Bezos: Why it won't matter if Fire Phone flops

[rcentros]

http://www.businessinsider.com/jeff-...-phone-2014-12

Amazon CEO Jeff Bezos says that he has made "billions of dollars of failures" at Amazon, and that it doesn't matter at all.

Speaking at Business Insider's Ignition conference, Bezos says that his philosophy for Amazon is to encourage people to make bold bets and iterate on them, while still accepting that some might fail.

"If you're going to take bold bets, they're going to be experiments," he says. "And if they're experiments you don't know ahead of time if they're going to work. Experiments are by their very nature prone to failure. But a few big successes compensate for dozens and dozens of things that didn't work."
...

Bezos says that it's still very early for the device, and Amazon plans to keep iterating on it for years to come. He believes it's going to succeed, but even if didn't, it was a bet worth making.

"I've made billionaires of dollars of failures at Amazon.com," Bezos says, joking that it could be like "a root canal with no anesthesia" if he tried to dwell on them.

"None of those things are fun, but they don't matter," he says. "What really matters is that companies that don't continue to experiment — companies that don't embrace failure — they eventually get in a desperate position, where the only thing they can do is make a 'Hail Mary' bet at the very end."

[tubemonkey]

Bezos says that it's still very early for the device, and Amazon plans to keep iterating on it for years to come. He believes it's going to succeed, but even if didn't, it was a bet worth making.

Then unlock the phone and lower the price. Have you not learned anything from the current $199 sale? High prices and AT&T exclusivity killed the phone.

[fjtorres]

Originally Posted by tubemonkey

Then unlock the phone and lower the price. Have you not learned anything from the current $199 sale? High prices and AT&T exclusivity killed the phone.

That might be the way they go next: a very low cost unlocked basic phone rather than a premium model. Or maybe they set up their own pay-as-you service and bundle a couple months into the selling price.

[fjtorres]

Amazon isn't doing anything that Google and Microsoft, among others, aren't doing.

Well-run companies don't dwell on past successes or wait for their cash cow to die out before looking at new business opportunities. And they don't let fear of failure rule them. That is small company thinking. Big companies need side bets and if at least some of the side bets aren't failing, they aren't looking far enough ahead. Because today's side bet is going to have to be tomorrow's billion dollar business.
Think of Microsoft's XBOX or Android at Google, both (apparently) far from their baseline businesses of software and ads, respectively.

As as been reported repeatedly, Amazon is already a GE-style conglomerate or Japanese-style Keiretsu, an empire of multiple businesses, some of which are mature cash machines while others are money-losing startups just ramping up. What Bezos is doing is investing all the profits from the cash generating businesses into the startups instead of letting it accumulate as taxable income.

The shareholders, of which he is by far the biggest, get their cut in the form of higher company valuation and capital gains instead of taxable cash.

It's all a long-term empire building play instead of a typical short term quarter-to-quarter day trader play. Most of Amazon shareholders know this. The rest should simply sell and go gamble elsewhere because Bezos has no reason to change his approach: his game is still going strong.

[crich70]

As he probably has billions I imagine losing a million here or there doesn't mean much to him, but a thousand little cuts can lead to a company bleeding to death.

[fjtorres]

Originally Posted by crich70

As he probably has billions I imagine losing a million here or there doesn't mean much to him, but a thousand little cuts can lead to a company bleeding to death.

Amazon has billions of cash reserves and even more in untapped credit.
Bleeding to death is not an option here because Amazon has abundant cash flow--unlike companies at actual risk that in the red because of lack of revenues, which is out of their control, hence the death spirals--Amazon runs in the red because of spending in new businesses.
Which is something they control.
If Amazon ever got near the edge they wouldn't even have to raise prices, all they'd have to do is slow or stop spending on new warehouses.

There's no Amazon death spiral anywhere on the horizon, no matter how tightly some might screw their eyes and click their heels.

[jocampo]

Originally Posted by fjtorres

Amazon isn't doing anything that Google and Microsoft, among others, aren't doing.

Well-run companies don't dwell on past successes or wait for their cash cow to die out before looking at new business opportunities. And they don't let fear of failure rule them. That is small company thinking. Big companies need side bets and if at least some of the side bets aren't failing, they aren't looking far enough ahead. Because today's side bet is going to have to be tomorrow's billion dollar business.
Think of Microsoft's XBOX or Android at Google, both (apparently) far from their baseline businesses of software and ads, respectively.

