Best Company in the World
Interviewer: What do you think about Amazon?
Spolsky: Best company in the world. Are you kidding? They have a strategy I don't think anybody even knows what it is yet.
Best company in the world. They have a strategy I don't think anybody even knows yet.
Break Off the Moving Parts
Spolsky: The Amazon strategy is to constantly find the moving parts in the business and break them apart. You have an online commerce store that sells books — but that requires disk space. So you either buy disk space on the open market, or you sell disk space to yourself and also to everybody else.
You've broken off the disk space from the books. Two separate businesses. One provides disk space at the lowest possible price. The other does books. Think of all the other things that go into it — warehouses, fulfillment. Anybody can have our fulfillment. They've done this repeatedly since the very beginning.
Find every moving part. Break it off. Make it compete independently. They've done this since the beginning.
Mitosis
Spolsky: Anybody else would have said vertical integration. They would have a big monolithic system. Bezos just sits there and breaks off little bits and pieces of it.
They now have 37 businesses. Everyone says — these are unrelated businesses. Why do you have web hosting and elastic storage and Mechanical Turk? But it's all just this: start with a bookstore and break off every single piece you can find. Make them all compete as if they were independent individual businesses.
Could you ever have guessed the most important cloud platform would come from a bookseller? You never would have guessed it. But once you realize how Amazon does things, it becomes evident. Mitosis is their system for inventing new companies.
Could you have guessed the most important cloud platform would come from a bookseller? Mitosis is their system.