Yeah, the Fire phone was a flop. And that’s okay.
On this episode of Too Embarrassed to Ask, Recode Senior Editor Jason Del Rey sits in for usual co-host Lauren Goode to answer questions about Amazon’s hardware ambitions. Del Rey talks about why the company is developing a new camera and smart lock — Cloud Cam and Amazon Key — and why Amazon has multiple Echo devices.
You can read some of the highlights from their discussion here, or listen to it in the audio player above. Below, we’ve posted a lightly edited complete transcript of their conversation.
Kara Swisher: Hi, I’m Kara Swisher, executive editor of Recode, and you’re listening to Too Embarrassed to Ask, coming to you from the Vox Media podcast network. This is a show where we answer all of your embarrassing questions about consumer tech. You can send us your questions on Twitter with the #tooembarrassed. We also have an email address: firstname.lastname@example.org. Reminder, there are two Rs and two Ss in embarrassed.
My regular co-host, Lauren Goode from The Verge, couldn’t join us today because she’s busy making YouTube videos or something like that. While this script says it made me sad for 30 seconds, it didn’t at all. Then I remembered I could easily replace her. I’m delighted to have Recode Senior Commerce Editor Jason Del Rey back on the show, because he is so much better than Lauren. Hi, Jason.
Jason Del Rey: I will not confirm nor deny that, but thanks for having me.
No problem. You just had a fantastic Code Commerce Conference. I really enjoyed it and learned lots of things about commerce, and the guests were amazing. One of the things that happened at the conference is everybody talked about Amazon, because that’s what you have to do in commerce today.
Today we’re going to talk about Amazon’s continuing push into hardware and the power of Amazon, because that was a big topic at your event. Can you talk a little bit about that? First about their power, and then we’re going to talk specifically about their hardware push.
Sure. Obviously there’s a lot of conversation going on all across the U.S. around tech companies, power, how they use it, how they control it or not. There are a lot of people out there who wonder whether Amazon has too much power right now. That’s obvious. The argument on their side would be e-commerce is only, let’s call it 10 to 15 percent of overall retail spend in the U.S. still to this day.
Which is … what’s the number? What’s the big number?
I want to say that the e-commerce part is 300 or 300 to 400 billion. You can do the math on the trillions.
Even when the Whole Foods acquisition went through, their pushback there on why that should be a no-brainer and be allowed was combined market share in grocery was just 2 percent. The question still remains, as e-commerce becomes a bigger part of the retail industry, everyone’s shopping behavior, and as Amazon branches off into physical retail, do the old-school ways of looking at power and market share and market dominance still hold? I don’t have an answer other than I think these are fair questions to be asked right now.
People do, just the way Walmart was a decade or more ago, the boogey man, like Amazon can kill anybody, they can do anything. Of course, they’re talking, and President Trump is talking about it, Congressional people are talking about it. They’re not in the cross hairs like Facebook, Google and Twitter right now, but it’s there. It’s definitely there.
It’s there, and people have very different opinions about whether something big is coming their way. They’re definitely paying attention. I think we both probably have personal experiences with the company, keeping a very fine eye on what’s being said out there and what the narratives are.
Yeah, they call you right away. They call you right away.
I think that shows they are concerned. I think we see sort of every couple of weeks when there’s either some speculation or some reporting around a new market they may enter, competition, billions of dollars of stock move in a day. There’s recent reports around Amazon perhaps getting into selling prescription drugs.
There was a great report which uncovered they have wholesale pharmacy licenses, I think, or have applied for them in at least a dozen states. We at Recode, we immediately looked at competition stock, and sort of all the big competitors dropped that day. That happens with several big tech companies, but Amazon is moving in so many different directions that it just feels like this is a type of power we haven’t seen in a really long time.
Absolutely. Let’s talk about where they’re moving, into a lot of places. One of these places they’re moving into is hardware. I have an Echo. We talked about the virtual assistant Alexa, which is found in that Echo product line. Let’s talk about the Alexa platform first, because that was their first successful foray. They’ve been into phones before. They obviously were in the readers area. Talk a little bit about where the Alexa platform is right now.
Sure. It’s really funny to look back at — you mentioned the phones, and phones and Echo and Alexa all came out in sort of the same period of time. After the phone flop, there was a lot of movement inside the organizations at Amazon that made these devices and worked on them. It’s really remarkable now to see history rewritten based on the success — and rightfully so in a lot of ways — based on the success of Alexa and Echo. There were a lot of people whose jobs seemed to be at risk from the outside who have now stayed and are thriving because of the success of the platform.
Early days, still. Only … I think it’s three years in from the Echo launch. They are clearly the market leader at this stage, which still seems like early days. When you see young children in houses that have these devices talk and communicate with them, let alone the adults, but you just watch. I watch my 4-and-a-half-year old, it’s very clear why a lot of people look at this as the future of computing.
Where they’re at right now is they just came out with a bunch of different Alexa-powered devices. There’s the Echo Spot, the Echo Plus, Echo Buttons, a couple months earlier the Echo Show, the Echo Look.
The Show, yeah.
My take on this was while they’re …
I saw a commercial for it last night. It looked very …
They’re leaning in pretty hard with TV advertising, national advertising, sporting events. I think you’ve seen them either in the World Series or Championship games, AWS being advertised.
