Bezos on Kindle, Amazon and EC2

BookExpoCast.com has this podcast where Jeff Bezos talks about Kindle and then Chris Anderson (Wired Mag, The Long Tail) speaks to Jeff about publishing industry, Kindle, Amazon and Blue Origin.

The podcast is very very insightful and here are my raw notes from the podcast. Please note that these are raw notes and I scribbled them while listening to the podcast. I might have mis-understood and/or mis-interpreted the podcast but there are so many gems of wisdom that it would be a crime to not post them here.

I am breaking them into sections.

On Amazon

1. Amazon was founded in 94. (I read later that Jeff Bezos created the Amazon business plan post his road trip across the country. I am planning to take one myself end of 2008. May be I will have some ideas too :D)


2. When he was founding Amazon, Bezos had more than 40 meetings with 22 angel investors to raise USD 1 mn for the seed.


3. Bezos also said more likely someone knew about the publishing business, less likely were they to invest in Amazon.


4. One Amazon customer has bought more than 1700 books. WOW.


5. Things like Super Saver on Amazon saves time and money or both Amazon and end customer. This helps them save by exploiting economies of scale and scope. They can ship two orders together faster.

On Kindle

1. It took more than 3 years to develop Kindle.


2. Kindle is a device that allows people to get books that they are looking for. And the ones they aren't looking for. Serendipity and accidental discovery of interesting books plays an important part of Kindle experience.


3. Kindle uses electronic ink. This is different from text that we see on a computer or LCD screen


4. While designing Kindle, the Amazon team wanted to capture few essential features of the system that they were making redundant. Things like book like form, ability to take notes, underline things etc.


5. Other important things were weight of Kindle, ability to read in sunlight, efficient on power-consumption.


6. The annotations and markings are stored on the Amazon servers. These are later searchable and can be accessed from anywhere.


7. Kindle wanted to make it easy for the customer to browse the books and eventually buy more titles off the store. (The streamlined the book buying experience by integrating the buy button on recommendation engine and then not charging customer for the download separately. The cost of the network/download is bundled with the price of the book)


8. Bezos made sure that the popular titles, including the ones on the bestsellers lists were available on Kindle right from day 1. This is important so that the customer who have spent about USD 399 on buying a device are not disappointed.


9. Someone sent a comment "it is about the message and not about the medium" - when they were comparing reading physical books with Kindle. (This I think is very important. We can make thousands of industries redundant if we focus on the delivery of the message).


10. Interesting statistic. About 6% of total Amazon book sales (by volume) now come from Kindle. Kindle customers buy as many physical book as eBooks. This was a surprising for even Jeff Bezos.


11. The grand vision for Kindle is all books ever published in any language anywhere in the world made available to you in less than 60 seconds. Which in my opinion is as large as a PC on every desktop. Kudos to Jeff Bezos for this grand a vision and ACTUALLY making it come to life.


12. He actually got CEO of Simon and Schuster on stage to talk about Kindle and how it is making it easier for publishers. (This was probably to address concerns of publishers - since the publishers have to first make the books available in electronic format).

On Future of Kindle

1. Amazon sees Kindle as more than just an access device. They are already talking about experiments like never-ending book and collaborative writing using Kindle.


2. Bezos envisions Kindle as a toolset for publishers and readers. He further talks about giving both publishers and customers these toolsets and let them surprise everyone else with their discoveries and inventions (I am reminded again of Jan Chipchase and his research).


3. Its also about finding the right readers for publishers. If you are a student in Iceland looking for books on biological traits of Saharan camels, you can only find them on Amazon. Or Kindle. Kindle thus acts as a platform where a publisher can find his audience and vice versa.


4. When asked if Kindle is already redundant with faster cellphones and other access devices, Bezos compared it with cameras. Every mobile phone has a camera now and people still buy smaller cameras and SLRs and other photography equipment. (I am sort of confused at this one. I think cameras AND Kindle both might get redundant at some point in time.)

On Bezos himself

1. Jeff Bezos is bald. :D (And so am I.)


2. 4 kids. 8.6.3 and 3. :D


3. "You do not choose your passions. Your passions choose you." Awesome quote by Jeff Bezos, when he was asked about Blue Origin. Bezos says motto for Blue Origin is Step by step ferociously and he says they are in an industry that helps humanity get into space.


4. Bezos says at one point in time that planetary alignments were needed to Amazon what it is today. Is he superstitious? (Am sure paparazzi would be snooping :D)

Other things

1. Jeff Bezos talk about a concept of "me time". A time that you spend away from everyone including your family, co-workers etc. This time is typically spent bathing, exercising, traveling etc. A Kindle gives people something to do in this "me time".


2. Awesome insight into way humans understand interactions. Humans are storytelling animals and we like narratives. (Actually wrote about branding as storytelling few months ago but I never developed the concept further.


3. What about used books? Is there money to be made there? Everyone wants to read books and doesn't really want to pay for the book prices. If there was a website to regulate that? A pre-web2.0 era website is doing that in Delhi. Is their merit in buying that website out?


4. You make money when you help customer make the purchase decision. This was in response to someone asking if negative reviews are bad for the business. All reviews actually help make the purchase decision. Negative , positive doesn't really play a role


5. On elastic compute cloud, the idea was to convert the huge fixed cost for customers into onDemand variable cost. (I wrote about onDemand economics for my Berlin School application)

The best part about any great conversation is the quality and quantity of ideas that stem out of there. For me, these are the things that I think have the potential to be businesses.

1. I think the Techcrunch Web Tablet probably stemmed out of the Kindle idea. And even though the commercial production and distribution might be years away, they want to stake a claim on the idea before anyone else.


2. How about doing something on the old books market in India. Especially in all the engineering colleges in India, the content remains same and thus there is a large chunk demand. And then obviously there is the long tail.


3. Search cost plays an important part in getting the buyers and sellers together. I wrote about Search Cost way back in Feb 08 and I think its about time I revisited that.


4. Purchase decision is an interesting thing to think about. My day job involves working on this purchase decision for some of the leading brands in India and there is so much that I learn everyday. Need to post about it. What if there was a tool that everyone trusted and assisted in purchase decisions?


5. The entire idea of making fixed costs redundant has been in existence for a long time. Things like outsourcing and contracts actually do that. But doing it to something as fundamental as network, access and storage is sheer brilliance. Airtel did that with their network in India and do far have reaped awesome rewards off it. What else can converted into variable costs? Brain power? Processing? Coding?

If you are listening to the podcast, please share your thoughts. And apologies for such a long post. I did not realize that I have taken these many notes.

Credits
Image: Gizmodo.com