay's former CEO last month — and he's already flexed his ecommerce muscles by going directly to consumers online instead of via Amazon. That move could lose the love of Prime members and their "ship 2-day-free or it's not me" policy. But here are 3 big benefits to owning your own online shopping:
You get customers' email addresses. Then you can pepper their inbox's promotions tab daily with reminders that you exist and sell things.
You don't get middlemen. Cut out the platforms that may take a cut of every sale of your goods on their sites.
You control the customer experience. Nike.com is a sleek, ripped website. Amazon.com isn't. Better looks leave customers happier and willing to pay higher prices.The Takeaway:The real winner here is Shopify... If you buy something online, there's a good chance it's powered by Amazon or Shopify. Shopify lets retailers control the front-end website, while it handles the back-end logistics. Nike may or may not become a Shopify customer — but if other big brands ditch Amazon, Shopify wins.
Shopify stock rose 2.9% Wednesday.
Amazon's fell 1.4%.
Oct 29, 2019
Amazon triggers nuclear option: Free grocery delivery for Prime members Read More Groceries. Delivered free. Within 2 hours... That insanely convenient offering is now real for Amazon Prime members in America's top 20 cities (it's coming to 2K cities total, but not necessarily within 2 hours). Pulling that off is so logistically hard that only existing Amazon Fresh customers get it right now — 1st-timers will hit a waitlist so Amazon can assess how many grocery-dashing humans it needs to hire (spoiler alert: lots).
Will this finally make grocery delivery a thing?... Most Americans still grocery shop the ol'-fashioned way — by grabbing a shopping cart and blocking the aisle while squish-testing avocado firmness. Amazon's new offering eliminates 2 of the 3 big barriers to grocery delivery:
The cost barrier: Grocery delivery today features fees (Amazon's used to be $15/month on top of Prime). Plus tips.
The planning barrier: You typically need to know your fridge's shelf status at least 6 hours in advance. That's cut to 2 hours with Amazon's new offering.
The freshness barrier: Some of us undoubtedly still want to harvest our own produce and not risk someone grabbing the wrong almond milk.The Takeaway:Don't try to beat Amazon on price. You'll lose... Last week we mentioned that Amazon's profits suffered because it insisted on beating Walmart and Target's 1-day shipping. Now its profits could suffer more (in the short-term) as it takes on those two in groceries plus Instacart and Good Eggs. Amazon's long-term plan: Get everyone to join Prime by offering the lowest prices/best deals, no matter what the cost.
Oct 24, 2019
Amazon's profits fall (and will likely keep falling) from that 1-day Prime shipping switch Read More "I know what you're thinking, but this is actually fantastic news!"... That's the vibe we're getting from Amazon's 3rd quarter earnings report. The stock dropped 9% despite the reassuring pillow talk from CEO Jeff Bezos:
“Customers love the transition of Prime from two days to one day — they’ve already ordered billions of items with free one-day delivery this year."
True, people love not waiting for packages... so what's the cost? Amazon's revenues rose 24% to $70B, but shipping costs surged much faster: Up 46%. That ate away at profits, which shrank by 26% to just $2.1B. And heads-up — Amazon also expects to make half as much profit this holiday quarter as the last one. Other highlights:
The profit puppy: Sales at Amazon Web Services, the cloud-beast that runs most of the internet (pretty much), rose by 35% and brought home the majority of the profits.
New-ish physical stores: Sales dropped. Dropped. We don't usually see that from Amazon (except Fire phone. RIP.). Those book stores and cashier-less Amazon Go are still finding their way.
The fine arts: Marvelous Mrs. Maisel now has 8 Emmy's and a new season in December.The Takeaway:Don't go back to your old habits, Amazon... That's the message from shareholders. They patiently waited through 20 years of Amazon unprofitably as it reinvesting every buck it made in growth — then suddenly in 2017 Amazon turned on the profit switch, making over $8B annually the past 2 years. Now with Walmart and Target challenging its shipping supremacy with their own 1-day options, Amazon's wildly spending again.
