YouSaid · the spoken record

Zach Kanter

lines on the record: 87
first: 2019-08-13
most recent: 2019-08-13
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“Of it is obvious. So the market is responding. The product has met the market and it is working. So people are starting to hand over money or if not money hand over data or whatever it is they're supposed to be doing. And of course it brings in other interesting things people have expanded on this of saying like founder market fit and so like you could say studies an example of founder market fit where I happen to be one of the only people on the planet earth who are interested in EDI and you know have some experience in it and so like this is like a good founder market fit but I actually love the image that comes up when you talk about product market fit which is if you think about the market as this amorphous three-dimensional thing did you watch the apollo 11 documentary”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“To the next level, if you imagine you could visualize a ladder, so I'm trying to get up the ladder to the next level so that I can look down on the delusion. And when you finally get to the place of looking down on the delusion, it's hilarious. And this is why you say like a year from now, we'll be laughing about this argument. And why is that? It's because it wasn't real. We were in a shared delusion together. So of course, this is helpful in relationships, but businesses, we're all in some sort of delusion. The pain of reconciling reality with the delusion can be substantial, but I very much agree that observation is important to sort of get you out of this delusion. Anyways, let me answer the actual question you asked. The actual question is, why is orientation so important in software? I think it was Mark Andrewsen who coined the term product market fit. And Mark Andreessen's famous venture capitalist and founder of Netscape and now Andreessen Horowitz. And what product market fit is, is basically what happens when whatever the startup has built has crossed this threshold into being the function.”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“And it's so great, which is you're stuck within the delusion. It's actually one of my favorite concepts in terms of relationship situations, too. And I think business is related, everything's relationships. You have business relationships, personal relationship, family relationships, investor relationships. And you often find yourself in a shared delusion with another person. And so here we are. Maybe we're out for dinner later and we get into an argument about something. And really, when two people are getting into an argument, it's rarely about an argument versus a debate. An argument is rarely about the actual subject matter. It's more about I'm having a reaction to something and you're having a reaction to my reaction. And so now we have these reactions to reactions. And pretty soon you're like way off the subject matter. My favorite metaphor for this is that when you find yourself in this space, they're usually characterized by stress, anger, frustration, any one of these negative emotions, which are fine to feel, but these negative emotions, that what you have to try and do is climb up.”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“Orientation. I'm banked at this and this is up and this is down. Now you can decide of what move you want to do and you can act, which is pulling a trigger and firing missiles. All sounds reasonable, but what it turns out is that Boyd meant for the OODA loop, and there's a more complicated Orders of magnitude more complicated than orientation in other businesses, and I could talk about why it might be some analogous things in investing. And so you have to maintain this mental agility, mental flexibility, and then externalize that to the rest of your team, to the rest of your company, such that the whole team can operate at this tempo of orientation that is faster than anybody else thinks possible.”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“Here's your menu of options exactly. And if you memorize these same things for MiG25 and you know you're flying at X, Al2, the other person's at Y altitude and the airspeeds and stuff, you can sort of start to figure out here are the things that I can do that make it impossible for the other person to respond. So you're observing and the next step of this is orientation. And so I don't know. I think you've read Ender's game. So Ender's game, sci-fi book, where all the battles take place in space where there's no up and down and there's famous quotes, sci-fi quotes from his book about picking the correct orientation because if your enemy is disoriented in a space and the enemy thinks that they're upside down and you have picked an orientation where you're walking on the ground, it's a very mental exercise, but all of a sudden this person's disoriented and you're able to imagine. Similar with two fighter pilots, I imagine. And so this is sort of the analogy that I thought I like to read sci-fi. And you see that they're in these two different orientations. And now once you've decided on the correct”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“And one thing that Boyd came up with is the idea of energy maneuverability theory, where up till that point, there was no equations, no algorithms for figuring out what tactics and moves were available to a fighter pilot in any given situation. And what Boyd basically figured out is if you say, okay, an aircraft weighs this much as this much fuel and has this certain characteristics