The Grand Theory of Amazon


This video is sponsored by Dollar Shave Club. Use the link in the description for a special
$5 starter set. On February 28th, 2017, you might’ve thought
the internet was down. 4 hours without Netflix, Spotify, Buzzfeed,
Reddit, Dropbox, Pinterest, Imgur, League, Tinder, and thousands of others, Even the site that reports outages. That’s embarrassing. If the world was more productive that day,
now we know why. r/Outside become, just, ya know, outside. A shark hadn’t bitten an underwater cable,
nor was it five/nine, Just an Amazon engineer’s typo. Probably a stressful afternoon in Seattle,
but also an impressive demonstration of the company’s size and power: Amazon Web Services hosts so much of the internet
that for many people, myself included, it basically is the internet. We know Amazon as an online store, Companies
store their products in its warehouses, which handle the marketing, and shipping, and returns. For us, this means total convenience – one
click away from $125, 27-pound gummy bear pythons, or 5, crisp, 2 dollar bills for $20. Wait, that’s not how money works… A hundred thousand companies make over a hundred
thousand dollars a year this way. But for Amazon, it’s only a fraction of
their business. There’s also Twitch, Whole Foods, Kindle,
Alexa sensibly named Echo, Echo Plus, Echo Dot, Echo Dot Kids, Amazon Tap, Echo Connect,
Echo Spot, Echo Show, and Echo Look, also a completely different Alexa, Fire Tablets
and TV, Prime Music, Video, Pantry, Ring Doorbell, Zappos, IMDb, Fresh, GoodReads, and over 70
consumer brands you’d never know they owned. whew. Hardly a month goes by where they don’t
enter and dominate a new industry, Just trademarking the slogan “We do the
prep. You be the chef.” was enough to drop Blue
Apron’s stock 12%. They’re even investigating pharmaceuticals,
education, and finance. Amazon defines its competitors as “publishers,
producers, and distributors of physical, digital, and interactive media of all types and all
distribution channels”, among others. That’s, like, everyone. Which raises the question: is Amazon… scatter-brained? Many of these products have nothing in common. Yesterday they wanted to conquer streaming
video. Today, sell organic grapes in grocery stores. Tomorrow, who knows? And their ideas, increasingly let’s say,
creative: 2-day delivery? How about 2-hour delivery, a 3D smartphone,
a grocery store without employees, a front door that unlocks for delivery drivers, A
flying warehouse complete with detachable drones. For all its success as an online store, more
and more, it also seems distracted. At least, that’s how it looks. The only way to make sense of their actions
and mistakes, and anticipate their future, is to see the world as they do. And there are three pillars to Amazon’s
plan for world domination: To really understand Amazon you have to understand Jeff Bezos Like Steve Jobs or Elon Musk, the philosophy
of the man is that of the company. Apple was founded by people in love with technology
and its design. No matter how big the company gets, this will
always be reflected in its decisions, priorities, even mistakes. Amazon began as a bookstore, but that was
never its heart and soul. or spine Bezos chose books because no one bookstore
could hold all of them, warehouses visited on the internet could. But make no mistake: They aren’t a book
company, a website, a delivery network, or even a retailer. Amazon is a scale company. Bezos understood that when you take something
and multiply it a hundred, thousand, million times, you can do things all the small businesses
in the world never could. A tree is a tree. But put 400 billion together and you have
the Amazon rainforest, a force so powerful it controls the world’s climate. From any other company, this sounds like generic
business-speak. But Amazon really means it. We say a company is focused if it specializes
in beverages, or cars, or bad website design, and puts all its XP into that ability. Amazon is rare in that its specialty isn’t
the product itself but its scale. That’s the focus. When considering a new product, the flowchart
is pretty simple: “Would this benefit from being a thousand times quicker, bigger, easier?” If so, you can bet Amazon either sells it,
or soon will. It’s easy to stop there, Sit back and enjoy
the profit. But Amazon asks “Okay, now what can we do?” And this is why it’s unstoppable: the snowball
effect. First, get as many users as possible. Give out $50 tablets, free shipping, license
Echo to every company willing. More users bring more data, which helps improve
the product. And the better product attracts even more
users. They aren’t just making it easy to live
off Amazon, they’re making it hard not to. That’s the power of data in the hands of
someone operating at this scale. It’s why there’s now a movement to limit