Oct 8, 2019
Walmart starts pulling the plug on its most innovative (and unprofitable) acquisitions Read More The brick-and-mortar store that wanted to become an ecommerce startup... Sounds like a lovely children's book. It's also the story of Walmart in the face of Amazon's growing domination. The historic retailer wanted to prove to itself and investors that it could fend off competition from ecommerce companies by beefing up its own online muscles.
If you haven't removed the tag, can you return it?... Walmart acquired a few key ecommerce startups the past few years (because that's easier than innovating itself) — but in the past couple weeks, it's trying to reverse those moves. Almost all of them.
2016: Jet.com is Walmart's 1st ecommerce pet, a purebred that cost $3.3B. But this summer, Walmart folded up all the Jet employees into Walmart corporate.
2017: Dude chino legend Bonobos was bought by Walmart for $310M. Yesterday it went slim-fit and announced dozens of layoffs.
2017: Extra faux vintage women's wear website Modcloth was acquired by Walmart just 2 years ago. Walmart already sold it last Friday.
Not sure when: Walmart incubated a fabulously unprofitable text concierge service for busy, high-end shoppers: Jetblack. Now it's looking for outside investors for the startup that loses $15K on every customer.The Takeaway:The reckoning for unprofitable companies just extended beyond IPOs... Ruthlessly efficient, Arkansas-based Walmart has a short patience. The old guard is annoyed that Walmart's ecommerce moves get all the media attention — those investments lose a reported $1B per year, while the old school stores quietly crank out profits. And profits are Walmart's north star.
Oct 1, 2019
Amazon's targeting airports, baseball stadiums, and movie theaters with cashier-less "Go" tech Read More 1 bucket of popcorn, 1 large DP, and don't miss the previews... CNBC reported that Amazon is in talks with airport convenience stores (CIBO Markets), movie theaters (Regal Theaters), and stadiums to license its Amazon Go cashier-less tech. Scan your phone when you enter, take what you want, leave — your Prime account gets charged, you don't miss the touchdown.
Amazon is the master of customer adoption... This tech is freaky (we've tried it). Cameras and sensors are all up in your space (and humans aren't). But Amazon's rolling this out to customers thoughtfully and gradually, first to those most-likely to adopt:
Early adopters: Amazon's got 16 of its own "Go" stores, visited by city-dwellers eager to brag to friends about the lack of lines.
People in a rush: If your flight already started boarding, you'll love not waiting 10 minutes in line for a pack of gum.
Mainstream: Amazon could add thousands of "No-Go" stores (that's what we're calling non-Amazon stores using Amazon Go tech), making friends out of would-be retail competitors. Amazon wants hundreds of these by 2020.The Takeaway:Software is way more profitable than physical stuff... Amazon's ecommerce operation ships a massive 10B products per year. But its way-smaller Amazon Web Services is the profit puppy, making over 50% of company profits through cloud services. Two tech companies in today's Snacks are following similar strategies:
Driver brains: Waymo is selling its self-driving software to carmakers (but not actually making cars itself).
Cashier brains: Amazon could sell human-less cashier and payment software to retailers (but not actually making stores itself).
Sep 26, 2019
Amazon challenges rivals with Alexa-infused everything (and a 1-mile-radius tech cloud) Read More So. Many. Connected. Gadgets... Another Alexa-palooza arrived yesterday from Amazon HQ in Seattle. Bezos & Co. whipped up 15 Alexa-fluent devices. Some totally new, some just improved:
Echo Studio: A $199 smart speaker, challenging Apple HomePod and Sonos (the speaker icon's stock fell 5%).
Amazon Sidewalk: Basically extends your wifi signal 1-mile for low connectivity devices, like a dog tag (aka "Echo Fetch").
New voices: Samuel L. Jackson is voicing over Alexa, with more celebs to fill the airwaves (each costs $0.99).
Apple & Google have 1 advantage in the voice assistant wars... Smartphones — you've probably got Siri (iPhone) or Google Assistant (Android) in your pocket. Now you can take Alexa to-go:
In the car: GM announced all models will support an Alexa app.