of lift and whatever else goes into an airplane. And it's flying at this altitude. These are the”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“And so he comes back and he sets out to write a tactics manual. And he writes this tactics manual, and it turns out not a single new move has been added to it. Substantial new move has been added to it since he wrote this tactics manual. So he's an incredibly thorough person. And eventually he came up with this idea of the OODA loop. And the OODA loop is observe, orient, decide, and act. And still, throughout this book, I'm like, oh my God, I really don't, you know, this doesn't land with me. And it wasn't until multiple Boyd books and papers and stuff that I finally came across what I think is what made the OODA loop click for me and maybe it will help some other folks. So if you think about a fighter pilot, you know, fighter pilot is flying in three-dimensional space. And maybe you're a fighter pilot in an F4 phantom and the other person's in a MiG-25 and you're coming at them at this airspeed and the position that you are angles relative to where they are flying in three-dimensional space also. And so a pilot is sitting there and they're observing. They're seeing what's going on.”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“Boyd is a fighter pilot. Call him the, you know, the Robert Caram biography is Boyd the fighter pilot who changed the art of war. And Boyd was a fighter pilot, I believe in Korea, and he was an incredible pilot. And at the time, fighter pilot tactics, these air-to-air combat tactics, was like more of an art than a science or maybe almost purely an art, not a science. And Boyd basically came back from Korea. I think it was Korea. Was it Korea or Vietnam?”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“Is bestie in the world. But he wrote the program and he wrote it in a way similar as you bring up to the Constitution where hundreds of years later it still is working pretty well.”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“It's like, okay, you know, hey, a distributed ledger blockchain. Hey, that's great. But what if we did that and we owned everything and owned all the benefits that accrue to it? And so it's this beautiful mix of centralized, some centralized decision making and capital allocation and decentralized, you know, bringing the wisdom to the markets by opening up all these things to external services. And yeah, he's, I think in some ways people say, oh, like you take away from Bezos' genius because I actually think that it's interesting to note, I don't know in your circles, but in my circles, the subject that never comes up, nobody ever says who's going to replace Bezos? When I bring that up, people say, oh, it's because he's young. It's not because he's young. People talk about that when there's someone, people talk about what would happen to Tesla or SpaceX if Elon Musk weren't there. These are subjects of conversation. The reason is because Bezos is not, I don't believe, is existential for the business anymore. And people say, oh my God, like, how could you say that? Absolutely.”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“I've never thought of it as a constitution, and I love that. He's built. People talk about simulations as a popular thing to talk about these days in terms of are we living in a simulation. Bezos has built a simulation or a game, or he's built. Really what it is is it's a microcosm of capitalism, except they own it.”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“Cheaper to buy stuff at Walmart than it is to buy stuff on Amazon. The selection's still amazing. You walk into the service. Walmart is an absolute eighth wonderer of the world. It's incredible what it's done for the world. And there's, of course, there's negative externalities as well, but what it's built is business is incredible. As a business, as a startup, as an established company, your reign is going to be zero months or it's going to be 12 months or five years. To what degree are you a flash in the pan? You zoom out far enough and you're a flash in the pan no matter what scale you look at, unless you can solve this problem of how do we force ourselves to continuously get better, faster, cheaper, faster tempo over time.”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“There's two sided benefits to that. One, if we start Amazon Web Services and we're our first and best customer, which is what Amazon is for Amazon Web Services, we will have the customer feedback. And because we know, we can't say we're internally obsessed. We know we're customer obsessed. We'll be fanatical about collecting this information as feedback from customers, delivering what they want, and we'll get the benefits of using the same service that our customers get. On the flip side, sure your customer is obsessed, but there's a whole different level of customer obsession when you have to use the same interfaces and tools that customers are using. And so what Amazon did is they exposed themselves to their customers' pain, which is the fastest way we talk about OODA loops, the fastest way of getting into this feedback loop. And I think, I'm going to try and ties back to something that's not Amazon and not Walmart. This is the key to building a lasting business. And Walmart did not have this. And that's why I say Walmart's one of the most impressive companies ever built. Because look at it. Still today, it's still.”