Hey, everybody, Robert Evans here again. As I stated last time, this episode ran very long, so we split into two parts. UM. I'm going to just dive into the episode with Jake and I right now, So thanks for listening watching if you can see sound. Um. In any case, here's more bezos. Jeff had been a demanding taskmaster to his employees up to this point, but he also sounds like he was a reasonably well liked boss that complaints you here later
about him. He's very strict, he's very like dedicated. He wants a lot of work out of you. UM. I haven't heard anything like allegations that he was abusive at this point, and that's because I think he's not really in charge. He's not running the company. He's got people above him, and I think that tempers some of what will later become his worst attributes as a boss. For some time, Jeff had been talking out different business ideas
with his mentor, David Shaw. Many of these ideas were financed focused, but one of the ideas they would talk about was what they call the Everything Store. Now. The Internet was young back then, and it was still very small, but both men were enough future focused to understand its potential and the fact that an online company that could sell products directly from manufacturer to consumer could save a fortune on store space and among other things and undercut
retail chains. This was not a revolutionary idea. I'm sure a number of people realized this was going to happen at some point, but Jeff and David are talking about it very early on, and Jeff did come up with one innovative plan for how this store would work. His idea was that it should be driven by customer reviews. Any customers should be able to leave a review, UM, and you know, all of those reviews should be collected, and you should get people buying, should be like shown
products based on what which stuff is best reviewed? UM. Now, this had never been done on a large scale. That's how the whole internet works now. But Jeff is really like kind of the first person who commits to doing this anywhere in internet commerce. UM. And that's really when you're looking kind of what set Amazon initially apart from
other attempts. That was a big part of it. UM. For a while, the Everything Store was a fun thought experiment for Shaw, but Bezos grew obsessed with it in his free time, he would read analyzes of the growth of the early Internet, and in nine he came across information that web activity had surged by two hundred and thirty thousand percent in the last year. So he thought quite accurately that someone could make a shipload of money
on the Internet with a growth percentage like that. So he decides to quit his high paying job because he's already very success He could have stayed at D. E. Shaw for the rest of his career and almost certainly would have been a multimillionaire. You know, UM would have been a very successful career, but he's he wants more than that, so he quits his job. Um kind of baffles his mentor, and he and his new wife, Mackenzie Flight of Texas, grab a ship car from some family
members and drive to California. Mackenzie drives while Jeff spends the whole time like putting together spreadsheets and reading different sort of business laws and figuring out how he's going to make this this company he wants to form work Um. One of the things he finds out on his drive is that, due to a nineteen two Supreme Court case, merchants did not have to collect sales tax and states
they didn't operate in. And this is kind of the loophole that makes early Amazon dot Com possible, the fact that like again when it because a big part of it is that they can really undercut prices. Part of that is we're not paying for a brick and mortar store, so we don't have to pay for like employees to stock ship, we don't have to play pay for storage space.
We can sell direct from the manufacturer. But part of it is due that is because if you're an online retailer in this period, you don't have to collect sales tax from any state but the one year in So if people who live in the state that your business is operated in buy from you, they have to pay sales tax, but nobody else does, which again means you
can undercut everybody else. So Jeff had initially picked California as the place to launch Amazon dot Com, but when he learns about this law, he moves to Washington State instead. Um and he picks Washington because number one, no income tax in Washington. I think that has an impact on it. Number two, and I think the main reason he picks it is because it has really good infrastructure. Microsoft is based near Seattle, so it has the kind of infrastructure
you need to create a tech company. But almost no one lives in Washington. The whole Pacific Northwest is very like sparsely populated, so it meant that like the least number of customers possible would have to pay sales tax for Amazon products, and no one in the other forty nine states has to pay. The initial plan was to sell books, because virtually all books came from one or two distribution companies who already had good distribution infrastructure, and
because books are comparatively simple to ship and store. The plan from the beginning, but from Jeff, was to make money selling a single product online and then branch out eventually to selling everything. The first name for what would be called Amazon was very stupid. Jeff wanted to call it Cadabra Incorporated, like like a yeah, that was his was really married to this name for a while, um, which is terrible, and a lot of his friends tell
him it's a bad name. There's kind of this like early Journey, where everyone around Jeff is being like, hey, how about this as a name? How about this is a name? Like one of his friends suggest, why don't we just call it make it so dot com based on like Captain Picard, who T and G is on the air at the point, and that's like Jeff's favorite Star Trek character. I think they decide not to do
that because I'm sure it would be copyright infringement. Um. So they stick with Cadabra, even though everyone's trying to talk him out of it. Um. He and Mackenzy get to Seattle. They rent a three bedroom home, which is their first headquarters. They operated out of the garage, and
they immediately set to work starting a business. Their first lawyer, the first lawyer for what becomes Amazon, is the one who finally talks Jeff out of Cadabra Incorporated as a name, and he does so by pointing out that over the phone it sounds like saying cadaver, and He's like, people, as I got a yeah, that's not a bad point. Um. Sitting together in their living room, m Z and Jeff Bezos registered a number of domains with potential names Awake
dot com, brows dot com, book Mall dot com. The name they kept coming back to was relentless dot com. They really like this. Jeff loves that name. He like I think he prefers it to Amazon. I believe it is still his favorite possible name for his company, Relentless. That's what he thinks is the best possible name. I think it's shit. Um. I think Amazon's a fine name for a company. Yeah, relentless is a bad name. But
