EP237 - Always Day One author Alex Kantrowitz

EP237 - Always Day One author Alex Kantrowitz

Alex Kantrowitzer (@Kantrowitz) is the author of “Always Day One: How the Tech Titans Plan to Stay on Top Forever.” He is an on-air contributor at CNBC and host of the Big Technology podcast.

In this broad-ranging interview, we discuss the unique management styles at Apple, Google, and Facebook, as well as doing a deep dive into what makes the Amazon culture unique.

Disclosure: links to Amazon are affiliate links.

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Episode 237 of the Jason & Scot show was recorded live on Thursday, September 24th, 2020.

http://jasonandscot.com

Join your hosts Jason "Retailgeek" Goldberg, Chief Commerce Strategy Officer at Publicis, and Scot Wingo, CEO of GetSpiffy and Co-Founder of ChannelAdvisor as they discuss the latest news and trends in the world of e-commerce and digital shopper marketing.

Transcript

Jason:
[0:24] Welcome to the Jason and Scott show this is episode 237 being recorded on Thursday September 24th 2020,
I’m your host Jason retailgeek Goldberg and as usual I’m here with your co-host Scott Wingo.

Scot:
[0:40] Hey Jason and welcome back Jason Scott showed listeners tonight on the show we are really excited to have the author of the book released,
this April always day one so if you’re familiar with Amazon that maybe a hint of what we’re going to talk about tonight and he’s also the host of the big technology podcast.
Alex kantrowitz welcome to the Jason Scott show.

Jason:
[1:05] We are three of the have you Alex I’m not remotely implying that this is why you wrote the book but Scott is a sucker for anything Amazon so it’s the fastest way to get on our podcast is to write an Amazon book.

Alex:
[1:17] Well you don’t even need to imply it I mean it was absolutely the goal and I’ve waited a long time but I’m glad to finally fulfill it here with you guys tonight.

Jason:
[1:25] Yeah well very well played also for for folks that have already read the book or are going to read the book as a result of this interview,
so as not to trick you the book is actually about more than Amazon but you wisely chose to elevate the Amazon portion to the title of the book which totally worked with Scott.

Scot:
[1:42] Wait wait the whole books not about answer.

Jason:
[1:45] Scott’s pretending like he hasn’t read the book but obviously being the consummate professional he is he’s read everything you’ve ever written.
Before we jump into the book Alex the first thing we always like to do on the show is get a little background I got about the guests and kind of find out how how you came to your current role so could you tell us a little bit about yourselves.

Alex:
[2:05] Definitely so I started my career buying digital ads right at the moment where Facebook was surpassing Myspace in the social media Arena,
and just watched it happen as a practitioner bought those ads and I spent about a year selling ad Tech,
in New York and just it was writing about it on the side and a certain point realized that this world was changing so fast that I’d much rather write about it professionally,
then do what I was doing it might have been just a function of the companies I was at but for me I saw there were so many stories that the media were was either getting half right or missing completely and,
you know I love doing the work and
you’re digging up what was going on and finding a way to tell it to an audience and just kind of made the leap so I covered the advertising industry in particular at first working for ad age
then went to BuzzFeed to cover like Facebook and Google and Snapchat and Twitter,
and while I was there just decided to go ahead and write this book always day one which looks really at the different Tech Giant work cultures that,
exists out there and the whole point of the book is these companies are moving to where the future of work is is going and we have two options one is we can like sit and fear them or two as we can call up their work.

[3:27] Their work systems and actually give them a run for their money and,
thrive in the workplace that they’re dominating and for me the idea was basically get the word out there and get the information out there and that was sort of the inspiration.

[3:40] Behind always day one is and then just as the book released I quit BuzzFeed,
I started my own publication called Big technology I what you call it in the intro its Weekly Newsletter and podcast that covers the tech Giants and it’s sort of.
Building on my work on Amazon and the other Tech Giants.

Jason:
[3:56] Very cool and how are you finding being a podcast hosted.

Alex:
[4:01] I mean I love it I just think there’s something special about being able to connect with people in a podcast I mean you guys know because you’ve been doing it for,
more than three years but the relationship you have with people who are putting on your show and giving you a chance you have to give almost your undivided attention,
you know when you have a show on in your in your headphones and your on a run or driving or you know going for a walk I think it’s just an amazing way to communicate with people and allows for
the Nuance that I think tap it topics in the world that we’re living in today deserve so
I don’t know I mean I couldn’t be more thrilled with getting into the podcast world.

Jason:
[4:41] Nice well speaking for ourselves.
It’s way better for lazy people because you know you just hit record your ramble for a bit and you have a show like you don’t have to write all those words and you know get judged by an editor and,
you know and it’s frankly harder for the audience to give you feedback so you don’t even have to hear how much the audience hated it.

Alex:
[5:03] Let’s see if you can work out an arrangement like that and any form of content production you got to make that happen.

Scot:
[5:10] Yeah I like it the just be careful about the audio Engineers they tend to be prima donnas that’s my big advice to you having done this for a while.

Alex:
[5:18] That’s right yeah got to make sure that you don’t have anything clicking in the background.

Scot:
[5:22] Yes yes drives them crazy.

Jason:
[5:24] Scot hasn’t stopped fidgeting for the four years that we’ve done the show I’m just saying right,
we’ve tried to buy him quieter chairs you name it we’ve tried it I apologize to all the listeners that have to do with it.

Scot:
[5:37] Fidgety guy.

