A VC - Latest Comments in Why I Just Bought Amazon (AMZN)

Re: Why I Just Bought Amazon (AMZN)

maurice — Fri, 21 Dec 2007 19:07:41 -0000

this is a common misreading the simpleDB docs: you only need to resort to zero-padding and offsetting negative numbers tricks if you intend on using the "<" or ">" operators on numeric attributes, and have that comparison be numeric. SimpleDB treats all of its values as strings, so < and > use lexicographic ordering-- not numeric ordering. While I agree this is a little annoying, it's not technically a requirement.

Re: Why I Just Bought Amazon (AMZN)

fredwilson — Mon, 17 Dec 2007 22:45:02 -0000

Thanks Charlie

I'll check them out

I love blog comments. I learn more from you all than anyone else!

fred

Re: Why I Just Bought Amazon (AMZN)

fredwilson — Mon, 17 Dec 2007 22:41:02 -0000

I wanted to generate smart links on the tickers and I know that a link to
yahoo finance will do that. Not sure if a google link will do that.

fred

Re: Why I Just Bought Amazon (AMZN)

Steve Kane — Mon, 17 Dec 2007 20:40:01 -0000

i agree that cheap commodity like technology infrastructure is great for entrepreneurs. and maybe great for vc funds which are focused like USV or First Round (that is, First Round's upcoming new fund which looks a lot like USV). But how does this help big or huge VC funds?

And what do you make of the increasing size of VCs funds? the need for capital seems to be going down but the supply of capital seems to be going up?

Re: Why I Just Bought Amazon (AMZN)

bjubb — Mon, 17 Dec 2007 14:04:00 -0000

i could disagree with the statement " If you coded
your database in Amazon to begin with you will never see the wall. As
you need more capacity you have to do nothing, other than pay your
bill". The DB service _may_ be that simple but the EC2 and S3 are
not. Its not a true elastic service without a bunch of programming done
on your part. There are even products out there that you might need to buy if you aren't able
to do so. (weoceo comes to mind)...

As far as their future aspirations to build a "web data API" that
makes commingling services easier down the line...probably not so
true. everybody has an API, i dont see why 2 startups having their
data in the same database service would make it so much easier that it
becomes a no brainer. some people need secure data (wesabe, flickr),
some people dont (weather, traffic, maps) and on and on.

Re: Why I Just Bought Amazon (AMZN)

Charlie Crystle — Mon, 17 Dec 2007 08:54:33 -0000

Fred, there's a company that's already added a DB layer to the web, so you can treat the entire web as a large data store. Josh Knauer is the founder, and its' a mature business... here's one of thei projects (out of CMU) http://www.maya.com/infocom...

Re: Why I Just Bought Amazon (AMZN)

fredwilson — Mon, 17 Dec 2007 07:47:02 -0000

I am not sure that investors ever had the advantage when it comes to a high
quality venture deal run by top notch entrepreneurs

fred

Re: Why I Just Bought Amazon (AMZN)

fredwilson — Mon, 17 Dec 2007 05:47:02 -0000

No I have not, but I suspect that the economics of this business will
change.

If a significant percentage of web services adopt Amazon's service
offerings, I think they will be in a position to make money in more ways.

fred

Re: Why I Just Bought Amazon (AMZN)

Ben Marklein — Mon, 17 Dec 2007 04:08:58 -0000

Fred - Obviously Amazon's service offerings are getting traction with customers. But what do you think of it as a business? For example Nelson Minar analyzed this when S3 and EC2 first came out and concluded: "[T]his best case scenario would be a 2% earnings improvement. Nice, but worth the distraction to their primary business?" Have you done your own analysis?

Re: Why I Just Bought Amazon (AMZN)

Dustin — Mon, 17 Dec 2007 01:10:46 -0000

You are long Google yet you link to Yahoo Finance? Seems odd to me.

Re: Why I Just Bought Amazon (AMZN)

gzino — Mon, 17 Dec 2007 00:21:21 -0000

Also, along with Google, positioned to be the major player as the semantic web develops. Watching each move they make, it would be shocking if they are not carefully building, storing, and correlating metadata around just about everything. And as they expand into other consumer areas (the TiVo deal etc), web service enablement (EC2, S3, now this), their PayPal clone, etc...wow. As a past stockholder that then built our startup on EC2 and S3, I'll say that I only increased my position. Now with this...even more so...

Re: Why I Just Bought Amazon (AMZN)

pwb — Sun, 16 Dec 2007 20:43:56 -0000

Until there is a fairly decent competitive offering, I have to think that it is too risky to put your whole company on AWS.

Re: Why I Just Bought Amazon (AMZN)

Peter Secor — Sun, 16 Dec 2007 16:08:06 -0000

Thanks for the response. I've been digging into it a bit and will be posting what I've found and what assumptions I've made. So far the best deal for overall cost (not just to me but including production and eventual disposal costs that may not be completely borne by me individually) looks to be any reasonably efficient used car from the '90's. It's been very interesting looking into the various subsidies (both government and company internal), tax breaks, and other costs that go into the production of a vehicle.

Re: Why I Just Bought Amazon (AMZN)

Bob — Sun, 16 Dec 2007 15:05:27 -0000

Good post. I especially agree with this sentiment
"All that area between the red and blue lines is risk that has been taken out of the equation for VCs and equity that should largely accrue to entrepreneurs."

