It'll be interesting to see what bezos does with it for sure.
But, if your just mean billion plus dollar orgs then something like : https://en.wikipedia.org/wiki/United_Farmers_of_Alberta is an interesting comparison. Further, measuring the success of such organizations is hard especially when they are not trying to make a profit. I mean how do you measure something like the US Democratic and Republican parties?
https://en.wikipedia.org/wiki/Mondragon_Corporation
Oneida is (was) the closest US analogy I can think of, though much smaller.
There are some very successful Kibbutzim spinoffs in Israel, into 100s of millions US$ (I don't know how ownership was structured).
Are they essentially large family-run houses of commerce much like tradesmen guilds of the past?
From Agriculture To High-Tech: Meet Five Kibbutzim That Became Global Powerhouses http://nocamels.com/2016/03/successful-israeli-kibbutzim-ind...
Comparing the wikipedia sidebar shows Publix with more stores, revenue, and over twice the number of employees.
https://en.wikipedia.org/wiki/Publix https://en.wikipedia.org/wiki/Whole_Foods_Market
I'm not going near Amazon, though.
[1] https://en.wikipedia.org/wiki/Migros [2] https://en.wikipedia.org/wiki/Coop_(Switzerland)
Whole foods is a good employer IN SPITE of being capitalist.
Even Walmart has started realizing this. It turns out that when you hire unmotivated people, pay them as little as possible, screw them on medical benefits, pay them too little to get their own apartment and in general work them harder than everyone else in that job sector that you get people who don't do a good job. In the past several years, Walmart has instituted new wage plans, better medical benefits, productivity goals from corporate that are still unreasonable but not insane and they think it is worth the money.
I don't know if Amazon has learned this expensive lesson, but a business can run with high employee turnover and dissatisfaction for a long time before it catches up to them. Once it becomes apparent it is often too late to fix without losing heavily in the marketplace.
Simply put, human welfare is directly in contest with maximization of profits. This occasionally can result in being paid well—it's cheaper than hiring two people at a lower rate.
And looky there, other commenters supplied a bunch more (actual) examples. I'll throw in: The Catholic Church. The nation of Yugoslavia. What the heck: the Hell's Angels. Far outstripping Amazon's "scale" in terms of heads smacked with wooden fenceposts, that's for sure, or maybe not.
Which is my next point - adjust the "scale" appropriately (and unfortunately you left no indication RE: scale of what, whether it be dollars in sales, people involved, people served, ham sandwiches set aflame, heads smacked, or dogs painted blue) in proportion to the amount of money/wealth existing in the world at that time. in history. or to the number of people alive at that time. in history. and that'll probably turn up a bunch more examples.
There's also the question of "successful at what"? At providing for its employees/members? At serving its customers? At enriching its shareholders? At painting dogs blue?
Also we should really make passing mention of the waxing and waning support for capitalistic enterprises vs. other types of communes in various places and times. in history. Is it a valid comparison between a company like Amazon, operating in one of the most capitalism-friendly sociopolitical environments (post-Reagan America) seen in some time, vs. another type of organization operating in the same environment that doesn't support that organization or even actively suppresses it?
Your comment reflects an overabundance of confidence in things that are by no means simple or certain.
Look at airlines--exec bonuses used to include metrics such as "customer satisfaction" and today those metrics are gone and only profits count. Nothing changed with capitalism, though. It's the asshole MBAs that changed.
Just calling this out to try to counter the tendency of U.S. folks to assume that there is only one, unchanging form of capitalism. In fact, ours is increasingly a weird outlier.
Makes hard decisions easier since the union and employees can see why decisions are made.
Lest you think this makes the country uncompetitive, Germany still makes cars, and the UK (which doesn't have this legal system) has vastly de-industrialised and doesn't make cars.
The unions also provide other benefits. For example, most of them own summer houses that any member can reserve to go spend a weekend away. You rarely hear the average Icelander on either side of the worker/manager divide complain about them at all. Everyone more or less views them as beneficial.
