[larrys]

"This is a winner-take-all market, like with Amazon in the 90s!"

Amazon is often pointed to as a company that was doubted much and then succeeded. What isn't talked about as much, in addition to the fact that there were many more companies that went bust than hit, is the fact that Amazon lost 3 billion before it became profitable. (Source: financials on Amazon investor site). The fact is Amazon should have failed and the critics were right more than they were wrong.

"I'm too young to remember if the same pitch was used for the Dotcoms of the '90s bubble"

Same idea. Making people think they are stupid if they don't "get it". I know otherwise smart people who lost $100,000 on dot com stocks that they had no business in back then.

[rudasn]

> Amazon lost 3 billion before it became profitable

Where exactly did they find 3 billion to lose? How did Jeff Bezos manage to convince investors to give up so much cash? I'm really surprised about this

[larrys]

Taking only 1 year as an example, 2001 Amazon had $444 million of accounts payable, $305 million of current liabilities (some other things...) and 2.1 billion of long term debt.

So, in 2001 the total current liabilities and ltd was over 3 billion dollars.

So they borrowed - they issued bonds as well as used other types financing. The interest payments for that year are actually pretty low in relation to the debt, interest expense for 2001 was only about 139 million.

[larrys]

"How did Jeff Bezos manage to convince investors"

With people investors or not

a) consistency principle - people not wanting to be proven wrong (so they will throw good money after bad)

b) sure failure if they don't give more money so they take a chance and throw good money after bad.

c) people issuing the debt make money on the deal so they have incentive to push and not as much if a failure.