Discussion Questions
This session we examine e-commerce, the idea of buying and selling things
over the internet. We're looking at two of the biggest attempts to push into
this area: Webvan and Amazon. One was a clear and spectacular failure, the other
is still around and may one day be profitable.
- The Time article comes from the very peak of Bezos's celebrity, a few
months before .com stock crashed and the party ended. (Comparing him to Martin
Luther King, indeed). Why did they make him Person of the Year? What made
Amazon such a hit with customers and investors?
- What was Webvan trying to do? Why did its founders believe their company
could be more profitable than grocery stores?
- Both Webvan and Amazon turned out to be quite bad at the business of
efficiently ordering, storing and shipping goods to customers. How could they
fail at such an important task? What were they concentrating on instead?
- From a new-economy perspective, both firms appeared to be "tech stocks" or
".coms". What standards and assumptions governed people's analysis of these
businesses? How appropriate were they?
- From a longer term perspective, Webvan looks like a home-deliver grocery
business and Amazon looks like a catalog store. Home delivery was big a
hundred years ago and gradually shrank (think the Sears catalog, department
stores, grocer's rounds). On the other hand, TV shopping channels, LL Bean,
computer catalogs, etc. saw considerable growth in the past 15 years. We also
saw that videotext was expected to drive home shopping in the 1980s. Why did
people expect the internet to shift the balance in favor of home delivery? How
did these (and other firms) try to use it to "change the rules"? How
much impact do you think it has really had on the underlying trends?
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