Editor’s note: Seattle venture capitalist and former ADIC CEO Peter Van Oppen wrote this email to GeekWire in response to the story we ran on Tuesday titled: “As criticism mounts, Amazon discloses parental leave policy that trails tech industry peers.” The note is reprinted here with his permission.
I saw your story about Amazon’s maternity policy and the comparison to “tech giants known for lavish perks.”
I’m a venture capitalist and long-time public company CEO, but I am not an Amazon shareholder, nor do I have a particular stake in this fight.
I think The New York Times story on Amazon’s workplace culture will generally have positive effects, but I do think that story and your story are misleading in the simplistic characterization of Amazon as a technology giant analogous to Facebook, Google or Microsoft.
While it is based on crucial technologies, Amazon does not have the characteristic gross margins (80% and higher) associated with software and web companies due to its main business being a retailer of physical goods. I was glad to see you mention Wal-Mart as they are among the competition for customers, if not for employment talent.
Amazon founder Jeff Bezos has had the dilemma of attracting technical talent, while eschewing the lavish spending and overhead often associated with similarly famous local and Valley companies. His vision and the company’s maniacal adherence to an explicit set of core values appears to have been absolutely critical to their success in a business of low margins, substantial capital requirements and logistical complexity.
Many in the local tech industry recognize Amazon as a tough and demanding place to work as well as an excellent source of talent tired of the culture, but I think many of us also admire the discipline that has been necessary to innovate and grow in a highly competitive industry. No one should condone the treatment of people described in the article, but organizations based on discipline and execution sometimes exhibit examples of bad judgment and extreme behavior committed in the name of disciplined goals.
These things can and must be corrected but not to the extent the business tries to match the perks of big name software companies while experiencing the margins of a physical retailer.
I hope the AWS business begins to dramatically raise the margins and profitability of Amazon, but for the time being the headcount is overwhelmingly related to the retail business and we Seattleites would be better off celebrating their vision, discipline and success rather than in endorsing and repeating simplistic characterizations and comparisons of their employment practices.
The news here is likely less about how Amazon’s culture compares to other tech behemoths and more about how they can use maniacal discipline to compete for talent, raise capital and succeed while making little or no short-term profit in a thin-margin business.