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“To sell goods and ship them immediately? What would happen if that could be true? And so Amazon solved the problem this way with sort of third party, what I'll call a platform model, which is we own the demand to use a phrase by Florent Crvelo, wrote this amazing piece about we own the demand, and we'll sort out the supply. Similar thing happened with Amazon Web Services, where they say, look, we can foresee that we're going to outstrip the ability to sort of procure enough services and at a good enough service level and compounding speed and all this stuff. So we're going to do Amazon Web Services. The problem with something like Amazon Web Services and building what these vertical integrations, these are the things that plague.”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“At it to start, and are they going to build this competency in house? Can they even hire enough people to do it? Maybe not. So what Amazon did is they opened up Amazon Marketplace. And for those who aren't familiar, Amazon Marketplace is Amazon's third-party business where Amazon sells tide on their website, but also you as a small business owner or even as an individual can sign up and start selling tide. And so what Amazon gets with this is they've got hundreds of millions of SKUs, is they outsource or eliminate the necessity of being the best in the world at something. So most businesses, you have to be the best in the world at everything that you do, otherwise you're going to get chipped away at piece by piece. Amazon, even if they had just the same number of SKUs as Walmart, they would have to be as good as Walmart, which is pretty hard to do. So they sort of brought in the wisdom of the markets. They open up Amazon Marketplace, which allows anybody to sort of create an account, the idea, the memo that was written for this, they said, what if anyone anywhere, anywhere in the world at any time could sign up?”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“Many generations, nothing. Almost impossible to do. So, what you have to do is build a system that is not rent-seeking, because if you build a rent-seeking system, the business is going to fall apart once you see some sort of skilled competitor come about. But it's also can run on its own. And that's the problem. This is the million dollar problem. This is the multi-trillion dollar problem that I believe Amazon has solved. So how is it done? You talk about these lateral moves. Amazon, to go back to where we talked earlier, we talked about this earlier, which is this idea that things get weird when you meet the internet scale. So Amazon had this start of this unbound search pretty quickly. What they found was, okay, we can't stock all the products that we want to stock. Not only can we not stock them, we can't even identify the totality of vendors that are out there and communicate with them. And if we were able to communicate with them, we can't negotiate with them to set the best prices. Walmart's the best in the world at negotiating the best prices. Amazon is maybe average.”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“Elon Musk or the Collison brothers at Stripe, or these name a famous founder and you've got this heroic effort that went into continues to go into building this business. And through their efforts of sheer will, they build this culture and they ship fast over and over again. But what you're relying on is this dynamic of successive heroes. And so other examples of this, Warren Buffett, Charlie Munger, who are going to be the heroes to succeed them and have they created something, have they created a business that a ham sandwich could run and for how long I'm not sure what Amazon has built is like an autonomic nervous system. It has built into its DNA a self-reinforcing property. And this to me is the thing that terms of you want to build a sort of business like this. One, of course, like if you want to build a business that lasts a thousand years, you have to do it this way. What are the odds that you can get succession planning, which is like the hardest thing in the world? You can get succession planning right for some.”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“Sort of touched earlier on about this idea of Amazon as an organism. Charlie Munger and Warren Buffett, they talk about this idea if we want a business so great that a ham sandwich could run it. The problem with a lot of ham sandwich businesses is that these businesses that are run this way, they're generally rent-seeking. So in some way, people are locked in and all this sort of thing. There's a lot of negative things associated with a business that runs on autopilot. When you look at a business like Amazon, which is not rent-seeking, you could argue about whether it will be rent-seeking in the future. It's constantly lowering prices with AWS and all these things. There's really only two ways of doing that in the short term. And there's, I believe, one way of doing that in the long term. The short term way of achieving this sort of like relentless tempo of customer value, customer value, lower prices, faster delivery, all the sort. And whatever that means for whatever your business is, any sort of business, is through Herculean efforts and the canonical examples of this are”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“And again, people, oh, two pizza team, like, I'm going to bring that back to my business. But it's the whole set of ingredients that works in a very special way. So what Amazon has done at this point is they differentiated through the mutation of memos. They've selected the ones that seem most promising, and now they're selecting those for some mild amplification. And those are going to be brought to market in some way, which is why whenever you see an Amazon nine times out of ten, you see an Amazon release of a new thing and it's half baked and it's embarrassing and all these things that you could just not believe that a company of Amazon's resources could possibly roll something this terrible out. But they do. And then they're the best in the world at allocating the capital to the ones that work.”