"The Everything Store: Jeff Bezos and the Age of Amazon" by Brad Stone

The Everything Store: Jeff Bezos and the Age of Amazon by Brad Stone was a thoroughly reported and well written look at Bezos and what the company he founded has done so far.

Amazon is described in the book as a hugely challenging place to work at and Bezos someone who can be difficult to work for. That said, it was interesting to read of how Bezos would hire really smart people into the company and then find something for them to work on. Also fascinating to me about working at Amazon is per direction from Bezos, PowerPoint presentations are never done within the company. Instead six page narratives are written, with meetings beginning by everyone reading the narrative. The idea behind the narrative documents is both keep the focus on customers by having them be like a press release and to encourage employees to critically think through an idea.

One interesting thing from the introduction to the book was a conversation between Bezos and Brad Stone with the author being asked how he'll handle the narrative fallacy, a concept written about by Nassim Nicholas Taleb, a noted statistician and writer who has decried the propensity people have for seeking simple explanations for complex events, when in reality there's often many factors, including those of the random variety. The response Stone wrote into the introduction was one that seems a good idea in many pursuits, in putting the book together given this narrative fallacy idea he wanted to "acknowledge it's potential influence and plunge ahead anyways."

Another author that Stone referenced Bezos influenced by is Clayton Christensen who wrote The Innovator's Dilemma about how companies are afraid to threaten or cannibalize their existing markets, with The Everything Store referencing how brick and mortar companies like Barnes & Noble and Wal-Mart fell into this trap, contributing in large part to the success of Amazon.

Also of note to me was how when Bezos would set low prices for products or services (as Amazon often manically does) it would be for a variety of reasons, ranging from simply providing the lowest customer price to putting pressure on a competitor and/or acquisition target to the fascinating to me idea of not pricing too high lest high margins bring in more competition.

Overall, it was a fast read and interesting business book from Stone.

Boomerang by Michael Lewis & Matt Taibbi on Occupy Wall Street

Have come across some excellent writing lately on money and markets. Form of the works have been in a quote, a magazine piece and the Michael Lewis book Boomerang: Travels in the New Third World.

If Lewis's 2010 book The Big Short (which I reviewed here) looked at the recent financial meltdown at a corporate level in relation to things like Credit Default Swaps and CDOs, this new effort looks at financial train wrecks with a much larger country level. It's a riveting and fast read and separated into five sections (with my thoughts on each)...

Iceland - "Hey, let's all become heavily leveraged investment bankers assuming the markets will rise forever. What could go wrong?"

Greece - "I want services provided by the government, but see no reason to do things like pay my taxes since the government doesn't seem to mind me not paying."

Ireland - A bit like Iceland, but financial insanity through real estate development.

Germany - The adult in the room... needing to decide how much pain to take on themselves to try to rescue the irresponsible kids (or PIGS).

United States - Perhaps the most interesting simply because it's local (including Lewis writing on Vallejo and San Jose here in the Bay Area). Covers the concept of country level financial problems (like underfunded pension obligations) simply getting pushed down to the cities. Ramifications of this... bad.

Lewis has quite the talent for creating easy reading on complex topics and with Boomerang, writes an excellent (and frightening) book on bad money decisions run amok.

-----

On the same subject of money, greed and decisions made at a high level impacting the common folk was a piece for Rolling Stone by Matt Taibbi. "Wall Street Isn't Winning – It's Cheating" is a look at Occupy Wall Street and offers a harsh indictment of the financial system and how it's structurally set up to reward the bankers who run it. Very well written and thoughtful story.

Finally, it's only a quote, but in the same vein as the Lewis book and Taibbi article was that below from Businessweek by Nassim Nicholas Taleb (author of The Black Swan about outside of normal financial events)...

"We're not living in capitalism. We're not living in Socialism. We're living in some wierd economic situation with the banks controlling more than their share. It's like we're serving them rather than them serving us."

Book Review - "What the Dog Saw" by Malcolm Gladwell

Finished reading "What the Dog Saw" from Malcolm Gladwell and found it to be a really interesting read.





Gladwell is a solid writer (whose website can be found here) and I've enjoyed reading his prior books "Outliers", "Blink" and "The Tipping Point". "Outliers" was my favorite of these and it's hard to compare his new effort as "What the Dog Saw" isn't about one overarching idea, but rather a collection of Gladwell stories from The New Yorker.

Probably the best way to review the book as a whole is to note the chapters that stood out as most interesting and get into why exactly that was.



Section One - Minor Geniuses

The Ketchup Conundrum - Addressed the question of why ketchup differs from mustard in it's number of varieties. Had the very interesting mention of amplitude as a measure of food ranking... with the concept being how well various flavors work together. Gladwell writes during this portion of how this amplitude measure is often the difference between the most popular consumer brands of a product and generic store brands... for that same product and featuring many of the same ingredients and flavors.

Blowing Up - About Nassim Nicholas Talib and the idea of not knowing what the stock market will do so betting on big deviations from the norm. Talib two years after this Gladwell story wrote about this idea in his bestseller "The Black Swan"... which I found to be an interesting, but also pretty weighty read. Gladwell's story here is interesting in that it really gets at the idea that you can't predict the future. Really, perhaps the only prediction that can be done is the obvious... like for example if housing prices are rapidly increasing and people are buying them based on income they don't have, problems will follow and prices will drop.