In your ears: Echo Buds — The AirPod knockoffs are cheaper ($129), but don't look as sharp.
On your face and on your finger: Echo Frames and Echo Loop let you ask Alexa questions and listen for her responses through glasses and a finger ring (these last two are so new they're available by invitation only).The Takeaway:Alexa's goal = make you 1% more Amazon... These devices might not make Amazon money at first. Long-term, Amazon's putting Alexa everywhere so you're that much more likely to be loyal to Amazon or even order through Alexa via voice (aka "v-commerce"). If the percent of your paycheck going to Amazon rises from 20% to 21% because of Alexa, that's a win.
Sep 20, 2019
Amazon commits to carbon neutrality — then orders 100K electric delivery vans Read More If you're on time, you're late... If you're 10 years early, you're on time. Amazon CEO Jeff Bezos took Amazon from loser to leader in the fight against Climate Change, the day before the Global Climate Strike (which is today).
Loser: Amazon transports 10B packages/year with fuel-burning planes and trucks in way-bigger-than-necessary boxes-within-boxes (plus packing peanuts).
Leader: It just co-founded "The Climate Pledge," to achieve the ambitious goals of the Paris Climate Accord 10 years ahead of its 2050 deadline. (FYI — The US is the only country in the world not in on the global pact to save the planet).
2 goals: Carbon neutral by 2040 and 100% renewable by 2030... Here's how Amazon's planning to un-do all its carbon footprints:
Keep investing in renewable: Jeff offered up a map of Amazon's solar and wind facilities (it's already 40% renewable).
Reforest the forests: Plant millions of trees, which inhale CO2 and exhale oxygen. #bio101
Buy 100K electric delivery vans: Amazon's an investor in Rivian (based in Plymouth, MI), which will deliver Amazon its first all-electric cargo van in 2021 (pic here).The Takeaway:The purpose of a corporation has changed... Until this year, companies were officially supposed to look after profits only. But the Business Roundtable changed this summer to become less narrow-minded — Amazon is taking care of other stakeholders besides shareholders with this move. Like the planet, and those who live on it.
Sep 17, 2019
A secretive Amazon team reportedly tweaked its core algorithm (and violated Amazon's #1 principle) Read More The greatest digital real estate on Earth... is Amazon's search results. And a WSJ investigation alleges that Amazon tweaked its core search algorithm last year to boost sales of its own products. These stats about Amazon's subtle-yet-powerful search feature humbled our souls and scream the key context:
Nearly half of all online purchases in the US are on Amazon.
66% of all purchases on Amazon are from items in the 1st page of Amazon search results.
20% of Amazon purchases are whatever was #1 in the search results.
Does the name “A9” mean anything to you?... Stands for "Algorithm" (and there are "9" letters in it). A9 is the Amazon division responsible for Amazon Search — and because that valuable search tool is ripe for corruption, Amazon keeps the team away from the Seattle HQ in Silicon Valley as a subsidiary company with a separate CEO. Here's what the WSJ discovered:
A9's core mission is to "get the best results for our users."
But Amazon's retail arm back home in Seattle wanted to push more profitable products to the top of search results — not necessarily the best products for customers.
So they pressured A9 to tweak the algorithm to increase sales of its own products and 3rd party ones it can make more money off.The Takeaway:This breaks Amazon's core rule: "Customer Obsession"... And could be unlawful since Amazon should be an unbiased marketplace, not a retailer pushing its own brands. But Amazon may have ignored its own laws: Its 14 leadership principles — this story violates the very first one. If Amazon tweaks search results to benefit Amazon, it's not benefiting you and us as customers.
Fun SnackFact: After the WSJ published the report, the A9 website was taken down. Awkward.
Aug 30, 2019
Disney sells YES Network to the Yankees, Sinclair, and *Amazon* Read More Now batting, for the New York Yankees... Jeff Bezos. In one of the final chapters of the Disney-acquires-Fox saga, Disney officially sold the YES Network Thursday to the NY Yankees, Sinclair Broadcast Group, Amazon, and some other investors. Here's what they're buying:
YES is the TV channel with rights to broadcast the Yankees, Brooklyn Nets, NY Liberty, and NYC FC teams.
