When you look at large manufacturing companies, it becomes very clear that the machine that makes the machine is just as important as the machine itself. There’s a lot of work in the iPhone, but there’s also a lot of work in the machine that can manufacture over 200m iPhones in a year. Equally, there’s a lot of work in a Tesla Model 3, but Tesla has yet to build a machine that can manufacture Model 3s efficiently, reliable, quickly and at quality at the scale of the incumbent car industry.
More than any of the other big tech platform companies, Amazon is a machine that makes the machine. People tend to talk about the famous virtuous circle diagram - more volume, lower costs, lower prices, more customers and so more volume. However, I think the operating structure of Amazon - the machine - is just as important, and perhaps less often talked about.