Jeff never is able to really let this go. He buys the relentless dot com domain in n He really tries to make this happen again. His friends kind of come together, friends and like early employees, and eventually you're like, it's creepy, Jeff, Like, it's a creepy name for your store. People are not going it's not going to be good
for us UM and Amazon. He finally gets convinced to pick Amazon, and the reason they decide on it is that it kind of speak to his how grand his goal is because the Amazon is the biggest river in the world, right um, But it also is is it's a placid name. It's not a name that scares anybody. But Jeff never gives up on relentless dot com entirely. And in fact, Jake, if you open a browser right now and you type in relentless dot com, it'll take you to Amazon. Well and dot com. Jesus Christ couldn't
even give it to the drinks company, just like nope. Yeah, And it's one of those things. It's this, it's what we've been kind of coming back to and back to. It's like he's never really changed as a person, Like he liked everything about him today is the same as when he was in sixth grade pretty much. And obviously the fact like he wanted relentless dot com to be the name. I don't think he every gets over that, um relentless, that it's relentless energy dot com. That's so long, man,
he can sell it to them. Yeah, another one of Amazon's victims, that energy company. You know who else is a victim of Amazon? Jeff Well, Jeff Jake, the products and services that support this podcast. Yeah, actually, I'm sure a number of them sell products on Amazon. But whatever, we don't need to think about that as uh we are back so uh. The same month that Jeff bought the relentless dot com domain, he drove down to Portland, Oregon to take a four day course on book selling
sponsored by the American Booksellers Association. He learned the ropes of the business, and soon they were off selling books at a slow pace at first. UM and Jeff and his first couple of employees are like physically because the way it works is they're they're buying books from one of the two distributors who sells books to all the bookstores. Like they get in order. They order the book from the distributor, and then the distributorship the book to them,
and then they mail the book to the customer. Right. They don't have a warehouse, they have a garage, so like they're getting books as they're ordered and their painstakingly mailing out each book themselves. And Jeff is to his credit, involved in all of the ship work from the start, Like he's putting stuff in packages, he's picking up deliveries,
he's mailing them off, and so is Mackenzie. And so we're like they're all kind of doing everything right, all of the early employees are doing every part of running the business. There's no there's no like where there's no warehouse staff, right, Like Jeff is the warehouse and so is Mackenzie. Like everyone is everything in early Amazon. Um that said, when it came to funding Amazon, other people
did most of the heavy lifting. Amazon did start with ten thousand dollars that Jeff Bezos had saved up himself, and another eight four thousand dollars in what are generally referred to as interest free loans. Now, a lot of this company this money actually came from his first employees.
He would basically when he was bringing he would he was hiring people he'd met elsewhere in business and saying like, look, you come to this company, take a pay cut, and if you pay I'll let you buy stock now, right, and like that's a big part of how he founds the early company. So for example, um, his first employee is a guy named Shell Kaplan, who many consider the co founder of the company and who Jeff later kind
of betrays. Shell was Jeff's good friend, and he joins Amazon because he believes in the vision of the company so much that he takes a fifty pay cut and he pays five grand to buy stock when he joins in order to help fund the company. Oh he must be fucking loaded enough. Oh yeah, I mean he's yes, he did very very well. And in fact, like he considered buying more but didn't want to gamble that much.
And it's like, I mean, it worked out well for him. Um, Jeff's parents were the first angel investors he had, dumping a hundred thousand dollars of their oil money into the venture. In early nine, Jeff told his parents there was a seventy chance they'd lose it all, explaining, I want you to know what the risks are because I still want to come home for Thanksgiving if this doesn't work. UM,
which is at least respectable. Uh. From the beginning, Amazon's promise to customers was a bookstore that was always in stock. Now they were really just letting regular people order books the same way that bookstores did, straight from the people who actually like kept them in a warehouse and charging a premium for the privilege. The book distributors had a rule where they'd only ship a book if you ordered
ten at a time. Since Amazon wasn't selling enough books to to order ten books at a time generally, the company developed a sneaky strategy of ordering the book they needed, and like nine copies of an out of print book, if the books were out of stock or out of print, the order would get auto canceled by the ordering software UM, and the one book that Amazon needed would get shipped
their way. And so that's how they got over this limit was kind of like fucking with the system and and hurting this company's profitability that they were utterly reliant on. But at this stage, it's not really a big enough business that anyone notices what they're doing. Um, In its first year of operation, Amazon required another cash infusion from Jeff's parents, this one of a hundred and forty five
thousand dollars. So fucking hell he gets I mean, he's kind of funded by x on Mobile, you know, like his dad gets rich from x on Mobile, and that's what allows Amazon to survive its first year or two. What what I don't get is why did he need those big lumps of money from his parents. You know, you already had like a really good job. I know he quit, but did he not like save anything, you know what I mean? I don't know. You know, it's an idea too. I think tim grand which is what
he invested in, its more money. I don't, I don't he wasn't. I don't know if it's that he made his parents put most of the investment in, or if he just like legitimately that was kind of what you made in fintech at that point. I really don't know what his actual net worth was. Um, but yeah, I mean it's it is kind of worth noting as a number of people will always point out that like, again, he's he's he's very reliant on his his family money in order to uh, you know, a couple of hundred grand.
