Ep 11: Jeff Bezos’ ‘Grand Challenge’ of Healthcare

with Brad Stone

May 27, 2021

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Brad Stone
Author of ‘Amazon Unbound’ Senior Executive Editor of Global Technology, Bloomberg News

Brad Stone is the author of four books, including Amazon Unbound: Jeff Bezos and the Invention of a Global Empire, published by Simon & Schuster in May 2021. It traces the transformation of Amazon into one of the largest and most feared companies of the world and the accompanying emergence of its founder, Jeff Bezos, as the richest man alive.

 

Brad is also the author of The Everything Store: Jeff Bezos and the Age of Amazon, which chronicled the foundational early years of the company. The book, a New York Times and Wall Street Journal bestseller, was translated into more than 35 languages and won the 2013 Financial Times/Goldman Sachs Business Book of the Year Award. In 2017, he also published The Upstarts: Uber, Airbnb, and the Battle for the New Silicon Valley. 

 

Brad is Senior Executive Editor for Global Technology at Bloomberg News where he oversees a team of 65 reporters and editors that covers high-tech companies, startups, cybersecurity, and internet trends around the world. Over the last ten years, as a writer for Bloomberg Businessweek, he’s authored over two dozen cover stories on companies such as Apple, Google, Amazon, Softbank, Twitter, Facebook and the Chinese internet juggernauts Didi, Tencent and Baidu. He’s a regular contributor to Bloomberg’s technology newsletter Fully Charged, and to the daily Bloomberg TV news program, Bloomberg Technology.

 

He was previously a San Francisco-based correspondent for The New York Times and Newsweek. A graduate of Columbia University, he is originally from Cleveland, Ohio and lives in the San Francisco Bay Area with his wife and three daughters

[Bezos] is a tremendous innovator, but it's the operator and the strategic mastermind that evaluates a competitive landscape and navigates around it, and bends it all to his will. That’s probably most responsible for the success.

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Gary Bisbee  0:06

Healthcare leadership is hard work, but what if you could learn from the most brilliant and influential minds in healthcare and beyond? What would you ask them? Would you ask about politics, policy, or maybe leadership? On The Gary Bisbee Show, I’ll do just that. You’ll hear from healthcare’s most successful leaders and those experts who they listen to, as together we’ll explore how the healthcare economy is transforming.

Gary Bisbee  0:36

Brad Stone is an accomplished author and reporter on global technology companies. His new book, Amazon Unbound, is a tour de force on the transformation of Amazon and its founder and leader, Jeff Bezos. Brad began to write Amazon Unbound three years ago. He thought he was writing about the transformation of a company. It turned out he was writing about the transformation of a person. We covered substantial ground in this conversation. First, for our healthcare audience, Brad spoke about the “Grand Challenge,” the term for Amazon’s pursuit of healthcare and what Brad describes as an area of major expansion. Regarding lessons for leaders, Brad discussed the fact that Bezos was inspirational, but could also instill fear. He was willing to disrupt the company in pursuit of a new idea or invention, such as Alexa. Those of us in healthcare are struggling with becoming more consumer-centric. Brad built the case for Bezos being solely committed to the consumer and being willing to pursue new ideas and disrupt the company to provide better services for the consumer. When I asked Brad the question “was Bezos of more value to Amazon as an operator or an inventor,” he provided a creative rationale that all leaders should think about. Brad debated how Bezos compares to other big tech founder CEOs, such as Steve Jobs and Bill Gates. Let’s join the conversation with Brad Stone.

Gary Bisbee  2:12

Good morning, Brad, and welcome.

 

Brad Stone  2:14

Hi, Gary, thanks for having me.

 

Gary Bisbee  2:16  

We’re pleased to have you at this microphone. We’d love to chat with you about Amazon Unbound, which was published just a couple of days ago, so congratulations. What an effort.

 

Brad Stone  2:27

Thank you, Gary. It was a long journey. I actually worked on it for three years and then I wrote the book from this room, which is actually a garage, during the pandemic.

 

Gary Bisbee  2:36

Wow. All 450 pages of it. I did want to ask, when do you write? Do you have any particular time of day or night?

 

Brad Stone  2:44

My sort of brain is the most fertile in the morning, so I would get down here in this cavern at around seven or 7:30, do a couple hours, and then do more reporting or outlining in the afternoon.

 

Gary Bisbee  2:57

As global executive editor for technology at Bloomberg News, I was wondering, what’s the day job? Writing the book or the executive editor job?