Jason:
[5:38] Yeah so before we jump in the book I did,
the book starts out like even in the preface you’re having this this big interview moment with Mark Zuckerberg,
you you actually got it seems like really good access to a lot of the leaders in their senior management team that you wrote about.
Did was there some trick to that like was that just from your what Your journalist career up to that point and and your reputation or I mean like frankly I feel like there’s a lot of other,
journalists that have written books and didn’t have that kind of access you were able to secure for yourself.

Alex:
[6:15] Yeah I mean I wasn’t as easy as it comes across in the final Edition I can tell you guys the story quickly if you want to hear how it all came together.
So I was covering Facebook for years here in San Francisco
or what you know I mean I’m not in San Francisco right now but it’s where I live and,
and so I told them I want to write this book based off of this interaction I had with Mark Zuckerberg and they said okay we’d be in Google said they can be in because I’ve been covering them for even longer
and then the ones I didn’t have were Amazon Microsoft and Apple.
And for me Amazon was going to be the key because I thought that you know if I’m writing a book about work culture Amazon has a pretty distinct in fascinating culture and for me nailing that that section of the book was going to be.

[7:05] Super important so even before we actually sold the book I booked a ticket to Seattle.
One way and I agreed to cats it for my friend’s moms cat lady the cat.
And basically said like all right if I sell the book hopefully I’ll get access but one way or the other I’m in Seattle until I’m out with the story.
And you know then we sold the book the day that I landed,
and I met with Amazon PR few days later basically said look like this is going to happen.
And Facebook is on board Google is on board and I’m not leaving Seattle until I’m done what do you think.
What’s let you know help me make help me tell like the most complete the most accurate story and let me actually get some people on record.
And they hadn’t participated in a book since the everything store which is Broad Stones book that came out I think in late 2013.
For 2014 so I didn’t have high expectations but I guess they figured hey we have this reporter that’s roaming around Seattle,
he’s already got these other two companies on board maybe he’s going to get you know some of the other fourth and the fifth so we might as well you know.

[8:17] Get out there and tell our story you know for ourselves and you know see if he’ll incorporate some of it and honestly like you know more I the overwhelming majority of the interviews that I did for the Amazon chapter.

[8:32] We’re with people who are not sanctioned through the company’s PR organization so I feel like people get the real story and,
this chapter it’s not just like a sugar coated repackaging of a press release but that said,
the people they did let me speak with we’re pretty invaluable I got a chance to speak with Jeff Wilkie who’s leaving but he’s their CEO of what consumer and then it from very interesting Lee Ralph her brick who was their head of,
machine learning who helped bring about this like pretty fascinating automation program in the headquarters that took a lot of the work that there are people in their retail organization we’re doing,
and automated it and it was great to have a conversation with him talking about how that project originated I had done some reporting outside but he was the guy that ran,
and so it was great to like bring the stories I had heard and sort of get his perspective on it and then I was able to visit a couple of fulfillment centers as well,
so you know I think as a reporter for me I’m always trying to tell the most complete story I think you’re missing out if you do only interviews you know outside the company,
I think you’re missing out if you only take access interviews and so I think always day one is a you know if I have to say it like it’s a pretty good blend of both,
I think it’s the first book ever that Amazon Microsoft Google and Facebook have participated in together an apple.

Jason:
[9:56] Scott Galloway is really pissed about that by the way.

Alex:
[9:59] I think Scott Scott’s doing fine and he blurb the book so yeah so yeah but but yeah Scott’s Kia Scott and I like I think there’s like great Synergy between the four,
and the thing that I wrote I mean I his book almost inspired me right his is all about the strategy.
You know what are they doing and always day one is more about how are they doing it look at the inside the work systems in the culture,
but have led to produce what these companies are you know are building so yeah and I mean like lastly Apple you know as per tradition didn’t participate but I got a chance to sit down with Steve Wozniak,
in a barbecue joint right outside of Cupertino and sort of.
Very end of my reporting on Apple share what I have learned from him learned and and get his perspective on it so apples out but wozniak’s and I’ll take it.

Scot:
[10:54] Very cool the I definitely want to dig into the Amazon stuff but before we do I wanted to Fanboy a little bit on CNBC I’m a huge CNBC junkie the are you in the Silicon Valley office there with like John 14 those guys.

Alex:
[11:07] So I’m a contributor I’ve been appearing on CNBC as a guest for about four years and then when I left BuzzFeed you know I had an opportunity to go out and be a free agent and,
work with anybody that I wanted to and CNBC and I got to talking and,
we started be a pretty great connection for between the two of us were you know again like I’ve been doing all this reporting on the tech Giant’s if you look at the S&P 500 they make up 25%,
of the of that index and supposed to be something that’s fairly well distributed across the economy and you have five companies taking up a quarter of it right so,
obviously it underscores how important these companies are you know to overall health of business in the US and the US economy which is what cnbc’s known for us the leader in covering so,
for me it was a great opportunity to go up there and be able to you know drop in when they need meat and and give my thoughts and share some of my reporting.
And it’s been great so far we were a couple of months in but it’s just been a real awesome experience to be able to appear on their shows from time to time.

Scot:
[12:19] Yeah yeah they do a really good job I like the Silicon alley and that’s probably where you do most of your appearance on mentioned because that’s when they talk mostly Tech right.

