Jeff Bezos

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THE NEWS WRAP: Yahoo! acquires Israeli ad security startup for undisclosed amount

8:28PM | Sunday, 17 August

Yahoo! has acquired Israel-based advertising startup Clarity Ray.   The startup raised $500,000 about two years ago, when it was offering tools for online publishers to circumvent ad blockers, but has since shifted its focus from ad blocking to ad security and fraud detection.   Yahoo! confirmed the acquisition to TechCrunch, but the terms of the deal are unknown.   In a statement on its website, Clarity Ray says its vision is to make “the eco-system safe, compliant and sustainable for consumers, publishers and advertisers”.   “This once-in-a-lifetime opportunity enables the mass scaling of our technology, impact and ideas to the absolute forefront of our field, while working with an amazing team who shares our passion,” the statement says.   Twitter experiments   A sizeable number of users are seeing tweets favorited by others in their timeline, just like retweets, in an experiment that is annoying a lot of people, according to The Next Web.   Those users are also getting notifications when others follow someone new.   Washington Post now inserting Amazon affiliate links into news articles   The Washington Post, which is owned by Amazon founder Jeff Bezos, is now including “buy it now” buttons wedged into its online book reviews, as well as on news items and letters to the editor.   The button links to related content available for purchase on Amazon.   Overnight   The Dow Jones Industrial Average is down 50.67 to 16,662.91. The Australian dollar is currently trading at US93 cents.

