A fact that counters your hypothesis: Amazon is obviously one of the most productive companies to have ever existed.
*Edited: Turns out I have been misusing the word "counterfactual" for quite some time.
*Edited: Turns out I have been misusing the word "counterfactual" for quite some time.
386.1b dollars / 798k workers = $483,834.58 / worker
That's impressive, but... Alibaba: $717.3b / 251k workers = $2.8m / worker FlipKart: $436.2b / 30k workers = $14.5m / worker Texas Instruments: $14.38b / 30k workers = $468k / worker G.E.: $75b / 174k workers = $431k / worker
I would agree with your assertion that it is one of the most productive companies to have ever existed, but so are a lot of other companies and they don't seem to hire people just to fire them later.
And heck, the last company I worked for was a small firm capitalized with several tens of thousands of dollars from its founders followed by a $75k angel round. Its revenues last year were around $38m with a staff of about 45 people or around $800k / worker. And they achieved it with a couple orders of magnitude less investment than AMZN.
Strictly speaking, I don't think this is a counterfactual. A counterfactual is a figure of speech that considers a situation wherein the facts are different than they really are. For example, "If I were you, I'd quit." This is a counterfactual, because I am not you, but if I _were_, then so-and-so would be the case. Google gives the example, "If kangaroos had no tails, they would topple over."
Its the equivalent of the corporation being a person smoking cigarettes. It imparts some benefits and doesn't kill right away but given enough time it still causes disease. They'll start to miss opportunities. They'll run slower.
The metaphor vanishes in a lot of ways though because the corporation can pivot and simply say "we were wrong". Microsoft is a perfect example. It regularly threw away people and this caused damage and various big failures but not enough to scuttle them. They are still successful. Still growing.
Students of history know that Microsoft's story of success hides a lot of messy details including behavior where plenty of law had to get involved. Amazon will go down a similar path. Or has likely already begun.
Truth is that any given time no company is perfect, they can simultaneously being doing things that give them an advantage in the market and doing things that undermine their own efforts. As long as the advantageous stuff outweighs the self-sabotage, they can be successful.
Some of the trouble is that people see success and assume that 100% of the things they are doing are the correct thing to do. Not considering that maybe the reason they can get away with one sort of bad behavior is because they have such a huge advantage in some other area.
So for Amazon, the soaring stock price serves as a big financial incentive that allows some employees to overlook the work environment. But that may not always be the case, and the more people share negative experiences about the work environment, the more new people avoid joining altogether. The negative reputation and the turnover may not be enough to doom the company, but on the flip side they'd probably be even more successful in the short and long term if they didn't have a firing quota.
Revenue, net income, employee head count, customer satisfaction, customer retention, customer lifetime value, return on invested capital, end price reduction for customers, stock price and market capitalization, SKUs available for sale, new products/services launched, etc etc.
Amazon could downsize by 90% and most of these would still hold up.
In order to scale back that far without suffering negative results you'd have to assume that those 90% of people aren't doing much day to day, so their loss would not be felt, and that is frankly not true and kind of insulting to the hard work that Amazon employees do.
I'll add 90% was hyperbole.
I'm not sure I understand your reasoning. How would any of these metrics not rapidly collapse under a 90% workforce cut? Are you assuming that the majority of Amazon is somehow automated? It definitely isn't.
IKEA makes cheap, good enough furniture. Similar to Amazon's approach. You can't argue that either is not hitting a certain high quality bar when neither are striving for it.
Disclaimer: I work for AMZN
It's so fascinating how diverse people's viewpoints are! My first experience of IKEA was that it was a confusing, frustrating, poorly laid out and inefficient labyrinth designed to get you lost, and also funnel you to the "hot dog" items that make them the majority of their profit. I've taken many of my parents and observed similarly people's parents and grandparents of friends get just as frustrated and confused at the layout. For god sakes, I just want to be able to walk in, go to the "kitchen decor" get what I need, and walk out. I don't want an "experience", but I digress.
I use it for some small businesses of mine but I wouldn't use it for a medium company. I would just get some servers from smaller provider in different data centers and deploy whatever I need.
AWS, was definitely the service that convinced everyone they needed the cloud. Most of the companies I've seen move to aws are just wasting money, don't need the scalability and are massively over-provisioned.
A few unicorns needs the cloud's powers to scale massively now - and, given how much it costs, they'll end up rewriting it anyway to save hundreds of millions a few years down the line.
That said, AWS is solid and best in class in many areas, and to paraphrase the old saying: "no one ever got fired for choosing AWS"
IKEA is not attempting to sell the highest quality furniture in the world. They are attempting to sell furniture that is "good enough" at a great price. Have they succeeded? Their customers seem to have dollar-voted with resounding "yes".
On the other hand, I have all Ikea furniture and it's survived 3-4 moves and only gotten stronger - my last mover's hobby was repairing furniture and he fixed everything with his pile of spare parts.
Amazon has 12 million skus walmart 75 million.
End price reduction? Amazon is rarely the cheapest.
Employee headcount, is more or less better?
Things always seem rosier.
??
Sorry but Amazon has far, far more than 12M SKUs.
Comparing online shopping revenue to social media revenue kind of feels like comparing apples to oranges to me.
> someone described that the reason AWS works at all is the size of their firefighting team
Customers don't care all that much why AWS "works". They care that it "works". And, again, it "working" is not their end goal. Rather, AWS "working" is yet another means to an end.
You don't have any of that at Amazon, there is firefighting instead of research, they aren't running out people willing to work for them yet, and personnel turnover is stratospheric.
Yes, they do make money, but you can't buy advancement.
It may make sense to guarantee a certain lower-than-maximum productivity than to shoot for a more risky absolute-maximum-at-all-times and sometimes miss that shot, and this system goes for the former.
But their stock price keeps going up and they keep eating up new markets.