Alex:
[12:26] Yeah I mean I’m still working my way into meeting everybody but honestly the number one show that I’ve been on a Squawk Box by a long shot,
so you know Ike I love doing squat Buck show I feel like those host won’t let you get away with anything and there have been times where Kieran and Andrew Ross Sorkin of,
called me on certain statements and we’ve had to have little discussions on are about it and honestly if you’re going to do live TV those that’s the way to do it right like.
Let’s have let’s have some fun let’s you know not allow people to get away with statements without really thinking deeply about them and thinking about the repercussions and you know I feel like I learn every day I learn something every time I’m with them and,
and I don’t know it’s just I walk away from each appearance saying man that was fun let’s do it again.

Scot:
[13:14] Yeah very cool so I could talk about that for the whole show but I don’t want to
Bernard Bernard time let’s take an Amazon what were as you as you kind of dug in there’s been some writing about day one and Bezos have been pretty open about it in his shareholder letters,
what were some of the surprises that you as you dug into the Amazon culture then also there was the you know there was that kind of famous New York Times article I think that,
2015 about in a kind of headline from that one was people crying at their desk and.
Amazon was very unhappy with that you know what were some of the surprises that you got from your Amazon interviews.

Alex:
[13:51] Yeah I mean man that New York Times story we should come back to that because I think it’s pretty fascinating
look I think we talked a little bit about the day one thing obviously it’s the title of my book Let’s just you know touch on it super quickly write the idea inside Amazon with day one isn’t
you know work morning evening and night
you know keep your foot on the gas pedal even though many people there do but day one really means like think like a start-up right don’t be burdened by Legacy keep Reinventing,
and whatever Amazon does today if you have an idea of something you know to do it better just just talk about it and do it because,
the companies literally operating
it’s as if like it is one of those companies on its first day without the burden of we have to support our existing businesses or this is just the way
we do things around here okay so you said that now here’s the question how do you do that right so it’s one thing you know all these companies have like
your missions and visions of they put like some Backwater in their internet and never talk about it ever
but Amazon’s really been able to live this always day one mentality and I think they like the rest of the tech Giants have been able to do it in two ways one.

[15:02] Because they rethought the way that we do work and this modern era,
so throughout our history throughout the history of the Work World almost all work has been done to support existing products I mean think of the factory right,
you would have one guy come up with an idea like let’s make screwdrivers,
and then everybody in every employee that he would hire because almost always a he right would be making in the factory making screwdrivers and if you say hey let’s make hammers they laugh at you because employee ideas,
we’re just not a thing that they would pay attention to and that age then in like the 70s we moved to the knowledge economy were all of a sudden we say,
all right workers are supposed to come up with ideas or we’re relying on their knowledge,
but even still almost everything that people in the office do is just supporting existing products you know you might be moving numbers around in a spreadsheet but you’re not coming up with new inventions.
By and large in today’s knowledge economy I think what Amazon and the tech Giants have done is sort of flipped the whole equation on their head they’ve used,
technology to minimize that work supporting existing products which I call execution work and maximize the amount of time their employees have.

[16:15] For inventing for coming up with new ideas,
and bringing them to life and so they first reimagined work and once you re imagine working create that room,
for your employees to come up with ideas you need to actually innovate on the channels that bring ideas to decision makers.
I think Amazon has done a terrific job with that as well they’re famous for the vi pager process were instead of PowerPoints you know people right.

[16:42] Ideas for new products down in a six-page document as a narrative single-spaced often
11 Point font calibri you know style and
then they just share it through out and of course it’s good for crystallizing your thinking and catching up Executives you know really quickly
on projects that you are proposing as opposed to like going through a game of telephone but what that I do what the whole concept of writing things up.
Doesn’t Amazon is it just make sure that that ideas can get from.
Employees to decision makers in as quick a time as possible so that’s sort of like the trifecta you know in the always day one equation right it’s think like you’re a startup don’t worry about Legacy.
Use technology to minimize execution work make room for ideal work and then create channels to bring ideas from employees to decision-makers in as quick a time as you can.

Scot:
[17:37] So I started a company that interacts a lot with Amazon and Google and eBay and Facebook and whatnot,
and it’s really interesting just from the partnership perspective to interact with all those companies because the thing that’s really amazing at Amazon is you’ll have a discussion with someone relatively senior there,
and they know the details of everything and that you’ll do a similar discussion with another company and they’ll have to kind of start looping in more and more people from the from various teams you know so if you have a shipping question they’ll be well let me get Larry the shipping guy in and Sally the,
payments lady in.
But you’d have that same discussion with an Amazon executive and they just know the business so deeply it’s it’s a little scary sometimes and then then you’ll go you’ll think oh that’s an aberration it’s just it’s just this guy and then you’ll go,
you know eight other people and they all know it just as well as the original person did you find that as you met various people.

Alex:
[18:32] Oh yeah I mean think about the amount of knowledge that’s contained in one of those six page documents and then how many conversations you would have to have to replicate that.
And it’s totally unbelievable how well I just think about the way meetings working Amazon.
In most companies would have meetings look like right you end up sitting down with a bunch of people you probably spend ninety percent of the time.
Thinking about what you’ve done up until that point and 10% of the time.
You know actually digging into the business and making decisions at Amazon you read that 6 pager and then that whole 90% you know figuring out what we’re doing is done by the time someone says a single word.
So of course they’re going to be you know well-versed on what the business is doing just because like that’s just the way Amazon operates so,
yeah I would say that the people that I spoke with had just this deep domain knowledge it was almost as if they’re all you know CEO level expertise and Amazon in a way that you don’t find elsewhere.

Scot:
[19:39] Yeah do you do you think that basis will let’s say he leaves do you think this culture will be so calcified in there that it will keep going or do you think eventually they’ll stagnant.