Amazon’s Fire Phone launch offers a warm platform for growth

6:36AM | Thursday, 19 June

Amazon, the e-commerce internet giant, is launching its first smartphone. Media attention is focusing on whether the phone’s features, such as its rumoured 3D interface, are really as cool as portrayed in its trailer video which aims to wow early users. But by entering into the fray of an already hyper-competitive mobile phone industry, Amazon is doing a lot more than adding another gee-whizz feature to a smartphone.   This launch tells us a great deal about CEO Jeff Bezos' strategy for his company – and what it might mean for the future of competition and innovation in our increasingly digital world.   First, let’s ask the obvious questions. Why is Amazon, known for internet retailing and related software development, entering a hardware market where leading incumbents like Nokia have already failed? After all, what does Amazon know about the telecoms business? Can it succeed where Google has failed?   We have seen Google, which has virtually limitless financial resources, enter the mobile phone handset industry by purchasing Motorola Mobile in 2012, only to take a heavy loss after selling it on less than two years later. Even incumbent firms who had a very strong set of phone-making capabilities have taken tough hits in this turbulent market – witness Nokia’s dramatic plunge, which led to a sale of its mobile phone business to Microsoft.   Platform Number 1   You cannot understand Amazon’s move without situating it in the broader context of platform competition. Platforms, these fundamental technologies such as Google search, Facebook and the Apple iPhone, are the building blocks of our digital economy. They act as a foundation on top of which thousands of innovators worldwide develop complementary products and services and facilitate transactions between increasingly larger networks of users, buyers and sellers. Platform competition is the name of the game in hi-tech industries today.   The top-valued digital companies in the world (Amazon, Apple, Google, Facebook) are all aggressively pursuing platform strategies. App developers and other producers of complementary services or products provide the armies that sustain the vibrancy and competitiveness of these platforms by adding their products to them. The more users a platform has, the more these innovators will be attracted to developing for them. The more complements available, the more valuable the platform becomes to users. It is these virtuous cycles – positive feedback loops, or “network effects” – that fuel the growth of platforms and transform them into formidable engines of growth for the companies and developers associated with them.   The smartphone is a crucial digital platform. Achieving platform leader status in this space is a competitive position all the hi-tech giants are fighting for. Google has its ubiquitous Android operating system, Apple has shaped the whole market with the iPhone, Microsoft has purchased Nokia’s phone business, and Facebook has invested $19 billion in WhatsApp among other acquisitions for its growing platform.   In fact, I suppose I should have rephrased my question a little earlier – why hasn’t Amazon already staked its claim to lead this digital space after having launched its Kindle Fire tablet and Fire TV set-top box?   Opening the door   Simply put, the smartphone is the main gateway to the internet today, and, in the hand of billions of users throughout the world, is the physical embodiment of a conduit that links those users to each other and to the whole content of the internet. There are almost 7 billion mobile phones in the world (and only 1 billion bank accounts). And the trend is staggering. Mobile payment transaction value surpassed $235 billion worldwide in 2013, and is growing at 40% a year, with the share of mobile transactions already reaching 20% of all worldwide transactions.   So, while risky, Amazon’s entry into the smartphone business is a classic play: a platform leader entering an adjacent platform market that is also complementary to its primary business. All platform leaders aim to stimulate complementary innovation (think how video game console makers aim to stimulate the provision of videogames), and they often attempt not to compete too much with their complementors in order to preserve innovation incentives. But at some point all platform leaders start to enter these complementary markets themselves. Google has done it through Android, Apple has done it with iTunes, Facebook has done it with Facebook Home.   It happens when platform leaders feel threatened by competition in their core market, or when they want to steer demand, competition and innovation in a particular direction. The idea is to use their own user base as well as their own content and technologies to create an unassailable bundle, one that is difficult for external competitors to break into. Think of it as creating barriers to entry, while expanding the core market.   The reasoning behind entering a complementary market is well known, and related to the benefits of bundling. In the case of hi-tech platforms, the benefits are even stronger. By optimising and controlling the interface between a platform and complements, a company can have a structuring impact on the evolution of the platform ecosystem – and that means on all the innovators around the world that invest and make efforts to develop complementary products and services.   In your hands   So, these are the reasons why Amazon is entering the mobile phone market, despite the difficulties inherent in taking on an über-competitive market. This strategic choice makes a lot of sense.   As to whether Amazon has a fighting chance of succeeding, there are reasons to be optimistic. Beyond its deep financial resources, Amazon has learned something of what it takes in the development and successful commercialisation of various versions of the Kindle. That has given it expertise in hardware, on top of its software background, and should prove a useful training ground to allow it to launch other consumer products such as the smartphone.   But the ultimate judge will be you, gentle readers. Will you be willing to swap your favourite mobile phone for a yet another new kid on the block, even if it does let you browse Amazon’s ever-growing catalogue in splendid 3D?   Annabelle Gawer is Associate Professor in Strategy and Innovation at Imperial College Business School.   This story was originally published at The Conversation. Read the

Three Australian founders share the books that were a catalyst for their careers

10:47AM | Tuesday, 1 October

Amazon executives are urged by their chief executive Jeff Bezos to read three books, which he uses as frameworks for explaining the future of the company.   Bezos told a CNBC tech correspondent he encourages them to read Peter Drucker’s The Effective Executive, Clayton Christensen’s The Innovator’s Solution and Eliyahu Goldratt’s The Goal.   Three local entrepreneurs spoke to StartupSmart about the book that changed their lives and approaches to their entrepreneurial careers.   Fred Schebesta, founder of rapidly growing comparison site Finder, told StartupSmart that Michael E. Gerber’s E-Myth helped him understand the importance of systems for driving growth.   “When I first started out in business I was completely stumped by continuously briefing the same project over and over again. As I had never worked in a big company before, I didn’t have the same frame of reference as other professionals and I needed something that would help me build a business,” Schebesta says. “E-Myth taught me the importance of systems, processes and how to manage people. It completely changed my view and provided me with a fresh perspective. I often consider reading it again for inspiration!”   Dan Flynn told StartupSmart reading Robert Kiyosaki’s Rich Dad, Poor Dad in his teens sparked a new way of thinking that inspired him to launch the social enterprise Thankyou Water several years ago.   “The book really got me thinking about ways to generate money but also helped me understand that while school education was important, entrepreneurs had to apply business principles in order to succeed,” Flynn says.   Thankyou Water has got their range of food and water products into major supermarkets after a crowdsourced lobbying campaign.   “As I look back over this book again now, there was this one line that was one of the key messages in the book: ‘Failure is the process of success.’ It’s crazy how this line is even more relevant to me now, five years into the Thankyou journey. The numerous failures and setbacks we’ve experienced have taught us so many lessons, which have helped shape Thankyou as a company and our team as individuals,” Flynn says.   Robin McGowan, founder of customisable commerce site for suits InStitchu, told StartupSmart Tony Hsieh’s Delivering Happiness: A Path to Profits, Passion and Purpose should be mandatory reading for every business owner.   “It tells the story of Zappos and the focus they put on customer service and experience. Tony makes the point that anyone can copy your business idea but they can't replicate the level of service you provide to your customers. If you go above and beyond with your service they will keep coming back no matter what,” McGowan says.