What I think this is about right now is there’s a lot of things that work well with Alexa. We use it still for music and weather. Still seems like there aren’t sort of the super killer apps that make these must-haves. I looked at the different devices as different ways to push different use cases for the Echo, and then study that behavior, and then decide maybe this portfolio slims down a bit in the future, but really to try to push different behavior and see …
See what happens.
See what happens, yeah.
They were first out of the gate. They really were first out of the gate in these things, and for a while. Now Google obviously has its offerings, Microsoft has its, Apple has their Siri, and Microsoft’s Cortana. Google also at the same time is on advertisement for Echo Show, I think it was. Google’s a little tiny thing. Their little small one was a big commercial for that. They’re doing a heavy amount of advertising. Talk about the competition, because they’re doing this in the face of enormous competition. Apple has a device too, although it hasn’t been super aggressive in the market. There’s going to be at least three to four of these.
Yeah. This has been talked about in voice industry circles, but Siri’s been around much, much longer. They must missed on this. They missed, and we’ll see they’re going slightly up market with a more expensive device I think they think will appeal to people who really, really care about great quality, sound quality. We’ll see what happens there.
The Google thing is very interesting. It’s become clear that Amazon is having a big effect on products, the market for product searches. When people go online, where do they start searching for a product? There’s some third-party data that’s showing I think more than half of U.S. internet users now start on Amazon. Google’s share, I’m going to forget the exact percentage, but let’s say it’s somewhere around 20 to 30 percent.
They’re worried, that’s why they’re making friendships. That’s why they’re making so many retail friendships.
Exactly. In a world in which a voice starts carving out pieces of online commerce, not only does that help Amazon, but it hurts Google even more so in product search. They’ve been joining up trying to get retailers on board in what I was calling an anti-Amazon alliance. They’re working with Walmart to allow Walmart products to be ordered via voice. They’re saying they’re working with these retailers in other ways related to technologies that they haven’t yet talked about, I speculate maybe augmented reality work they can do together. I think it’s sort of they’re looking at retailers, and retailers are looking at them as our best bet to try to not let this …
Right, Google is. Absolutely.
I just had lunch at Google, and that’s all they talked about was shopping and how they’re going to help them fight Amazon. I think that was a big topic among them, but not at Apple. Apple was talking about AR. People at Apple were talking about AR versus anything else, and not these voice platforms. I guess AR is kind of a voice platform.
I will say, whenever we have these new technologies, you’re always looking for what’s not the gimmick, what isn’t just marketing. There have been a lot of — just in the past year — a lot of use cases where augmented reality for e-commerce makes a lot of sense. Just today as we’re taping things, Amazon finally added an augmented reality feature to their main shopping app so you can …
See how it looks in the room.
Using your phone, see how a vase or a couch looks in your home. These things are far from perfect right now, but I think even if they can move conversion rates, I don’t know, 5, 10 percent for some of these big companies, that’s a lot of added revenue that was being lost.
Right. Explain that. Ikea had one of the first more successful ones. Explain to people who don’t know.
The reason why we’re seeing more of these features is because Apple has built a platform called ARkit that allows developers not to have to start from scratch building their own AR technology. They’re building on top of ARkit and more easily adding features to their existing — in some cases their existing — apps, just talking in the home and furniture category.
You mentioned Ikea. There’s also … Houzz has a feature in their app now. Wayfair, which is a fast-growing public company that sells furniture online, they have one in their app. It seems like this is one of the areas where it’s more than a gimmick. You actually can see the benefit to the consumer, which seems like it should always be the reason why technologies are built, but we often see that’s not the case.
Absolutely. All right, let’s break it down for people who don’t really understand what these devices are. Again, Google has several. Microsoft, do they have a device? Do they have a … No.
They have Cortana.
Cortana, yeah. Works on devices.
Which is available through their own operating system. You can get to it on laptops or other Microsoft devices. Cortana and Amazon are actually working together. It seems really clunky right now, but a lot of these companies, at least Amazon keeps saying, “We’re happy to work with all these digital assistants.”
Yeah, “Because we think there’s going to be different use cases.” The current construction is you have to say something like, “Alexa …”
Yeah, I don’t know the exact keywords, but something like, “Call Cortana.” They think in that case, you might be able to have great integrations with Microsoft’s email clients, which a ton of people like. Cortana calling to Alexa can help with purchasing, which Amazon is hoping is a main use case of Alexa.
Yeah, anything to get people to buy.
I have a hard time seeing Siri getting involved with these others or Google, Google and Amazon will just not have it, no matter what they say.
Yeah, they won’t do anything together.
It’s just not going to happen. It’s a lot of still feeling out where everyone’s lanes are. Alexa is something a lot of mainstream Americans now know.
And “Okay, Google,” which is …
Yeah, Google, too.
I have plenty of family members who are not early adopters. I would say in a ton of their homes going up and down the socio-economic grades, I’ve been surprised over and over again how many homes I’ve seen either an Amazon or a Google device.
Right. Let’s talk about the Amazon ones, the Alexa devices. They were announced earlier this year, the Echo Look and Echo Show. Explain the difference and why they’re different, and why are they making so many different ones?