Alex:
[19:54] Yeah I think look the culture at the end of the day is going to come from whoever the leader is I do think like you know I do think CEOs have an outsized influence in the way the culture,
operates inside a company that’s why when CEOs were like oh I wasn’t aware of how this toxic bubble happened or this toxic Behavior happened I always laugh a little bit because it’s like.
Yeah okay maybe you weren’t there day-to-day but you certainly set the tone that allowed this stuff to happen.
So Bezos I mean first of all I don’t think Bezos is going to leave anytime soon you know I when I was in Seattle reporting this book and in the time I’ve spoken with Amazon employees since my impression was always that Jeff Wilkie,
would be the guy to take over if pesos left and milky leaving to me is sort of a clear indication that Bezos has no plan.
To go anywhere anytime soon so I expect Bezos to leave that company for a long time,
to come you know as for whether the culture will change here’s my prediction if it’s somebody internal it won’t change very much because they’ve seen,
how that culture has been so effective in getting Amazon to where it is but like if Mark Zuckerberg took over Amazon after Bezos left you better believe it’s going to be a different company with him running the show.

Jason:
[21:09] Oh yeah sorry that was that was hard to imagine for a second there.

Alex:
[21:14] Never Say Never because actually Zuckerberg and I
write about this little bit in the book but zeca Berg ask Bezos to go and Shadow him for a couple of days you know Zuckerberg had this thing and it happens common in Silicon Valley where CEOs will ask other CEOs to spend a couple of days just watching how they work.
And and so Zuckerberg had Shadow Don Graham the CEO of the Washington Post and Don said you know Mark you’re not going to learn anything from me but end up being pretty
you know impactful in terms of Zuckerberg ability to lead Facebook and then
Don Graham eventually sells the Washington Post to Bezos but Zuckerberg knew we had a relationship even before hand and he said Dom Don you know can you introduce me to Jeff and he said sure.
So Graham asked Bezos stiff Zuckerberg can Shadow him and done Graham was you know
pretty involved with Facebook you as a board member and so just said okay let me make this asked and Bezos calls him up and says hey Don look it’s a great idea
but the only thing more distracting than having Mark Zuckerberg follow me around all day would be having Angelina Jolie in the office,
and so unfortunately we’re going to have to pass on this idea and why when I brought it up to Zuckerberg he seemed like absolutely dejected he’s like yeah you didn’t let me in I was so funny.
So anyway I don’t think it’s such a random idea you know maybe Zuckerberg snake doc next ACT is doing some sort of e-commerce business.

Jason:
[22:41] No I’ve not maybe at that level of CEO but there have been a couple like pretty public examples of these CEO swaps we’re not just shadowing each other but where they trade jobs for a week which is pretty funny and Illuminating.

Alex:
[22:55] Yeah that’s a fun hypothetical what happens to Facebook if Zuckerberg if Bezos runs it for a week what happens to Amazon if Zuckerberg gets his hands on the thing for for a week or two that might be interesting.

Jason:
[23:07] Yeah I have a hypothesis but I maybe I’ll save it for later in the conversation I do want to unpack a couple things so first of all you do right.
A lot about the engineers mind and it’s kind of a thread throughout like a number of the.
The Deep Dives and I certainly think of Jeff as a,
as an engineer although he’s not a formal engineer but as having an engineer’s mind and so I always wondered why he doesn’t call it Day Zero instead of day one that’s has always bugged me.

Alex:
[23:40] Well that’s right I mean yeah we got to take points away from besos.

Jason:
[23:44] All the coders are pissed because day.

Alex:
[23:45] Believe yeah he is a trained engineer though he just hasn’t worked in it for a while.

Jason:
[23:50] Fair enough.

Alex:
[23:51] Education is in engineering yeah.

Jason:
[23:53] Yeah so.
One of the things that’s been fascinating to me and maybe we have to jump into another part of the Amazon story that you wrote about and hands off the wheel but but hold just a sec on that right like you talked
in the beginning and this to me is like one of the fascinating insights from the book that you know just this whole evolution of,
hey in the industrial revolution it was all about execution and you could add the most value by being good at execution and ideas were like almost.
Not useful and then you know ideas where a small percentage and and you know today we’re in this culture where ideas are the most difficult thing to replicate and we can.
You know frankly execution is easier it’s easier to Outsource and increasingly you can automate it and throw a i at it.
And so.
In the context of the Amazon story you you sort of have the example of a program than Amazon run called ran called hands off the wheel and when I let you explain it and then I’ll pick back up.

Alex:
[24:56] Yeah and you guys asked up the top like what the most interesting thing I found in the book was and hands off the wheel no doubt was it so I heard some Rumblings that Amazon was automating.
White-collar work and its retail organization and I thought okay well this is something to investigate,
and it turns out that they’ve been running this program called hands off the wheel it was originally called project Yoda by some people and they’re saying basically instead of having Amazon’s retail employees the vendor managers.
You know do things like order products and figure out their pricing and do inventory management and even negotiate with vendors,
we can hand that all off to machine learning based off of all the data that they had.
So they started it around 2012 where they said hey like we have almost two decades of data at our disposal.
Can we figure out the way to do this work that our vendor managers would with technology instead.
And it took a little bit of time but eventually they are predictions got pretty good and so those predictions started to end up in the retail employees software tools were instead of them like typing in,
you know where they wanted to,
you know put certain units of product the a I would suggest it and they could either say yes or override it.