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“The reason why all these things are so important, and you can't, you had asked me, how do these things come back to what we're doing at Steady? You can't just say like, oh, customer obsession, that's great. Let's do that. And then we'll have Amazon. Or let's just be frugal. That doesn't quite work either. Like all the customer principles or all the Amazon principles are in this sort of elegant sort of tension. And what the executive's jobs are in these meetings is to be a proxy for customer value, whether this idea, Amazon Prime as an example, is going to deliver customer value while allowing Amazon to build a sustainable business over time. As you start to model this process out, now the ones that succeed, of course, ones that fail, the Higg memo goes into very quietly. Yeah, those go away. And now the ones that go well or the ones that are well received are given the two pizza team, which is the other thing Amazon talks about, which is the idea that when we have a new initiative, we're not going to have a team larger than can be fed by two pizzas.”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“Of the best ideas from evolution. And what I mean by that is evolution is a very dumb process. It's very smart in the long term, but in the short term, it's very dumb, sort of like the stock market. What happens is Amazon is famous for this memo culture. And so for those who aren't familiar in advance of every major meeting with every major new idea, employees have to write a six-page memo. And the memo sort of goes through all the details of what they're proposing.”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“For understated, it would be quite difficult for a person to come up with on their own when you see the way fish swim and all these things. Amazon has taken this concept of differentiate, select, and amplify, and they've added, so if you think about this as the branch of science of evolution, if you go back to like these ideas of philosophy and sort of pseudoscience of this idea of creationism, again, assuming we're just talking about straight signs here, hope I'm not offending anybody. If you talk about creationism is basically the idea of intelligent design. And everybody's probably heard the story of the blind watchmaker analogy and the idea that this was the standard philosophical argument maybe up to the 1600s or something like that where you are wandering in the woods and you come across a pocket watch and you pick up the pocket watch and you would not assume that it was grown in nature because it looks like it was designed with some intention versus you pick up a leaf you know a leaf is just sort of obviously natural what amazon has done is taking the best ideas from intelligent design and mix”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yep, 17 leadership principles, frugality is one of them, and I think like probably top of mind for a lot of people in Amazon. And so Amazon makes bets for sure. Bezos always writes about this in his shareholders' letter in terms of if we want to make bigger bets and we want to lose more money and all this stuff. And it's like, yeah, it's kind of true, but you don't really want to waste a lot of money. Fruality is sort of baked into the DNA of Amazon. And what you see is Amazon, I think, is the best in the world. They've institutionalized the evolutionary equation. And what evolution is, is again these all things sort of all break down algorithms. Evolution is this idea of differentiate, select, and amplify. Process differentiation happens by mutation. The process of selection is by fitness for given functions, and then amplification happens through sexual reproduction. So evolution is definitely not the most efficient system, but is definitely highly effective, and it evolves these really interesting, unique sort of designs that I think would be difficult.”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“Implies some lack of maybe precision or insight. It's the Facebook idea of move fast and break things. And that's speed. And it's not necessarily efficient speed versus you look at a company like Amazon, it has an emphasis on frugality. It's like one of its main cortex.”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“When you think about any sort of business, if you could wipe your mind clear and you come into this in a very naive way, you would think, as a business gets bigger, it should get faster because it has more resources and all these things. And if you were this totally naive actor who walked in here, this is what you'd believe. Of course, any person who's worked in a small company versus a large company knows that this is not the case, or even a large group. HOA with three people or an HOA with 30 or 300 people, you start to see the point of diminishing returns pretty quickly. And I call this generally gridlock. Generally big systems end up in gridlock. And whether that's a feature or a bug of systems, you can argue. And some people say, hey, the US government's a giant system and it's in gridlock. And that's maybe a good thing. But we'll try and stay away from that. When you think about Amazon, it defines these ideas of what should happen in terms of agility at large sizes. And I think the difference between speed and tempo is that speed...”