Once or twice a year they make headlines when one group of workers or another feels aggrieved and it escalates to a brief strike in some small sector of the economy, but on the whole, I don't think many Icelanders would trade their system of employment for ours.
Like so many other areas, I think the problem is that we in the US are just so very much worse at running our society and country than most other comparable countries. Look at health care. No one liked the ACA; no will will like the AHCA or whatever the Republicans pass. The problem isn't that it's impossible to do a decent job at a health care system. The problem is that we specifically suck. Put us in charge of anything, and we'll turn it into something awful that doesn't work, but provides some brief period of outsized shareholder value.
So while the EU plugs away making incremental improvements each year we keep jumping around in fits and spurts forward and backward. There is still a strong belief of American Exceptionalism even in fields where we are clearly inferior. Look at Healthcare Europe figured something out that we didn't and their is cheaper and better.
As you "scale up" in diversity, population, and geographic distribution the set of things people can agree on falls off dramatically.
Iceland has a very divisive political system at the moment. The ruling government has been a coalition of the Progressive and Independence parties, roughly the european versions of the social conservative and pro-business factions of the Republican party respectively. Though it should be said that no one in Iceland really touches quite how regressive American social conservatives are. And, of course, being (sort-of) Scandinavian, there's a massively strong Social Democrat/Pirate/Left-green contingent in the Reykjavik area that can't stand the agenda of the main ruling parties.
Iceland doesn't function because they manage to get people to agree more than Americans do. There are something like 13 political parties in an average election, and they stand in bitter opposition to one another across a huge variety of issues. Iceland functions because they make their government function anyway. Nothing about being small makes it easier for two opposing parties to somehow figure out a way to get the damned bills paid. You could replace the entire American republic with Donald Trump and Barack Obama, and we'd get no more done than we do today, because the government isn't trying to solve problems. They're trying to preserve whatever problem is most plausibly the fault of the other party.
Actually, it's 1000x.
We need new political platforms focused on consensus-based policies. Not distinguishing our groups from "the other"
Go look at the film industry, and the Writers / Directors / Screen Actors Guilds. The WGA doesn't stop screenwriters from negotiating their own terms. Do you think someone like JJ Abrams is getting paid the WGA set fees? That Tom Cruise works SAG and Equity rates? Of course not.
The point of the guilds in these industries is to set minimum standards for pay and benefits. It is designed to stop studios from exploiting people desperate to work in the industry. I majored in film and many of my classmates have gone on to work in Hollywood - I don't know anyone of them who would say their unions aren't a good thing.
Would you say that it works?
My understanding is that these unions make it more difficult for new people "desperate to work in the industry" to actually break into the industry.
That's something a worker's organization would help with, even if I don't feel like I need them in wage negotiation.
Not that I disagree that it was a huge deal, it's hard to gather greater sympathy/empathy from people that tend to make less than half of those aggrieved.
If wasn't supporting a whole raft of people who aren't my kids I could get by on 10 hours a week. Most of these people will be self sufficient in the fall. Then we will see I can get fewer hours.
Charge hourly, produce good work(actually work those hours you charge) and spend enough time learning to stay proficient in your niche of the craft. This recipe won't make you a millionaire quickly, and it won't get you a house in the bay area, but it has given me great financial freedom in the Midwest.
The few engineers who care to engage in the negotiations which yield their true market value end up making several times that of the average. Yes, some of them are exceptional engineers, but some are not, and the only real distinction is being able to find and negotiate optimal market rates for their work.
Last year I had a consulting gig in a Europe based company, with offices next to a big airport. As summer was slow anyway I'd work 30h weeks (invoicing four 7.5 hour work days) Tuesday - Thursday, and spend the other 4 days at a beach in Ibiza, Bulgaria or Cape Verde (with occasional remote login to take care of emergencies).