My question is what about companies like smugmug, hotornot, plentyoffish? They never took VC money and are profitable and have no plans to take VC money. Are they the exception or soon to be the norm for web 2.0 startups? Even in a case like facebook, it seems like they are in command of the terms rather than the investors putting the investors at a disadvantage.

Re: Why I Just Bought Amazon (AMZN)

fredwilson — Sun, 16 Dec 2007 13:42:01 -0000

I think the VC business will be fine. I don't think Google can monetize most web services better than the owner of the service can. Google ads are not the most native monetization system for most web services.

Ultimately the owners of these services will need to build organizations to best capitalize on the opportunities in front of them

As I said in my 'web 2.0 is a gift' post last year, this is all good for entrepreneurs and VCs as it reduces risk for everyone

Fred

Re: Why I Just Bought Amazon (AMZN)

Sun, 16 Dec 2007 13:34:47 -0000

I am not talking about Goog engineers building a twitter clone. I am talking about the next evan building the next twitter using the open goog infrastructure and goog development tools & framework. No cost. No data center moves - no down time. Today goog will monetize your pages for you. Tomorrow goog will build and host your infinitely scalable business and monetize that for you. PS. I love your blog and I know you will be ok but where does that leave the vc biz.

Re: Why I Just Bought Amazon (AMZN)

fredwilson — Sun, 16 Dec 2007 13:24:02 -0000

I left a comment on this thread with a link to a post I wrote almost a year ago called 'web 2.0 is a gift, not a threat, to vcs'

Go take a look and let me know what you think

Fred

Re: Why I Just Bought Amazon (AMZN)

fredwilson — Sun, 16 Dec 2007 13:20:01 -0000

It is pricey but I like to be invested in innovators. If it goes down I can always buy more

Fred

Re: Why I Just Bought Amazon (AMZN)

Bob — Sun, 16 Dec 2007 13:01:38 -0000

As a Web X.0 entrepreneur and someone who has been in the software industry for 20 years, I have kept a close eye on AWS for aforementioned reasons. Unfortunately I couldn't use it for my current startup because it was still in private beta at the time. Recently at a AWS event co-sponsored by KPCB, I asked a KPCB VC about what AWS means for VCs. It has become so affordable (AWS, VPS, shared hosting, etc) to build a Web X.0 site that a lot of startups don't need VC money, at least not for a good long time if ever. Companies like SmugMug, hotornot, plentoffish, etc will never need VC money because their burn rate is way below their revenue stream. Fred, I would love to hear your thoughts on this subject.

Re: Why I Just Bought Amazon (AMZN)

awilensky — Sun, 16 Dec 2007 12:58:28 -0000

To quote the database super Server industry foremost expert, Kingsley Idehen of OpenLink Software:

"For every database function of the old model, increased complexity, increased administration. Stored procedures, replication, unified data model, DB to DB connectivity, etc." I might add, that the new languages used to spin out new web based applications are all trying to make everything a nail, because all of the databases that they have to work with (mySql, Postgress) are hammers. This has created a specialist industry where we have something that did not exist before: Programmers that have an intimate knowledge of the serving and request structure of the client's remote calls, to a degree not known in previous era's.

In other words, you can be a Ruby or PHP programmer, but to be really in demand, you have to know A LOT about the back end. You can get started with basic knowledge, and get a small demo working, but once you get to even mid sized apps, you find that there are all these issues in the database closet that are very, very arcane.

I am going through this right now, where my poor little bootstrap venture has such a starting mezzanine complexity requirement, that is a useless exercise to start with under provisioned complexity. If you are going to have thousands of small user objects that need to updated and tracked on real time, you have to solve an number of vexing problems that even heavy databases have problems with. Sure, an off the street Rails guru will get you so far, but that data back end......

http://www.squidoo.com/Thru...

Re: Why I Just Bought Amazon (AMZN)

david lee — Sun, 16 Dec 2007 12:51:13 -0000

i agree 100% fred. not to sound like an egghead (and i probably don't understand the book completely), but i think their moves around web services are a textbook way to respond and react to innovator's dilemna. compare them versus ebay. amazon took a much more audacious path around an emerging trend while ebay focused on just squeezing every incremental penny off their auctions.

great stuff, fred, although i feel like it's still a little pricey :)

Re: Why I Just Bought Amazon (AMZN)

fredwilson — Sun, 16 Dec 2007 12:46:01 -0000

That seems to be the prevailing wisdom. My bet is they do what it takes to get it right

Fred

Re: Why I Just Bought Amazon (AMZN)

awilensky — Sun, 16 Dec 2007 12:38:00 -0000

The Amazon DB has numerous shortcomings, but may evolve to include all the functions of a fully functional database that most web services need.

Re: Why I Just Bought Amazon (AMZN)

fredwilson — Sun, 16 Dec 2007 12:35:01 -0000

Honestly I haven't researched the whole hybrid engine thing enough to be able to post intelligently about it

Toyota is one of my smaller holdings and it hasn't done much since I bought it

I need to read up on this whole topic a bit more

Fred

Re: Why I Just Bought Amazon (AMZN)

Peter Secor — Sun, 16 Dec 2007 12:21:13 -0000

Hi Fred,

You mentioned near the end of your post that you had a position in Toyota as part of a hybrid engine play. I don't recall any posts (after searching a bit) that discuss the reasons behind this and would be very interested in what the motivations are. I'm in the market for a small/mid-sized car here in the Bay Area but every cost model I've done for the hybrids ends up more expensive overall.