[26:22] And then at a certain point right around 2015-2016 Amazon’s executive said hey these predictions are pretty good,
and instead of giving our employees a chance to override them in the system’s why don’t we let them make the actual calls and then see what happens and allow them to learn,
they can adjust the machine learning tools and so they said essentially take your hands off the wheel.
And they gave them pretty high goals some employees told me as much as eighty percent of all the work that they used to do was now handed off to machines and basically what they would do.
Is audit and just say okay did you get it right and you know are there trends that we that the machines don’t know that we should try to account for like for instance you could have 30 years of historical,
knowledge but not retail knowledge but when something like a fidget spinner becomes hot how do you then,
let the algorithm know that it should start ordering some fidget Spinners because it’s not going to know but on its own it does nothing to work with.
So Youmans actually became more Auditors and doers and eventually their work became much less important inside Amazon.

[27:30] And so typically when you hear stories like this you’re just like oh those people are gone owners like obviously the company fires them but the amazing thing about this story inside Amazon is instead of firing these employees.
Amazon just made you know many of them product managers and program managers basically professional inventors inside the company.
Where they said okay well your jobs automated but we still need you to build new things and it’s this prototypical example of a company using technology to minimize execution work right because like,
you’re buying stuff but you know doing inventory management inside Amazon was basically supporting an existing product that could run on autopilot you know anyway.
And it gave them time to come up with new ideas so it maximized idea work and allowed for reinvention
and that’s sort of been to me one of the main secrets to Amazon success over the years and your listeners will know it’s not the only thing but I think it’s certainly one of the big headlines,
that’s enabled Amazon to stay on top for so long.

Jason:
[28:29] I know for sure I mean I basically my career is helping people compete with Amazon right and most of the unsuccessfully and I totally agree with the the fundamental premise of your book.
You know clients are always asking me like what what Amazon’s fundamental advantages and they’re like is it you know the massive fulfillment capability they have or the huge product category catalog they have or the,
you know the flywheel and Prime and now you know those are all super valuable things,
but but my firm belief is that their biggest fundamental Advantage is their corporate agility and their ability to just.
Evolve and react faster than other companies and it’s largely because of a lot of the principles that you captured in the book.
Um but what I’m not convinced about I’ll just be honest is the hole.
Repurposing of these employees so I so I had an interesting view to hands off the wheel my many of my clients were the brands that sell on Amazon and they hated hands off the wheel right because.
If you think about it if you’re a consumer packaged good company you sell the Walmart and Target and Amazon and the way you are good at your job is,
you you got those buyers to come to lunch with you and you built personal relationships and you you know you hope that you influence them to buy a little bit more of your product instead of the other guys.

[29:53] And so as Hands on the Wheel started getting implemented those those vendors.
Lost a human to talk to and to smoother than to wine and dine and it became this ridiculous thing like,
haha my competitor lost their Vendor Manager but we’re so big we still have one,
and I always had to break the news to you yeah you have one but they they don’t do anything they just go to lunch with you and then the hands off the wheel algorithm still decides how much of your stuff to buy.
So it’s.
I’m curious Amazon’s famously good at hiring people and they have super high standards they have this whole bar razor program which I’m sure you ran into so so they they used all that to hire the best vendor managers they could hire.
And then they obsoleted that job which was totally to their credit.
Presumably the people that they hired as the best vendor managers are not the best inventors or idea people and so it.
Like I haven’t seen evidence that it’s not working for them obviously but it just like him like in my mind fundamentally it seems like.
Huh hiring a bunch of people is buyers and then turning them into program managers and product managers because you obsoleted their job doesn’t on its face sound like a recipe for Success like it seems like you could hire better program managers.

Alex:
[31:15] Yeah well let me yeah let me give the counter-argument here right.
I fully agree with you that this experience has been frustrating for first party vendors with Amazon no doubt about it.
But it also happened in a broader context where Amazon was saying okay we’ve we’ve rode the first party Marketplace to a certain point,
for us to be able to expand to the next point we’re going to need to really foreground the third-party Marketplace and our fulfillment and Logistics services,
so it changed the business definitely changed right but this is again the whole idea that you think about when it comes to all these day one is are you going to hang on to your asset.
Milk it for all it’s worth or are you going to build for the future may Microsoft’s a good example Microsoft’s number one asset was Windows for a long time.

[32:04] And it became the number one desktop operating
system company in the world and remained so long after desktop operating systems were an important anymore because mobile operating systems became the most important operating systems in the world
and only after realized to let go of its asset then it sort of was able to reinvent himself as a cloud services provider.
And became what it is today as opposed to what it was just a few years ago,
laughing stock so yeah Amazon did definitely meet transform itself in that way and those Transformations are in Easy they’re painful,
I mean think about how terrible people in the windows division felt inside Microsoft after they were like the kings of the castle for you know their whole lives and then they realized that they were just kind of,
on the outside looking in.

[32:51] And so yeah from a from a first party vendor situation it’s painful and doesn’t doesn’t feel right and might look like Amazon is
blowing its lead but it was also this part of this necessary transformation that happened you know maybe before it needed to but kept Amazon,
you know moving forward in a way that’s helped it.
Maintain its dominance today to Second point of your question I’m going to give a broader answer and then a more specific answer the broader answer is,
I think in today’s economy we have to stop looking at people as like you know folks who do one thing and of course yes specialization is important and it takes time to learn,
to learn you know sector specific skills but on the other hand
all of our economy is becoming more abstract you know you have to be able to be nimble and think about things differently and you know maybe move to a couple of different jobs throughout your career I remember Basil’s was sitting with.
Walt Mossberg at the recode conference or maybe it was all things D at that point and you know.

