Amazon Ideas

Why hot ideas make for a tepid future

In this post I explore what happens when free capital can be splurged on ideas and implausible-sounding projects. Just who do they benefit?

Unlikely ideas

At the peak of Starbucks’ 1990s expansion, the satirical newspaper The Onion ran a story headed:

New Starbucks Opens in Restroom of Existing Starbucks

The company’s latest plan, teaming up with Uber to deliver coffee to your home or office. This is scarcely less fantastical. You can see the logic, though. Starbucks has nearly reached caffeine saturation point. Exploiting ideas of a global surge in impatience and idleness is one way to try to escape this bind. Capitalism and technology are always testing new markets. Drones seem to feature heavily.

IBM has filed a patent for airborne cup-carrying drones. Jeff Bezos distracts us all with Amazon’s’ amazing plan:

Flying robots will, any second now, be delivering your Christmas books, DVDs and gadgets to your door within 30 minutes of you ordering them, thanks to a new initiative announced by Amazon on CBS News’ 60 Minutes on Sunday.

Billions in sales

Bear in mind that Amazon makes billions of dollars in sales. It appears to be dominating its e-commerce rivals. However, as a company it is mired in controversy. Amazon has faced numerous allegations of anti-competitive or monopolistic behaviour, both in and out of court. This includes documented instances of:

  • price differentiation,
  • enforcement of controversial patents against competitors,
  • attempts to prevent discounted direct selling by publishers, and
  • a declared intention to cease working with third-party print on demand services in favour of its own.

Consider also that, as reported here, as far back as 2012 Amazon generated more than £3.3bn of sales in the UK. Moreover, it paid no corporation tax at all on the profits. Additionally:

at the end of November, around 1,000 employees took further strike action at Amazon’s facilities in Bad Hersfeld and Leipzig. The brief work stoppage was aimed at pressuring the world’s largest online retailer to recognise the services trade union Verdi as a partner in contract talks.

And:

A BBC investigation into the retail giant Amazon has uncovered working conditions that an expert has said could cause “mental and physical illness”.

Disruptive ideas

Clearly the use of an aerial vehicle to dispatch every order, for every customer is just ridiculous. But for me that is of secondary importance. What this shows is that Amazon is constantly trying out disruptive ideas and innovations. These upset current business models and invent new paradigms. And if extreme innovation in coffee delivery offers clues about how to complete the difficult last mile to customers’ doors, it could prove valuable.

Even so, this latest move looks like a cautionary tale of what happens when free capital can be splurged on implausible-sounding projects. As they sink their fourth hand-delivered gingerbread latte of the day, even the laziest customers are likely to decide that it would be cheaper, quicker, healthier and more sociable to saunter round the corner to the café.

Photo by AbsolutVision on Unsplash

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