Yeah. I’m still surprised by how many they’re making, but I’ll try to run through with some logic or my best guess.
Echo Look is still, I believe, invitation only, and that is one that it does all the regular things that Alexa does, reads you weather, news, music, all that. The main additional use case is there’s a camera in it, and it’s supposed to give you advice, either help you keep track of your outfits or give you advice and help you choose which of two outfits look best on you, and then recommend outfits or recommend clothing to you.
There’s a couple of quick pieces to this. One is Amazon continues to want to get big in fashion. They’re big right now in apparel when it comes to basics, but sort of fashion, contemporary fashion, they still have a long way to go. This is one way for them to get more data, I think, on what people are wearing. Another thing is, they’re developing more of their own in-house brands. I think this is a way to push that.
I laughed at first when I heard of this. I’ve asked a bunch of women just around me in the office. They said the idea that you could just have something that organizes, lets you know what you wore when, especially for people who go into an office every day, is somewhat useful if you were going to buy an Alexa device anyway. That’s one.
There’s the Echo Show, which has a screen on it. I looked at that as there’s … voice shopping is still very early stages. One of the issues is if you’re not just reordering something that you already know exactly what you want, the idea that you’ll just buy something by voice without seeing it I think is sort of an obstacle they recognize. Now with the Echo Show …
It’s a little computer.
You could talk by voice and then see it. They also think people ask to pull up recipes while they’re cooking and don’t want to touch something, touch a book.
Yeah, yeah. That’s what they were doing on the commercial.
That’s another use case.
They were doing that on the commercial, which I always like to see what they think it is.
Right, what their marketing message is.
Yeah, yeah, what their message is. So recipes, I forget what else.
Right. Another use case, which led to some controversy in the industry, was for voice calling. You could call other people who have a device or do video calls with other people who have the same device. They had invested in a company who had built its own tablet to do that very thing, and then they came out, and the marketing of that device was all about communication. That startup was not very happy. Amazon defended their choices saying the startup knew what was coming, but for a couple of weeks that was a big story.
Then we have the newer slate of devices, the Echo Plus, which has a smart home technology hub built into it, so it makes it easier to set up lighting systems — smart lighting systems and voice controlled heating systems — without a bunch of different gadgets. That one, I think, is around $150. They brought down the price of the traditional Echo, and they redesigned it. That one, I think, is around $99, $100 now.
Yeah, they’re cheaper. They’re really amazingly cheap.
This is the thing. We’ve long seen with Amazon if they could just break even on the hardware, they look like a hardware company, but they’re not a hardware company.
Right, it’s not about that.
They’re a services and retail company.
Neither is their shows. Their shows are about selling paper towels. I get that. I think most people get that. Before Alexa, they really did … Jeff Bezos has always had an interest in hardware for sure. Besides his own personal space and rocket and plane thing, they were very aggressive in hardware, in Fire Phones, tablets, everything else. It just was a disaster. Is that a fair assessment?
I think e-readers have done exceptionally well, obviously, over time. The Fire tablets …
They had this idea that they could go high end and sort of compete with the iPad. That didn’t really work out. That said, they have a ton of different price points now that are super affordable. They do six packs now of $50 tablets, and especially I see it in school-age children, if you can get a child a tablet that works pretty well for $50, it feels like they’re having success there. Of course, they don’t share numbers, so it’s hard to say definitively.
The phone was considered not a great …
The phone was a disaster. Yep. Phone was a disaster. People thought they might try to compete and disrupt the pricing model. They didn’t. It was expensive. It had some interesting stuff, like Firefly, which was a technology that let you just, I guess, point your phone at different products and identify them. They had this 3-D technology in it, but I think at a different price point maybe it would have worked, but they quickly cut the price, and it was one of the biggest disasters I can remember in my almost five years covering Amazon. They very quickly followed that with the Echo, and it was quickly forgotten.
Yeah, forgotten. Forgotten, but that’s okay. Google’s had a lot of losers. We forget about them. Has tons, and Apple has too. They all have. They all have a bunch if we start to, “Oh, that one and those.” I don’t mind those failure. I liked it.
The 5C. The 5C iPhone.
Whatever. There was a bunch. There was a bunch. Google has a ton of them for sure. A lot of people like them now. Obviously you said a success in Echo clears out a lot of sins of the past. There were reactions that were not so positive to their newly announced products, the Cloud Cam and the Key. Can you explain each of these?
The Cloud Cam is essentially an internet-connected security cam, but Amazon Key is a combination of using the camera with a smart lock on your front door to allow Amazon delivery people access, if you so choose, and if your home is eligible, to drop off a package inside.
So they don’t get stolen.
Inside your front door, mainly so they don’t get stolen is sort of the sell. On Amazon’s side, they don’t disclose exactly what this is, but they also spend a lot of money making good on stolen packages for people. I think that’s one big pieces of this. The other piece of this is they didn’t launch with allowing for returns to happen this way, but I would be very surprised if somewhere in the future there isn’t a way for you to leave an item inside your door if you’re afraid of it getting stolen or if you’re living somewhere where packages are known to disappear and have this person come and pick it up without you needing to box it back up or bring it to a FedEx or UPS. I think that’ll come.
The concerns — I can let you jump in, or I can keep going.
The basic concerns are you’re letting a stranger in.