[34:02] Basis was talking about her work at Amazon you need to be open to change and if you’re not interested in change.
Of course you should find a more stable career.
I mean the joke is that there are no more stable careers like that like one of the things he said is go you know become an insurance adjuster and Walt Mossberg said well they use iPads now and basil said Insurance soon enough they’ll be using machine learning and it’s true,
right now insurance is the field where.

Jason:
[34:30] The Drone flies over the hurricane area and writes all the adjustments now like a hundred percent.

Alex:
[34:36] Yeah I know I know I’m you know rambling on a bit but I do really think that so so yes if you are a you know.
Fire that’s that’s the type of career that you want to have you’re going to have some trouble but if you thinking more broadly about being an adult being the person who could succeed in this economy,
it’s not about job functions it’s about skills and thought process which Amazon certainly teaches then you can Thrive okay here’s the more specific example.
Dilip Kumar who was the head of pricing and promotions inside Amazon went on to become bezos’s technical advisor Shadow him for a couple of years.
And by the time that student was up his old you know domain was on its way to getting automated through it was then project Yoda and eventually hands off the wheel.
And so we had an option here could go there and sort of see his job become obsolete or he could try to invent something new and he ended up leading or being one of the members that led the team that built Amazon go which is Amazon’s check out free.
Convenience store and soon-to-be Supermarket I believe that sort of came out of this idea can we eliminate the most annoying part of shopping in real life and that’s checkout,
and and they didn’t I mean you guys I’m sure I’ve been inside of the ghost tours they’re freaking magic and they you feel like you’re stealing every time you go in.

[36:01] And turns out that,
you know that that turned out to be one of the next big moves that Amazon’s making every time you hear Bezos talk about it you hear how it’s the future for the company so I don’t necessarily buy the idea that if you,
do a retail core retail function you can’t be an inventor I think Kumar is a good counter example for that.

Jason:
[36:23] For sure.

Alex:
[36:24] And yeah I just think that this is sort of the way that we’re heading and the.

Jason:
[36:28] No no and that’s fair enough and I’m sure Amazon would would rightly point out and I think Google and others are even more on this way of like a lot of that bar razor is less about job-specific skills and more about,
cognitive ability and problem-solving and things like that that would apply to multiple job so I’m sure a portion of that is totally fair,
um I do there’s one other theme in here that’s kind of fascinating to me like if you think about hands off the wheel and you you kind of described it really well I can’t remember is in your book
we haven’t mentioned it yet but you also wrote a great hbr article specifically about the hands off the wheel component of Amazon,
the first phase of hands out the wheel was tools for the merchant right so you know originally the merchant has black magic and only he can figure out because back then it was always a he,
how many how many widgets to buy from a vendor and put on the website right and so then,
we get this AI algorithm that suggest how many he or she should order.
But it still was ultimately up to the the human and human could override that system and I think you wrote that they discovered that the human overrode the system way too often and So eventually.
They got to the point where it was a hundred percent the the system and they you know ultimately were able to solve for all four most are all edge cases.
Um the in analogy to that also in the Commerce industry do you follow Stitch fix at all.

Alex:
[37:56] I dabble.

Jason:
[37:57] Yeah so Stitch fix is you know in a parallel retailer but kind of their part of their magic is personal stylist for every customer that gets to know that customer and make custom recommendations and early on they hired the the,
chief.
Intelligence officer from Netflix that had written the Netflix product recommendation engine and invested heavily in a i for Stitch fix and so they have,
you know this this Tier 1 machine learning product recommendation engine that takes all these attributes from the customer and recommends,
fixes or products for them but but Katrina the CEO at Stitch fix hit has been adamant.
The customer wants to deal with a human so we’re never going to just send the recommendations from the algorithm we’re always going to have a stylus that.
Presents those recommendations and has a chance to sort of override or curate those recommendations so and in a way that’s what like that interim version of hands off the wheel felt like to a lot of my my clients right like,
they gave my clients a human being to make my client feel better but in reality the work was being done by the algorithm and I’m curious if you think.
Over time are we all going to learn that the algorithms are better like well will there come a point at Stitch fix when they’d be better off to say,
we have world-class math picking your products instead of you know a moderately paid employee.

Alex:
[39:26] Right for a high dollar product like that you probably want a blend of both so you want the AI to be so good that the stylist doesn’t have to go back a thousand times to get you something that you like,
because each one of those moments is an opportunity to that you know to lose money for Stitch fix and to annoy the customer,
and so you get the AI really good and then yeah you work in conjunction as a person and the human being becomes this concierge you know on top of the AI That’s using that to end up,
making the recommendation of the client and I do think that model you know this idea that.
That you know everything’s going to be automated and all the humans will go away,
no I’m not I’m not ascribe to that I think we’re still going to have very important job for humans but it might be something that’s more interesting right,
that is something like you know be the stylist or be the concierge from Stitch fix that speaking to you know speaking of the customer,
that sounds like a much more interesting job than like being the person that runs into the back and,
you know keeps getting different things for people to try on and be the person that puts the order in to bring it from the warehouse.

Jason:
[40:38] Or that re folds the clothes to put them back on the Shelf after they leave.

Alex:
[40:42] Because if the AI can minimize the amount of times the stylist in the person needs to go back to try to find the right fit then is doing its job perfectly.

Scot:
[40:49] Freckles that’s a we want to leave some for people to buy the book so that’s good
good overview of the Amazon you also cover Microsoft Facebook and apple what interesting kind of cultural conclusions we’ve got kind of anchor of Amazon now did you draw from
those conversations.

