Timeless: Jeff Bezos at Startup School 08, The True Origins of AWS, Space and Why Amazon Always Wins

Key Takeaways:

  • From 2008: “Amazon’s real business down the line will be its cloud services. Amazon will be like a book store that serves cocaine out the back door. Books will just be a front to sell storage and cloud computing [Insert Evil Laugh]” – Jeff Bezos
  • All companies want to get from idea to finished product as fast as possible, but there is always a lot of undifferentiated heavy lifting between that idea and the finished products, and that heavy lifting needs to be done at a world class level – Jeff Bezos
  • “AWS is the modern smart-grid concept applied to server use, done perfectly” – Podcast Notes
  • When your system goes down, good communication is essential. Even when zero down is ideal
  • Bezos does his best NOT to talk about other companies, he believe they innovate more when customer and not competitor focused
  • Understatement of Century: Bezos predicts a lot of retail sales and various media offerings on mobile devices, “it makes a lot of sense”, along with mobile shopping – [Nailed it, to the least]
  • Amazon always focuses on being “the low cost provider” and pushing efficiencies back to customers. They always try to win, never try to squeeze short term profit – Longer term horizons is a powerful strategy

How Did the Idea of AWS Come From?

  • Idea in 2004, started first version in 2006
  • Solve your own problem: Amazon had enough internal users that we needed this type of infrastructure at scale
  • Then it was obvious it would be helpful to others and ideally turn it into a profit center
  • Quick uptake was not expected
  • AWS began using more bandwidth than the rest of Amazon in 2008

AWS Principles For Taking Over the Cloud

  • Be really easy to use, simple APIs
  • Low latency
  • Highly Available
  • Pay by the bit – no longer term commitment, no up front charges

All Things AWS, Before it Took Over the World

  • From 2008: “Amazon’s real business down the line will be its cloud services. Amazon will be like a book store that serves cocaine out the back door. Books will just be a front to sell storage and cloud computing [Insert Evil Laugh]” – Jeff Bezos
  • All companies want to get from idea to finished product as fast as possible, but there is always a lot of undifferentiated heavy lifting between that idea and the finished products, and that heavy lifting needs to be done at a world class level – Jeff Bezos
    • AWS is that heavy lifting, it’s like having reliable and scalable electricity when that began to appear
  • “AWS is the modern smart-grid concept applied to server use, done perfectly” – Podcast Notes
  • Cloud Computing will be a multiple winner business, but one that is low margin and profit is through efficiency and careful frugality and defect reduction – A Core part of Amazon from Day 1
    • It’s very rare for significant and meaningful industries to be built by single companies
    • “If we’re not the leader 5-10 years from now, it’s because we didn’t execute well”
  • When your system goes down, good communication is essential. Even when zero down is ideal
  • Bezos does his best NOT to talk about other companies, he believe they innovate more when customer and not competitor focused
    • AWS would not have been started 4 years back if they focused on competitors
  • AWS succeeds with variability by having enough scale to absorb viral hits and spikes in use, just like large insurance companies

What is it Like to Launch Rocket Ships into Space?

  • Space has been a passion to Bezos since age 5
  • Blue Origin working on vertical takeoff/landing rocket (UPDATE: They’re asking for a Government bailout!)
  • AWS has sped up big calculations from 70+ to 12 hours

Other Notes

  • Mechanical Turk: Artificial Artificial Intelligence
  • Understatement of Century: Bezos predicts a lot of retail sales and various media offerings on mobile devices, “it makes a lot of sense”, along with mobile shopping – [Nailed it, to the least]
  • NYT times took articles back to 1861 (4 terabytes, 11 million articles), need a one time server. Go there and search for “Computer” May 1962: Post about recruiting humans to be ‘computers for national almanac workers”
  • Amazon always focuses on being “the low cost provider” and pushing efficiencies back to customers. They always try to win, never try to squeeze short term profit – Longer term horizons is a powerful strategy
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Notes By Mr. Podcast Notes

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