It's not an insignificant investment against the thing that all these guys have in common. Um. That said, Bezos and his early employees knew that like mom and dad's money ain't gonna keep going forever, and they have to pound the pavement to find investors. It was not an easy sell at first Amazon. The year his mom and dad put a hundred and four you have granted into the business, the company lost three hundred thousand dollars. Um. Amazon is
a lost leader for a while. Jeff told every potential investor that the company had a seventy chance of failing, but he projected net sales of seventy four million dollars by the year two thousands. So he's like, yeah, we're losing money now, but we'll be making tens of millions of dollars by the year two thousand. And it's one of those things I think at the time most people would have probably rightly been like, well that is a is nonsense, Like you're just you're just pulling a number
out of your ass. He was actually pessimistic with that estimate, because actual net sales for Amazon in the year two thousand were one point six four billion dollars um. Now, Amazon still loses money in the year two thousand up until like two thousand fifteen. I think they're losing money constantly. Uh, but their income grows and that's why people keep investing in them, and then they keep like reinvesting their profits back into expanding the business. Um. So the investment money
starts to come in. N venture capitalists port tens of millions of dollars into Amazon, and things begin moving very fast for Jeff. Amazon's first company motto was get Big Fast, which is also the motto for a significant portion of steroid twitter. Um. And I guess we can make a comment about all the testosterone Jeff appears to be taking these days. But yeah, he got big fast, that's for sure. Yeah.
The company had its I p O in nine. It succeeded in winning a stupid legal fight with Barnes and Noble, who are like desperate to try to kill Amazon, but not quite smart enough to figure out how UM and it expands from books to CDs, DVDs, toys, and electronics. In his first letter to shareholders, Jeff Bezos and some of his early employees wrote, this is day one for the Internet, and if we execute well day one for Amazon dot Com. Now that is important because it's become
kind of like a religion within Amazon corporate culture. You will hear day one constantly. There's Day one posters everywhere. Jeff regularly emphasizes the need for day one thinking. Treating what they're doing like it's the first time anybody's done it again. Not a bad way too, obviously, this is a part of the company's success. That's not a bad way to look at things if you're trying to innovate them. UM.
For its first few years, Amazon grew meteorically. Bezos was Person of the Year in nineteen, which actually causes some problems for him because the article itself and all the attention generated by this fawning piece helps to send a flood of customers to Amazon for holiday season, and this is the first time Amazon has a huge holiday season.
They've recently expanded to products other than books. Um, and they get all this media attention and people start flowing flooding there to like buy Christmas presents and Hanakah presents and stuff from them. Um and Bezos had put millions in investment capital into expanding Amazon for this moment. This had been his goal and was part of the strategy. But they kind of suck it up because actually keeping number one, keeping the most popular toys and stock proved
to be kind of impossible. They were selling too fast, but a bunch of other stuff they bought didn't sell, and so like their warehouses are filled with unsold inventory while people can't get the products that they actually want. Um. It's enough of like a cluster fuck, and largely caused by issues with the warehouse right, Like he hadn't scaled up distribution enough in order to actually handle the demand. They've only got like five warehouses at this point. So
this causes enough of a calamity that it starts. It results in this like flood of bad press. Journalists start writing articles about how Amazon stock is overvalued and like the company is about to come to a crashing end, and it's actually really kind of an existential threat for Amazon, and in order to kind of meet the threat, Bezos
institutes what he calls a Save Santa operation. He forces his like all of his employees, like the guys who are like coding, the people who are like doing marketing, the people who are like all of his like actual staff employees, he forces to take two weeks each leave their families and spend two weeks of the holidays staffing customer service lines or working distribution in like isolated warehouses. To save money, workers were kept two to a hotel room.