People in your house. Yeah, people in your house.
Yeah, people in your house. What happens to my pet? This big, bad company, they’re more and more in a piece of my life, and it’s invasive now.
They’re going to come load up my refrigerator without me wanting them to.
Right, so Walmart actually has-
Or U2 going on my iPhone. Thank you, but no thank you kind of thing.
Yeah. Listen, the way I look at it is if people can choose convenience and they can afford it, they choose convenience.
Yeah, that’s true. Fair point.
Some people look at this as Silicon Valley being super detached.
Yeah, there was an opinion piece in the Washington Post, which is owned by Jeff Bezos, that the Amazon Key was Silicon Valley at its most out-of-touch, comparing it to Soylent and Juicero. Interesting way to put it. One of the things, those are two companies that people think are silly. As you know, I’ve always called … It’s something that works here, may not translate elsewhere. I always call San Francisco assisted living for millennials. This is just another step.
Now you’re not going to just order, we’re going to put it in your house. You’re not going to just put it in your house, we’re going to put it in your refrigerator. It is kind of like solving problems that most people don’t necessarily have.
Right. I read that piece. A lot of valid criticisms about Juicero and Soylent and a bunch of others. The difference here, I think, is that there are actually a ton of Americans all over the country in different types of neighborhoods who have packages stolen.
That will say yes.
You’re opting into this if you want. Who knows if it takes off? I think initially if you’re someone that has this issue and you were thinking about buying a digital or smart lock anyway, maybe this makes sense for you. Maybe for a lot of people it doesn’t. I think it’s kind of crazy to lump this in with those, but I see the convenience angle, like how lazy can we possibly get? I think this is slightly different. I think this is, “I don’t want my …” Can I curse on this?
Yeah. Oh, please do.
“I don’t want my shit stolen.” I don’t want my shit stolen.
Yeah, fuck that. Jesus. What the hell. There we go, that’s all of them.
One more point on this thread is that I actually just recently wrote a piece about the big e-commerce brands that actually work in the U.S. are those that are aimed at mainstream America and not the Silicon Valley consumer, and Stitch Fix is one example, Chewy dog food company, Dollar Shave Club, all of that. I totally think there is a Silicon Valley blind spot when it comes to consumer products.
They’ve let it happen.
I just think this is something some people will like and some people won’t.
I think people will do it. I agree with you. People will do it. In general, the backlash, is it a media backlash, or is it a political media backlash and not a people backlash? People do like Amazon. I like Amazon. They’re one of the … It’s sort of like you like Uber even though you hate their CEO, for example. A lot of people say that to me. “Yeah, yeah, I like it, but I don’t like that CEO, but boy do I like the service,” kind of thing.
I think by the estimates we see of Amazon Prime members, which anywhere from in the U.S. let’s call it 50 to 80 million households, that’s a lot of people who like Amazon. There are plenty of people who don’t buy from them who think they’ve killed mainstream America. I get it. I think a lot of the backlash was around privacy. I think privacy is a topic that gets people worked up, as it sometimes should. I think people are saying, “Wait, now we’re giving this company access to my home? How much more are we giving away?”
Amazon has tried to say that the camera automatically goes on right before the lock is unlocked, and it shuts off when the door is locked. You can watch it live on your app. You can watch a copy of the video later. They do background checks on these people. I think in a world in which we get into the car with strangers, we sleep at strangers’ homes with Airbnb …
Yeah, you’re right. That’s fair.
I think some people won’t like it, and I think some people are going to feel comfortable with it.
Right. That’s a really good point. Yeah, you’re right. Absolutely. It’s interesting because of the stealing thing is interesting in certain places. I put out candy last night on Halloween, and someone stole the whole candy and the bowl. I felt bad.
Yeah, my wife and I learned that lesson.
My ring was not close enough.
We watched a parent watch his kids take five things each off of my sister’s porch. It is what it is.
It is what it is. Oh well. In any case, it’s definitely an interesting time for all of Silicon Valley, and Jeff Bezos and Amazon will definitely get their fair share. At least they’re not in the Russia hearings, but again, they had a nice appearance in the sexual harassment controversy with the head of Amazon Studios. None of these companies are going to escape scrutiny going forward, I think.
We’re here with Recode Senior Commerce Editor Jason Del Rey, talking about Amazon’s push into hardware. Now we’re going to take some questions from our readers and listeners. Then I have a few more of my own. Since Lauren Goode is not here today, I will read all the questions, not just the first one.
This is an email from David Imel. “How do you guys think Amazon will convince the average consumer to buy into its system? I’m personally fine with the idea, since it requires a camera, but the general consensus on the internet seems to be it’s creepy and no one will use it.” This is the Key and the Cam, essentially. We already let the Echo in. The Echo is there. It’s already made a beachhead in our house.
It’s there. Yeah. Yeah, it’s there.
What’s their convincing … What’s the marketing of this? If you’re Jason Del Rey, head of marketing at Amazon, how do you say, “Sure, you want us to creep around your house”?
I get scared every time someone mentions the idea of me working at that company.
“We promise Roy Price won’t be delivering it,” how about that? No Roy Price doing delivery. No comment.
You don’t have to. I’m getting a call soon. Oh well.