this, why companies like Digi.me, who I’ve previously
mistaken for a data collection company, actually let users manage and safeguard their information. And the results are things like Prime: It
may lose money on the heaviest shoppers, but with a hundred million of them, they’re
winning a lot more than they’re losing. So why purchase competitors like Whole Foods? Exactly because it’s not what they’re
good at: Books never expire, well, some do. But groceries, not so much. You have to go back repeatedly, putting Amazon
in your routine. And with so much shipping, Spending $11 billion fulfilling 300 million
packages in 2015, they can do something almost no-one else can: Compete with UPS and FedEx. They already lease 32 Boeing 767 cargo jets,
and plan a massive cargo hub in Kentucky, But that’s just the beginning. After announcing a new $79 Kindle, Bezos wrote “There are two types of companies: those
that work hard to charge customers more, and those that work hard to charge customers less. Both approaches can work. We are firmly in the second camp.” And he’s really not kidding… The parts alone cost $78.59, plus $5.66 for
assembly. That’s a loss of $5.25 for every Kindle
sold, not including things like marketing, licensing, and support. And sure, there are ads, but only as an option, Companies like Facebook and YouTube are fundamentally
advertising companies. No matter how well-intentioned YouTube employees
are, unless something drastic changes, the company will always prioritize advertisers
over creators. That’s the business model. And then there are customer companies – where
You and I decide what gets demonetized. Apple is comfortable charging more for †he
very best experience, And for Amazon, helping the customer means
making us pay as little as possible. Both are loved in a way that’s impossible
for an advertising company. You might say – “They only care about the
customer to make more money” And maybe you’re right, there’s no way
to know, but the effects are the same, When Apple refused to unlock the San Bernardino
iPhone, When Amazon takes a loss for the sake of our
wallets, and offers some of the best customer support
I’ve ever had, It may only be a calculated business decision,
But it’s great for us. Of course, when the customer comes first,
everyone else comes second. Employees can be easily be forgotten in this
never-ending quest to satisfy us. Here’s how Bezos describes it: “One thing I love about customers is that
they’re divinely discontent. Their expectations are never static. It’s human nature. We didn’t ascend from our hunter-gatherer
days by being satisfied.” This is the hedonic treadmill – no matter
how much our lives improve, our expectations simply adjust. Almost any other company would resent this
– constantly having to improve their products, even the rate at which they improve. But Amazon embraces it – they’re just as
discontent as we are. Except, if there are billions to be made by
concentrating on scale and customers, why can’t anybody else do the same? How can a tiny online bookstore do something
exponentially better than Walmart, the world’s largest company by revenue? It’s easy to think of the CEO as the supreme leader of a company but “Even Bono Has A Boss”. In this case, shareholders. The longer a company loses money, the greater
its risk, and the more anxious get investors. But for Amazon – lack of profit isn’t just
tolerated, it’s celebrated – They could stop and make a dollar, they’d
rather wait and make five, Using profit from things like AWS to fund projects like Kindle
and Echo. Because Bezos is so open about this, shareholders
sign off, and they can think far into the future. Those cargo planes? Not so cheap. But that doesn’t stop Amazon. Supermarkets operate at a 1% profit margin
– but Amazon can buy Whole Foods, and actually lower prices. It also gives them freedom to experiment. The Fire Phone was never ready for, ahem Prime
time, but that’s a small price to pay for this strategy. MoviePass, Snapchat, Uber, Spotify, Blue Apron,
all starving companies following in Amazon’s footsteps, crossing their fingers money will
come later. Ex-Google CEO Eric Schmidt says Amazon is
already Google’s biggest competitor. AWS competes with Google Cloud, Echo with
Google Home, Prime and Express, YouTube and Twitch Even search. A company this diversified will face plenty
of challenges, A lot will change in 10 years, but we’ll
always want low prices, fast delivery, and easy shopping. As Amazon conquers one industry after another, they may only have one real competitor: the
government, who may say “Do not pass go, and do not collect $200”. Profits may be shaved, But you and I will
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PolyMatter with the link in the description: DollarShaveclub.com/PolyMatter Thanks to Dollar Shave Club, and to you for
trying it out.