Alex:
[41:07] Yeah well I think the main thing that I learned was the leaders of these companies operate a little differently.
Then I imagined you know the world-class CEOs operating I mean maybe I came to Silicon Valley with this idea that.
Everyone was going to be Steve Jobs and sort of you know not give a shit about what anyone thinks and sort of stand up on the table in the middle of the campus with the megaphone,
Park a bunch of orders and demand people,
follow their Vision but I think that that would be a misconception because you having spent time with people like Zuckerberg and been in and around the offices of Google and Microsoft and.
You know touched on Amazon of course and apple to some extent like what I found is that these leaders are really terrific at eliciting feedback and it starts with the very first story in the book where I go in.
Sit down with Mark Zuckerberg and typically your,
you know your average conversation with the CEO as a reporter is you know you sit down they lecture you for about 25 minutes and the pr person in the room monitors your facial expressions and,
you know if you look concerned they say thanks for coming we’ll see you again sometime soon and you know if you look at some what engaged they might give you a time for a question or two.
But when I came in to meet Zuckerberg he immediately starts asking for feedback.

[42:25] And I was like what’s going on like this is is this a weird way of trying to sell a song you know what he’s trying to say.
And then I ended up just going and speaking of Facebook employees as we tend to do in this line of work and found that feedback is just built into everything that Facebook does so.
There are posters on the walls in the office you know back when that was a thing that’s a feedback is a gift and.
Once a two-day trainings for employees to learn how to give and receive feedback major meetings ends with a request for it and I think this is important because it means that.

[43:00] When you’re so comfortable sharing ideas with your colleagues are sharing Thoughts with your colleagues.
You’re not going to hold ideas for good products back and I certainly found inside Facebook and elsewhere in the tech Giants that when that sort of behavior is enabled people aren’t shy they actually believe what you say,
and they feel hurt and they’re going to come out and tell you things that you know might save your business one day and it certainly has happened for Facebook a couple of times.

Scot:
[43:27] What you think about the Facebook go fast and break stuff and they have the of the hacker mindset and all this kind of hacker kind of stuff on all around.

Alex:
[43:36] Yeah so ice actually spoke to Zuckerberg about this.
He maintains that move fast and break things is not like actually like break Society it was more just like you know push code as fast as you can to the site.
And I mean speed building the speed has always been important for Facebook and why is that important for Facebook I think it’s because social media is the most fickle of all,
product categories product categories in the world.
You know we’ve gone through so many different social media apps with Facebook itself is losing interest with teen users pretty fast and one social media networks are social media platforms start to shrink it’s very difficult for them,
to build back in fact I think Twitter is really the only one that sort of lost users and then,
brought them back and you know I mean who knows what the data says that Donald Trump isn’t necessarily responsible for it but,
you know I don’t think it’s one account I think its new environment around his presidency that certainly helped you know Twitter revive you know so that said like.

[44:41] Facebook needs to invent fast because if it doesn’t do that it’s going to it will really be dead and it has reinvented itself numerous times throughout its history from an online directory to sort of this broadcast platform where you write something on your wall,
and everybody you’ve ever met in your life and their friend see it and now it’s transforming again to a series of smaller more intimate networks with groups and the messaging.
So you know when it comes to like Zuckerberg move fast and break things like you know you might call it the unfortunate you know phrase that sort of you know stuck with Facebook as it has gone and broken stuff in a big way.
But it really captures both sides right they build fast they release products before they’re ready.
And oftentimes when they do that it has negative repercussions on society no do I think that they’re working to fix that I think there’s at least an effort inside Facebook,
I’d like to see it expanded but I don’t think they’re as unconcerned with what happens to society afterwards as they had been in the past.

Jason:
[45:42] Very cool at that point in your book I so you cover it Amazon you covered those other companies and then the book takes what I’m going to jokingly call a dark turn.
And that’s because you write a chapter about Black Mirror which is a very
dark dark show but the premise about why you bring that up is,
you introduced the hypothesis that science fiction writers are probably better at predicting the future
then corporate employees and I was wondering if you could tell the audience a little bit more about about that hypothesis.

Alex:
[46:20] Yeah so
definitely so first of all like I’m a big fan of the show Black Mirror obviously have watched it predict lots of different things that happened,
and will probably continue to be prescient in terms of what’s going to happen in our world but look I’m writing this book always day one from like a standpoint of these are work systems that.
I’ve helped the tech Giants in a big way and we ought to know about them and Co-op them so we’re able to be competitive in their world,
and I’m bullish on the systems but the other side of that is that like everyone who goes out and approaches Tech in a way saying this is positive and only positive has been wrong because there’s always downsides to it.
And so what I decided to do was to bring in a science fiction writer and while go Nim who helped start the Arab Spring,
and who now has some reservations about the impact of social media on the world even though he used Facebook largely to help stoke.
The revolution in Egypt and said let’s look at some of the uses of technology in the book and see where they could go wrong and I think just to push it home.

[47:32] Inside Amazon they write these narratives the six pagers that we’ve talked about and that your listeners I’m sure extremely familiar with.
And one Amazon employed ex-employee told me it was like,
it was like writing science fiction when you wrote these things because it was a story of something that’s going to happen that doesn’t exist yet and that’s largely what you do in the tech world is you dream something up that doesn’t exist then you go and build it.
But the thing about the tech industry stories as they always end happily and you have to do that for a reason right you’re in a company you’re tasked with building stuff.
You want to think about the successful case in build towards that but often that makes you blind to the negative.