I think the straightforward and initial push or logic is for people who don’t like where their packages are currently left today for either weather reasons or theft reasons. I think that’s a no-brainer. The other piece is people in the market for a digital lock, Amazon has said not only can you let a delivery person in, but this system could be used to let in dog walkers. I think the examples they gave were dog walker.
Dog walker. Yeah, I know my dog walker.
I know my cleaning person.
Or family or friends.
I know my family or friends. Keep going. I don’t like any of your marketing, Jason. Keep going.
I think, yeah, I would be a terrible marketer, which makes sense.
If it was the same delivery person all the time, I might get to know them, because I know my post guy, although he’s a little creepy. I’m trying to think …
Listen, I actually think the returns piece, I think for me, I think that’s the piece. There’s still a ton of stuff I don’t buy online, because I just don’t simply want to return it. It is work to find a box, package it up. I don’t think this is me being super high maintenance. I think it’s a lot of people …
Lazy is what I was thinking.
Okay. That works. I just think if this ends up including returns, I think that becomes an easier selling point. Again, you have to be willing to want to spend, I think the minimum combo price of the camera and lock is $250. I think it goes up into maybe close to $400. Not everyone’s going to want to spend that, but digital locks are becoming more common. That’s probably not going to change. They’re going to keep becoming more common. This is another option out there, if you’re a big Amazon customer and you’re changing your lock.
Yeah. Absolutely. All right, next question. I would agree. I’d still think the hiding it behind the plant thing works for me, but that’s a very good point. “Can’t Amazon …” Oh, I just told people what I did. Shoot. No, but I don’t have it behind the plant. I actually have a cabinet.
I have your address right here.
I have a cabinet with a whatchamacallit on it, one of those locker things. “Can’t Amazon just make a …” Those are full. People are sending me those lockers. They get super full. They’re very popular, the ones where they put it in and you get it out with the combination. They’re pretty great. They work pretty well. “Can’t Amazon just make a mailbox that works like the lock here retrofitted outside of an existing house and be pretty too?” Talk about the locker concept and what it is and how it works.
Sure. Amazon has created a whole division that makes Amazon lockers. These are sometimes located in convenience stores, sometimes located in apartment buildings more and more, and increasingly in Whole Foods stores now that they have bought Whole Foods. You can order delivery — if you’re not going to be home, you can order delivery to an Amazon Locker, and then you are able to get access to that locker one time to pick up your item. That’s something they’re doing. The same team that worked on Amazon Key also works on Amazon lockers.
I’ve seen patents that they’ve come out with or patent applications for crazy ideas of compartments on city buses so that you could, if you take the same bus every day. They’re trying out a bunch of different things. Amazon’s known for letting internal teams with sort of similar goals compete with different methods and think that’s sort of the best thing to foster the best product in the end for their customers. I guess they could do that. This is also a way for them to get into the in-home camera market. I was somewhat surprised they didn’t come out with their own lock as well, but I don’t know if they thought that was the line that was too creepy to cross, but it feels like we’ve gotten there already.
They could also do a refrigerated thing too, because the more groceries, and go back to the old days like the milkman.
Walmart is testing exclusively in Silicon Valley right now, of course.
We need to get our things, right.
Something where someone’s coming in and actually putting your groceries away.
Yeah, I’m not letting them in either. Sorry, Walmart. I don’t trust you either, letting you in my house. Jeez. This is fascinating. We’re such babies in this country. Anyway, you know the thing is we still pump our own gas when that was a good thing, people pumping our gas, and that went away.
Now we do not do that.
That was good. That was okay.
Yeah, we cannot do that in New Jersey.
I was good with that. Oh, they have to pump your gas for you there in Jersey?
Yes, they do.
Oh, that’s nice, isn’t it? It’s a nice little moment.
Except when they’re too slow, and then I get the evil eye as I get out to finish it up.
Oh, I see. Can’t just sit there for a minute and contemplate the universe and things.
Nope. All right. “What data is Amazon getting/keeping when you ask Echo questions?” Yeah, when you ask them, they know. There’s probably 26 questions everybody asks, correct?
Right. What Amazon says is how do you … Well, they don’t say this. I say this. How do you think Alexa is getting smarter? It’s getting smarter by listening and hearing and digesting and then combing through everything that everyone said. If you go into your Alexa app, which probably not a lot of people do, you’ll see all of your queries there. You can delete those, but Amazon’s argument is if you want this thing to get super smart and be really convenient for you, all this voice data is what we need to make it smarter.
Yeah. All right.
Did I answer it?
Yes, you did.
I don’t know if I answered the question.
Yeah, yeah. I just feel like at some point they’re going to go, when I ask them something, they’re like, “You don’t want to know that, actually.” They don’t tell me what I want to know. You know what I mean? Then it’ll be, I’ll be in “2001: A Space Odyssey” and I’ll be dead. That’s really what I think.
It’s creepy. It’s creepy. It definitely is.
It’s creepy. I guess it’s no more creepy than my mother, I guess. Anyway, it’s an interesting question of what they’re going to do with that. Obviously, they’re using the information. That’s the way Google uses query information. Everybody’s using this stuff. Everything you put in there, people, let me just be clear. You are fodder for these giant companies to make more money. Thank you very much.
Yeah, nothing’s free. Nothing’s free.