 

Brad Stone  3:06

That’s another reason why the early morning hours were key because the day is distractions galore and a lot of meetings. In a weird way, the pandemic maybe made it a little easier. I wasn’t trying to sneak off for bits of time here and there. At Bloomberg, we cover the big tech companies, the entrepreneurs, the startups all around the world, including in Asia, which makes the night times busy. I was lucky in a perverse way that I didn’t have the fear of missing out during the pandemic. I was able to focus.

 

Gary Bisbee  3:36

I know you’re an English major from Columbia. Were you always interested in writing?

 

Brad Stone  3:41

I got the bug in college going to creative writing workshops. I also worked at the Columbia radio station (WKCR) covering the news and I got the news bug. I went to the once-proud magazine known as Newsweek for many years and came out to Silicon Valley, a stop at the New York Times covering Amazon and other big tech companies, and then Bloomberg which has been a fantastic home for in-depth journalism.

 

Gary Bisbee  4:06

Let’s look at Amazon Unbound. Let’s start back in 2013 when you published The Everything Store. Why did you choose to write about Amazon and Bezos at that point versus any other big tech company and founder?

 

Brad Stone  4:24

It was actually just opportunistic. I wanted to write a book and it seemed to me that there had been Apple books and Microsoft books and Google Books and it was a street that wasn’t jammed with traffic in a way. I think that was because, at the time, Amazon was so secretive and Bezos had been personally unavailable to the press for a number of years since the dot-com bust. I thought, “Okay, well, I covered this company for the New York Times and now it’s disrupting book publishing and seems much more interesting. I’ll dive into that.” Little did I know (and really had no special foresight at all), how interesting it was and how important it would be in our society, in our economy. That was The Everything Store. It was published in 2013 and then I thought, “I’m proud of that book, but I’ll move on to other things,” and it just kept changing. The Kindle company became the Alexa company, the marketplace became global, Amazon went into India, Amazon went into Hollywood, Bezos bought the Washington Post, he became a subject of tabloid fascination, and I thought, “Okay, this is now even more interesting. I need to write another volume.” Of course, even while I was writing, a lot happened, including the big controversial search for a second headquarters.

 

Gary Bisbee  5:41

Right, for sure, and AOC and The Compatriots got involved in that one. Our audience here is interested in leadership and, thinking back to The Everything Store, what did you take away about Bezos as a leader at that point? I imagine that’s evolved through time, too. What would you say were the key characteristics of Bezos as a leader at that point?

 

Brad Stone  6:06

Let’s start out by positing that he is obviously a tremendous leader. The value creation, the disruption of not just retail, but enterprise computing, book publishing, voice computing, it’s a tremendous record of accomplishment and maybe we could put it alongside Steve Jobs and maybe Bill Gates and the sheer impact. I believe he will be remembered as a tremendous leader. He has been remarkable in creating a system of invention that might perhaps endure when he’s gone. These are all of the rituals inside Amazon. The six-page documents, which I write a lot about in the book. The biannual meetings, the leadership principles that are followed with almost religious fervor inside the company like frugality and think big, disagree and commit. Some of those were taken from Silicon Valley best practices. Intel, for example, or Walmart. Others he came up with and refined so, in that respect, also a remarkable leader thinking about how he can build a company that lasts longer than he is around. The last element of the answer is he’s pretty brutal in a way that maybe is not an exemplar but seems somewhat common in Silicon Valley. I have stories in Amazon Unbound of him ripping up documents and throwing them down the table because there’s an error or cutting an employee off at the knees. I feel like, in Amazon Unbound, I’m telling the story of him maturing as a leader, but that is something that both intimidated and maybe inspired some of his employees. It’s been effective and yet, in the wrong hands, copied by the wrong kind of leader, probably can be counterproductive.

 

Gary Bisbee  7:46

As you read the book, one of my takeaways was he is a unique person, at least in my world. How does he stack up? You mentioned Jobs and Gates and others. How does he stack up with the other big tech founder CEOs in terms of being a unique person?

