Chenyi Shi

If you have something underneath your existing power umbrella, and that's what Amazon did, they had this distribution logistics.

They started with...

We all know books and then CDs and then electronics, et cetera.

It's the natural extension that not just leverage, but also intensifies your existing power.

That's way less risky.

You know you start somewhere new, but with a headstart compared to anyone that's a competitor.

But the movement into Amazon Web Services is invention.

And I loved your guy's story on how there's the four different sources of starting point of Amazon.

People would love to think it's based on some existing competitive advantage of the business, but it's really not.

It's invention.

They figured out a new thing that the market wants.

But as successful as they are in AWS, they also flopped Fire Phone, if you still remember that.

They also lost billions and billions on Alexa.

There's really no track record of a business who can continuously come up with successful invention.

And that speaks to the riskiness of that, which is why it's only the point number three or number four on the list.

Because if you don't have to go there, don't.

But if you do have to go there, co-action is the most possible place for success.

Yeah, it actually occurs to me that there might be exactly tied to switching costs.

There might be another rationale for buying, which is building takes longer than buying and timing matters, particularly for companies with switching costs.

Now, the interesting about switching costs going back to the power itself is it's non-exclusive, right?