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“Walmart and they're dumping it online not to downplay what Amazon did, but that's the basic idea. Amazon comes about and starts doing this and all of a sudden what you find is that when you take a infinitely massive incredibly large market, which is consumer packaged goods, and then you collide that with the internet. And now all of a sudden you're not geographically restricted in terms of an average Walmart has 100,000 SKs or something like that. Amazon has 488 million skews. And that was the last time I checks was probably another 500 million on top of that. All these weird things start to happen. And so the sort of point of this piece that I wrote is discussing what is the weirdness that starts to happen when you bring things into internet scale and how did Amazon solve those things?”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“But we took away the constraint of the floor space. And they said it's this idea of infinite shelf space where all of a sudden you start to see this paradigm shift where consumers are shopping online. What are the things that are going to stay the same and what are the things that are going to change? The things that are going to change is all of a sudden there's really no constraint in terms of shelf space. You don't have to figure out, should I have 500 units out front or should I have 50 units out front? So it's a different optimization problem. And you also have the ability for customers to look for the specific thing because your customer maybe they would have been willing to spend 45 minutes in a Walmart. Maybe they're also willing to spend 45 minutes on Amazon.com, but they can get a lot more browsing done in 45 minutes than they can in 45 minutes of walking around Walmart. Of course, this brings up questions of discovery where it's much easier to discover something in a Walmart than it is in an Amazon. We could talk about that. Fundamentally, Amazon came onto the scene and the distinction I draw is basically they came up with this unbound Walmart, which is basically they're taking the...”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“To store communication, they invented practically EDI, although I think IBM got most of the gains from it because Walmart didn't really do a whole lot with the standard. Innovations in inventory management, they have a logistics fleet of 7,000 tractor trailers and all these whole apparatus that makes Walmart look like a very complicated business. And of course it is, but it's all in service of this up until Walmart.com is all in service of this optimization of this footprint. And the whole organization got optimized around that. And then in 1994, I think when Amazon came about, Amazon had their own hypothesis. Amazon's hypothesis, or Jeff Bezos' hypothesis, was, okay, well, what if we did exactly that?”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“So, if you look around a store like Walmart, what you should see the correct way to see it is this massively defective, you see defects everywhere because, of course, like the only good news is bad news. If you don't get bad news, if you only get good news, you can't change anything. When you get bad news, you find out, oh, we've been robbing our customers by pricing this too high or we've been robbing them because we've put this welder at the wrong end cap, you have a list of things to remediate. The idea here is basically that you can never have the perfect mix of everything unless you had perfect access to information. So your job as the manager of a Walmart store is constantly to fix these defects. I don't know if this is how they think about it. This is what I think when I walk into a Walmart or a Sam's club. So everything else, you hear these unbelievable things about, I've heard these unbelievable things about Walmart that I feel like kind of have gotten overshadowed by Amazon, but they built the first and largest private satellite network so that they could do”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“You have the price for each product, and then the placement for each product. So it's a pretty simple thing. As they say, it's as simple and as hard as that. So you've got this optimization problem, and Walmart executed on that for like 30 years. And they got to be the best in the world at that. And what you see with this sort of optimization problem is an entire organization built around optimizing for this problem. And you could write this out as a formula practically.”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“And he would fly around in his plane, and he'd look around and he'd say, You know, that looks like a pretty good spot for a Walmart. And so he would land the plane, and then he'd get out and he'd negotiate the purchase of this place right on the spot. I had a whole store team, and this is actually, you can see the sort of mirrors of how Uber expanded and region by region. They would bring in this cracked store team and they'd build this place and then they would order goods. So they'd order tractor trailer load full of welders or God knows what. And then they would have a grand opening and they'd start to sell this. So what you realize is that Walmart is this optimization problem. So you have this footprint, and maybe Liza Footprint is 100,000 square foot store. And what you're optimizing for is within this, assuming that the footprint is fixed, because this has to be increased by step function sizes or large increments, is that you're basically optimizing for the selection of SKUs, the quantity of each skew that you have, and a skew is a product. So selection of products, the quantity of each product that you have.”