The Billion Dollar Industry of Saving Time

I watched an interesting keynote speech from Scott Galloway recently.

Twice, actually. I liked it so much, I watched it again the following day.

About 14 minutes in, he talks about businesses that build "time machines". More specifically, he explains that your best chance to build a business worth billions is to build a business that saves time.

The examples he uses:

Clear Secure Inc.

The first example he uses is Clear; that company that helps you skip the security lines at airports.

I had no idea they were a billion dollar business.

Their market cap: $3 billion.

Netflix

It's easy to become numb to the success story that is Netflix.

The company has become so ubiquitous that most of the company news we hear about now is negativity about rate increases or programming being removed from the service.

But, the first time machine that Netflix built was DVDs through the mail. They basically killed the video store.

They saved us the time of having to go to a video store, pick a title or two, and then return the titles a few days later. Netflix made it so you didn't have to leave your home.

The second time machine Netflix built was streaming.

If you took the average child's television consumption and moved it from broadcast television with commercials to ad-free streaming, you would save that child 12 days per year.

In 2000, $30+ million in debt and unsure how much longer they could make payroll, Netflix founders Reed Hastings & Marc Randolph offered to sell their startup to Blockbuster for $50 million.

They were laughed out of the room by Blockbuster CEO John Antioco.

We know what happened to Blockbuster.

Netflix's market cap: $238 billion.

Amazon

You want to talk about ubiquity and being numb to the incredible rise of a company?

I have a few books about Jeff Bezos & Co. on my shelf. I remember my Mom coming over one day and seeing one of them on my desk. She rolled her eyes and said something disparaging about the need to read about him or his company.

I understood the perspective. It's easy to become complacent to convenience when it becomes a staple in our daily lives.

However, I, being the defender of big business that I am, reminded her that we only had to go back to the 90's to get to a time that Amazon was being run from a suburban garage.

(This reminds me of a hilarious bit by a now-disgraced comedian comparing a guy complaining about the airplane wi-fi being broken to the fact he is sitting in a chair in the sky experiencing the miracle of human flight.)

It's easy now to forget they were once just a bookstore. And to forget the stories of millionaire administrative assistants that took stock options as bonuses in the early days.

It's easy to forget the massive financial losses they used to report. And to forget the simultaneous confusion of old school Wall Street experts as they watched the stock price keep climbing.

Amazon's Time Machine

It's easy to forget how long package delivery used to take.

Packages used to take up to 9 days to be delivered. And delivery was rarely, if ever, free.

Consider the expanse of their catalog and think of all the time Amazon has saved us from no longer needing to physically go to department, hardware, and grocery stores.

Framing it the way Galloway does as a broader industry of saving time makes Prime Video look like a logical progression.

Amazon's market cap: $1.6 trillion.

Saving Time is the Goal

I wish I had watched Galloway's speech before we did our podcast episode on the FBA fee changes that we are now in the middle of.

It's easy to let ourselves process things like increasing fees from the point of how it affects us personally. How much it will cost us. How much it sucks. Amazon is out to squeeze us for more money, etc.

It's also very difficult to realize that it's part of Amazon's massive and decades-long investment in the improvement of their fulfillment network.

Amazon has normalized delivery that is 90% faster than it used to be. And they're not done yet.

If inventory is at the proper level and in the optimal location, they will continue to shorten the gap between checkout and delivery.

It's that industry-altering efficiency and convenience that has brought the hundreds of millions of customers to the ASINs we source and sell.

I think that's the big picture that I hadn't grasped yet during the podcast. I lost sight of how valuable it is to save so much time.

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Did You See This?

📰 The Birthplace of Amazon.com is on the market

The garage (and house it's attached to) that Jeff Bezos founded Amazon in is up for sale again. It will take a cool $2.28 million to secure the property.

Luxury Launches has the story

📰 Saturation is a Myth?

Thousands of new sellers join the Amazon marketplace every day, yet more than 50% of sales in the US come from sellers that started selling more than 5 years ago.

There's a fascinating chart in the article showing the balanced expansion of the marketplace.

Sorry (not sorry) to all of the "Amazon is saturated" curmudgeons. Also, h/t to Ryan Grant at OSE for putting the article on my radar.

Read More at Marketplace Pulse

📰 Hometown Teams on Prime Video

Diamond Sports Group provides regional broadcasts for 37 different teams across multiple leagues (think of the biased announcers on the local station that your Grandpa or Dad used to watch on tube TVs).

They had a rough last year ($8 billion in debt kind of rough) and filed bankruptcy - throwing the state of contractual local sports access into chaos.

Well, they caught something like a last-second hail mary last week when they announced a surprise partnership with Amazon.

There's a lot to the story, but the part we should be interested in is the positive impact the lure of beloved hometown teams streaming on Prime Video could have for Amazon Prime membership numbers.

More Details from ESPN

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If You're Still Reading...

You're either a faithful reader of my verbose newsletters that always end up much longer than I intended (and consequently spit in the face of modern day attention spans).

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Look for an announcement coming in the next few days and sign up to open in early February.

A few of you have been so patient and diligent trying to sign up for a subscription, I don't want you to miss out. (You know who you are. Shoot me an email 😉)

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Sometimes I Think I'm Funny

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Have a great week! Talk to you soon.

Chris