And it's worth $3.7B because New York sports have global appeal despite local frustration.
This Disney & Fox deal goes way back to 2017... That's when Mickey started a bidding war against Comcast to acquire 21st Century Fox, which included X-Men, Fantastic Four, The Simpsons, Avatar, 22 regional sports networks, and the YES Network. The Justice Department allowed the merger on 1 big condition:
The requirement: Disney can add all those big names, but only if it sells the sports channels and YES — otherwise it would have too much media power.
Sports translation: LeBron and Kobe can be on the same team, but only if they trade away Steph to another one.The Takeaway:Amazon's now the proud 15% owner of YES Network... It hasn't said what it will do with that — But we're all hoping for the Yankees to be a #PrimePerk. Amazon Prime Video has already done deals with the NFL's Thursday Night Football and the Premier League. CEO Bezos won't offer up details yet, but it's already generating HQ2-style speculation.
Aug 29, 2019
Amazon's Ring security cameras team up with 400 police departments Read More Pranks just got harder... Over 400 police departments (these ones) can now ask Ring security camera owners for help cracking a crime. Amazon acquired Ring last year for $800M, then connected the doorbell-camera security startup to its own Neighbors app — Now Ring shows you, or the police, who's knocking.
Don't panic... You've got to opt in first. But here's how it goes down. The Neighbors app lets Ring-owners open up the video feed of their front stoop for all to see. Then "neighbors" (as Amazon calls the users) could get this request from local police: "There was a burglary this morning on 240 Spruce Street — you got video footage?" Got Ring? You might.The Takeaway:Nearly every new tech product has a privacy issue... Amazon made phone-connected home security a scalable thing — Ring became a Prime Day bestseller. Now catching package thieves in the act is the next reality TV hit. But Ring's relentlessly un-blinking 24/7 footage is just another front in the tech privacy battles:
The customer benefit: Protect your home, your neighborhood, and help the police catch "the Wet Bandits."
The social downside: Record your unwitting neighbors, potentially start over-reporting unsuspicious activity, and possibly get your feed hacked into.
Jul 18, 2019
Amazon's (record) Prime Day highlights its defining strategy: the "flywheel" Read More Even Siri knows it... Sales on Amazon's Prime Day surpassed both its Black Friday and Cyber Monday. Combined. A record 175M items were snagged — up 75% from last year. Some of that's thanks to T-Swift's kick-off concert, most is from the 18 countries now taking part. Here are your worldwide best-selling items (straight from Amazon's brag sheet):
US: Personal water filter straw, 23andMe ancestry kits.
UK: Sony PlayStation (FYI, Mexico loved Nintendo Switch, while Australia's top-seller was Mario Kart 8 Deluxe).
China: Dove exfoliating scrub.
Italy: Nescafé espresso (classic).
Germany: Some very, very practical stainless steel pans.
Add "Halo Effect" to the shopping cart... That's the impact Amazon's mid-summer splurge-fest had on the rest of retail as everyone launched their own mini-sales.
The positive: Sales surged 68% at big non-Amazon retailers and 28% at small ones.
The negative: Discounts drove those sales — retailers desperately race to the bottom on prices on Prime Day. Great for us, not really great for the companies.The Takeaway:"Flywheel effect" is bigger than "halo effect"... The flywheel is what Amazon biographer Brad Stone called the company's "secret sauce" — the self-reinforcing wheel that Prime Day is now a spoke in. Here's the cycle: Prime members shop big on Prime Day (to justify the $119/yr membership) and they bought Alexa products for their homes — Echo Dot and other voice assistant products were the top sellers this week. Now those primers will do even more with Amazon, thanks to Alexa's help.
Jun 28, 2019
Data shows Amazon ships almost half its packages ITSELF Read More When you track every Amazon package for 2.5 years... you learn juicy details. Data-obsessed company Rakuten found that the percent of Amazon packages delivered by Amazon rose from 16% in 2017 to 48% today — The US Postal Service ships 33%, UPS has 17%, and FedEx covers under 2%. All of Amazon's gains over that span were at the expense of the Postal Service (just as Trump started demanding Amazon pay more for mail).