Online travel management tool breaks down borders

8:23AM | Friday, 23 August

Duncan Thomas has assembled an unlikely international team to help bring his online travel management start-up to life.   From his Hobart home he’s brought together developers in Pakistan, website backend expertise from Israel and a flights wholesaler in India.   Pakistan and India have battled over the Kashmir region for many years, while Pakistan’s passports say they are valid for all countries except Israel.   Despite the tensions between the countries, Thomas, who works in software sales and business development, says “people are people” and the people he works with aren’t interested in politics.   “Politics is for politicians,” he says.   Thomas has been working on Travl8tor, a travel management and booking tool for small and medium-sized businesses, for the past two years and recently won a pitching advice webinar run by international accelerator Founder Institute and co-hosted by StartupSmart.   “I like the business a lot,” Founder Institute chief executive Adeo Ressi said of Thomas’ pitch for Travl8tor. “This is a real issue.”   Thomas, 37, says the idea for the business came to him when reading an article that interviewed a human resources manager who said the biggest issue they faced was travel management for their employees.   “I got to thinking that seems an easy problem to fix from a software basis.”   After discussing it with his brother, a sales manager at a mining company, whose reaction to the idea confirmed for Thomas that “it has legs”, he set about writing up a business plan.   A key weakness, however, was that he didn’t know anything about the travel industry.   That was overcome as he researched the subject and came across an Israeli start-up that developed backend platforms for travel agents and websites and helpfully sent him a document titled ‘So you’ve decided to create an OTA’ [online travel agency].   “Once I had that the pieces began falling into place.”   Thomas has secured travel product suppliers that can offer 200,000 hotels around the world, 900 airlines and car rental in 193 countries.   Travl8tor works by providing a platform for businesses to manage travel bookings. Businesses can set budgets and company travel policies which are applied whenever staff book travel.   Thomas says motivation for working on Travl8tor is “easy”.   “It’s my idea, it’s something I can see, I know what it can potentially be,” he says, adding he’s bootstrapped the business and spent around $20,000 building it so far.   The biggest problem he says he faced was thinking too long about the idea. “You’ve actually got to do it,” he advised other start-up entrepreneurs. “You’ve got to follow through.”   He adds that he’s also inspired by a quote from Amazon founder and chief executive Jeff Bezos who said: “There are two kinds of companies, those that work to try to charge more and those that work to charge less. We will be the second.”   Thomas says the thinking reinforces the theme that customer service is key and that customers generally want to pay less.   He also advises that start-ups have a “good lawyer” on board as early as possible to help navigate legal issues such as trademarks, supplier agreements and patent applications.   While Ressi liked Travl8tor’s idea, one thing he didn’t like was the name.   “I beg you, this is such a good idea, just rename it,” he said.   Thomas says he’s open to suggestions and wouldn’t rule it out.

