Stepping Over Dollars, Grasping at Dimes

Business The Edge Podcast Top November 17, 2018
Amazon HQ2


Stepping Over Dollars, Grasping at Dimes

An Eagle was soaring through the air when suddenly it heard the whizz of an Arrow, and felt itself wounded to death. Slowly it fluttered down to the earth, with its life-blood pouring out of it. Looking down upon the Arrow with which it had been pierced, it found that the shaft of the Arrow had been feathered with one of its own plumes. “Alas!” it cried, as it died.

“We often give our enemies the means for our own destruction.”

The Eagle and the Arrow, Aesop (~560 BCE)

A word on Amazon’s HQ2 debacle. In a time of increasing political polarization, when you’re able to get Democrats and Republicans to come together in publicly denouncing your actions, you’ve got to ask yourself: “Was this really the best idea?”. I get it. On paper if you’re Amazon this made a ton of sense. ‘Let’s leverage our capital and labor needs to curry the favor of politicians and give us an unfair competitive advantage when it comes via tax breaks. And not only that! Let’s split the HQ2 between two major metro areas with massive political pull, we get even more Senators and access to two labor markets instead of one.’

But need I remind you, Amazon, that the tax breaks you are getting are pittance compared to the riches you already have. This is not me talking down about corporate greed or vilifying Amazon for wanting to get unfair treatment form politicians. Amazon is simply playing the game, a game that politicians gladly play and benefit from too.

What I am looking down on Amazon, and specifically Jeff Bezos for, is for falling for the very trap that he has so long been revered for avoiding. The trap of short-term thinking. Bezos has consistently made decisions that neglect the short-term in favor of his long-term vision. But for the first time he did the opposite.

The small rewards given through tax incentives and local government favors pale in comparison to the horrible backlash that Amazon’s brand is now receiving. In a world where former tech darlings like Facebook, Google, and Twitter have seemingly become public enemy number one, Amazon has managed to get by unscathed. Both the media and regulators have for the most part not looked Amazon’s way.

No more. This blunder now has brought the eyes of journalists looking for clicks, and politicians looking for a war cry straight Amazon’s way.

Amazon played this terribly wrong, and for the first time one of the great entrepreneurs of our time has shown that even he can fall victim to short term thinking. Let this be a reminder to all of us to not shed our feathers where we don’t want them to fall.