How'd it happen so fast?... A combo of strategic under-the-radar and high-profile shipping fleets:
Amazon Flex: Lets gig workers deliver packages in their own Honda Civic delivery coupe à la Uber/Lyft, making $18-$25/hour.
Amazon Delivery Partners: Amazon entices local entrepreneurs to start micro-delivery companies to handle last-mile delivery of packages to stoops across their hometowns.
Amazon Now: Those Amazon-branded vans that can deliver to a bar within an hour.
Amazon Locker, Amazon Counter: Deliver a bunch of things to 1 spot, like a student center or a Rite Aid (that partnership was announced yesterday), letting customers carry their stuff home.
Planes (Amazon just leased 15 at the Paris Air Show), drones (arriving "within months"), and a $1.5B air hub in Kentucky.The Takeaway:Let the competition give you data, then beat them with it... Amazon's relationship with a bunch of partners shifted from friends to frenemies to enemies — It partnered up at first, but eventually used partnership data to do it better itself. Amazon's done that with physical stores (Amazon Go) and even video (Amazon Original films). And according to Rakuten, Amazon-delivered packages take 3.2 days on average. Everyone else takes 6.
Jun 13, 2019
CrowdStrike surges 71% on IPO day Read More When the DNC was hacked by Russia pre-election 2016... CrowdStrike was there. The cybersecurity company that protects against hacks discovered the breach, told the FBI, and then snagged a lot of PR. Now it's earning attention for its IPO — Shares surged 71% in their first day of trading and CrowdStrike is worth almost $12B (aka 2/3 as much as Lyft).
Who ya gonna call?... Probably one of these companies. The attention on CrowdSource reveals how packed the competitive landscape is for securing your digital stuff (work and home):
Personal: LogMeIn owns LastPass, keeping your "!-2-3-4" passcode less obvious.
Home: ADT, Brinks, and Alarm.com are all on guard.
Business: Palo Alto Networks and FireEye are always at work (competing with CrowdStrike).
Side-hustlers: Their core biz isn't security, but Google's Nest covers your kitchen, while Amazon's Ring doorbell has the front porch.
The Takeaway:Bikes need bike helmets... As internet adoption grows, so does the data generated along with it — And each bit of data probably needs protecting. The rise of tech is driving the cybersecurity industry that guards it. CrowdStrike (and its 5X revenue growth since 2017 to $250M) is happily caught in that trend.
Jun 12, 2019
Amazon shuts down "Amazon Restaurants" — Grubhub celebrates with 8% jump Read More Apparently Amazon fails at some things... The company's restaurant delivery service, uncreatively-named Amazon Restaurants, will end on June 24th — The 1-hour meal delivery for Prime members is over. Now "Restaurants" gets to join the rarely-discussed club of Amazon un-successes:
Amazon Fire: A smartphone. 2014-2015. RIP.
Destinations: An attempt to get into the travel bookings game. Shut down the year it launched.
Dash Buttons: $5 gadgets you press to auto-order more things, like Tide. Barking at Alexa turned out to be easier.
And now, Amazon Restaurants: It was tiny — Just 20 cities and 2% of the overall market.
90% of the food delivery market... is devoured by 4 companies: Grubhub, Uber Eats, DoorDash, and Postmates. Word that Amazon canceled its delivery plans popped Grubhub shares 8% Tuesday (shares of the others are either private or complicated by Uber's ride-share majority business). Amazon's not completely out, though — Last month it led a $575M investment in UK-based deliverer Deliveroo.The Takeaway:Amazon clearly didn’t promote Restaurants enough... And we found a key example that highlights that: Fast food partnerships. Uber Eats delivers for McDonald's, DoorDash has Wendy's, and Grubhub handles Taco Bell. Amazon didn't invest in driving growth to its own service, so it'll invest in startups to do that instead. 
