Race to a Trillion

Amazon will be the first $Trillion market cap firm, and the green flag was dropped this week.

Apple and Uber created more shareholder value (since ’08) than any public/private firm(s) The key to their success was the iPhone and GPS ordering/tracking, right? Wrong. The secret sauce was more mundane: breakthrough stores and reduced friction. It’s not the GPS tracking illuminating where Javier and his Lincoln MKS is, but your ability to bomb out of the car/store without the friction of paying.

So … this week Amazon offered the chocolate and peanut butter strategy that eliminates the bullshit — checkout. We have been predicting Amazon would open (thousands of) stores for a while (despite denials). This is the center of the maze, the circle is complete, etc. Amazon now has all the pieces in place for zero-click ordering — AI, purchase history, warehouses within 20 miles of 45 percent of the population, millions of SKUs, voice receptors in wealthiest households (Alexa), and the world’s most trusted consumer brand.

Amazon, me thinks, will test an AI-like offering anticipating all your retail needs — sending stuff automatically and calibrating based on what you send back or edit via voice (“Alexa, more Rogaine and less sunblock”). The test will register an Amazonian increase in spend/household, the stock will become anti-gravity matter and triple to a $Trillion in value. Facebook and Google own media, Apple owns the phone, and Amazon is about to molest the entire retail ecosystem. And retail is a much, much bigger business than media or telco.

Some Big Ass Losers Here

Obviously grocery. Had it coming. The largest consumer sector in America ($700B) has been where innovation goes to die. Same bad lighting, same depressed workforce, same impossibly frustrating experience in finding my Chobani as I go aisle by aisle. Restaurants that deliver will suffer as will overnight delivery firms—last innovation from UPS/DHL/FedEx was package tracking introduced in the eighties. Oh, and then there’s all of the rest of retail that will hemorrhage value to the Seattle firm.

The biggest loser? Easy: Walmart. The largest markdown in retail history is < 36 months away as the $3.3B Jet.com acquihire hits the roadblock to Walmart’s e-commerce growth: namely their workforce is underpaid and lacks skills/training to close the omnichannel circle, and their customers are that group you’ve wondered about who don’t have broadband or a smartphone. The wealthiest man in the 20th century mastered the art of minimum wage employees selling you stuff. The wealthiest man of the 21st century is mastering the science of robots selling you stuff.

So…is Every Retailer Screwed?

No, there is a rebel force of retailers who are fighting the empire. Sephora, Home Depot, and Best Buy to name a few. These firms are zigging as Amazon zags and investing in, wait for it, people — beauty associates, blue shirts, geek squads, and gold canvas aprons. They couple their investment in human capital with a deft investment in technology and register the highest Digital IQs in their categories.

Other Losers: the Unremarkable

I was a remarkably unremarkable kid–mediocre grades…but didn’t test well (either). In high school, worked as a box boy at The Westward Ho in Westwood, CA and made around $4/hour. My freshman year at UCLA I got a job, again as a box boy, at Vicente Foods in Brentwood. However, this time, as a member of the UFCW 770 (i.e. Union) at $13/hour that paid for, and then some, my $1,350/year in-state tuition — Go Bruins. Vicente Foods is still there, so it doesn’t appear the 200 percent wage premium, that put me through school — put Vicente Foods out of business. In 1984 it was possible to be a remarkably unremarkable kid with a part-time job to pay your way through a tier-1 university. Things have changed…a lot. Amazon, good or bad, and the other innovators we worship are making it the best of times for the remarkable, and the worst for the unremarkable.

Westworld and My Bipolar Girlfriend

I dated, for a year, a bipolar/bisexual woman. Time with her inspired the same emotions registered after watching the season finale of Westworld:

— This is super-interesting;

— Wow, so beautiful; and

— What the fuck is going on here?

Thandie Newton’s first film, Flirting, is a jewel. Anthony Hopkins is good in pretty much everything but especially understated and powerful in Remains of the Day, and Yul Brynner defines bad ass from original film—I have committed to naming my 11th son Yul. Finally, Ed Harris has the right stuff portraying John Glenn (1921 – 2016) who defines the term “American hero.”

From NYT Obituary:

— To the America of the 1960s, Mr. Glenn was a clean-cut, good-natured, well-grounded Midwesterner, raised in Presbyterian rectitude, nurtured in patriotism and tested in war, who stepped forward to risk the unknown and succeeded spectacularly, lifting his country’s morale and restoring its self-confidence.

He still had time to court his high school sweetheart, Anna Margaret Castor, the doctor’s daughter. It did not matter that she stammered; she was his girl, and he loved her. They married in April 1943, and he often called her “the real rock of the family.” From the time they came to public attention, and throughout the turbulence of spaceflight and politics, John and Anna Glenn each seemed the other’s center of gravity. —

Life is so rich,
Scott

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