At one point Sears owned an ISP, a bank, and a nationwide stock tracking and distribution system.
They were Amazon before Amazon, but just didn’t realize it.
They were Amazon before Amazon, but just didn’t realize it.
And fair enough: When the ship is that big and there are that many people on board, you often don't want to "move fast and break things," because the downstream effects can be extreme. Now you've just broken a company that had been working for decades. You're incentivized to take small risks with high likelihoods of reward.
Of course, the problem is, at some point that becomes fatal. A balance can be struck, but it can be hard when the original driving force is long gone.
As you said, finding a balance is hard and maybe not truly possible.
HP(E): after stumbling with itanium, replaced its proprietary Unix server business with x86 and Linux.
They went from 300k employees to a small fraction. They went from designing graphics cards in-house to practically rebranding white box servers.
(Yes, they still make their own servers, too much of the design and manufacturing work being done by outside firms).
They’ve also thrown away a mind boggling amount of talent and institutional knowledge of storage and networking.
Consumer: I can check prices at different stores in 1 minute
Chinese: why do business with the Sears agent in Hong Kong when I can sell directly to the West?
Rule numbero uno: there is no customer loyalty in Ba Sing Se!
Consumer goods got cheaper at the cost a few million decently paying jobs and manufacturing capacity directly and due to second order effects.
Maybe in alternate history we could have saved some of this onshore manufacturing capacity but we’ll never know now.
Amazon took their largest cost center, IT infrastructure, and made it a profit center (AWS). That is the part that makes money.
Amazon also wasn't like Sears, they depended heavily on 3rd party sellers to built their initial catalog. Sears didn't have 3rd party sellers until much later on. Amazon just leveraged those 3rd party sellers to figure out what they should carry and sell as Amazon down the line.
They did realize it (well, they obviously didn’t have Amazon as a reference, but...). And they enjoyed it for a long time. But, as has happened many times to firms very successful in one set of conditions, they failed to adapt to changing conditions.
Sears had shifted so firmly into retail by the 80s. Then Wal-Mart ate their lunch on low price retail logistics.
Then Amazon came along, and solved last-mile delivery of catalog sales.