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100 Responses

  1. PolyMatter says:

    Come chat on our updated Discord: http://discord.me/polymatter
    Also: some things had to be cut for time, so I’ve posted my notes to Patreon

  2. Kyuso KK says:

    Snoothest sponsor transitions in the game

  3. Sooryaunshu Mulawkar says:

    4:04 whatt! Amazon owns dropbox?!!!?

  4. Beast The Bot says:

    Smoothththth

  5. The Right Circle says:

    I can tell you how to create the next Amazon! Just have a peek

  6. Spoopy Lucy says:

    THE FIVE NINE MR ROBOT BIT YES

  7. 12squared Network says:

    Wow a non-iPhone/china PolyMatter video? Getting a little ballsy there aren't we?

  8. Brady says:

    5:45 Amazon communist confirmed!?!?!?

  9. Bárður Joensen says:

    Jeff is like a supervillain taking over the world, and everyone is fine with it :p

  10. Savage Exposer 59 says:

    Wait amazon owns twitch??

  11. DerpToni616372 says:

    Dollar shave club has a monopoly on cheap shaving

  12. Ryan Tart says:

    When your Echo comes on everytime he says "Alexa"

  13. Woody W says:

    Absolute nonsense! PolyMatter seems to be churning out trash 10min+ videos for the revenue.

  14. Miguel Miquel says:

    Uber is illegal.

  15. Christian Conrad says:

    So does this mean that Amazon is making it even more difficult for new entrepreneurs simply because of how far reaching their services are?

  16. Ashleyapples says:

    lol, you have to add the shave pun at the end

  17. 77 % pro says:

    4:00 sponsored by tier zoo

  18. That Local Pessimist says:

    I just barely noticed that the Kindle reads out the beginning of Animal Farm.

  19. otis says:

    yeah amazon needs to get broken up

  20. Justin Xin says:

    8:40 Am I the only one who sees the wing on the plane really messed up?

  21. TWF CHANNEL says:

    COMCAST GIVE ME MY INTERNET

  22. skilecco says:

    chairholders

  23. Spi kee says:

    I will be really glad if someone tells how this video is created… I mean the software used

  24. The Union Jack says:

    Biggest empires

    1:British

    2:Amazon

    3:mongol

  25. IndustrialDonut says:

    I wish you talked more about how the only thing to give them 'competition' is or will soon be just the government. That seems kind of important regarding the brief mention of world domination.

  26. Egor Eremin says:

    That's how cyberpunk starts

  27. Silent D says:

    Amazon needs to die.. its a cancer to this world. A company that doesn't make money, holds the the market hostage, eliminating and destroying healthy competition. While staying afloat only because they dont make a profit.

    Capitalism has become an investors frenzy, where seemingly good ideas get flooded with money, only to realize decades later that the business model was unsustainable. While at the same time denying any alternatives to rise, due to its undermining nature. So whenever the company finally fails. The harm is done, and the competitors have already been destroyed.

    People clap their hands at amazon for selling cheap products while not realizing the harmful footprint amazon leaves behind.
    In a sense amazon operates like a communistic government taking over every business, making it state ownership. "if jeff was the president" But as long you get cheap shit you are happy right.

    Oh and then they get huge tax cuts, because they dont have any profits.
    I thought the model for how to sustain a country economics, was to have those who made the most money help contribute to its survival. But that is not the case when you actually dont have profits.

    Amazon gets all the benefits of the tax laws, while not paying back as intended, because well "we didnt make any money this year.. again" Instead the bill goes to the smaller businesses and regular people. "clap clap" praise be amazon.
    So those cheap products you thought you got from amazon, – well I hope by now you realized that you are paying a premium for through your taxes. Even if you dont shop at amazon. Youre paying for their existence. "capitalism? ehm no. america is more red than china by now. Congrats.