And I'm gonna quote from the Everything Store here to talk about this first big Amazon holiday season infirmly. Some employees stayed at the Golden Nugget in Reno, and after they worked at the graveyard shift, they met for beers at the casino bar at six am. Later, a few swore they had been working alongside furloughed prisoners from a
nearby jail, though that is difficult to prove. Early employee Tom shon Hoff was among the group that went to Delaware, where the facility was having problems with the quality of the temporary labor pool. There were a lot of temp workers that looked like the rehab center had pushed them out the back door. He says he watched one worker get fired for intoxication and then wet himself while he
tried to protest. So, yeah, we're starting to see the beginnings, right of like the Jeff Wayno today, it was enough of a debacle that some executives and it's kind of a mix of how badly the Christmas season goes and how like how infuriated they are by this time article where he like is fluffing himself and that leads to a lot of this rush on Amazon. Some executives try to push him out of his company. They call him impetuous and controlling Um, and this sparks a fight with
the board and alleged fight with the board. Some board members deny it happened. There are there are other people who are executives at the time who say it happened. There's this fight to try to oust Jeff Um. And this is not that long after uh, Steve Jobs had been ousted from Apple, right, there's this period where Jobs gets forced out of Apple. He creates a computer company,
he creates pixar Um. Jeff manages to avoid this happening because he keeps the majority of Amazon stock, but the early years are rough, and you know, there's a lot of people saying Amazon and is dead in the like two thousand, two thousand one, people saying the company is never going to survive another couple of years. Bezos actually gets investigated for insider trading in two thousand one because of like how bad some of the financial decisions he
makes are. Um and the company is just bleeding money through its early years, like their their profits are increasing rapidly, but they're just like pissing cash into a fucking trash fire. That said, by the early odds, things had started to stabilize and the company began to grow like exponentially. It's
profitability again. They're still losing money, but they're growing profits by so much that investors are willing to keep pumping money into the company because they're like, well, if we stop reinvesting in the company, eventually there will be dividends and shipped for us. It's just yeah, you know that that's kind of like how he sells this to them, um, And you know the broad strokes of the rest of the story, Jake, everybody does because we've all lived through it, right.
Amazon expands steadily and despite losing to Apple in the digital music race because Jeff Bezos doesn't understand music. The company rises is to become the globe striding colossus we
all know today. To close us out, then, I think the best thing I could do, rather than sort of like, oh, let's talk about how they started Amazon Web Services, or let's talk about how they expanded in the television, right, I think the best way I could actually close us out today is to hone in on the first stirrings of two problems that are kind of the main things
Amazon gets criticized for today. Number one would be it's relentless, obsessive and unhealthy work culture, and number two would be the callous disregard for human warehouse workers in its distribution centers or fulfillment centers, as they call it. The first major publication to report on Amazon's corporate culture in a really critical way with The New York Times in two thousand fifteen. Here's how it opened. They are told to
forget the poor habits they learned at previous jobs. One employee recalled when they hit the wall from unrelenting pace. There is only one solution. Climbed the wall. Others reported
to be the best Amazon ians they can be. They should be guided by the leadership Principles fourteen rules inscribed on handy laminated cards when quizzed days later those with perfect scores or in a virtual award proclaiming I'm peculiar, the company's proud phrase for overturning workplace conventions and one of the things that really separates Amazon from the other
big dot com startups like Google. They don't go to any real efforts to make it comfortable or to like give perks to employees, like you get money and you'll get stock and you can get rich working at Amazon. But like there is like there's no like massage rooms. There's no like game rooms for chilling out in like Google gets famous for. Like Amazon, Like, yeah, you are going to work like yourself to the bone at Amazon.
That's the promise we make you um and the times sites employees like bo Olsen, a bookmarketer who said his main memory of Amazon was seeing people weep at their desks. You walk out of a conference room and you'll see a grown man covering his face. Nearly every person I worked with I saw cry at their desk. Much of the heart nous and irrational workaholism was justified by the near sanctified fourteen rules Bezos had for his employees. Quote.
According to early executives and employees, Mr Bezos was determined almost from the moment he founded Amazon in nineteen four to resist the forces he thought sapped businesses over time, bureaucracy,
profligate spending, lack of rigor. As the company grew, he wanted to codify his ideas about the workplace, some of them proudly counterintuitive, onto instructions simple enough for a new worker to understand, general enough to apply to the nearly limitless number of businesses he wanted to enter, and stringent enough to stave off the mediocrity he feared. The result was the Leadership Principles, the articles of faith that described
the way Amazonian should act. In contrast to companies where declarations about their philosophy amount to vague platitudes, Amazon has rules that are part of its daily language and rituals used in hiring, cited at meetings, and quoted in food truck lines at lunchtime. Some Amazonians say they teach them
to their children. The guidelines conjure and Empire of elite workers principle number five higher and develop the best who hold one another to towering expectations and are liberated from the forces red tape office politics that keep them from developing their Utmost employees are to exhibit ownership number two or mastery of every emblement of their businesses and to dive deep number twelve or find the underlying ideas that can fix problems or identify new services before shoppers even
ask for them. And the indoctrination that that goes on in Amazon that like to get people kind of roped into this idea. The overwork that comes with it is also consuming. That employees take to calling themselves ammabots with a myth mix of like pride and resignation, like there's an element of pride that were like robots for Jeff's
big vision. Being the ultimate data guy, Jeff takes full advantage of the fact that Amazon's online nature gives him like a wider variety of metrics than any other boss has ever had to analyze and judge how the human beings in his company are working. Employee evaluations are often fifth to sixty pages long, filled with numbers like on people's performance that employees are expected to memorize, and then
they'll get cold called by their managers. And if they haven't memorized all the different numbers about their metrics and aren't able to like explain or justify them, they get in trouble quote from The Times. Explanations like we're not totally sure or all get back to you are not acceptable, many employees said. Some managers sometimes dismissed such responses as stupid or told the workers to just stop it. And in this Amazon is very much taking after its founder.
