Amazon Insiders Weigh in on CEO Jeff Bezos Stepping Down

Let's bring in somebody who knows a lot about the company. He was an early investor. Matt mclwaine is Group managing director at Madrona Ventures. Matt, your reaction to Bezos's I don't really want to call a departure. He's still going to be executive chairman. What exactly will you be doing? Well? I think you'll get to keep being a pioneer and and thinking about the next major areas where you know

Amazon can find opportunity. Um. I mean I was surprised that he's handing over the CEO job because I think he got to do a lot of that pioneering and envisioning in the role today. But On the other hand, I am highly confident that Andy Jassie, who's going to be taking over as CEO, will do an incredible job in that role. He is absolutely the most logical choice for all kinds of reasons. And man, any uh, anything

we should take away as it relates to timing. Why Now, you know, they really did have an exceptionally good year in really tough circumstances, and Jeff leaned into the business and helped them innovate, not only on uh you know, how are we going to scale up to to support all of this increased demand? And I think they spent over ten billion dollars on COVID related you know, testing and processes and protocols so that they could keep their

employees healthy while they're continuing to serve their customers. So that must have been an exhausting year. I know how exhausting it's been for all the startups we work with, and it mobi Jeff just said, look, you know, there's there's certain aspects of that role that I think another person and and somebody like Andy, who was of course

Jeff's you know, technical adviser, think of that. It's kind of like his chief of staff twenty years ago, early in his tenure at Amazon, and then you know, Andy, through that process, you know, helped identify and transform how Amazon was going to scale of the business through you know, kind of cloud based infrastructure. And then he went up

and started you know, Amazon Web Services. You know, I remember hosting with Andy fourteen years ago, uh an event at a warehouse in Seattle for startups and I got up to make fond adventure capitalist and Andy got up and said, hey, we've got this new service. It's called you know, compute as a service and storage as a service. We're calling it Amazon Web Services, and new startups might want to give it a try. Fourteen years later, that as a fifty billion in revenue business growing at almost

it's very hold and catch fire. So Amazon stock unchanged today, and obviously people are quite fine with this change. But I wonder, you know, what what does it mean for the future of Jeff Bezos. Does he want to concentrate, for example, on Blue Origin is space company, and it's maybe his philanthropic work. I mean, we know he does

philanthropic work. We're not quite sure where or was. But he also of course owns the Washington Post or while start at something new, do you think, Yeah, you know, Jeff is fabulously curious, and so I wouldn't put it passed him to start something new. But he has been investing in several areas outside of Amazon. You know, you mentioned Blue Origin. You know, it's probably less well known. I think stylistically, Jeff and Andy and the Amazon folks tend to kind of just go do things and make

a difference. You know. In Jeff's case, you know, there's the Bezos. You know, you know therapy clinic at the Fred hutch Cancer Research Center that I've been on the border for many years, and so there's a passion there around helping with the leading edgeways to to treat and cure cancers. You know. You know, for that matter, Andy, Jeff has been incredibly involved in education and educational opportunities through organizations like Nier Scholars in Near Prep, where he

serves on the board and that donates his time. So

I think of the nonprofit world. They both share a lot of passion around climate change, and you know, they were very involved together in you know this the new arena that our new hockey team that Andy's one of the owners of is the kind of Climate Pledge arena, so I think in the environmental areas and the commitment by Amazon to be carbon neutral uh by some time, and then theties I can't remember exactly the year, you know, those are kinds of things that I think Jeff will

continue to be engaged with and involved with. And then you know, to your point, you know, will he find some other area. I think this whole broader area of healthcare, with all that's happened with COVID this past year, I think it's really caught the attention of Amazon and how they can take some of their you know, start with the customer, iterate, you know, learn and then scale up kind of approach and apply it to uh, to the health care world. Matt, what do you think of philanthropy

real quick? Here? Jeff has been um, I guess criticized by some by not being perhaps as aggressive as some of his peers. Uh. You know, I think that there's always gonna be you know, folks that that that could keep you know, kind of high profile you know, uh, individuals. Uh. You know, I think there's so much generosity of both time and resources, and the senior folks at Amazon that I've come to know over the last you know, twenty plus years. UM, and I think that Jeff is amongst those.