[48:09] And the amazing thing is once you put a couple science fiction writers actual science fiction writers on the problem people who are used to thinking dark and dark ways,
you’re going to be a thousand times more likely to catch the liabilities in your products,
then you would otherwise and so I found it to be an incredibly useful and interesting exercise at the end of the book when I was done with my reporting to bring these folks in.
And for me you know I’m just like you know an author of a book doing one dinner with these folks so imagine how,
amazing their perspective would be inside a tech company that’s actually actively building the future every day.
And I do believe that we need many more science fiction writers working inside Tech doing exactly this thing like looking for liabilities looking where things could go desperately wrong in the future and then helping these companies look out for the problems before they happen.

Scot:
[49:06] Well that’s a good jumping-off point so if we if you kind of take what you’ve learned and projected out
maybe it’s three five ten years do you know do you think it’s like 95% probability these dark mirror scenarios come true where you know we’re being surveilled all the time and Alexa devices are recording our every word or do you think that,
there’s at least some probability that that we have a more utopian future.

Alex:
[49:31] Yeah well we are being surveilled all the time and Alexa devices are recording or every word they’re just I guess deleting them after 10 seconds.
But you know I think that at the end of the day in a capitalist Society.
The tech Giant’s right now are good example that they will push the limit to about the edge but they won’t go over it because they know there’s just going to be a backlash among the customers like.
Ultimately you know if your Amazon’s number one leadership Principle as you guys know customer Obsession right.
And you know you’re obviously obsessed with giving customers a good experience low prices wide selection and fast delivery,
and so like the data that Amazon collects is used in service of that I don’t think Jeff Bezos like sits on his iPad at the end of the night or is like you know there’s one remaining Kindle Fire and.
Decides to you know figure out which Amazon user he’s going to spy on.
Just for kicks in fact now he knows what it’s like to be spied on after his photos were stolen off of his phone,
or off of his his girlfriend’s phone in some way anyway look I think that like we that detect Giants need some form of data collection in order to exist every every company today,
really need some form of data collection to exist I mean I run a newsletter business and I have to collect emails you know that’s Pi I so.

[50:58] So it’s important part of the way our economy works today on the other hand like I don’t I don’t expect.
You know this widespread nefarious use of data to become.
And you know we’re definitely going to need a strong press to watch some of the ways things go wrong like I do have some concerns about.
The way that Amazon handles the data that comes off of their ring doorbells for instance but ultimately like.
These companies are here to serve consumers and,
you know if consumers know that you know there are echoes show is I don’t know if that’s still what it’s called her,
but whatever the Echo Show is spying on them in their bedroom and like Amazon employees are you know watching me sleep,
they’re going to go to Google so ultimately I think that’s the thing that keeps this baby more than anything else.

Jason:
[51:53] You know coincidentally Amazon had a big product announcement today they launched a bunch of their newest Echo products and they an ring products and they had a lot of new software features and a lot of the software features.
We’re mostly around cleaning up a lot of that privacy stuff so for example.
You The Echoes all have better more powerful chips in them now so they can do more of the speech recognition.
In the devices so they send less actual data over the network than they used to,
but they built in these cool new features like you can say Alexa forget everything I’ve ever said or forget everything I said in the last hour or things like that that.
You know they didn’t used to have and they done full in and encryption on drink so I will give them credit for,
first starting to address some of those and it occurred to me as you were you were talking you know there are a couple of these big tech companies that have hired science fiction writer so I think like.
Ray Kurzweil famously works for Google and I met this guy Peter Schwartz who’s,
I wasn’t familiar with them but he’s a cool futurist that like.

[53:06] Invented a lot of the experiences in Minority Report like including the you know though II scanning in the Gap store and all that stuff and he’s a full-time futurist for Salesforce.
So I think it is your hypothesis may already be true I think they may already be starting to sort of a dad that thought process to there.
Corporate knowledge base.

Alex:
[53:28] Yeah that’s great I applaud anyone that does that and it’s a two-parter right the first thing that is you hire the science fiction writers are the dark thinkers and the second part is you listen to them.
And so we just got to make sure that these companies if they telling us they’re hiring science fiction writers at their coming through on the second half of that equation as well.

Jason:
[53:47] Hundred percent and I’m sure we’ll see some where they only do the first half.

Alex:
[53:52] It’s a nice press release.

Jason:
[53:53] Yeah and that’s a great point and that’s actually going to be a great place to leave it because it’s happen again we’ve used up all our allotted time,
but Alex we certainly enjoyed chatting with you if listeners have any further questions or comments about the show
we sure would appreciate a comment on our Facebook page or hit us up on Twitter and as always if you enjoyed this episode we’d love it if you jump on iTunes and finally give us that five star review.

Scot:
[54:20] Alex thanks for joining us if folks want to follow you online what we’re what are your best places that you publish content.

Alex:
[54:28] Yeah thanks so much this was a great conversation really appreciate the opportunity to be on I would say I would recommend folks go to the big technology podcast it’s big technology podcast you can get it in any
podcast app and I have a different interview up there every week everyone from
you know VC’s to timbre the VC who that sorry the Amazon VP left over its treatment of whistleblowers journalists,
and Founders so the whole crew comes on it’s been super fun so far as we talked about in the beginning so I’d love to see you there and if you’re interested in the book
it’s always day one and you can find it at any Bookseller you could just type it into Google or Bing if that’s what you’re interested or DuckDuckGo if you don’t like being tracked as we talked about in this last segment and you’ll be able to find it and,
yeah I’d love to hear your thoughts.

Jason:
[55:22] That’s terrific will definitely put a link to the podcast in the show notes and until next time happy commercing.