So if you don't want to work 40 hours, don't. I have much less sympathy for a software engineer who has better leverage than a kid who works at McDonalds and couldn't earn a living wage working 60 hours.
The fact that you could strike and not really sacrifice much; and if it failed find another job, puts you in a great position. Unions are good for protecting those that can't afford to protect themselves and are at a disatvantage. SE is not IMO a vocation that needs to organize.
The games industry disproves your theory.
I have read several stories of people leaving game deve for a nice boring job writing insurance software for more money and fewer hours. Many could be doing it the other way around, write software for a lame, but lucrative, insurance company, then make a small lifestyle business writing indie games with a few friends.
I agree there is the romantic factor in play as well. You have a lot of supply of devs and a random walk of success stories.
Most people who are super excited to make games are gamers themselves, and it seems to me that most gamers are pretty open minded. In my own research it seems to me that most indie titles that "don't suck" turn at least a modest profit. Don't suck needs to be defined objectively, but not being riddled with bugs (unless that's the point [Goat simulator, Desert Bus]), having a consistent even if primitive art style and being fun to at least some gamers is a reasonable definition.
The breakaway successes like Minecraft and Super Meat Boy should not be examples. Better example are Rovio's 50 games before Angry Birds. They made enough money to live on and make the next title while having a decent but not affluent lifestyle.
First of all, "sub-prime wages" is not a thing I've ever heard of. Absolutely nothing on Google so I'm assuming you mean below market wages, which game industry wages are by definition not.
Secondly, and perhaps most importantly, paying people what they are willing to earn does not make game studios assholes. Everyone developing software for game studios knows they could make more writing software for a bank or some YC CRUD app.
> I have read several stories of people leaving game deve for a nice boring job writing insurance software for more money and fewer hours.
With the right skills, you can leave any industry and go to any other industry and make more money. Not sure what your point is here.
Are there warts? Sure there are. Nothing is perfect.
Isn't that equally true for collective undertakings?
* Association of Educational Psychologists
* British Air Line Pilots’ Association
* FDA ("The union for senior public sector managers and professionals")
* Hospital Consultants and Specialists Association
* Prospect, the professionals' union
There are a lot more listed here: https://www.gov.uk/government/publications/public-list-of-ac...
Unions are important in many industries, including software development. You and your employer may have a good method of negotiating your pay, but that doesn't make it universal
Belittling the presumed intelligence is completely unnecessary
What is the strategic logic behind this move?
NYT, WaPo, WSJ, Bloomberg all take the same line: this is about Amazon's expansion into brick-and-mortar retail. They need a physical footprint, knock out Instacart for delivery, accelerate Amazon Go, and so on.
But is this really Amazon's play here? Seems to me this is just the superficial and obvious rationale, and these analysts completely missed the bigger implications.
Since Amazon said they're not renaming the stores, how can this be about Amazon's brick-and-mortar expansion?
Seems more likely that Amazon's strategy is actually the opposite of this.
Instead, maybe the bigger opportunity is to "Amazonify" a good brand, good people, good merchandising and thousands of relationships with good suppliers.
Customers already trust Whole Foods and they like the assortment, but (1) only a small percentage of the population has access to a store, and (2) an even smaller percentage of the population can afford it.
What if this is about taking the Whole Foods concept online in a big way ... make it dramatically more efficient, aggressively lower prices, and deliver all this goodness to a far larger percentage of the population?
Whole Foods market share is less than 2%. Amazon could turn this $13 billion business into a $130 billion business by plugging WF into Amazon's existing apparatus for merchandising, pricing, inventory control, online sales, logistics, and direct-to-consumer delivery.
Taking WF market share up from 2% to 20% is a much bigger opportunity than going the other direction, and just using WF stores to sell Amazon's grocery assortment.
Amazon market cap went up 3.5% as of the current tick, roughly $15.5B. The market effectively rewarded AMZN for the transaction far beyond the actual $13.7B tender offer!