This has been an ad for “Kara Swisher understands this and you don’t,” and you need to understand that you are nothing since back in the day of AOL. That’s what’s really interesting, that these companies are doing the same thing over and over again, which is you are what’s for sale, not the stuff. Thank you. Thank you.
Yep. Is the trade-off …
Yeah, it’s a good trade-off.
Right. It comes down to what is the trade-off.
It’s a pretty good trade-off. That’s true. I get a lot of stuff. One time when Steve Case was talking about at AOL when he was the king of the universe, which is one good thing is these kings come and go, but when he was king of the universe, I remember him saying …
We could use a queen.
We could use a queen, exactly. Thank you. I’m going to ask you that in a second.
He was like, “Everyone’s worth $75.” I think he was talking about every user of AOL, that’s how much money they make off of them. I put up my hand. I said, “When am I getting half of that, since I’m the one for sale? Don’t I get $30 of that?” I was wondering when they were going to pay me.
We do need a queen.
You wrote a book on them, didn’t you?
Two of them. Two of them, Jason. Let’s not talk about that.
That was a different life. Anyway, you should write a book, Jason. I think you’re such a wise person, and especially about this topic, you wrote recently about how not diverse Amazon’s top ranks are with 17 of the top 18 executives being men, essentially. Talk about that story and what the reactions have been, because I’ve gotten tons of reaction to it and have lauded your ability to point out something that should be obvious to one and all that they just don’t have a diverse rank. An impact that I think of this Roy Price thing is that there was not a diverse enough group of people there.
Actually, right before the Roy Price stuff broke, I don’t know what had me thinking about it that day, but I’d just been thinking about the fact that it felt to me like Amazon has sort of avoided the same level of scrutiny that some of the other tech companies have gotten over a lack of diversity in powerful positions, or across the board, but especially in powerful positions at their companies.
They publish online the board of directors and the officers of the company, but I knew that the team that really has the most power below Jeff Bezos is his SVPs, and that’s not public. I just spent a little time digging around trying to see … I couldn’t think of any women who are at that level at the company. I realized that sometime in the last year, I believe, they did promote a woman named Beth Galetti to SVP, which is this elite rank. She runs human resources, which — that’s another story which people thought was stereotypical.
In any event, then the Roy Price stuff happened, and I think this became sort of a bigger conversation inside Amazon, because there was some thought that Amazon knew about this for a while, and the question was asked: Perhaps if there were a woman in power, would he have kept his job for these last couple years?
Yes, that’s a good question. Or the investigation — the first investigation — would have resulted in a suspension immediately. Even if they didn’t know about it, they did then.
Correct, correct, correct.
Then it’s sort of the pass, the guy that gets the pass. Guys give other guys passes. That’s the feeling.
Correct. You look at this SVP level below Jeff. Jeff, there’s also two other CEOs under Jeff: Andy Jassy, who runs AWS, and Jeff Wilke, who basically runs the global retail business.
Very smart dudes, often thought of as CEOs for other companies too, by the way.
Right. Yeah. They could have their pick of a lot of places, you would think. When it comes to this SVP level, when you look across the board, these are people who have been working there with Bezos 10, 15, 20 years in some cases.
Yeah, they are.
The New York Times and I reported this makeup of this top level around the same time, and that Times piece had some color from a recent all-hands meeting in which someone asked Bezos about this. His response was something along the lines of, “Listen, turnover is slow at this level of the company.” It didn’t explicitly answer the question of, “Do you care? What are you doing to make sure five years from now your …”
Right, where is this pipeline?
“… consigliere look different? Where’s the pipeline?” I’ve been told there are a lot of women, and not only women, there are a lot of men inside the company who think A) this isn’t good for business, especially when there’s people who make the argument most consumers are … women do a ton of purchases in most households. You’re a retail company at the core, so business sense doesn’t make a ton of sense. There’s also people who just think it’s bad internal perception to women who might look up and say, “I’ll never get there.” Then B) talent-wise, recruiting.
There is no movement. There’s no movement there. Facebook is similar. That whole gang’s been together 10 years. Netflix is another company that’s super cohesive and stable. That’s a good thing, but it also makes a situation where everybody gives each other passes, no matter how you slice it.
Yeah. I refrained from responding to all the tweets I got about this story, as you could probably imagine a lot of the ways they went.
Oh, I bet. It’s working.
One of the arguments was, “Well, why would you fix something that’s not broken?” The other side of the argument is, who knows where Amazon would be today if they had a diversity of opinion, background at that level.
Right, that is a good answer, Jason Del Rey. I agree. Yeah, so it’s a good thing. He should be thinking that.
As the kids would say, don’t @ me.
Don’t @ me. Don’t @ Jason. He’s tough on Twitter. He don’t take any shit. Fuck that, right? Oh, I just cursed some more.
It’s a really interesting question. It’s good to point out. I think we should always keep pressure on all these companies to think about this stuff. One of my arguments … is good for business, there’s so many studies about this, blah blah blah, but there really is. I always say, “What’s the right thing to do?” Everyone’s like, “That’s not a good enough.” It’s like, “No, it really is.” A right thing to do is often the right thing to do. There’s a reason why, and it also does provide different, and not just gender diversity, people of color, age diversity, background diversity, geographical diversity. It always ends up being better.