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“Course, what makes the two businesses similar when you start to line these up side by side, you say, okay, what are the commonalities in the business? The thing that occurred to me when I was writing this piece called What is Amazon is realizing that they're both optimization problems. So what Walmart basically figured out is that their sort of hypothesis in the beginning was rural areas of America can support much larger discount store formats than most people think. And so I think is it Keith for Boy who says, what secret do you believe about the world that everybody else thinks is false or maybe it was Peter Thiel I forget? And that was sort of Walmart's core thesis. And at the time, people thought it was crazy at 25, 50, 100,000 square foot store. They thought you put it in some town in the middle of America. They didn't think it would be able to support that. Well, what Walmart basically set out to do is procure these stores. And what Sam Walton talks about in the book is he would pick an area based on zip code and some demographics.”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“So, when you look at Walmart, what they did is a feat of such scale that I think in some ways it's more impressive than Amazon because they sort of reach the limits or got close to the limits of what's possible with an intentional sort of coordination. Whereas Amazon, I look at it more as more of an organism, which is, I think, some of the things that got clipped to the cutting room floor in this piece. And I think the differences in sort of those models is just almost infinitely rich area to explore. How much?”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“Picking up velocity over time is what makes it the most interesting business. It's the only business that I can think of that as it's gotten bigger, it's gotten faster. Faster not just in one dimension, but faster across a broad range of dimensions that are certainly astonishing to watch. But you can't appreciate Amazon without appreciating Walmart because Amazon really took Walmart's playbook and then they brought it onto the internet. And I think a lot of the things that Amazon has done really well in the ways that Amazon has differentiated itself from Walmart and built what I believe is a really truly first-in kind, first-in-class sort of business are things that were required to do business at internet scale. So I'm obsessed with the founding of Walmart, Sam Walton's book, Made in America is just, it's fantastic, you know, hidden beneath this veneer of folksiness is this unbelievable story where he just sort of makes it seem like, hey, you know, I woke up out of bed for 40 years and accidentally Walmart is the biggest company.”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“Walmart and Amazon, I think a lot of people appreciate Amazon on one or two dimensions. And that's usually maybe you do business with Amazon and you use something like Amazon Web Services or maybe you're just a consumer and you think that the idea of Amazon Prime bringing a package to your house in one hour is the greatest thing in the world. What I've had the fortune to see being a vendor to Amazon. So I've sold with Auto Parts business. I sold to Amazon both on the vendor platform, which is where they're the seller of record and on the marketplace where Amazon is the seller of record. Obviously as a customer in many different ways. And then also as a business customer in the sense of using Amazon web services, which heavily relies on Amazon Web Services for our infrastructure. And so you just see that the surface area of this business is astonishing. And it's not only the surface area, it's the speed or what I would say the tempo, which we can come back to some of the differences on that later. But the idea that Amazon seems to be”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“And study, and I'm thankful to have learned a great deal from Zach over the last few months. Please enjoy our conversation.”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source
“This week's guest is Zach Cantor, the founder and CEO of Steady. Zach and I decided not to talk much about his business on this podcast and opted instead to explore business more generally. So a bit of an introduction to what they do may be helpful here for some extra context. Steady is a platform for exchanging and automating 300 types of business-to-business transactions. Things like purchase orders and invoices. It's a modern take on an archaic protocol called EDI, electronic data interchange, something I'd never even heard of until a few months ago. Learning about EDI is a bit like finding out about the matrix. Every physical object you come across from the food you ate for breakfast to the clothes you're wearing and the electronics you use, basically anything with a barcode on it was likely touched by EDI, often dozens of times before making it into your hands. Steady is the first update to this messaging layer in decades. Our conversation in this podcast is about business in general, starting with Zach's fascination with Walmart and Amazon. I should also note that my family is a recent investor.”
2019-08-13 · Invest Like the Best · Zack Kanter – All Things Business - [Invest Like the Best, EP.142] · IDENTIFIED FROM THE TRANSCRIPT · source