  28. Evan Silversun says:

    I love the whitisism and depth of knowledge! Great vid! Also the segway into the advertising at the end of every video is genuinely relevant & entertaining! This is the future of education, keep it up 😉

  29. Ryde Mk says:

    Amazon: Let’s buy Youtube!

    Google: no

    Amazon: ok, let’s buy YouTubers

  30. Mark Fryer says:

    So just when is Amazon going to turn a profit? Shareholders eventually want to see not just capital gains but also dividends. Staff want to be paid a living wage and not have to rely on food stamps to make ends meet. Governments eventually need all businesses to pay their fair share in taxes to pay for and do the things that private businesses can't or won't do.

  31. Wuety06 says:

    Bs with Apple. They lost that love of tech when they started trending twoards strong looking products with engineered internal issues like structural bonding adhesives over heatsinks and or the long screw design on most ip versions

  32. Biv Lab says:

    Amazon literally refers to their business plan for the year as taking over the world. Staff meetings were always really creepy

  33. Bobby Lee says:

    love the way you transition the ad lol

  34. Bongos says:

    Amazon should buy Venezuela

  35. Aditya Bonar K. says:

    that ad transition was so smooth, makes me forget everything i just watch about amazon

  36. Tim Calvit says:

    Well it seems Amazon has a really long term vision and plan for the future. Wouldn't surprise they become the most powerful company in the entire world in coming years

  37. CommunistLamini says:

    Amazon is slowly abusing its power. Basically a modern monopoly, except it owns part of the market in almost everything.

  38. lily slo says:

    are we not gonna talk about that transition for the ad at the end omgg

  39. Zesty Salad says:

    Amazon on a Sunday: Books
    Amazon on a Monday: Website
    Amazon on a Tuesday: Shipping company
    Amazon on a Wednesday: Streaming service
    Amazon on a Thursday: Grocery Store
    Amazon on a Friday: In-home assistant
    Amazon on a Saturday: Controlling the internet

    Amazon in 5 years: Human production

  40. Blu Dude says:

    Damn that was smooth

  41. Ivypool AJ says:

    Comment Section Percentages:
    90% talking about the smooth transition to the ad
    8% talking about how awesome PolyMatter is
    2% saying the percentages of the comment section

  42. tubagus prakasa says:

    Thumbs up for ad

  43. chopin2712 says:

    And you have LINUX

  44. Austin S. says:

    DISCORD IS ON THE PHONE

  45. Hyoroemon Meto says:

    "No matter how much our life improves, our expectation adjust".
    This

  46. Aaron TV says:

    When Amazon's business models stop benefitting the customers, they will be forced to break as a monopoly to ensure competition

  47. Rebel90x says:

    I honestly think that Amazon and Coca-Cola need to be broken up.

  48. The Combat Wombat says:

    They will replace us all lol

  49. Benjamin Michael von Lichtenwald says:

    Didn't expect it to be this philosophical…

  50. lombax says:

    think you forgot google cloud services..

  51. Antsy says:

    9:30 smoothest transition into an add ever….. EVER!

  52. bamdadkhan says:

    still fucking hate amazon since the bookstore days. also i'm not sure people outside the US are so satisfied with them – i mean they can't even hide products that don't ship to my address in central europe.. xD

  53. Optron Cordian says:

    The last minute of this video remain unwatched!

  54. Cynn says:

    I truly and utterly hate companies like google and amazon. They invade privacy, and profit off of incorporating their products into everything we do. Google is much worse than amazon in privacy invasion, but I digress. I just wish for a future in which we can have all of our information private and safe.

  55. lkoadil1 says:

    best ever pull based marketing ..

  56. Al Sam says:

    This shows how much we need to break up amazon, you know anti trust laws.