 

Brad Stone  8:05

He is a singular figure. In some respects, like if we’re going to compare him, maybe Steve Jobs had more of a refined design sense, more of a completionist when it came to Apple products. Bezos is more technical than Jobs was. What’s remarkable to me is his ability to dive deep in various disciplines. I tell the story in Amazon Unbound of Alexa, which is an idea Jeff has and he emails his executives about. Then I have the first drawing of Alexa on an Amazon whiteboard that he did in his own hand. He also goes deep into these documents to understand the front tier of artificial intelligence, speech recognition, and then with the grocery store technologies, computer vision. It’s unique and, in that respect, maybe we could compare him to Bill Gates. Maybe, to some extent, to Mark Zuckerberg. Then you look at the Washington Post, which he has revived. We have to give him that, and getting into the details of the media business. Not the editorial details, but certainly the business plan and the operating details. He’s unique and we’ll look back and his visage will be chiseled into the Mount Rushmore of business leaders who have left a historic impact.

 

Gary Bisbee  9:17

I’ve heard you say that, in terms of his legacy, you figured that he would want to be known as an innovator. Is that true?

 

Brad Stone  9:25

He said that. In his last investor letter, he says, “I consider myself an inventor.” My joke has been Taylor Swift wants to be a songwriter, but the world sees her as a performer and a singer. Bezos wants to be seen as an inventor, and yet we’ll consider him to be an Empire Builder, an operator, maybe a monopolist, perhaps a philanthropist, depending on the kind of legacy he leaves there.

 

Gary Bisbee  9:51

Thinking about the success of Amazon, you can be an innovator or you could be an operator or both. I guess in his case, he’d be both. Which do you think ultimately is the most important contributor to Amazon’s success? Being an innovator or being an operator?

 

Brad Stone  10:13

It’s a really good question, so maybe tonight or later today in the shower or on the exercise bike I’ll change my mind. I’m going to say, operator. I go back to 1995 when he opened an online bookstore, and it wasn’t the first online bookstore and he expanded into new product categories, and it wasn’t the first online retailer. And the difference was Bezos has an operator his ability to focus on the customer To seduce Wall Street and to create a different relationship with investors where they were willing to hold their nose, in the lean years and in the profitless years, and the inventions been important but like the Kindle wasn’t the first e-reader it had elements that the other e-readers didn’t. Alexa was unique. AWS is maybe the outlier because that was revolutionary. But again Oracle and other companies had elements of enterprise computing in the cloud, so Bezos crystallizes some things that are out there and brings them together. In that respect, he’s a tremendous innovator, but it’s the operator and the strategy, this strategic mastermind that evaluates a competitive landscape and navigates around it and bends at all does as well. It’s probably most responsible for the success.

 

Gary Bisbee  11:25

You make to point in a book that he’s an avid reader, and would work in would talk about books with his staff. How important do you think that was to his success, the fact that he was so well-read?

 

Brad Stone  11:38

In the early years, tremendous. That’s why in The Everything Store, the first book, I have an appendix of the esteem reading list. You can look at books like Good to Great, or The Innovators’ Dilemma, or there was a book by Steve Grand, the video game designer that inspired the creation of AWS. You really see it in the first book. I tried to draw connections between the books they were reading at the time and the big steps or the organizational changes that led particularly to the revival in the first decade of the 2000s. In Amazon Unbound, I was looking for that again. I had this idea of doing another appendix, another Jeff’s reading list, and I didn’t find much. I feel like maybe a little bit of the reading culture has lapsed. The one exception is they all read a book by Mark Levinson called The Great ANP. It was David Sapolsky, the chief lawyer at Amazon, who urged the leadership team to read it, not Jeff. He thought the antitrust struggles of the A&P supermarket and the 1930s and ‘40s would be instructive because Amazon itself is moving into a phase of heightened regulatory scrutiny, so reading has been important. You look at things like Alexa and a lot of Jeff’s commitment to voice computing is because he’s a Star Trek fan and a science fiction fan, so it has been important during the arc of history.

 

Gary Bisbee  13:03

Of course, he’s appointed Andy Jassy now as the new CEO, he’s moved to executive chairman. And getting back to the question about innovator versus operator. You wonder whether a new CEO is going to have that blend of operator and innovator in such a way that they can move Amazon forward at the pace that Jeff did.

 

Brad Stone  13:28

It’s the key question. I do not get the sense that Jassy is an innovator. Certainly, AWS has been innovative. He has technical people around him, maybe the reason why it maybe doesn’t matter as much is because Bezos says he’s going to remain in that invention role and he’ll be executive chairman. It’s not just the new ideas that are important. What I learned researching Amazon Unbound is it’s the magic of the founder. Not just the inspiration, but the fear he can inspire. If Bezos has a new idea, it might be a really interesting new technical feat, but it might be something silly like I tell the story of this thing called the single cow burger in Amazon Unbound. Bezos propels that through the organization. He breaks through the bureaucratic slush to make it happen and that’s the real magic in, not just inventing new things, but sponsoring them and making sure the company invests what they need to invest and doesn’t pull back, and also then releases it in a very high profile. One more example was Siri with Apple and Jobs sponsored it. He acquired the company. He introduced it in the iPhone 4S and then he unfortunately passed away the next day. If you’re an Apple user, you kind of feel like Siri is a little bit like an orphan inside a big company whereas Alexa still has the maniacal attention of the founder. That might be the difference.