It means there's an opportunity cost: all other things being equal, it would cost Amazon two billion dollars in market capitalization to NOT do whatever the hell Wall Street THINKS they're going to do with Whole Foods.
Maybe the market thinks they're going to use them as bases for grocery distribution: reward, the cost of acquisition plus a bonus two billion. Maybe the market thinks they're going to gut the company, fire everybody, and then there's one less competitor for what Amazon means to do with groceries! Maybe the market thinks they'll take the existing Amazon grocery stuff and rebrand it Whole Foods and the rabble will buy into that for a time.
The point is that this money really isn't free: it's conditional on whether Amazon does what the investors think they're gonna do, with the acquisition. If Amazon fails to do that, the market capitalization can evaporate.
My own hunch is that the market thinks Amazon is super efficient and acquisitive, and that Whole Foods is weak and inefficient and misguided. As such, the expectation of greedy and amoral investors is that Amazon will take over and whip Whole Foods into shape, maybe even fire everybody and replace 'em with Amazonians, and that will make Whole Foods 'better' and justify the exercise. They certainly aren't buying into Whole Foods' 'enlightened' memes: that has no place on Wall Street.
So I'm guessing it's BECAUSE Whole Foods has been 'enlightened' that the prospect of wrecking that so motivates investors. They figure that the Amazon way is clearly the winning way, and they figure there will be a BIG difference in how things are done, and it's a difference they characterize as 'good for capital', so there's a synergistic effect that makes it 'free' for Amazon plus a bonus. And then Amazon is obligated to do what's expected of them, which I think is probably kinda predictable.
This of course pales in comparison to the 478 million outstanding shares, so, you are correct: their shares don't appreciate nearly enough from the $15 billion surge in market cap to pay for the $13.7 billion purchase. However, to say "whatever the stock does has no impact on the company" is also inaccurate.
They do not, either in theory or in practice, own the assets of the corporation while it exists.
"effectively free" is a strange label to give this.
> What if this is about taking the Whole Foods concept online in a big way ... make it dramatically more efficient, aggressively lower prices, and deliver all this goodness to a far larger percentage of the population?
Efficiency and cheapness would go against the Whole Foods brand.
For their existing customers, yes, but WF has become an aspirational brand.
What if the play is to gain a large number of less affluent customers by WF-labeling lots of inexpensive things?
Search Amazon for some commodity like corn meal, or rolled oats. There's a huge price difference between Quaker brand and Bob's Red Mill. Amazon could insert Whole Foods brand right in the middle and skim customers from both ends while maintaining handsome margins.
I don't know what this means. The WF experience has nothing to do with these things. The price (cheap or less-than-expensive) and efficiency (I think you mean availability?) aren't really important, other than they are successful in the same way Trader Joes is successful, in fewer locations.
with regards to the purchase I can imagine cobranding or in store only advertising. perhaps they can use it let people pick up orders themselves? Online grocery ordering but only where a Whole Foods store is available.
The only reason I know about Aldi is that I spent a couple of years working in Chicago (and living further out), and even there I had to drive a long ways out of my way to find an Aldi. I think I went once in the 2 years I was there.
Whole Foods is everywhere.
EDIT: apparently I was effectively wrong, different Aldis:
Sure they say that now...
The logic of trench warfare era militarism is even more depressing than the normal logic of war. It's mind-boggling to think leaders figured it was appropriate to just throw demographically significant numbers of 16-20 year old boys into a meat-grinder just to keep the machinery of colonialist industry well greased.
Another example of this is Wegmans -
http://www.cbsnews.com/news/could-this-be-the-best-company-i...
https://www.washingtonpost.com/news/wonk/wp/2015/05/13/why-w...
http://www.adweek.com/brand-marketing/why-do-so-many-people-...
http://m.csmonitor.com/Business/The-Bite/2016/0225/Why-is-We...
“Our employees are our number one asset, period,” Kevin Stickles, the company’s vice president for human resources, told Reuters in 2012. “The first question you ask is: ‘Is this the best thing for the employee?’ That’s a totally different model.”