And you know, you know, he's got a lot of passion for education as well. UM. You know that's an area with uh, you know, you know, some of the foundation priorities that he has set up that I think he'll probably be able to have more bandwidth to to to do additional things in UM. But you know, you know, these are folks that are you know, deeply, I mean, you know, it's interesting. Jeff and I went to rival public high schools in Miami and we both you know, did not come from you know, a lot and had

to work really hard. And I can completely empathize with, you know, his desire and passion. I share it for giving every person the educational opportunity that they deserve to have. Well, we're looking forward to seeing all of that. And just very quickly, did you get out of your Amazon position? You still in? Oh? Well, we we were early investors in Amazon, and so you know, from a Madrona perspective,

you know, we haven't been investors in Amazon. As a venture capital firm, what we do do is invest in a lot of companies that build on top of things like Amazon's cloud business or work with the Amazon Alexa and Echo platform. And so it's been very instructive over the years to have those close relationships and think together about how do you build out an ecosystem around some of the successful investments that Amazon's made in different areas, Like that story I told you back from two thousand

and seven. Well, Matt, we would love to hear more about that very very soon, and thank you for joining us today. One of Amazon's early investors, early early investors want Michael Wayne, group lunging director at Madrona Ventures, and so now we want to bring in somebody with a little bit of a different perspective. He wrote the book Working Backwards Insides, Stories and Secrets from Inside Amazon. He was a former Amazon VP. His name is Colin Ryer, and he joins us now. So Colin excited to hear

some of the secrets from inside Amazon. Haven't had a chance to read your book, very definitely will now. But it tell us something about Jeff Bezos that we may not know well. So I worked with at Amazon started and I worked for two years as Jeff Bezes as chief as staff right after Andy Jossy left that role. And moved on to to start web services. And at

that time it was a pivotal time for Amazon. We were creating and launching Amazon Web Services, the kindle fulfillment by Amazon, know, things that would eventually go to be

very very large businesses at Amazon. But one of the things that isn't really talked about too much side of the company is Jeff and Andy and the management team spent a whole lot of time figuring out how to build and enduring company and create really created a set of principles along with some scalable, repeatable processes on how small groups and large groups can build and operate, uh, and create new businesses that are really customer obsessed, long

term thinking, uh, you know, have a spirit for invention and then really take pride on operational excellence. And that's what we what we call the Invention Machine. And and it's a set of its leadership principles in a set

of scalable processes. And I think that's going to be one of Jeff's and Amazon's enduring legacies that will last after you know, well, some day we're gonna look at these hockey pucks and cylinders we have in our kitchen and and and think that, Hey, can you believe we thought two day and one day delivery was a premium express experience. You know, the customer experience is going to evolve over time, and I'm excited to see how that

happens and what Amazon is going to do. But an enduring legacy for Amazon that they've given everyone at Amazon, and also what we talked about in the book for that other organizations can use is how to build these types of companies. And it's a new way of building and operating and management science, if you will. Colin talked us about the culture, the work culture within Amazon. There's been lots of stories writing about how it's so demanding, it's perform or get out. Talk to us about the

culture that Jeff Bezos created at Amazon dot com. So if you had to encapsulate, well, what the culture is, you know, and Jeff has described it this way, he would say customer obsession instead of competitor obsession. M a willingness to think long term and being misunderstood for long periods of time, and just an eagerness to invent. And part of that is also you have to um if you're going to invent an experiment, you have to have some processes in place on how you fail and how

you can learn from failures and move forward. And then the last thing is really taking pride in operational excellence. And you know, most of the work that a lot of these teams do don't see the light of day, but even outside of your team. But you have to get the little details right. And you know, one of Amazon's leadership principles is and it's just on the highest standards. Um. You know, if you go and work at Amazon, you

need to bring your a game every day. You have to hold yourself first and foremost account vote to those high standards, and then those around you and those around you will do the same to you. So it's a culture that I personally liked it. You made me want to be a better person and work with teams and produce something that sometimes we didn't even think were possible. Um, it's not for everyone, you know, they're luckily there are many different company and corporate cultures. But you know the