And I'm gonna quote here from the Everything sort of talk about how Jeff actually refers to like speaks directly to the people who work for him. Bezos was prone to melodramatic temper tantrums that some Amazon employees called privately nutters.
A colleague failing to meet Bezos's exacting standards would predictably set off a nutter if an employee did not have the right answers, or tried to bluff the right answer, or took credit for someone else's work, or exhibited a whiff of internal politics, or showed any kind of uncertainty or frailty in the heat of battle. The vessel in Basos,
his forehead popped out and his filter fell away. He was capable of both hyperbole and cruelty in these moments, and over the years he delivered some devastating rebukes to employees. Among his greatest hits collected and relaid by Amazon veterans, are I'm sorry? Did I take my stupid pills today? Are you trying to take credit for something you had nothing to do with? Are you lazy or just incompetent?
I trust you to one run world class operations, and this is another example of how you are letting me down. If I hear that idea again, I'm going to have to kill myself. Does it surprise you that I don't know that that you don't know the answer to that question? And why are you ruining my life? Uh? Some of
them are pretty funny. I mean it's pretty bad, but I wouldn't say that, like you know, And you can see with that both how someone could be like really fucked up by that, especially if like you devote your whole life to this company and in your boss just basically said you're ruining. But you can also see how people would find that like intoxicating and would draw into
a guy like that. And would be desperate to like please him and get positive Like when it's paired with all that rules, yeah, it's very cold, like yeah, exactly. So you can see both white people would find it off putting, but also why that would inspire people to work even harder, you know. Um. In two thousand thirteen, Amazon hired Elizabeth Willett, a former Army captain who had
served in Iraq. After some time, she had a child, and she arranged with her boss to come to work earlier and leave earlier so that she could pick up her baby and then she would get on her laptop and work from home. Her boss told her this was fine, but her colleagues thought she was skipping work because she was leaving early and they didn't know she was coming in early, and they informed on her to the boss
that she'd gotten approval from to do this. That boss then attacked her, saying, I can't stand here and defend you if your peers are saying you're not doing your work. And this is kind of emblematic of a dark trended Amazon, which is that a lot of these these fourteen principles and the system of coworker evaluations often based on the principles wind up being used uncommonly, often to attack specific
groups of employees. And one of the things that like women who work there will note is that one of these fourteen principles is you have to be honest. And one of the pieces of criticism that like female employees get from their coworkers at Amazon is that they're all dishonest. Like that's that's a common it's a part of why
there's very few women in high management. And one of the claims they'll make is that like, well, these principles are used as a justification to attack us and just say that like, well, you're not following the principles, when in reality, it's just like people kind of being shitty
towards women in the way that they often are. Um, it's an allegation, very very whole, like that ship, you know what I mean, that's actually and it's like mind games, that's like abusive type ship, Like right, he gave her the permission and then he's having to go for something that you know, essentially he should have told the colleagues it's none of your business, like stop informing, Like but no, it's like now that person is in trouble that's fucking weird.
That's not right well, and it's again because Jeff isn't directly involved in that story, but the system he's builts. And part of why that, part of why that boss is doing that is that that boss is going to get evaluated by all of their employees. And so the boss, even though he gave her permission to do this, even though she's been doing a great job, he can't defend her because then his subordinates will criticize him, and so he throws her under the bus to protect his own career.
And that's the that is how the system Jeff built works, right, That's it working as intended um, which is kind of sucked up, I would argue, uh, and it gets sucked up at her because again, that story is one of the less unsettling ones from the Times. A woman who had thyroid cancer was given a low performance rating after she returned from treatment. She says her manager explained that while she was out, her peers were accomplishing a great deal.
Another employee who miscarried twins left for a business trip the day after she had surgery. I'm sorry, the work is still going to need to get done, she said, her boss told her, from where you are in life, trying to start a family, I don't know if this is the right place for you. A woman who had breast cancer was told that she was being put on a performance improvement plan, Amazon code for you're in danger of being fired because difficulties in her personal life had
interfered with her fulfilling her work goals. Their accounts echoed others from workers who had suffered health crises and felt they had also been judged harshly instead of being given time to recover. And that's not unique at Amazon. It's just again, it's part of this system that that that
that Jeff has built. Now, when this report, this New York Times article drops, Amazon makes statements about like we're going to investigate a lot of these claims, like this is not us, Jeff Bezo, since that a letter saying like what's described in this New York Times article isn't the Amazon that I know or that our employees know. Um, yeah, it's the standard kind of pr flak response to this ship.