Ha, I think that's one of the most ringing endorsements of a business I've ever read.
Yeah, darn those investors. How dare people with pensions, 401k's, IRAs, and other investments expect some kind of return on their investment? It's disgraceful. /s
EDIT: The sentiment against investors is rather ironic considering the amount of equity collectively held by HN readers.
Do you vote the proxy for all the funds in your 401k? Do you understand how your vote affects the above - it all does.
It might not be your intent, and you might not have enough of a vote to stop it, but you are still doing it. (sort of like Americans opposed to the current foreign policy are still at fault for it)
This might not be an option for everyone, of course.
If your retirement is 3 months away, then sure you should be thinking short term, which actually means you should be moving away from stocks entirely. Investors that are really that short term should be in bonds or cash.
Noted by a friend who used to work there:
- They treat each store (and each department within each store) like its own separate business, which is great for teaching individual managers about waste, efficiency, profit/loss. However they can't bother to get together on a corporate level and combine purchasing power on most things. Every store has to work on making a deal on their own merchandise, separately.
- In a show of solidarity, all employees, whether floor workers or corporate IT, must work holidays and instead have floating holidays for time off. Then predictably there is a seniority effect where the long-term workers get to have their holidays and the recent hires have to come in on a completely useless day and stay till 3 or 4 when the management "lets" them leave.
Also I recently shopped at their 365 store and it's a great store with better prices, but their website sucks and my name comes up as "firstname lastname" on their computers. If Amazon can knock some sense into their IT, that would be a huge win.
There was also an article that talked about the brilliance of Amazon biz organization. Business units are set up like API interfaces, ones that serve both internal needs as well as external customers. The author's claim is that it helps trim the fat, with what was normally internal services being exposed to market forces. It makes me also wonder about WF's fate from that perspective.
Groceries are not APIs.
If money weren't a matter, I would love to shop at whole foods: shopping for groceries seems more of an experience there than at other places. Maybe using Amazon's superior operations management would let them lower prices even further attracting more regular customers.
When I airbnb'd in someone's Portland home once, The host worked for another local alr grocer chain, proudly telling me it is like WF but better.
Just a tangent: the downtown Seattle WF has a fantastic eatery ... and in the months before I moved, it turned into a major Amazon employer hangout, after the Amazon HQ moved there. Now I marvel at the irony it is effectively an externalized company cafeteria.
TJ is a good deal for some things but it only somewhat overlaps.
What you will see is a relationship between Amazon Prime and WF. But, as with the case with Twitch, it will be Amazon that deals with that and WF will likely continue to do its thing while Amazon generates MORE customer loyalty and a new customer base.
Trader Joe's has limited selection and is mostly on the cheap side, often even cheaper than Ralph's in SoCal. Its the place I go for cheap produce that just happens to be organic/natural/etc... (though I don't really care about the latter).
Here in the Bay Area I'm really happy with Draeger's. Haven't really been back to WF much since I started going there. Unlike Trader Joe's it does have a reasonably complete selection of meats (and for specialty cuts there are local butchers).
https://techcrunch.com/2017/05/14/why-amazon-is-eating-the-w...
Flip side is that, according to this: http://www.bizjournals.com/seattle/news/2017/03/27/amazon-go...
There are a lot of troubles with the logistics around distributing produce. The models Amazon has for managing non-perishable goods is not working well for things like bananas. It would be stupid of Amazon not to try to learn from logistics experts from Whole Foods, and Amazon has a good track record for not being stupid.
Side note: just yesterday, my wife and I went to our local Fry's for our normal shopping. They are testing hand-held devices to scan items while you shop and then just settle at the self-checkout line; this was fairly new. We gave it a try just to see what the experience is like (and likely, by the time my step-daughter comes to age, something like this will be normal). I remarked to my wife that Fry's isn't sitting still, waiting for Amazon to take over grocery shopping with Amazon Go, either.