 

Gary Bisbee  14:55

It’ll be interesting because you could see that Jeff might come up with some creative idea, but at Not being the CEO, it might be a little bit more difficult for him to drive that through the organization. It’ll be interesting to follow that might be your next book.

 

Brad Stone  15:12

If he wants to, he’ll still be able to drive it. The question is, will it be floating off in his yacht? Will he be flying to space? Will he be in Washington DC or in Hollywood? It’s more the distraction. He’ll still always pull a lot of water at Amazon, but how close will he stick around is the question.

 

Gary Bisbee  15:32

You quoted Jamie Dimon in the book that Jeff has more or less become a man of the world, versus the earlier days. How do you see all of this pursuit of leisure activities and his new friend, Lauren Sanchez? Is that just the normal maturity of somebody? Or is this a change in Jeff?

 

Brad Stone  15:56

It’s certainly a change. That is one of the reasons why the book took me in unexpected ways. It wasn’t just about the growth of a company and ended up being a transformation of a person almost in front of our eyes, right? It’s relatively apparent. And that that was partly focusing a little less on Amazon buying the Washington Post, battling with the Trump administration’s of visibly, but also starting to enjoy some of the advantages of fame and extraordinary wealth. And I wouldn’t have said that Jeff Bezos, circa 1998, or certainly 2010 would have been a boat guy, or a luxury car guy or buying. I can’t even summon the number off the top of my head and extraordinary property in LA, the biggest real estate deal in California history. Yet, clearly he has not only stepped onto a larger stage in terms in terms of the fame and attention and being the richest person in the world, but seems to be a little less obsessively focused on tuning the machinery of this business and enjoying the advantages that come with that lifestyle.

 

Gary Bisbee  16:58

This has been a terrific interview, Brad. As we wind down here, the way healthcare people look at Amazon and Bezos is a singular commitment to the consumer and healthcare organizations look somewhat enviously because they haven’t been that good at it. Those of you in the tech world, and you in particular as you’ve tracked Bezos and Amazon, was this preoccupation with the consumer an important part of his success?

 

Brad Stone  17:30

No doubt. It’s easy to be cynical (particularly if you’re a journalist like I am) about that because you hear it from a lot of corners. Who will come out and say they are not focused on the customer? It almost feels like a cliche, but then you look at some of the uneconomical things Amazon has done over the years—Prime being maybe a great example—to say “we’re gonna figure it out and have faith in our model, but we’re going to reduce a customer pain point by delivering in two days.” I have some examples in the book where I feel like they’ve gotten away from the “customer first” principle, advertising in the search engine being a great example. They went for the goldmine there instead of giving customers presumably what they would want, which would be the most useful search result. In health care, Amazon views it as a major avenue of expansion. Inside the company, they have this secret group called the Grand Challenge. The name kind of says it all. Bezos himself meets with them a couple of times a month. They’re a fountain of new ideas and, in a very Amazon-like way, none of it really makes sense together. It’s a jumble of ideas. They’ve got clinics, a telehealth service. They’ve got Alexa glasses and a wristwatch. The idea is that the next story or chapter (hopefully not book, for my own sanity) in the Amazon story is going to be big new markets that create an impact. Healthcare is one of them and they’re committed to trying to do something meaningful there.

 

Gary Bisbee  18:57

We’ll be following that. 20% of the gross domestic product, so they have to be looking at health care, and we’d love it if you dig into that for an article or a book because it should be interesting. Brad, thanks so much for spending time with us so shortly after you published Amazon Unbound. It’s a terrific book and you’re great at what you do, so thanks for being with us.

 

Brad Stone  19:21

Thanks, Gary. I really appreciate it. I’m appreciative of you having me on the show.

 

Gary Bisbee  19:26

New episodes will debut every Thursday. Join me in conversations to gain advice and wisdom from CEOs, presidents, and healthcare experts. Health care leadership is hard work, but it becomes more manageable as we learn from the remarkable lives and careers of our guests. I’ll see you there.

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