There are some changes made to the employee self review process, but fundamentally nothing changes about the way the company treats its own people, because again, to Jeff, the human beings that work for Amazon are both like robots that are there to execute his ideas, but they're also there to be targets for his anger when things go wrong. And a good example of this comes from the first Prime Day, which is Amazon's big sales day, and the very first
Prime Day occurs in two thousand fifteen. Um, Amazon programmers and other staff work twenty four hour days in order to prepare the site to host its first massive sales event, which went on to be the biggest sales day in company history. So this is a huge success by any kind of financial metric. Right, they announced this thing, they roll out this big day of sales, and it's it's the best they've ever done, right, Um, But the rollout
of the software that organized the deals was imperfect. So, like they're kind of algorithmically picking which stuff to put on sale. Um, some of the products that they're relying on to be big sellers sell out and so people can't get them other like weird products, Like there's like discounts on pop tarts and ship and people are like, I can't get these electronics that obviously I want, but you're trying to get me to buy these discounted pop it's not it doesn't hurt again, it's the best sales
that the company has ever had. It doesn't hurt them financially. But there's a bunch of people on like Twitter making fun of Amazon because of some like technical glitches, and this, to Jeff Bezos completely wipes out the fact that they've made the most money they've ever made. People are making fun of Amazon, and so he's furious at the people who have just executed his dream to do Prime Day. Right. Um, I think a reasonable person would be like, yes, of course,
some weird ship went wrong around the edges. We made the most money ever. This is worth celebrating, Jeff. Yeah, dollars going to buy. Yeah. But Jeff gets really fucking angry, and I'm gonna quote here from the book Amazon Unbound. Behind the scenes, Jeff lost his mind over the negative online reactions, said Craig Berman, a senior PR vice president who was at his son's swim meet in Oregon when all hell broke loose. He was screaming at me and my team that we needed to be clear that these
aren't shitty deals. He was being maniacal, saying get this fixed. You've got to show this as a success, and yeah, it's you know, it's it's the kind of like poisoned internet brain a lot of big wealthy people have where it's like, I mean, by any measure of the word success, this is a success. But people are angry at you on Twitter. So you're like, you're broken about it. I I you know, I really kind of get my head around that. I mean, you know, I'm one for Twitter
and that it's fine, Like it's decent. But if you had all the money in the world, it's why, like, oh are you with this person on Twitter? You can go and do anything. I'd be on a quad bike, like just doing something, you know what I mean, Like, oh, someone's about on Twitter by Like it's just I it's You're right, it's like a poison you know. I mean, but I think it comes comes with ego, you know, when everything you built. Yep. I think so it's because
this company is like fundamentally extremely personal to him. Yeah, exactly, it is the core of his identity. Yep. Cool shit. Uh. There's probably no better example of how uncaring and actively harmful Jeff can be towards his employees than the story of Amazon's fulfillment centers. We've all seen articles that dropped early this year about people pissing in bottles to make the inhuman metrics for cargo moved or packages delivered. Um, you have a show, you know, Mega corp is largely
about this. This is a big part of Mega Corps is like Amazon fulfillment center workers and how they're treated. Um. And so at the end of this episode, I'd like to talk about how that system started, right like the very early days of what led to this people pissing in bottles and like passing out and stuff on the work floor and RV city setting up outside of fcs in order to keep them like all that ship. So the man who largely built Amazon's fulfillment center system was
Dave Clark. He was a former middle school band teacher who got hired in nineteen nine when the company had only seven warehouses in the US. By two thousand twelve, when he becomes head of Global Operations, Amazon has forty warehouses in the US and twenty four other warehouses worldwide, but these were located mostly in the middle of nowhere. So at this point twelve, Amazon has a bunch of warehouses like sixty seventy in the world. But they're all
in like really inconvenient places. And the reason why they're inconvenient places is those are general lead the places with the chiefest labor and also the most advantageous for tax purposes. So we'll set up like the warehouses will be in some bum funk town in the middle of nowhere because that town gives them a tax break and because it's cheap to higher workers around there, right, And that makes sense for a company that isn't trying to do what
Amazon starts trying to do. Right. That can work great if you're just trying to sell products online minimize your costs. But if you're obsessed with the idea that like there should be two day or one day shipping, you can't do that. You have to have a fat you have to have a fulfillment center in every major city if
you're going to do that kind of business. Right. Um, So, Dave Clark is the guy who kind of oversees the pivot from we have our warehouse systems set up in order to maximize the amount of stuff that we can hold and ship out and minimize the costs too. We don't care about minimizing the costs anymore. We care about getting as many fulfillment centers started as possible so that
we can get products to people in a day or two. Right. Um, And that's again it's become such of like Amazon's two day shipping has become such a part of just like life now that it it's it's not until like right around when the Trump years start that like they actually get this really off the ground. You know, it's fairly recent that this has been an aspect of modern life that you could expect two days shipping on your Amazon products. Um, it's it's just kind of taken over everything because it's
it's offers such close to day. Yeah, I've had ship arrived like same day that I didn't even like try to order same day. Yeah yeah, yeah, same, It just happened. Yeah. Now, over the next five years, Amazon adds a hundred fulfillment centers worldwide, and this is where most of their gargantuan like huge warehouses and like that are in every city kind of or at least on the outskirts of every city.
