Ben Gilbert: evaluation

Transcript context

…To invoke Ben Thompson a little bit, like it is a little bit aggregation theory in that what these new retail experiences do have in common, is they are a superior customer experience versus you are going to Warby Parker for one specific thing, you're going to Blue Bottle for one specific thing. You're going to an Apple Store for a one specific thing. Like there aren’t thousands of skews just lying around on the floor. And so as a result, you can have a much better, purer experience of that thing in that store and as a result, if you're able to get distribution, now this is where it breaks down a little bit in the physical world versus the aggregation theory on the internet. If you're able to have distribution wide enough and you have that superior customer experience, you will win every time. I mean, if there is a Blue Bottle next to a Starbucks like I’m going to the Blue Bottle, you know, but in the physical world and I think this is also, Ben, what you were talking about in the beginning of the episode like Blue Bottle has been valued like it is an internet company but it’s not. Like they need to have a store everywhere to do that and that’s going to require a ton of capital. Yeah, it’s pretty interesting. I mean, the way I like to think about internet companies being differentiated is the super low, if not zero marginal cost. You can have super high fixed cost but low marginal cost especially not businesses like Apple that make hardware but like internet companies. As you sort of look around at those businesses they tend to be winner-take-all. Facebook is a winner-take-all business and Amazon will be a winner-take-all business, and Amazon doesn’t quite fit but maybe Amazon as the third-party seller group kind of fits. So the interesting thing here is like coffee stores are not actually winner-take-all. Like, despite the fact that Starbucks, you know, it's not just the internet that allows you to quickly saturate a global market. It’s many other factors of our world today too. It's our ability to do logistics at mass scale, our ability to do single advertising campaigns at large scale where you quickly make a brand understood by many, many people. So it’s slower than if it were just bits because it’s in the real, real world. But Starbucks, while expanding to a global market fairly quickly, I mean 24,000 stores, it turns out there actually are segments and it’s not a one-size-fits-all for everyone to create the best experience when you're in the real world and maybe even when you're in software too. You can’t create the thing that’s best for everyone under one single company. Well, you can though if you're a marketplace. Right? And I think that’s why Amazon can be a winner-take-all business in retail because, like, you can buy the, I don't know, what’s some trivial example? Like an iPhone dock. Like, you can buy the $3 iPhone dock from China on there but you can also buy the like $500 artisanal, you know. You can get your Starbucks and your Blue Bottle on Amazon.…

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