Comment by vishnugupta | Hacker News Reader

Comment by vishnugupta | Hacker News Reader

I was a software developer in that division in 2012 so I got to witness the early days of optimism.

After tasting success with Kindle Amazon went full throttle with their hardware investment. They were optimistic about replicating Kindle success so they threw the entire kitchen sink at it. The division hired 1000+ in product and development in a matter of weeks. It was truly heady days but equally chaotic as no one had a clue as to what were they supposed to be working on. Managers and execs promptly built their empires took promotions etc.

However it was not clear to anyone how would they monetize. Whenever some lowly developer asked the answer was standard, Amazon’s model is to grow big first and then figure out making money.

But for the interest rate hikes perhaps they could have continued down the path, who knows.

All that said, if I owned any of Alexa devices I’d be planning on sunsetting them. They will put the entire infrastructure on a strictly lights on mode. So expect things to break on the edges, at first.

> Amazon’s model is to grow big first and then figure out making money

I think this is the case with most start-ups nowadays. Attention is considered to be the most valuable thing you can get from a person, the assumption being is that you have the attention, you should easily be able to monetize it somehow. Also, the number of users is what investors mostly care about in the early stages and the "traction" is one of the highest valued KPIs.

I do think this is wrong though, from many, many points of view. The worst way in which is wrong is that we end up not creating good products or products that provide value, but only addicting products or those that provide instant-gratification and are purely focused on the short-term benefits.

> Attention is considered to be the most valuable thing you can get from a person, the assumption being is that you have the attention, you should easily be able to monetize it somehow.

This sounds like planned extortion.

"Look at this nice thing you are enjoying. Give us money or it goes away"

> This sounds like planned extortion.

It feels a bit like it. Because the point is to first get you hooked/trapped, lure you in, and then find ways to take advantage of you.

It was the same with Google Search. It was useful and free. Now that they have everyone trapped, they can exploit the s*t out of our attention. They can put 5 ads in search and video ads every minute on YouTube and enough people will still use the service, as the users are already trapped, there are no alternatives due to them creating a monopoly.

I think this is the definition of Vendor lock-in: https://en.wikipedia.org/wiki/Vendor_lock-in

Or maybe Antitrust: https://en.wikipedia.org/wiki/Competition_law

Leading to Predatory pricing: https://en.wikipedia.org/wiki/Predatory_pricing

"Predatory pricing is a pricing strategy, using the method of undercutting on a larger scale, where a dominant firm in an industry will deliberately reduce the prices of a product or service to loss-making levels in the short-term.[1] The aim is that existing or potential competitors within the industry will be forced to leave the market, as they are unable to effectively compete with the dominant firm without making a loss.[2] Once competition has been eliminated, the dominant firm now having a majority share of the market can raise its prices to monopoly levels in the long-term to recoup its losses."

I think the Alexa hardware has more or less reached maturity. And even the software side is probably going into regroup and harden mode. It's no longer going to be your digital butler but a smart speaker that can play music and set alarms and tell you the weather and maybe turn the lights on. Which is altogether a much smaller vision than 2012 but something extremely useful and with a still growing base of users.

Alexa the service is doing just fine. Alexa the hardware group has been significantly cut. Or at least that’s how I understand it.

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