As as been reported repeatedly, Amazon is already a GE-style conglomerate or Japanese-style Keiretsu, an empire of multiple businesses, some of which are mature cash machines while others are money-losing startups just ramping up. What Bezos is doing is investing all the profits from the cash generating businesses into the startups instead of letting it accumulate as taxable income.

The shareholders, of which he is by far the biggest, get their cut in the form of higher company valuation and capital gains instead of taxable cash.

It's all a long-term empire building play instead of a typical short term quarter-to-quarter day trader play. Most of Amazon shareholders know this. The rest should simply sell and go gamble elsewhere because Bezos has no reason to change his approach: his game is still going strong.

True.

Reminded me my days at HP, when Leo released the HP tablet at 400 bucks. Then 300 bucks. Then silence... then 99 bucks and finally taken out of Best Buy and giving an statement saying that the iPad hype is real, lol ...

I knew from the start that this was going to be a failure. I have no idea why Amazon tried this on a market that is almost saturated of smartphones, with Android and Apple dominating the actual app ecosystem.

[leebase]

Originally Posted by tubemonkey

Then unlock the phone and lower the price. Have you not learned anything from the current $199 sale? High prices and AT&T exclusivity killed the phone.

I'm sure he knew ahead of time that if you sell something for enough of a loss, people will buy it. HP cleared out all of it's Palm Tablet inventory at $99, doesn't mean that it could have ever been made profitable at that price point.

[leebase]

I'm not sure how Amazon can ever succeed with phones. With tablets there is a basic use case that plays to Amazon's strengths - ereading. I'm not sure anybody will buy a phone who's main purpose is to be an ereader. Amazon could forgo Google and build it's own ecosystem on a tablet. Amazon could price a table at cost and make money on ecosystem sales. Going without all the Google ecosystem on a phone? I don't see it. The Chinese get away with it because Google is blocked in China.

[tubemonkey]

Originally Posted by leebase

I'm sure he knew ahead of time that if you sell something for enough of a loss, people will buy it. HP cleared out all of it's Palm Tablet inventory at $99, doesn't mean that it could have ever been made profitable at that price point.

I'm not suggesting a loss. If he priced it unlocked for $250~$300, it would sell.

[fjtorres]

Originally Posted by tubemonkey

I'm not suggesting a loss. If he priced it unlocked for $250~$300, it would sell.

And they could make money at that point if they dropped some of the gold-plating.

[tubemonkey]

Originally Posted by fjtorres

And they could make money at that point if they dropped some of the gold-plating.

Yep

[Barcey]

Originally Posted by jocampo

True.

Reminded me my days at HP, when Leo released the HP tablet at 400 bucks. Then 300 bucks. Then silence... then 99 bucks and finally taken out of Best Buy and giving an statement saying that the iPad hype is real, lol ...

I knew from the start that this was going to be a failure. I have no idea why Amazon tried this on a market that is almost saturated of smartphones, with Android and Apple dominating the actual app ecosystem.

My personal belief is that he has a vision of a virtual 3D store front where you can hold a virtual object in your hands and see it from all sides and then purchase it. I think the 3D phone was a start at that but the cost for all the cameras is still too high. They've been spending R&D and thought they could get some return on the investment at the high end market (and failed). Technology costs keep dropping so I expect them to take another shot at the low end of the market and try to grab market share.

I thought the phone launch was underwhelming and I'm not surprised it failed. The smartphone market isn't easy to crack. Ask Nokia or Blackberry.

[jocampo]

Originally Posted by Barcey

My personal belief is that he has a vision of a virtual 3D store front where you can hold a virtual object in your hands and see it from all sides and then purchase it. I think the 3D phone was a start at that but the cost for all the cameras is still too high. They've been spending R&D and thought they could get some return on the investment at the high end market (and failed). Technology costs keep dropping so I expect them to take another shot at the low end of the market and try to grab market share.



I thought the phone launch was underwhelming and I'm not surprised it failed. The smartphone market isn't easy to crack. Ask Nokia or Blackberry.

That would be cool!

And because they are basically an online store, it would be fantastic for customers. Imagine that! Ability to see the product in front of you, before buying it. You can touch it but it's a more immersed experience.

[rcentros]

Originally Posted by crich70

As he probably has billions I imagine losing a million here or there doesn't mean much to him, but a thousand little cuts can lead to a company bleeding to death.

Stagnation is more deadly.