Amazon Takes Over: How a Flood of People Could Remake Seattle

5/9/12Follow @curtwoodward

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The Glympse team started looking around for new digs in Seattle, scoping out all the standard neighborhoods where startups might grab some office space: historic Pioneer Square, with its old brick buildings; funky Fremont, where companies like Google and Tableau Software occupy big offices along a ship canal. In the end, they settled on a former architect’s office in South Lake Union, just east of the Amazon campus, next to a parking lot where several busy food trucks congregate at lunchtime.

Trussel now says that not being in Seattle earlier was among his top five mistakes as a CEO. “From day one, we were like, ‘This is fantastic.’ Everything about it—the vibe, the area,” he says. “I think I really underestimated the impact of your office space, both the quality of it and the location.”

And it’s not just the packed restaurants, cool bars, and gleaming new buildings that has Trussel excited about his new neighborhood. Those Amazon engineers at the food trucks outside? If they pull out their smartphones while waiting in line, they’ll see a wireless network pop up under the name “Glympse is Hiring.”

“There was a physical and psychological barrier between Microsoft and Seattle,” Trussel says. “Amazon is in the heart of it.”

The lunch crowd at food trucks outside Glympse headquarters near Amazon's campus.

DENSITY RULES

Influential urban planning theorists like Richard Florida have advanced an idea in recent years that there is something special about a concentration of creative, talented people in a dense urban environment.

Developers and city officials around the U.S. yearn to create neighborhoods like South Lake Union, with its collection of human capital that leads to serendipitous discovery, chance meetings, and random inspiration that can breed unexpected, positive results for an economy and a society. These are the kinds of interactions that happen for techies in San Francisco’s SoMa neighborhood, and for biotech pros near MIT in Cambridge, MA’s Kendall Square.

“Cities bring together diverse groups of people and companies in ways that increase productivity,” Florida writes, “and create the networks, clusters, and chance interactions that lead to the discovery of new innovations and the creations of new entrepreneurial businesses.”

Chris DeVore sees the roots of such a scene taking shape around Amazon’s headquarters. DeVore is a general parter at Founder’s Co-op, a prominent early stage investment firm that recently raised an $8 million second fund and has connections to just about every notable tech startup investor and entrepreneur in town.

DeVore and his business partner, Andy Sack, moved their headquarters to South Lake Union in mid-2010, after Sack took on the director’s job for Seattle’s branch of TechStars, a top-tier accelerator program that nurtures and invests in tech startups. Their offices, tucked alongside the Amazon campus, are now a hive of activity for Seattle’s burgeoning startup scene—along with the annual classes of TechStars startups, the building houses several of the fund’s portfolio companies, including website gamification company BigDoor and mobile gaming startup Zipline Games. A common area in the basement has been transformed into an all-purpose free meeting space for tech-related events, under the banner of StartupCity. And just steps away, in virtually any direction, are coffee shops, taverns, and restaurants packed with Amazon workers, investors, and entrepreneurs.

“The commitment [by Amazon] to stay in downtown feeds a lot of what I believe to be critical for the future of Seattle as a tech innovation hub, which is density. It’s the density of lots of different layers in the ecosystem—the canopy, the middle, and the ground level of the rain forest—where everybody’s in the soup together and they get together for coffee, and they have lunch, and they share ideas,” DeVore says. “I believe that, in the long run, that will be the role that Amazon plays.”

But there’s another element to Amazon’s presence that makes it something more than an anchor tenant. The company prizes driven engineers, developers, and product managers who build innovative products with an almost obsessive focus on the customer. Teams are purposely kept small—legend has it that if your team can’t be fed with two pizzas, it’s too big for Amazon.

Amazon also prizes frugality and expects after-hours work—sometimes to extreme degrees, according to former employees. And teams are said to be given autonomy over their projects, with less regard for internal politics than at other big companies.

In other words, if they ever get tired of a big company, Amazonians are good candidates for a startup. And that’s strikingly different, DeVore says, than the profile you might typically see at the region’s other tech heavyweight.

“If I had to pick a team of guys to invest in, I would always pick a team from Amazon over a team from Microsoft—even if they were equally competent from a skills standpoint,” he says. “The behaviors and the training and the cultural conditioning that you get at Amazon are much more about independent, autonomous, performance-oriented … you live or die by your metrics.

“At Microsoft, it’s much more about how effectively have you moved your agenda into the broader agenda of the organization … it’s less about excellence in platoon performance and more about being a good team player and political operator. And both of those are admirable and valuable skills, I’m not judging one or the other. But for my world, which is about autonomous, high-performing teams, Amazon manufactures more of that than Microsoft does.”

And these days, those teams cover a lot more territory than the relatively simple core of online retail. Amazon Web Services, the company’s cloud-computing provider, now powers a significant slice of the Web and is estimated to generate around $1 billion in annual revenue. Amazon’s Kindle Fire, even in its somewhat clunky first version, has become the unquestioned leader among tablets running on Google’s Android operating system. Amazon’s digital content initiatives are rapidly expanding to bring that new hardware to life, and the company is even making bigger moves into content creation.

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Curt Woodward is a senior editor for Xconomy based in Boston. Email: cwoodward@xconomy.com Follow @curtwoodward

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