one Amazon has is is really customer obsessed. And I mean even with them Amazon, I presume Colin you're talking about the Whier color job. I mean, we know, you know stories coming out constantly. For example, just a couple of months ago, we wrote a story about how four thousand employees are on food stamps in nine states. We also know that Alabama is trying to unionize and Amazon is ratcheting up anti union pressure on a worker is there. Do you think that Jesse will be a better boss

to those employees? You know, I think Amazon now has one point three million employees, give or take UM. The vast majority of those do work in UH fulfillment centers and the logistics armament, and so it is a key

component of Amazon success. And I do think that Andy is going to continue to focus on creating a safe environment, leaving the charge in some respects about career choice or military veterans coming back to Amazon, UM and UH, you know, with fifteen an hour minimum waves stepping up before or other a lot of other companies have. I think you'll see some of that continue that have e been said.

Amazon does occupy a different place in society than it did five or even ten years ago, and UM, it can and should be scrutinized the company practices just because of the impact that has in society, and UM, you know, be part of the scital dialogue on how a company that large interacts with its employees and business partners. So, Colin, would you expect Andy Jesse to do, uh anything different? Do you expect him to maybe pivot the company in

any way? New products, new services, new verticals. I think that there will be some surprises along the way inventions. But in terms of you know, how Jeff and Andy are, I think they have many more similarities than than than differences. Um. You know, Andy does have an inventive spirit. He created Amazon Web Services that went from zero to ten billion dollars faster than Amazon dot Com itself did, and you

know it's now about a fifty billion dollar business. So and he's got experience working both with small teams creating you know, taking ideas and creating them from scratch and making them uh very viable products and services for customers, as well as managing large, multi billion dollar businesses. So um, I think, um, you know, in terms of what will happen in in your term, it's going to be more of the same. And part of that is just simply

because of Amazon scale. A lot of the seeds that uh we're planted, you know, they take years to develop and you know to reach the scale that it will be noticed outside of Amazon. So the things that we'll see over the next twelve or eighteen months likely will have started before. You know, Andy took the CEO roll. But I would expect how Amazon operates, it's gonna be not changed too much. But Amazon will surprise us with new products and features as they always have. Yeah, that's

certainly the case. Colin Brier, thank you so much for joining us. We really appreciate your insight. Colin Brier, former Amazon Vice president and author of Working Backwards, Insights, Stories and Secrets from Inside Amazon, is also co founder of Working Backwards LLC, based in Seattle, Washington, Well. New York State has an aggressive commitment to source sevent of its energy from renewable sources by next guest is part of

the effort to achieve that goal. Clint Plumber, he's CEO of Rise Light and Power to Holy own affiliate of LS Power based in New York City. Clint, thanks so much for joining us here. This is a fascinating story. I look you start by just saying having you describe what Rise Light and Power rate is and how you're part of this renewable effort with the State. Hey, thanks so much for having to y on Um. We are

the largest power generating station in New York City. We have about of all the generating capacity in New York City, and over the course of the last several years, we've been making aggressive investments in retooling our facility to help achieve the state's goal of transitioning to clean energy by So can't explain what that means to those of us

who should know more about this area but don't. New York City uses a great deal of power, and that means it's very important that we're able to transition that from its conventional mix of mostly fossil fuels to cleaner sources like wind and solar. Our site is a gateway

for bringing capacity into New York City. So we've been making investments over the last several years in building out battery storage on our site so we can store energy that's produced at night that's cleaner and cheaper, and deliver

it during the daytime. We've also been developing a series of new transmission facilities that will allow us to connect New York City to other points in the grid, like upstate New York, where power is cheaper, where power is cleaner, and in so doing, we're able to reduce the cost of energy in New York City, and we're able to improve the air quality around our plant and others. Clint tell us about the Tax Skills Renewable Connector. That sounds

interesting to me. Yeah, that's the project I was referring to. Pull. It's a um it's a big buried transmission line. It will start at our site in Queens on the East River and traverse the East River, the Harlem River, and the Hudson River to a point that about a hundred and twenty miles north of New York City, just south of Albany. It will connect to the bulk transmission system there that gives us access to abundant wind and solar energy resources across Upstate New York, both existing and new.

