Blake Scholl: prediction

Transcript context

…When you worked at Amazon with Jason Crawford, by the way, who’s the founder of Roots of Progress, what did you learn about speed? I never feel I’m waiting for my Amazon packages. It’s quite reliable. You were there. What did you internalize from that? Oh, boy, so much. I worked at Amazon, and then years later, I worked at Groupon. Both companies said a lot of the same things about vision and culture, but they were actually completely different. The study in contrast was really incredible. It was a study in long-term decision-making versus short-term decision-making. I remember back in — oh, this will date me — it was early 2000s when CDs were still a thing, but they were starting to be on their way out. What would happen is at the end of every quarter, the record labels would panic and be like, “Oh, we’re going to miss the quarter. This is going to be terrible. Quick, let’s stuff the channel with lots of CDs at a discount.” Amazon would run the math, and they would do the discounted cash flow analysis and say, “Okay, great. If we take a whole bunch of discounted CDs, we will actually be able to sell them. Our profits will go up. It will make our Q4 look terrible because we’ll have this glut of inventory, but our Q1 will look amazing. The long-term cash flows support this decision,” and so they would do it every time. When I worked at Groupon — I’m looking at a couple of people I worked here at Groupon with that will know this story — the second half of my time there, I ran the email business. This was the most uninspiring job you could have because I was running the world’s largest spam cannon. I’m so sorry. I did quit. I would get a call from the CEO, and it would come every quarter. It was like, “The quarter is soft. Send more email.” I was like, “Dude, that’s why this quarter is soft because we did that last quarter.” He’s like, “I don’t care. Send the email. Fix it next quarter.” We’d email the same customer three or four times a day. Then the conversation would be like, “Why is everyone seeing the same deals over and over again?” It’s like, “Yes, because we send more email than we have deals.” It’s a case study in long-term versus short-term decision-making. The thing Amazon did very, very well is make long-term decisions while being incredibly short-term vigilant. There was operational excellence, moment-to-moment, day-to-day, while all major decisions were made with a view of the long term, and that is, I think, super important. How is it they kept that as the company grew much, much larger?…

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