We had WF delivery for a couple of years. It was great for us. But, you could tell they were trying (unsuccessfully) to monetize it. When they curtailed it they offered a pickup service as replacement: Instacart is the app for placing orders. On the whole, the pickup service works pretty well except you don't get sale prices.
I can see delivery coming back now that Amazon is in the picture. I can also see a bigger push to sell prepared foods for delivery. Prepared foods are the real money makers.
Imagine suggesting that any employee who was hired when the stock price was higher than the selling price now had to pay money to those who were hired when the stock price was lower. Fortunately, employees are not held liable for the valuation of the company at which they work. If they WANT to participate in that risk and reward they can buy stock--sometimes at a discount like Whole Foods offered.
I flat out reject this idea that people should get the bulk of reward simply for already having money.
Are you saying there should be less/no return for investing your money? If so, how do you suppose we incentivize investments?
I merely stated that the bulk of reward should go to those who actually DO something, not those who's only contribution is already having money. Of course they should get a return on that money. It just shouldn't be the bulk of the reward.
But investors are actually doing something as well - they are putting their hard earned money towards a venture. And as it stands today, we have more need for capital than 'actual work'. So it gets rewarded more. In simplistic terms, If you want an investor to put his money into a business you are starting instead of buying up rare resources or hoarding his cash, you give up equity. And hence their reward are relative to the money they put in.
I was just trying to see if you have any alternative plans to encourage such investment. This is back to basics economics as I know, but I don't know much there. Hence my query.
https://www.google.com/search?q=whole+foods+stock&oq=whole+f...
http://www.chron.com/business/article/Kroger-s-darkening-out...
Amazon buying WF will likely have two results:
1) As long as Mackey can run the company WF employees will stay. Once he leaves (likely soon), they will leave. This is an opportunity for some other investor with Mackey's same principles to buy up WF's human capital. For example, Starbucks will benefit b/c former WF employees make good baristas.
2) Amazon will be left with the infrastructure of WF, primarily the real estate, warehouses, storefronts and whatever slice of humanity Amazon hires to replace former WF employees. So maybe Amazon wants WF primarily for the locations, the real estate and the warehousing capacity. They're getting a good price by buying while WF is at a low.
Amazon is simply too much - time for the monopoly-busters to break them apart.
What exactly does Amazon have a monopoly on?
Selling books? Nope, Barnes & Noble and Walmart and others compete there.
Cloud computing? Nope, check Google, Microsoft, IBM, Racksapce, Linode, etc.
Selling other random stuff on the net? No, Target, Walmart and a bazillion specialty sites also do that.
Groceries? Obviously not.
The idea behind anti-trust / monopoly law is generally to prevent a company from leveraging a monopoly in one area to gain excessive control in another area. I don't see how anyone can argue that Amazon are doing anything like that.
Being big and successful is not, in and of itself, wrong.
...or monomania of "the [stock] market," and the myopia of those who look to it to determine what "works."
But the $13 billion sale of a public company is a bunch of hemming and hawing about what the stock was worth a few years ago.
I'm not saying it couldn't have been more successful. I'm not saying Amazon won't completely destroy the culture (they may, they may just let it continue as is and use it as Amazon Fresh logistics hubs as some have speculated).
But I don't see how this isn't a great example of how you can treat your employees well - better than almost anyone else at the same level - and make a lot of money while doing it.
Wasn't Whole Foods valued at over $20 billion a few years ago? If you bought Whole Foods stock at that point (either as an outside investor or an employee) it might feel like Amazon is buying it for $13 billion because Whole Foods has been having trouble staying competitive in the market.
Of course, if you actually started the company $13 billion may be a very big success if your goal was to sell.
[1] http://www.npr.org/sections/money/2017/06/09/532303452/episo...
And it's so much worse than that, really. A lot of public companies are being strip-mined of their true wealth by the insiders. Pump the stock, gut the company, screw the investors.