This is where all that comes from. So Dave Clark's the guy who's like expanding massively the fulfillment center system so that they can do this now. At the same time, Amazon they realized they can't rely on like ups or usp us, so they get their own like fleet of planes. Um. But they don't. So one of the things Amazon does with its warehouses and with everything is they never want to interface with unions in any way, shape or form. Ever. They never want to, like, in any way deal with them.
This is a problem with getting your own planes because pilots are unionized, right. Um. So Amazon basically leases planes from a company that actually runs everything and hires the pilots so that they don't have to deal directly with unionized pilots. Um. And they structure their distribution network very carefully to avoid any unionized warehouse workers. This also allows them to avoid scrutiny over the hours worked or miles
driven by people in distribution. When this starts killing people because drivers are involved in crashes, they run people down on the side of people like are dying in the warehouses. Um. You can find a bunch of stories about this, and when those stories start to come out that there's like drivers crashing and killing people trying to make Amazon's like metrics, there's backlash um, you know, both from the media, from public outcry, and from some people inside of Amazon itself.
One of these people is Mark Onetto. Mark was head of operations in the mid Auts, and he introduced a number of innovations to try and make fulfillment centers run more smoothly. He was also very concerned with the treatment of employees in these fulfillment centers, and he tried to force empathy for employees onto Jeffrey Bezos quote from Amazon on Bound. In two thousand nine, Onetto's human resources deputy David knee Kirk wrote a paper titled Respect for People
and presented it at an S team meeting. The S team is like Jeff and his his like trusted advisors, right like it's the top of the Amazon Empire. The paper, yeah, the steam. The paper drew from Toyota's proven lean ideology and argued for treating people fairly, building mutual trust between managers and associates, and empowering leaders to inspire employees rather than act as disciplinarians. Bezos hated it. He not only railed against it in the meeting, but he called knee
Kirk the following morning to continue the brow beating. Amazon should never imply that it didn't have respect for people embedded in the very fabric of how it operated, he said. Bezos also solemnly declared that one of the biggest threats of the company was a disgruntled and entrenched hourly workforce, like the unionized workers that impaired US automakers with strikes and onerous contract negotiations. Amazon later denied that Bezos said this.
He encouraged nie Kirk and Noetto to focus on ensuring that FC workers who weren't advancing with an with an
Amazon stayed for a maximum of three years. He like cancels bonuses makes it impossible for well to get raises past a certain point, like, rather than we shouldn't be enabling the self respect of our fulfillment center workers, we should make sure there's as much turnover as possible so that nobody's there very longs that no kind of culture conform, so that people don't get to identify themselves as part
of a community of labors and unionized. So Onetto is pushing against this, Bezos pushes back, and Nonetto's end at the company comes in two thousand eleven, when a local Pennsylvania paper reports that an Amazon warehouse near al In Town had gotten so hot during the summer that workers had passed out and been taken to hospitals. And Amazon had been so aware of the danger that they had
ambulances just waiting outside for when people passed out. Right like that, This was like there were yeah, of course X number of employees are going to pass out in our unair conditioned warehouses in the dead of summer, and we'll just keep ambulances on site. There was in my research. I actually spoke to someone that spoke to the workers there and they were saying, uh, in the offices when people went into complain, they had the air con on full blast in the office, but in the who house
they had nothing like yep, so grim. And here's the thing. Ohnetto had seen this coming, and in fact, months earlier he'd presented a white paper to Bezos another top brass about rooftop air conditioners and FC facilities and said they were they would cost like fifty two million dollars, but he was like, we need to do this. It's going to be necessary both for maintaining productivity and taking care of our people. Bezos himself shut down the request to
put in air conditioners now. When the story goes viral that workers are passing out, he immediately approves air conditioners for the FCS, Like right, it's this kind of thing where he's like, no, we're not going to spend that money. Oh, now people are yelling at us. Now it's bad PR. We'll do it now. And then after he's forced to like put in air conditioners, he attacks Onetto for not
stopping the disaster. The guy who had been like, we have to do this and Jeff had said no. Jeff goes after him and blames him for the fact that there's bad PR and I'm gonna quote from Amazon unbound and like how he does this? Fuming a Netto prepared to remind Bezos of his original proposal. Colleagues begged him to let it go, but he couldn't, as they anticipated.
