Both men have taken great risks to make their companies successful. Both men gave slide show keynote presentations to introduce new tech products designed to change the world. While Steve Jobs was known for wearing a mock turtleneck t-shirt, jeans, and sneakers, Amazon’s Bezos is the emperor with new clothes.
The Fabric Is Different
Steve Jobs built Apple into an iconic technology powerhouse, left the company, then returned years later to take Apple from the brink of disaster and death to the most powerful, profitable, valuable, and rich tech company on the planet.
Amazon’s Jeff Bezos recognized a wonderful opportunity with a web-based retail outlet that sells everything and built his dream into the world’s largest online store; dwarfing the competition in sales, but not profits.
Along the way, Amazon’s stock took Wall Street for a ride, at least until the losses piled up so high that investors finally realized that Bezos new clothes were actually no clothes at all.
Hans Christian Andersen’s The Emperor’s New Clothes could just as easily be turned into a reality TV show about Amazon’s Bezos.
How so? Amazon, which sells more goods online than the next five largest competitors combined is a bust when it comes to creating new technology that sells, or even making a profit on the basic online retail business.
Here’s the original plot:
A vain Emperor who cares about nothing except wearing and displaying clothes hires two swindlers who promise him the finest, best suit of clothes from a fabric invisible to anyone who is unfit for his position or “hopelessly stupid”. The Emperor’s ministers cannot see the clothing themselves, but pretend that they can for fear of appearing unfit for their positions and the Emperor does the same. Finally the swindlers report that the suit is finished, they mime dressing him and the Emperor marches in procession before his subjects. The townsfolk play along with the pretense, not wanting to appear unfit for their positions or stupid. Then a child in the crowd, too young to understand the desirability of keeping up the pretense, blurts out that the Emperor is wearing nothing at all and the cry is taken up by others. The Emperor cringes, suspecting the assertion is true, but continues the procession.
The swindlers are Wall Street. The Ministers are Amazon’s investors. The Emperor is Bezos.
Amazon’s stock has been a high flyer for years, but as word that the emperor’s new clothes are really no clothes at all begins to spread throughout the land, the stock price has begun to languish.
It’s about time, too. Competitors which sell far fewer goods online often make more profit than Amazon. As to the stock price, compare Apple’s Price to Earnings ratio of around 15-1 to Amazon’s sky high P/E of 500-1. Amazon refuses to say how many Kindles, Kindle Fire tablets, or Amazon Fire Phones have been sold, which indicates there isn’t much to brag about.
Let’s face it. Amazon is a one-trick pony company, and the trick isn’t all that good in the first place. Amazon does not dominate online sales, the technology ventures have yet to return a profit or return on investment, and the stock is going nowhere as more investors catch on to the founder’s clothing malfunctions.
Amazon had a good run. There’s nothing to see here. Time to move on.