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

5/9/12Follow @curtwoodward

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In short, Amazon is picking lots of fights—and that means a more diverse array of technical and business skills among the entrepreneurs who will eventually decide they want to leave and try their own thing.

“So we’re going to be able to partake in the human exhaust of lots of different battles that they’re fighting. And it won’t hurt them, in the sense that there’s natural churn in an organization. It’s not like we’re stealing people out of Amazon,” DeVore says. “It’s people who’ve chosen to spit themselves out. And we just want to be there to catch them.”

FITTING IN

The quick rise of Amazon won’t come without its headaches. Seattle doesn’t have a very good public transit system—it’s mostly based on buses—and car traffic around the company headquarters is already packed enough that Seattle police have to wave cars through the quaint little four-way stops at quitting time. A few blocks away, a major construction project snarls the rush-hour commute toward the freeway.

Housing in the city also could become more expensive if many thousands more people flood into the area, particularly if they make decent salaries. But the culture of Amazon also will have to be grafted onto the city, and that may not be an easy feat.

Seattle also has a well-earned reputation for being very politically liberal—hybrid cars, natural food stores, backyard chickens, and tax increases are well received here. Clever businessmen, vast wealth, and fancy dress are often frowned upon. Seattle likes its institutions to be world-class, but it also wants them to remain humble and give back to the community.

Amazon founder and CEO Jeff Bezos, on the other hand, is said to be quite libertarian in his politics—and it shows in his business strategy. Where Amazon sees the beauty of efficient markets liberating consumers from hefty price markups, some see a rapacious margin-chiseler bent on destroying the local bookstore.

Where Amazon sees a clever tax policy that keeps it from competing head-to-head with the big box guys, many see a cynical series of subsidiaries and technicalities that mostly serve to deprive cash-strapped states of sales taxes that brick-and-mortar retailers have to collect.

And, as any reporter who has covered the company can attest, Amazon is not that interested in engaging with the public discussion about itself—the Amazon public-relations strategy amounts to “we’ll let you know.”

This culture clash was crystallized in a recent multi-part report by The Seattle Times. The newspaper, saying it was taking readers “Behind the Smile” of Amazon’s cheerful logo, detailed complaints from local charities that Amazon has been largely absent from the giving circuit. Subsequent reports took on Amazon’s sales-tax avoidance, its hard-nosed approach with the publishing industry, and reports of poor working conditions in some of its warehouses.

The reaction to those stories offered a glimpse at the mixed feelings Seattle has about Amazon’s growth. Commenters lit up the Times’ Web pages with criticism, wondering why the paper had set out to kneecap a company that was doing so much hiring and bringing such talent and wealth to the city. The newspaper’s top editor was forced to write a column explaining why the Times had gone after Amazon, and asserting that the staff had actually gotten several quieter messages of encouragement.

Some of the criticism Amazon gets can simply be chalked up to normal growing pains that come with success. But there is still a risk that the company’s insular internal culture will serve as a brake on the enormous potential that its people have to affect the city. It’s not enough to just cram a bunch of people together—they have to be open to the random interactions and encounters that can spark new ideas. Right now, Amazon rarely opens its doors to the public, and usually only does so when it’s got a new service to sell.

“The fact that they’ve chosen to [expand] in the city’s a little bit surprising, just because of the fact that Bezos is so paranoid. The culture of secrecy—it borders obsessive paranoia. It’s a need-to-know culture. And so the question is, will the promise of that many really smart technologists in the middle of a city be realized?” DeVore says.

In an industry that particularly prides itself on sharing knowledge and showing your work, it’s a bit of an anomaly. And in an era when the best Web technologies are about connecting people with each other, as DeVore has written, Amazon continues to be about connecting customers with merchandise.

“Our version of a perfect customer experience is one in which our customer doesn’t want to talk to us,” Bezos recently told Wired magazine. “Every time a customer contacts us, we see it as a defect. I’ve been saying for many, many years, people should talk to their friends, not their merchants.”

SEATTLE’S GROWTH

The frothiness of the tech sector in the greater San Francisco area has given Seattle a new bit of shine in recent years. The cheaper cost of living translates into lower salaries for top engineering talent, which has become so hard to find in Silicon Valley that big companies have been snapping up startups just to hire their developers.

In this climate, Seattle has become the favorite second engineering office for the Valley’s biggest and hottest companies, including Google, Facebook, Splunk, and Zynga. They compete for smart graduates from the University of Washington, but in a time of declining state budgets, there’s only so many of those people available. The real prize is usually raiding the cupboards of Microsoft and Amazon.

Even startups are getting in on the action. “I love the fact that Amazon is sitting here expanding,” says Adrian Aoun, CEO of Seattle-based semantic search startup Wavii. “I’m like, `Two for you, one for me. You pay the relocation fees, I’ll bring them in a few weeks later.’”

Even with increased competition for talent, Amazon is growing at a remarkable rate. Last year, the company’s employment base grew 67 percent to 56,200 employees worldwide. Just 90 days later, Amazon’s head count had jumped again, to 65,600—a hiring rate of more than 100 people per day.

Head to South Lake Union any weekday morning, and you can see it in the flesh. On sidewalks where hardly anybody walked five years ago, Amazon employees are everywhere. They come from every direction—pouring out of buses, crowding the street corners, and streaming down the sidewalks, wearing the telltale light-blue ID badges. They tend to move quickly, and don’t spend a lot of time chit-chatting. Amid the most significant corporate expansion this city has seen in years, there’s work to be done.

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

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