Andy Kessler

WSJ: Advice to New Grads: Scale or Bail

 https://www.wsj.com/articles/advice-to-new-grads-scale-or-bail-1526841165

Dear Grads: How can you make an impact on this world? Michael Keaton told Kent State students, “I’m Batman.” Ronan Farrow encouraged Loyola Marymount’s class of 2018 to “trust that inner voice.” Human-rights lawyer Amal Clooney told Vanderbilt grads last week, “Courage is needed more than ever.”

Maybe you’re looking for something less vacuous than warmed over “Wizard of Oz” themes? If so, put down your JUUL vape pen, unplug from “Fortnite,” tuck in your “I Am the Change” shirt, and listen up. Scale or bail.

Many of you graduates think you want socially conscious careers—giving back, fighting injustice and making a difference. “Well, you know, we all want to change the world.” You want to reduce inequality, end poverty, comfort the homeless, expand human dignity. Guess what? Me too! But you’re going about it the wrong way.

Some 44% of millennials believe they do more to support social causes than the rest of their family, according to the 2017 Millennial Impact report. If you’re volunteering at shelters or working for most nonprofits, that’s all very nice, but it’s one-off. You’re one of the privileged few who have the education to create lasting change. It may feel good to ladle soup to the hungry, but you’re wasting valuable brain waves that could be spent ushering in a future in which no one is hungry to begin with.

There’s a word that was probably never mentioned by your professors: Scale. No, not the stuff on the bottom of your bong or bathtub. It’s the concept of taking a small idea and finding ways to implement it for thousands, or millions, or even billions. Without scale, ideas are no more than hot air. Stop doing the one-off two-step. It’s time to scale up.

I hear you talking about food deserts and the need for urban eco-farms to enable food justice. You certainly have the jargon down.

WSJ: Columbus Discovers the Amazon

https://www.wsj.com/articles/columbus-discovers-the-amazon-1525635011

Jeff Bezos is the world’s richest person. Amazon is on a tear—sales grew 43% last quarter—and may soon pass Apple as the world’s most valuable company. Amazon has ruptured retail, floated in the cloud, and even made superhero TV shows like “The Tick.” But what makes Mr. Bezos tick?

Sure, he sells everything from books to the TubShroom drain protector/hair catcher. That’s why Amazon owns close to half the American e-commerce market. And its 100 million Prime customers will shrug off the recently announced 20% fee hike. But retail is a low-margin business. That can’t be Amazon’s endgame. The prize is much bigger.

Like Warren Buffett, Mr. Bezos likes to write rambling annual shareholder letters. Most are about Amazon’s fanatical devotion to the customer. This year he labels them “divinely discontent.” Don’t be fooled—his customer focus, referred to as the “Bezos Way,” is only marketing fluff, not a strategy. And think about it: Mr. Bezos got us to read books on pieces of plastic and to query an imaginary woman residing in a cylindrical speaker. We weren’t discontented. We were amazed.

Years ago, I took a stab at understanding Bill Gates’s strategy for Microsoft . I likened him to James Monroe. As with the Monroe Doctrine, Mr. Gates defended to the death his hemisphere—that is, basically anything that touched his Windows operating system. His dominance of compression, word processors and spreadsheets forced others to play in markets away from Microsoft. But Mr. Gates fenced himself in. He was Microstuck as innovation happened in other worlds: the Palm Pilot organizer, Netscape browser, Google search, Apple iPhone.

Is there a Bezos Doctrine? I suspect he learned the Gates lesson well. Too well, as Mr. Bezos is now channeling pioneers, be they Columbus or James T. Kirk, exploring strange new worlds. His strategy is that he doesn’t let business models get in his way while exploring on the edge. He started selling books with no real endgame in sight. He squeezed prices and didn’t make much money. But Amazon shareholders gave Mr. Bezos a long runway, as they anticipated long-term riches. He was forced to create an infrastructure—digital clicks and analog bricks—to move merchandise. Amazon pops up distribution centers in new cities in mere months. With same-day delivery, it is a logistics beast. But making a ton of money wasn’t immediately important.