Completely. The other thing to point out, we had a recent visual published which looked at the makeup of a bunch of tech companies going down one or two levels of management. For a company like Amazon or Apple, it came out to about 105 executives. Of the group that we looked at, Amazon had the highest percentage of white males, which, again, not super surprising. It is very interesting to me why they haven’t earlier been sucked into this conversation. Maybe it’s partially the people who cover them who’re to blame. I’ll take some blame there. I think also, something … it has to do with they’re not in Silicon Valley.
They have a presence there, but they’re Seattle-based.
Seattle’s a different demographic, for sure.
It’s a slightly different narrative, because they don’t often get lumped in with Silicon Valley. Anyway, I’ll continue to report on it.
It’s a big topic. We are going to continue to report on it. It’s a really interesting topic. You know what? Jeff Bezos, this is good for you to hear, I’m sorry to tell you. You need to hear this. I know everyone says you’re fantastic, but we like to …
Yeah, he would not talk to … That was my main request, was talking to him for it.
Do you know what? He used to be so chatty years ago. Never would get off the phone. It’s fascinating how he’s changed. He would be like, “Come visit. Why don’t you come visit?” Now he’s like as if he’s on another …
World’s richest man or woman.
Whatever. I don’t care. Anyway, he should talk more. He will be. You’ll see a lot of more friendly Jeff Bezos for sure out there because of all this possible issues around regulation. One thing he’s trying to do — speaking of friendly Jeff Bezos and friend to all and help for the universe — the new Amazon headquarter search, which they’ve done a good job making this sort of fun and interesting.
It’s a great idea. I really have to say, I think it’s smart. It’s being done in a really fun way. It creates a lot of discussion around some good topics about jobs and where people should be located. This new headquarter search, why don’t we finish on that, and then the opposite of people going after them. I think it’s a really good answer to that. Is it just PR or is it really an interesting way to think about their company? I think it’s the latter, actually.
When I first saw this, my take was I was surprised in this sort of environment right now where tech has come under a microscope, Amazon specifically, there’s the question about power. I was a bit surprised that they … I assume they knew what would happen, competition between all these cities, and what it displayed to me is sort of what feels like a power imbalance between the cities that want them and Amazon the big corporation.
Because it discusses new tax breaks. It brings up tax breaks, giving up.
My good friend and colleague, Peter Kafka, very publicly on Twitter was like, “Hey, jobs, politicians love jobs, people love jobs, and hey, people love Amazon. A lot of people love Amazon.”
It’s a race. It’s a fun race. It’s like one of those shows. It feels like a show to me.
It does, and I think the part that’s going to be very interesting is when we get down to it and see what the real deciding factors are. If it is, I think, one of the top ones, and they’ve said it straight out is what kind of benefits are they going to get, whether it’s tax breaks or otherwise.
Why not? Sure.
Then the story will … I think whatever region that is, there should be a ton of reporting over the next few years about did they live up to it?
On what they got.
That’s the big question for me. There are a lot of cities that could use up to 50,000 well-paying jobs and sort of that burst of energy that would come from it.
Sure, but will they really benefit from it? That’s the issue in San Francisco, too. Is it really helping the city or wherever region? Let me just ask you a couple quick questions about that. Are they thinking within Amazon about — I was thinking the other day they’ve got to be thinking about — I don’t want to use the term liberal, but they’re a very tolerant company, very much like Silicon Valley. They don’t want to get stuck in a state where they’re going to have to walk out, that kind of stuff. They’re very open-minded about gay and lesbian, transgender, things like that.
Yeah. It’s funny, it’s a conversation. Any sort of business function I go to, dinner or drinks or otherwise, this search is coming up, and not only with tech people. One thing that a bunch of people have said to me is wouldn’t it be really smart for them to go into a state or a city that really needs their help and maybe isn’t a super liberal place? Maybe it’s a red state, and I just think when it comes down to it, Amazon at its core, and this is how they’ve gotten where they’ve gotten, is going to do what’s best for Amazon. I’m not sure how much they care about what the perception is of what city they choose.
What city they choose. What are the criteria? What they get for themselves, where they have access to transportation.
They need great transportation, public transportation. They need …
Yeah, housing that isn’t too expensive. They need a ton of talent. That’s why places like Boston with the pool of colleges up there are being bandied about as being, among other reasons, top contenders.
When do they make the decision? When are they making the decision?
It’s going to be next year. I don’t think they’ve given specific times.
Who gets to do it? Is he like Willy Wonka and he’s going to pick the kid who … It feels like the Golden Ticket kind of thing, like all the rest are going to come out like a blueberry or whatever, and then Charlie Bucket will get it.
I think there’s probably seven or eight top contenders that I’m looking closest at. I could run through them super quickly.
Yeah, please. Yeah, do it quickly.
I think Boston area, D.C., Chicago, somewhere in Texas, perhaps Austin is the leader there, Atlanta. I’m trying to think of who else I’m missing. Atlanta, Philadelphia, Toronto, and a lot of people are talking Denver.
It’s too close.
I just don’t see it. I think they’re going to be somewhere central to east coast with already a big presence in a lot of places out west.
