Comment by ballard | Hacker News Reader

Comment by ballard | Hacker News Reader

The author may not fully appreciate the long game Bezos has been uniquely blessed to play: the sooner Bezos can effectively expand what's working, without over-expanding, it's bootstrapping on a massive scale: buying speed without diluting ownership to even more money sooner. It's not deficit spending (until it is), it's reinvesting profit to grow assets that are the body of the money monster. (For Starcraft fans out there: It's like being broke because of focusing on building SCVs.)

On the other side of the gorge of eternal peril: Cash is king, and should not be underestimated. Or those with the war-chests may try to puke all over Bezos' cake by mistaking lack of current reserves for an actual weakness. I'm sure Bezos is fully aware the ridge-line he's walking on. He probably has aces up both sleeves to clobber anyone that tries to make a move.

Long term, I'd say walmart continues to cash in on the greater unwashed that don't know any better for b&m impulse buys while amzn goes after suppliers and logistics, maybe even an Ali Baba and/or Kickstarter to bring in more product pipes.

> For Starcraft fans out there: It's like being broke because of focusing on building SCVs

While I personally play Protoss, I think this is an awesome way of thinking about it. "Keep your money low" is a mantra that you must remember when playing SC2, and I've always been curious how that translates to actual economics.

If I recall correctly, there was an actual paper written applying Starcraft economics to "real world" econ. Wonder if I can find it..

I'm not sure if it is a 100% perfect analogy to real-world economics, but the best analogy is that all money you use in Starcraft is "working capital". Money in the bank only does you any good insofar as it allows you to handle unexpected emergencies, all other cash should be deployed towards your goals. Which in Starcraft would be to defeat your opponent with generating more cash as a subordinate objective, and in business would be to either make as much money as possible throughout the history of your company, or fulfill whichever goals your company has. Amazon does this by keeping low margins to discourage competition and reinvesting as much as possible.

The biggest difference between Starcraft economics and real-world economics is that Starcraft has no regular expenses or debt, so there is no way to go bankrupt. This removes a large risk element in reinvesting your money.

Starcraft uses supply depots to represent the recurring costs of supporting your army. Using the normal resources would over complicate the game. In a way you could be "in debt" if you ever don't have enough supply.

I believe the business term is worrying about a "lazy balance sheet". You want every dollar working its bum off, not lazing around in a bank.

This is usually an argument for taking on debt to finance new projects.

That said, the complicated way capital gains and income tax interact in the USA mean that lots of investors prefer share prices to rise to any dividend; so when there's nothing to spend cash on, it just piles up.

Compare Australia, where franking credits mean that major companies regularly pay dividends. It's a different kind of complication, but I think on balance it's the better outcome.

> He probably has aces up both sleeves to clobber anyone that tries to make a move.

The razor thin margins are a great moat in themselves.

I'm still trying to work out whether (1) ballard's remarkable cascade of mixed metaphors was itself a joke, or (2) eru's comment was poking fun at it, or (3) both comments were intended entirely straight and it's just coincidence that the density of metaphor mixture is so high.

Both comments make perfectly good sense taken "straight". I'm leaning towards #3, with apologies to ballard and/or eru if I missed their joke.

(My father was in a meeting once when someone said "Let's not beat about the bush. | When all's said and done, | at the end of the day | you just have to take the bull by the horns." At which, at least the way he tells it, everyone else nodded sagely while he desperately tried not to laugh too loudly.)

I'm not a native speaker. And, I spent too much time with managers, recently.

So I wish it could have been 1 and 2, but for me it's 3.

My father-in-law who himself was a director in a large international company told me about a game they used to play in meetings: bullshit bingo. You have to make up your cards ahead of time and then mark off the squares as you hear buzzwords.

That was an actual game at some MIT presentations. Eventually the speaker noticed.

Despite losing money as the SEC and GAAP accounted for it, Amazon ended last quarter with about $100 million more cash than it started with.

That's not hard to do in general. Companies undergoing an "orderly liquidation" achieve this, before accounting for payments to creditors.

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