  57. Rocket Number 9 says:

    2023: Amazon changes its name to Weyland
    2027: Weyland partners with Yutani

  58. Ben Stevens says:

    That sponsor at the end was shameless

  59. Raj Wilson says:

    At this point the main reason I watch your vids is to see how U transition into your ads 😂😂😂

  60. Kolanko says:

    amazon customer support is trash. I wanted to close the account, so i figured out the only way to do that is contact their support, after 1 hour of waiting they told me it's done. Guess what happened next? THEY FUCKING CHARGED ME FOR TWITCH PRIME AFTER THEY FAILED TOCLOSE MY ACCOUNT LMAO

  61. Juggmane says:

    Amazon is taking over the world

  62. SquareB0t says:

    8:00 You said Bono instead of Bezos lmaoo 😀

  63. Zues Adam says:

    Literally bought a razor before realizing it was an Ad

  64. Plainjupiter724 says:

    Hey I noticed that teir zoo reference

  65. Nico Peruzzi says:

    This whole video is a fucking ad

  66. Devin Crum says:

    Fantastic content!

  67. Dot Lea says:

    shave butter?! wtf?! Ive used foam for 20 years and dont need anything else…

  68. M Boychi says:

    What does everyone think of the digi . Me app? Any downside?

  69. ballzack57 says:

    8:02 you said Bono and not Bezos lol.

  70. Luc Donderwinkel says:

    Interviewer: How many companies do you intent to buy?

    Jeff Bezos: Yes.

  71. Targaryen Dynasty says:

    Imagine watching Buzzfeed

  72. Crazy Rich Wu Mao says:

    Wait, wut. You shave? You sound like my 14 yrs old brother. Thumb up on the video tho.

  73. InnerWorks says:

    You sound like a non amazon hater

  74. Tate Corbridge says:

    I didn’t even hear the transition because of the dick in your mouth

  75. Ernest Tsui says:

    god that segue was smooth

  76. Rap Kritik says:

    The problem is the way the people think about shopping and consuming…

  77. Brandon Stennett says:

    Can you explain why Sweden has no bail ? Would help us understand ASAP.

  78. Anakia a says:

    They make products cheaper to gain market share. They sell the kindle for cheap, because they gain so much profit from the sales that follow.

  79. Lua Tran says:

    I quit Amazon 1 month ago =). Still living

  80. Ahmet Omer Ozgen says:

    Lazershit is running everything good on amazon. Or shall we name it greed?

  81. Mariel Ang says:

    this was a PR video for amazon

  82. canuckleaf says:

    Amazon kills stores in the downtown, underpays it's employees… They are not paying any taxes everywhere. Nowhere. These tactics need be scrutinize more than to be celebrated. But everyone wants "more comfort".

  83. Ramanvir Sodhi says:

    Great explanation!

  84. Refuze2Lose says:

    heres a new one. The way you slipped in the ad was so cool it actually shaved time off… i not as good as you. but im buying shave club and im only 13

  85. Jimmy Hayat says:

    I love Amazon as a company. Unless they have some evil agenda to control all of us and everything

  86. Kian Docherty says:

    Amazon NEED to be broken up. These fuckers are scary.

  87. Matthew Maldonado says:

    A REVALUATION

  88. JFB says:

    Never heard of 3 of those shows at 0:15

  89. Bread says:

    Omg I watched this 2 years later and I just saw the tierzone reference

  90. Becoming Financially Fit says:

    The animations in this video are amazing, keep up the good work!

  91. brent grubbs says:

    That segway was on point!

  92. Kilercole 2101 says:

    I like that tier zoo reference

  93. Mirik Kla says:

    amazon is for fat idiots!

  94. Richard King says:

    Amazon is going to own your house and your car tell you what doctor to go to what Dennis to go do what phone do you use Amazon will control everyone's lives

  95. NicoBellic says:

    amazon is a monopoly

  96. Piyush Parmar says:

    When Amazon CEO don't need to do shaving and still selling razors. Ironic combination of video and ad in that case of coincidence.

  97. Piyush Parmar says:

    Amazon that includes A to Z that's amazon Amazing

  98. Retro Electro says:

    Could you do grand theory of google at some point?

  99. cesar garza says:

    Amazon P4P #1

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