Yeah, and they want to have somewhere their employees want to live. They have very highly educated where they’re … They’ll be there, but they’re going to move people and stuff like that. I’m going to tell you what my guess is. I have two. Pittsburgh.
They mentioned Detroit, but go ahead.
Yeah. Pittsburgh. Yep.
Nashville. Thank you. Those are my two guesses. When they’re right, I want you to laud me with great …
Yeah, I was going to say what can I add to the glamorous life of Kara?
Let’s have a bet. I’m going Pittsburgh. What are you going to bet? You’re not allowed to bet, really, can you? Because you’re writing about it. If you had to guess, you can bet, you can say, what is your bet?
Today, I’ll go Boston.
They’re not listening to hear this.
I’ll go Boston.
Boston. Okay, all right. I’m Pittsburgh, you’re Boston. All right. That’s our top pick. All right. All right. We’ll see what happens on this. It’s really going to be an interesting … They have made it fun. Even I think it’s fun. They’ve been very good. It is PR, but it’s a good use of PR. You’re right. We should really find out whether they really did bet. It’s like stadiums or anything else that get these breaks and stuff like that whether they really …
Yeah, a lot of stadiums have been just an absolute joke. I think at least here they can point to real, real big-time hiring as one no-brainer that you’ll get from it. Jobs, the jobs thing.
Yeah. All right. One last question I’m going to ask you about Amazon. This is just me. What’s their craziest thing they’re going to do? Are they going to have an airline? Is he just going to jet off to the moon and see you later, Bezos? What do you think the crazy thing is they’re going to get into, if you had to … What would you like to write about? I think an air transportation system or buy Uber? They could do that. That would be interesting. Yeah, buying Uber would be interesting for them. Just think of something really off crazy. I just thought of three things that they’re going to do.
One thing in the medium term that you think they’re actually going to focus in on, and one term that would be really fascinating if they got into.
I think they’ll probably buy another brick-and-mortar retailer in the next few years, but that’s not super crazy. I think the idea that we’ve seen, I think they’re going to have a full-fledged cargo airline. It seems crazy and sounds crazy, but there’s some people who think eventually, like when was the last time that a consumer airline industry has gotten disrupted? Could we see Amazon try to reinvent the airline?
Yeah, the airline, consumer airline.
Jeff seems focused on space.
Space, yeah. That’s right. They all want to go to space.
What are yours?
I think they could buy an Uber. I could see them doing something like that that’s crazy, or the cargo thing is definitely. I think one thing that’s interesting is, will he put more into media? I think I’m always looking at that. Because so long ago I remember his obsession with robotics. He always rode around on that damn Segway at the TED conference and ran over my foot once. He loved all that robotics. He was sort of enamored with Dean Kamen and that kind of stuff. I think the robotics stuff and logistics is super interesting to me. I was just at the … They had me there, because I said something sideways on CNBC, and they had me up there to show them that they’re very nice people. It was cool.
I have to say, I was really so impressed with their facility at Kent. You started to see glimmers of where it was going in robotics that you don’t need people at all. I’m thinking, “Oh, you replace …” Although I have to say I have nothing but regard for the boxers there. Most of this stuff is robotically … The stuff they’re doing robotically is fascinating from every perspective. The people who packed, and they had all kinds of new systems they’re testing out, and I really liked that about them. They were trying all kinds of things. These packers were freaking epic with how quickly they got in, how they had the right amount of tape. Of course, that’s technology, but I was so impressed with these packers, how incredibly smart and fast and efficient they were. That was kind of interesting.
Is your point they’re going to wipe them out though?
Yes, it is. I don’t know if they will, but I don’t know. I don’t know. He’s got to be thinking about that. Is he going to wipe them out, or is he going to think of really interesting new ways for the workplace to change? I would like to know that. I bet if anyone could think of something like that, I think of all the people he’s the most thoughtful. I think if he can think of ways where it could change, I would be fascinated by that from him, any ideas. I don’t think of him as this Scrooge kind of personality, but he’s not Willy Wonka, either. You know what I mean? I don’t know how it’s going to go.
Anyway, Jason, this has been another great episode of Too Embarrassed to Ask. You are doing an astonishing job on commerce. I recommend you all read Jason’s pieces, his one on the lack of diversity at Amazon caught a lot of attention, as well it should have. He does every day, he has another fascinating thing. This is a company you’re going to be spending a lot of time with, I think, going forward, because maybe he’ll be president. What do you think, will he run for office?
Oh man, I just can’t get over that Jeff Bezos now looks cool. When I see the old photos …
Oh, the muscle thing? I didn’t bring up the muscles, did I? Whatever, he looks good.
Let’s save that.
Yeah, let’s save that. He looks good. He looks good. I’m good with that. I’m fine.
If I was that rich, I better look like a Hollywood actor.
Are you kidding? I would be micro-dosing. I’d be having the most fresh food come in. I’d be like everything. I would do everything. I’d have a blood boy. I’d do the whole thing.
I’d have 14 …
I got you laughing. You’d have what?
I’d have a 14-pack instead of a one-pack for abs.
Yeah, I might even have people just carry me everywhere. My feet would never touch the ground, maybe.
I thought that happened on the west coast already for you.
Yes, yes, it does. No, just Eric Schmidt. Anyway …
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Author: Recode Staff
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