The Relentless Jeff Bezos

💡JC's Newsletter #82

Dear friends, 

In JC’s Newsletter, I share the articles, documentaries and books that I enjoyed the most in the last week, including a must-read. 

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👉The Relentless Jeff Bezos (Stratechery)

  • Amazon doesn’t simply make buying things easy from the other side of the world, they make dealing with shipping and customs trivial; they do it all, and refund me if they over-estimated the cost. It’s so easy that it is easy to forget how much work went into making this possible.

It is the level of differentiation we want to have in every vertical we go. Define the new normal. 

  • The only thing more surprising than this new benefit that arrived completely out of the blue is that there is a part of me that wasn’t surprised; for customers Amazon just keeps getting better.

We want to give the same feeling, add benefits, and make people know about it and love it (I’m not sure we are great at the “make people know about it”)

  • So if you’re going to get people to use a website in today’s environment, you have to offer them overwhelming compensation for this primitive infant technology.

  • Sinegal explained the Costco model to Bezos: it was all about customer loyalty…”The membership fee is a onetime pain, but it’s reinforced every time customers walk in.”

I’m a big fan of the Costco model, more to come in future newsletters.

  • Bet everything on volume in an attempt to gain leverage on huge fixed costs, was exceptionally risky in an arena with inescapable marginal costs.

  • Real moats are built with real dollars, and Bezos has been relentless in pushing the company to continually invest in solving problems with real world costs, from delivery trucks to data centers and everything in-between. This application of tech economics to the real world is what sets Bezos apart.

The level of commitment and investments to get there is just incredible. 

🏯 Building a company

In addition to selected articles, I share one of Alan's leadership principles every week - the same one that I share internally every Wednesday.

👉Alaners edit the company

  • Everything is in draft. Just because we have written something does not mean it is an absolute truth. All of our internal documentation is 'in progress' and it evolves over the life of Alan. For example, everyone has editing rights to all our internal pages.

👉 The excellent story of Backstage at Spotify (Podcast)

  • Describes how to measure engineers productivity (how long it takes to have 10 PRs merged), how to create an internal platform in a culture of autonomy, and how they eventually open-sourced it.

👉 The SaaS org Chart (David Sacks)

  • Worth having a look at the numbers from Series A to Series C numbers and org. Nothing to be copied but gives an order of magnitude.

👉 Inspiration from the World of Sports (Howard Marks)

  • Logically speaking, the bargains that everyone has come to believe in can’t still be bargains… but that doesn’t stop people from falling in love with them nevertheless. 

  • “You can’t judge the quality of a decision based on results”. In Fooled by Randomness, Nassim Nicholas Taleb talks about “alternative histories”, which I describe as “the other things that reasonably could have happened but didn’t. 

  • So rather than judge a decision solely on the basis of the outcome, you have to consider (a) the quality of the process that led to the decision, (b) the a priori probability that the decision would work (which is very different from the question of whether it did work), (c) the other decisions that could have been made, (d) all of the events that reasonably could have unfolded, and thus (e) which of the decisions had the highest probability of success. 

  • The fact that something worked doesn’t mean it was the result of a correct decision, and the fact that something failed doesn’t mean the decision was wrong. This is at least as true in investing as it is in sports. 

  • Novak Djokovic said: “I believe that half of any victory in a tennis match is in place before you step on the court. If you don’t have that self-belief, then fear takes over. And then it will get too much for you to handle. It’s a fine line.”

  • To achieve great performance you have to believe in value that isn't apparent to everyone else. The great investors are entirely comfortable diverging from the herd. This final qualification means that investors must engage in brutally candid self-assessment. 

  • Without conviction, he won’t be able to act boldly and survive bouts of uncertainty and the inevitable slump. 

🗞In the news


👉Snap hits its stride (Platformer)

  • Snap’s successful augmented reality platform in an effort to turn it into an e-commerce destination.

  • You can now use Snapchat to shop, scanning a friend’s outfit to surface similar looks you can buy from your phone, or trying on full outfits virtually using AR filters to layer them over the clothes you’re wearing. (Snapchat also added voice and gesture controls to make virtual try-ons easier if you’re posing for your phone from a distance.)

  • “The demand is so strong from consumers. It makes sense that that they want to try on products that they might love while they’re playing around with AR,” he said.

👉ESPN+ Rights Deals, ESPN+ Increases Prices, Black Widow's Streaming Numbers (Stratechery)

  • This is the second ESPN+ price raise in the last two years; the service launched at $4.99, went up to $5.99 last year, and now is increasing another dollar, and I don’t expect the price increases to stop. 

  • That, after all, is the power of exclusive sports right: if you want to watch every Wimbledon match, or see every hockey game, or want to watch Lionel Messi and Barcelona, then it is easy to cough up an extra $1/month.

🏥 Healthcare

👉Ro, a health care start-up, will acquire Modern Fertility. (The New York Times)

  • Modern Fertility was founded in 2017 with its flagship product: a $159 finger prick test that can provide a baseline understanding of a woman’s egg quantity, which can help determine which fertility method might be best.

  • “We essentially took the same laboratory tests that women would take in an infertility clinic and made them available to women at a fraction of the cost,” said Afton Vechery, a founder and chief executive of Modern Fertility, noting that her own test at a clinic set her back $1,500.

  • The company now also sells an at-home test, available at Walmart, to help track ovulation, as well as standard pregnancy tests and prenatal vitamins.

👉Roman Enters 4,600+ Walmart Stores in First Retail Partnership (Morning Brew)

  • Lola, the period care brand, expanded its partnership with Walmart to reach 2,900+ stores last year.

  • Instead of sprinkling products across several aisles, Ro will cross-merchandise seven men’s sexual health products and vitamin supplements on one end cap. 

👉Vida Health raises $110M for chronic condition management (Medcitynews)

  • General Atlantic led the $110 million funding round, with participation from insurers Centene and AXA Venture Partners.

  • The San Francisco-based startup offers app-based programs for managing a variety of common health conditions, including diabetes, high blood pressure, anxiety and depression. The company pairs people with coaches to help guide them through its programs, and also hires nurses, physician assistants, nutritionists and therapists to help manage their health.

  • The startup primarily sells its service to employers and payers as a covered benefit, and names Cisco, Ebay and Boeing among some of its customers.

💚 Alan

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