The meeting did not go well. Bezos said that as a matter of fact, he did remember the paper and that it was so poorly written an ambiguous that no one had understood what course of a of action Onetto was recommending. As other s team members cringed, Bezos declared that the entire incident was evidence of what happens when Amazon puts people in top jobs who can't articulate their
ideas clearly and support them with data. And I think it's because the actual data, like Jeff was willing to accept, oh we'll lose ex productivity in order to save this amount of money by not air conditioning our factory or fcs, it's worth it netto was saying like, it's bad to do this to people. And the thing that Jeff's data didn't account for is that like, well, it may not have cost you money, but it did cost you bad pr when it came out that you were doing this
to your workers and that hurt your bottom line. But no data that Otto could have presented would ever have made that case right. There was no like white paper saying this is how much money will lose. When The New York Times writes a story about this, you know, um yeah, yeah, I still don't think he's fully grossed that.
It's like, you know, he's made more money than he's ever made throughout the COVID and the union workers, you know, doing the most efforts right now to unionize, and he's still just spending millions and millions trying to stop them. You know what I mean, rather than just being like, yeah, you know what, we made loads and loads of money. Okay, let's let's put it back in, let's actually fix this, and it's just no, he's just just not having it. Yeah.
It's kind of like you could you split one percent of Amazon profits among FC workers and suddenly you've got aware a work force that's like a lot more mode. You would have much more career people, you'd have less turn up. But whatever, I know, I'm not a businessman. Uh. It would also be at least less unethical. So the guy who Atto leaves after this, like he quits I think the very next year. Um, and the guy who takes over from anetto spearheads a bid to acquire a
company called Kiva. Kiva is a robotics startup. They make machines that can transport merchandise containers around warehouses and streamline the whole process. Before Kiva, Amazon pickers had walked upwards of twelve miles a day to grab products and take them to shipping. Kiva bots are able to kind of like move all of the shipping containers and these warehouses around in order to make things more efficient, so that workers have to walk less and can pack more per
like our um. And these robots really start to hit their stride and warehouses around two fourteen. They increase the amount of products per square foot and an Amazon FC by five deeper scent because it's just so much more efficient. But they come with downsides to primarily for the human workers. Quote.
The robots also transformed labor that was physically exhausting characterized by endless walking into work that was instead mentally straining, with employees standing in placement not and listeningly repeating the same movements over and over. Report in the Center for Investigative Reportings Reveal magazine cited an Ocean letter to Amazon that said the robots exposed employees to ergonomic risk factors, including stress from repeated movements and standing up for ten
hours a day. Just as the tyrannical invisible force of software guided the robot swarms, it also monitored worker performance, flagging any quantifiable decrease in productivity and subjecting employees to performance improvement plans and possible termination. And that at this point where where we are when megacorps starts, Jake, this is kind of what feeds into all that Like this
is how this is. You know, it all makes sense, right, None of it is a Yeah, the diet thing is just like the obsession with data above just humanity basically is kind of you know the stage that the you know that all of this is kind of dancing on you know what I mean, And it's just it's it's it's like it's it's almost like unintentional horrors is just like yeah, like just just not even caring, you know what I mean, It's like whatever, whatever. The data doesn't
show that. It's just like me, these are human beings with families and lives. It got you know what I mean, got to eat, but the data doesn't it doesn't show that that level of kind of context. Um, it's just kind of sad, you know what I mean. Yeah, yeah, it is kind of sad. But that's the that's the that's the podcast, that's the episode. Yeah, where you're going over it all. It's very jolly. Yeah, it's fun everybody. So you know, consider this part one and consider listening
to Megacorps to get the full story. Now you know who f Bezos is, it's time to learn in detail every funked up thing his company has done. Um, Yeah, definitely. And you know, I would say it's not exactly a lot of people have been like, oh it's it's not exactly the most uplifting podcast. It's like, well, no, what did you think was going to happen? This is about scandals. You know, one of the arguably the biggest kind of company on earth in a way. So yeah, no it's not.
But like I said in the kind of in the in the intro to the thing, Um, you know, if you if you have ever bought anything from Amazon, I think you should at least have to be aware of the way they operate. And it's not just about the work, because we're going to be going into like the surveillance, the deals they did with them I six and the c I A. Like, there's so many layers to it. Absolutely, and uh yeah, check out Megacorp, Jake, do you have
anything else you want to plug? Um? Yeah, I mean, if anyone wants to just check out my work, just goes to Jake Hanrahan dot com. Um and you just see all my links or whatever. Yeah, alright, check out Jake Hanrahand, check out Popular Front, check out Megacorp, and check out of the Internet now and go do something offline. You've you've spent enough time online today. Yeah, all right, bam