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What if America’s most successful companies are sometimes clueless?
Recent articles about Amazon’s projects in groceries and robots in the home show that even America’s most ambitious company can fumble around. In one, more details emerged about the company’s chain of supermarkets — not Whole Foods but another one — that show Amazon still hasn’t figured out how to sell us milk and chips. The company also has a team of 800 people working on what so far seems to be something like an Echo speaker on wheels.
Never underestimate Amazon. But we also shouldn’t assume that the wildly successful tech giants have it all figured out. Sometimes, these companies may just be throwing spaghetti at the wall.
Facebook’s efforts to turn WhatsApp into the default method of customer interactions with businesses may be less a grand design than the company’s only good option. When Amazon made a big splash a few years ago with promises to reimagine American health care, maybe it didn’t really have a clue. When Google, Facebook and SpaceX say they will bring internet access to more people using balloons, drones or satellites, they haven’t necessarily cracked a complex challenge.
Many of these are worthwhile efforts. We should all believe in the power of innovation to solve problems. But the public and policymakers should also not put too much faith in what is sometimes expensive, real-world market research by giant companies.
Let me go back to one of Amazon’s high-profile projects in groceries. To sum up the company’s last 15 years: Amazon operated a grocery-delivery service for a decade without much success. Then nearly four years ago it bought the Whole Foods chain of 500 grocery stores for more than $13 billion. That hasn’t been a smash. Now Amazon is building a different chain from scratch with stores that Bloomberg News described as somewhere between a Trader Joe’s and larger supermarkets.
The optimistic view of Amazon’s grocery meandering is this is merely the first step of the company’s master plan. Maybe!
There have been news reports that Amazon has dreams of heavily automated stores and plans to eliminate cash registers in lots of places. Maybe Amazon wants to use its grocery outposts as prep centers for deliveries of fresh fish and dish soap.
I am eager to see Amazon’s big ideas. But for 15 years there hasn’t yet been evidence of Amazon’s grand theory of groceries or an ability to translate imagination into reality. Meanwhile, some companies in China cleverly mix the best of in-store shopping with delivery. Britain’s Ocado and Market Kurly in South Korea are tackling inefficiencies in getting groceries to people’s doors. The best ideas in groceries are not coming from Amazon.
This is where I add that it’s possible I will look like an idiot for writing this. Groceries, robots for the home, pharmaceutical drugs and health insurance are all areas worthy of innovation. It’s just helpful to think of Amazon’s efforts as experiments — sometimes bad ones — rather than fully baked marvels of creation.
Mostly, I worry that we’ll put too much faith in what may be low-stakes tinkering for tech giants but high-stakes problems for the rest of us. It’s not helpful if some policymakers are holding off on transit projects to see if driverless cars might be the answer to transportation nightmares. (They won’t.)
I write a lot about the power of big technology companies and the harm that can result. But believing tech superpowers have it all figured out can be harmful, too.
Facebook’s Australia feud ends with a whimper
You know what’s not awesome? Australians getting stuck in the middle of a business negotiation between Rupert Murdoch and Mark Zuckerberg.
Do you remember a month ago — I know, these days it feels as if time has no meaning — when Facebook blocked all news from the app in Australia? This came after a new law in the country required Google and Facebook to pay news organizations for links to their articles.
The law may be misguided or it might be clever. I don’t know. Certainly, Google and Facebook didn’t like it — but they took opposite approaches, at least at first.
Google chose to grit its teeth and sign contracts to pay several news organizations, including News Corp, owned by Murdoch. Facebook’s response was to make a ruckus, criticize the law, and stop people and news organizations from sharing or viewing news links on its app in Australia. (Facebook later temporarily lifted the news blackout.)
Then on Monday, Facebook did pretty much what Google did a month ago: It signed a deal to pay for material from Murdoch’s company. Maybe this fight that was supposedly over the good of the public was really just a tussle between billionaires?
I don’t want to let the rather meh conclusion obscure the important underlying issues. Google and Facebook gobble up a significant portion of advertising sold in the world. That makes life harder for news organizations and other companies that support themselves with advertising.
Lots of people and government officials are trying to figure out what, if anything, should be done about this. U.S. lawmakers are debating a bill that would give smaller news organizations collective bargaining power to cut deals with Facebook and Google — not dissimilar to what happened in Australia. (It’s also not unlike a proposal I wrote about in 2009. )
Whether these are wise steps or whether news organizations deserve special help at all is a worthy debate. Unfortunately, in Australia the important questions were muddled by rich companies bickering over power and money.
Before we go …
A secret labor settlement, relevant again: After a contentious effort to unionize Amazon warehouse workers in east-central Virginia, the company issued a 22-point promise that it wouldn’t retaliate against people for supporting a union in the future. My colleague David Streitfeld recounts that formerly secret agreement with federal regulators and how it’s relevant to the company’s current labor unrest.
Hacking all your text messages for $16: A Vice News reporter found multiple hackers-for-hire who were able to reroute all his text messages and use the access to break into his online accounts. It’s a scary tale that shows a lack of accountability in the sprawling mess of our text messaging system.