🪃 Amazon.bomb

Author

Matt George
January 02, 2022

Short, practical drops on culture and technology. 🚀

"Ouch" 👇

In December 1999 $AMZN was at $106/share as it approached the dot-com bubble. Within two years it hit $6/share and the hordes of keyboard warriors dubbed the company “Amazon.bomb.”

Bezos tweeted about it recently and Balaji talked about how often legacy media gets this wrong on an epic 4hr+ podcast with Tim Ferris. 👇

In his annual shareholder letter that followed, he led with one word: “Ouch.”

“Ouch,” because, of course, that hurts. It hurts to think you might be swallowed whole like so many other tech companies of the time, and it hurts to admit to the people who believe in you that this thing might go belly-up.

What it really is, is a masterclass in vulnerability.

What's the point? 👇

Vulnerability and clarity of thought is exactly what we’re all craving. Don’t tell us what we should think, tell us how you think. Tell us that this is going to suck and that we might not make it through the valley. Tell us that you’re going to need our help: it’s going to be all hands on deck. Tell us that this is really complicated, that you don’t know what you’re doing, but that you’re going to do your best.

The fundamentals 👇

Ironically, at the same time as shares hit $6, Amazon’s fundamentals didn’t change at all.

“Every single thing about the business was getting better and fast….what I could see is that, from the internal metrics, is that at a certain volume level that we would cover our fixed costs and the company would be profitable.”

Jeff Bezos

Not a thing about the business had changed. The lesson here is obvious: if the long-term fundamentals are strong, steel yourself for the winter, know that it’s coming, and get to the other side. You will be rewarded.

PS: I wrote a follow-up to this letter recently describing how this year I didn't take my own advice. I got scared. I felt uncertain. I sold at a loss.

Getting practical 👇

The analogy for me here is bitcoin. Bitcoin’s valleys are deep and its peaks are tall. We may be reaching escape velocity soon as institutions and nation-states come aboard, but short-term volatility seems likely to continue. 🚀

I’m continually trying to understand on-chain fundamentals and will write more here soon. In the interim, follow one of the best in this emerging market: @wclementeIII. 👇

Gratitude 🙏

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See you on the path.

- MG