There's a tremendous amount of potential to build new wind and solar across upstate New York, but those projects are shut in because they don't have access to the same type of customers that are in New York City. So we see this project is one that will give New York City energy users access to clean, cost effective renewable energy made right here in New York State, and it will help spur economic development, job creation, and new tax base for communities across upstate New York that will build

and host those facilities to deliver power down state. Now, as CEO Rise Light and Power, your CEO of an energy asset manager and developer. It's wholly owned by l S Power. But I'm curious as to where you get your funding in general for all of these projects, and whether it's all state funding and what a new administration might mean given how focused you are on clean energy and renewable energy. Yeah, absolutely so. LS Power is a privately held company that manages about ten billion dollars in

private equity funding. Um So, we're very well capitalized. As you also mentioned, we own and operate the largest generating station in New York City, so we have a steady stream of cash flow to fund these development activities. Um So, all of our investments are privately funded. Um We do see the new federal administration taking aggressive actions in support of new clean energy, both onshore and importantly offshore. I spent thirteen years in the offshore wind business before coming

to this job. I'm very proud to be part of the team that developed and built the first offshore wind farm in the United States. We see the Biden administration making aggressive moves to help grow the offshore wind sector. As a coastal metropolis, New York City is prime to take advantage of the abundant offshore wind energy resources near

our city and so at Rise Light and Power. In addition to the cat Skills project, we're also working on a number of initiatives to help bring clean, cost effective offshore wind energy into our site as well. So, Clint, just give us a sense of how New York State is relative to some other states in terms of renewable energy. If I drive up state the next or the next time I drive up state, should I be on the

lookout for wind farms solar farms. Yeah. New York has a long history of being out on the forefront of thinking about UH clean energy technologies. In fact, it really is a story of two different grids. The upstate power grid in New York is very very clean and very very cost effective because going back a hundred years, we've been building hydropower and in addition to that, we now over the last decade or so, we've been very aggressive in building out wind and solar facility. So it's a

very clean grid, it's very cost effective grid. The challenges when you get to a densely populated urban area like New York City, it's difficult and expensive to build large scale renewable energy in a place like this, and the unique geography of New York and that we've got this pinch point coming down the Hudson River Valley, it's very difficult to build transmission lines there. So New York has very aggressive policies that are progressive and that are move

bing us in the right direction. It's simply a meet a a challenge of the bottlenecking our ability to access that was cleaning a bunch of resources upstate and at the same time getting access to the clean resources that are offshore. Our focus at Rise Light and Power is being a hub for bringing in both offshore and onshore renewables and breaking through that log jam to get it in New York City. You know, we can talk old day and it gets more interesting the deeper we get

into subjects like this. And we appreciate your time, so do come back soon please. Clint Plummer is CEO of Rise Light and Power and uh, I don't know about you. Poll, but I'm probably certainly getting some of my power from them. Yeah, you know, I just you know, I'm one of those that just flips the switch and just expects it to work, and I don't only think about where it comes from. But Clint was just you know, explaining the economics of

upstate versus downstate. This is a project that makes a lot of sense to me, at least, absolutely a lot to talk to our next guests about. Let's just get straight to David Garrity, chief market strategist for a laid Law and Company and partner at bt Block, huge expertise in tech, really across the spectrum of tech. So we want to talk about Bezos moving to executive chairman in a few moments, but I have to start with the game stop saga and basically the Reddit swarm. David, you

know what's going to happen next? Who are the heroes the redditors are going to anoint? Obviously they've annointed Mark Cuban to Mouth and a few others, people who clearly have everyone's best interest at heart. So who who's next? Um, clearly, looking at the Reddit mom I mean, certainly champions have come forward, Arguably Mark Cuban has always been something of a controversial figure, has always been out there representing himself

as working for the little investor. UM. But nevertheless himself has made a fabulous amount of money being a billionaire. UM. But I would argue that the Reddit mom itself is going to have to be schooled. We're looking at the upcoming testimony before Congress I think in February nineteen with respect to robin Hood's CEO U. There are questions clearly with respect to how social media is being used to

