Colleagues:
I would like to return to a different aspect of this discussion since none of us really knows where the stock price is going anyway. My interest is in the vilification that is constantly heaped upon the founders of Amazon by several people on this thread. I must preface my remarks by saying I have no personal knowledge of the Amazon founders nor their motives, but I feel like much of the vilification comes from the frustration of constantly being wrong about the stock price.
Can someone tell me why the following potential interpretation of Amazon is off-base? Amazon was founded by people who had a vision that e-commerce was going to be the wave of the future and that the potential for sales ran easily into the billions of dollars. They began with a vision of an online bookstore, but quickly realized that this concept could be expanded into a virtual online mall. The key to being successful was gaining people's attention and market share.
The founders realized that competition would be tough in this arena and that cutthroat "streetfighting" would be the only way to survive. They knew they would have to endure years of loses to build marketshare, but if they were successful, it would pay off in billions for themselves and their investors. The only possible way to win this battle is to drive the competition out and be the last one standing, even if one ends up considerably bloodied.
The founders developed a very careful business plan which is closely guarded. The most important factor here is to keep the competition unaware of the next move. By constantly surprising the competitors and making unexpected moves, advantage is gained. Financing at exorbitant rates may be necessary, but the other alternative is to lose the battle.
The goal is to dominate the market, become profitable, and win big for the investors. It is understood that it may take five to ten years to do so, but the payoff is worth it. Meanwhile, you keep your mouth shut, endure the criticism, and hope you win.
So, if this is the plan and it works (i.e., AMZN wins the battle, becomes profitable, and validates its stock price eventually), are the founders no longer morally bankrupt as has been suggested on this thread? Is my scenario above totally without merit? I would be interested to here from those of you who see charlatans at AMZN who are only out to take your money and let it all collapse. What evidence do we have that they are not really serious?
Walter High |