What the Dog Saw - The title chapter of the book and written about the "Dog Whisperer", Cesar Millan. Featured Gladwell's writing about the fascinating concept of Laban Movement Analysis... basically high level non-verbal communication (and the concept of phrasing as a combination of posture and gesture).



Section Two - Theories Around Experience Or Events

Open Secrets - About Enron accounting and how it wasn't lies, just information people didn't look for or want to believe. The model the company followed was predicated on normal, but the company was brought down by not normal conditions. In many ways, this chapter reminds me of the Taleb story.

Connecting the Dots - About military intelligence and stands out as interesting given how this chapter relates to the intelligence failure around the attempt to blow up a Detroit-bound airliner (from Time Magazine).

Blowup - About the Space Shuttle Challenger disaster and how it really was due to an acceptable risk not having an acceptable outcome. Reminds me of my blog post about terrorism in Detroit in that the world isn't a perfect place and bad things can happen.




Section Three - Predictions About People

Late Bloomers - Was a fascinating chapter about how you have boy wonder types and then those who work and flounder around prior to success. Gladwell quotes the economist David Galenson who says "late bloomers goals are imprecise, so their procedure is tentative and incremental" (and experimental). Another idea put forth by Gladwell is that late bloomers simply often aren't that great to start, they have to improve to get there... which reminds me of the David Kord Murray book "Borrowing Brilliance" (that I reviewed and summarized here).


All in all, really an interesting book with some chapters that may appeal more than others, but that's where the practice of skimming through the less interesting stuff comes into play...

Attempted Airline Terrorism Story From Time

Interesting (and disconcerting) cover story from the latest issue of Time Magazine.



Titled "What We Can Learn from Flight 253", it examines the attempted detonation of a bomb on a Northwest Airlines flight into Detroit on Christmas Day. As the piece by Michael Duffy and Mark Thompson reveals, would be bomber Umar Farouk Abdulmutallab came very close to his goal of blowing up the plane... which raises a host of questions about both how that occured and also what our response was.

Abdulmutallab used a similar explosive to what hopeful shoebomber Richard Reid used, only rather than in his shoe, it was sewed into his underwear. While it's true that there are some next-generation airport screening devices that would have detected the bomb-making gear, the standard metal detectors at most US airports wouldn't have spotted it. Additionally, Abdulmutallab was on a US terrorist watchlist (but, only the first level which doesn't mean much).

Profiling is another way that authorities can try to help prevent terrorism, and in their book "Superfreakonomics", (which I reviewed here) Steven Levitt and Stephen Dubner tell an anecdote about how effective it can be. However, profiling as well as full-body scanning machines at airports raise legitimate privacy concerns and can't be counted on to prevent bad things from ever occurring.

On the same subject of preventative measures, there's the concern of simply taking after the fact actions that don't help going forward. From his book "The Black Swan: The Impact of the Highly Improbable", Nassim Nicholas Taleb wrote about this idea... with a potential example being everyone taking their shoes off going through airport security.

Another thing to keep in mind is the recent example of Fort Hood shooter Nidal Hasan. As Nancy Gibbs detailed in her Time cover story (which I wrote about here), terrorism doesn't necessarily have to be sponsored, paid for and planned by a terrorist organization, but rather can be the act of a person or persons wanting to commit a terrorist act.

-----

All this considered, and as Duffy and Thompson argue in their cover story, you can't guarantee as a government that terrorism will always be prevented, so as prevention is practiced, you also have to look at response.

To this end, the Duffy and Thompson piece quoted Homeland Security Director Janet Napolitano playing down the attempt by saying "once the incident occurred, the system worked" and spoke not of terrorism, but "man caused disasters." Also, "The Lesson: Passengers Are Not Helpless" by Amanda Ripley in this same issue of Time addresses both passenger response on Flight 253 and then how the FBI treated people after the attempted bombing was thwarted by the same passengers.

Just annoying stuff from Napalitano and the FBI...

The whole things is a big nut and tough to easily solve, but after reading the pieces both both Ripley and Duffy/Thompson (as well as past stuff), I think our government can do a better job of it's preventative measures, but perhaps even more importantly... of communicating with us as adults who understand we live in a dangerous world in which bad things can happen.

"The Black Swan" by Nassim Nicholas Taleb

In his book The Black Swan Nassim Nicholas Taleb gives a fascinating layer by layer account of his views around the major events that impact our lives. Taleb is a former financial type and voracious reader who takes exception with the traditional model of politicians, economists and financiers who follow the bell-shaped curve in predicting events. Taleb's notion is that the truely momentus events that occur in life cannot be categorized so easily. These are not the everyday things that occur, but rather than big ones... what Taleb refers to as the "black swans".

Examples of a black swan would be the terrorist attacks of 9/11, the stock market crash (pick your crash), the devaluation of the dollar and any other event that has the following characteristics:

1. An unpredictable event.
2. Carries a massive impact.
3. It's attempted to be explained as predictable after the fact.

Taleb's notion is that what we do is concentrate on what we know and disregard what we don't. By doing so, though, we miss out on the biggest events with the deepest impact. Another example of this would be the scientists who stick to the things that are worked on by other scientists. Any new discoveries in these areas will be incremental at best and have a fairly limited impact. The alternative to this would be those scientists working out on the fringe of research dealing with highly speculative lines of investigation that most likely will not amount to anything, but have the potential to have enormous impact should they come to fruition.

Two additional interesting things from the book are as follows:
- Should describe things AS they are happening, rather than after the fact. Difference is in recording your impressions as opposed to your memory of what your impressions were.
- Should read a lot.