disseminate investment advice. UM. You know, from the standpoint that you have when people sign up for robinhood account, they've automatically are on margin and they have the ability to trade options at no cost. One has to argue, is there customer suitability requirements in terms of how investors are able to trade? I mean, we're clearly at a moment here where people are potentially at the risk of losing

billions of dollars UH. And the market at the same time has been potentially, at least in some areas destabilized to the extent that heavily shorted stocks have gone the other way. Clearly, they're being shorted for a good investment reason. I would argue that the Reddit mob is going to have to be schooled. Uh, so this market but wars

and stabilizes. Yeah, David. Customer suitability, that's a big, big issue when you know, someone opens up an account at a regulated broker dealer, when you sign up for this app, there is none of that, is there? No people are able to sign up very easily, and one would argue too easily, and from that standpoint, there does need to

be some regulatory oversight here. Um. I would argue, here's a good opportunity for regulators such as FINRA, UH and the SEC to come and inquire more closely as to how it is that Robin Hood is conducting their business. All Right, we have to ask you about Amazon. You're an expert in Amazon. You've been watching really since the beginning of Amazon times. Who is this new guy and

what's the old guy gonna do? Yeah? No, certainly in terms of Jeff Bezos, um, you know, stepping back at the end of the third quarter of one into an executive chairman role. I mean clearly he's not walking away from the company by any stretch of the imagination. That's where the term executive chairman comes into play, but certainly he does have a more strategic focus that he wants to concentrate on to the extent that he's put um

the people heading up the cloud operations in charge. UH certainly look for Amazon to become more competitive if they aren't already in that area, in order to sort of fend off the likes of whether it's Oracle, whether it's Google, whether it's IBM trying to encroach, or Microsoft trying to encroach on their cloud territory. So in this regard, we don't necessarily see anything that's going to be a significant change of style going from Zos over to his successor.

But we would say in a broader question, now, as we're starting to look at vaccinations gain traction or vaccination efforts gain traction, you know the fact that you've now got Amazon, along with its other three peers among the text majors, now having annual revenues in excess of a

trillion dollars. As we start moving towards perhaps what hopefully will be a post COVID world, you know, we're gonna have some very tough comps to deal with in terms of growth year every year sales earnings and potentially stock prices, and you know, might we be looking at a situation here where Bezos is deciding to step aside into this executive chairman role, so we can be seen as sort of going out perhaps at the top maybe in terms

of the stock price. Yeah, that was kind of one of my thoughts, h David, because what a quarter and what a year Amazon just put up last night in terms of its re results here. And I guess, as you mentioned, David, there are some concerns that near term comparisons are going to be difficult one, but it appears when you talk to investors that the long term bullish case is better today than it's ever been. No no

argument there at all. And I would say that you know, clearly we've had to shift towards work from any where, um, the reliance up on the cloud has only grown stronger. Amazon is the leader in that market. It is a higher margin business than the e commerce side of Amazon.

And so while e commerce may not necessarily see the same growth because of a transition to a post COVID world, one might argue that the secular shift that we've seen over towards work from anywhere distributed workforce in dependence upon the cloud is going to work very very much towards Amazon's strengths. David, thank you so much for all of your expertise in joining us today to talk about all

of the stories. David Garrity is Chief Market Strategies for a laid Law and Company and partner at bt Block And I think the last point is extremely well taken. We're seeing a whole bunch of shops raise their Amazon price targets today after earnings, and you have to imagine that this this can keep happening quarter after quarters. So maybe this is the top. Are very close to the top. So for example, that Jeffreys the price target is now four thousand from thirty eight hundred, A Pivotal the price

target is fifty from Morgan Stanley hundred. I mean, these these prices are just phenomenal. Pole. Yeah, they really are. Just point to the long term bullish call I think most analysts have on Amazon. Thanks for listening to Bloomberg Markets podcast. You can subscribe and listen to interviews at Apple Podcasts or whatever podcast platform you prefer. I'm Bonnie Quinn. I'm on Twitter at Bonnie Quinn, and I'm Paul Sweeney.

I'm on Twitter at pt Sweeney Before the podcast. You can always catch us worldwide at Bloomberg Radio.