Sydney venture Sofia Furniture sitting pretty with $1 million investment

4:07PM | Thursday, 4 April

Sydney-based start-up Sofia Furniture has received $1 million in funding from the founder of an ASX 100-listed company, and is now preparing to open a showroom in the city in coming weeks.   Sofia Furniture, founded by brothers Jack Teoh and Steve Davis, who named the business after their dog Sofia, aims to provide consumers with luxury furniture at affordable prices.   The $1 million in funding has come from an investor who would prefer to remain anonymous.   “We’re in the same office as a few other start-ups. We work with Jekkle and BrandTable. Through working with them we approached a few venture capital firms,” Teoh says.   “We received VC funding from one of the founders of an ASX 100-listed company. We pitched the idea to her and she loved it. She is a prolific VC funder.”   “It didn’t take long. We spent a few weeks pitching and she was the first who gave us a call.”   The business, which has five staff, claims its online-only model can save customers up to 70% off traditional retail prices. However, it will open a showroom in the Sydney CBD in about three weeks. It is also aiming for revenue of $500,000 in 2012/13.   “We really see a world in which the physical blends with the virtual. Showrooming will be a huge part of everyday life,” Teoh says.   “The showroom is sponsored by [our investor], which is where part of that money’s going.   “I think because we all have a technical background we didn’t have to spend money on the development side of things.   “Most of that money will be spent on marketing and buying inventory.”   The business was originally self-funded, with the founders forking out around $15,000 in order to get the business off the ground.   “We were able to start the business by hiring a developer off an online forum and in-house designer. We also borrowed a warehouse from a family friend as well,” Teoh says.   “I was looking for a sofa for my parents’ granny flat and I was about to fork out $3,000 until I realised a factory of a friend of mine actually manufactured the same sofa,” Teoh says.   “They were selling it for $400 – a fraction of the price I was about to pay.   “I was curious and he told me about how the industry works. It turns out every middleman – agents, traders, importers, wholesalers, etc – makes a huge margin and it is widely accepted.   “We decided it was time to shake up the industry a little by offering affordable designer furniture direct from the factory to the consumer.   “That way we skip the middlemen, salespeople and expensive rents, and offer our customers amazing savings.”   Teoh is confident Sofia Furniture will stand out in what is becoming an increasingly crowded market, although he admits there have been challenges.   “Sourcing the product [has been the greatest challenge] – we felt as if we needed to be as environmentally conscious as possible,” he says.   “So we found factories that only use responsibly sourced wood from Scandinavia. This was an enormous hassle but we eventually found one after many weeks searching.   “We are not into the replica business. We design our own product and are proud of it. We love the quote from Jeff Bezos – ‘Start with the customer and work backwards’.   “So we try to have that embedded in our company culture.”   Teoh says the business has also leveraged technology in order to reduce the price point of each item.   “Utilising iPads within our showroom as the point of purchase, customers can order online directly, cutting out costs associated with sales staff,” he says.   “We are also implementing newer technologies like NFC to allow customers to tap their phone on our products and have information delivered straight to their smartphones.”

Forbes names most powerful people – who can you learn from?

3:49AM | Monday, 11 March

US President Barack Obama might be the world’s most powerful person, according to Forbes, but there’s a handful of entrepreneurs on this year’s list for start-ups to draw inspiration from.

How I built the Amazon empire: Four top tips from Jeff Bezos

3:09AM | Monday, 11 March

Start-ups should respond to skepticism systematically and be prepared for a fight from the very beginning, says Amazon founder Jeff Bezos, who has shared his thoughts on entrepreneurship.

Fear and failure

1:55PM | Monday, 7 January

Last weekend I did the scariest thing I've done in my life. I spoke at TED.

Amazon unveils Android-powered Kindle Fire tablet

9:45AM | Thursday, 29 September

Amazon unveiled its long-awaited tablet device overnight along with a complete refresh of its Kindle line-up and the introduction of new content services in a push that could make the company’s products a genuine competitor to the Apple iPad.

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