chairman coatue ventures / 20 years at facebook and amazon

Joined April 2007
Thanks to everyone who has reached out to me after listening to my podcast interview on This Week in Startups. Many nice notes from old friends and colleagues, and tons of outreach from new acquaintances. thisweekinstartups.com/e33-a…
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But once we started the transition to Linux, there was no going back. All hands on deck refactoring our code base, replacing servers, preparing for the cutover. If it worked, infra costs would go down by 80%+. If it failed, the website would fall over and the company would die.
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We finally completed the transition, just in time and without a hitch. It was a huge accomplishment for the entire engineering team. The site chugged on with no disruption. Capex was massively reduced overnight. And we suddenly had an infinitely scalable infrastructure.
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Then something even more interesting happened. As a retailer we had always faced huge seasonality, with traffic and revenue surging every Nov/Dec. Jeff started to think - we have all this excess server capacity for 46 weeks/year, why not rent it out to other companies?
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Around this same time, Jeff was also interested in decoupling internal dependencies so teams could build without being gated by other teams. The architectural changes required to enable this loosely coupled model became the API primitives for AWS.
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These were foundational insights for AWS. I remember Jeff presenting at an all-hands, he framed the idea in the context of the electric grid. In 1900, a business had to build its own generator to open a shop. Why should a business in 2000 have to build its own datacenter?
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Cloud infrastructure would have emerged eventually even w/out AWS (like electric vehicles w/out Tesla), but how much later and at what opportunity cost ? After the cost of starting a company was reduced dramatically by AWS, innovation exploded and the modern VC ecosystem was born
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Amzn nearly died in 2000-2003. But without this crisis, it's unlikely the company would have made the hard decision to shift to a completely new architecture. And without that shift, AWS may never have happened. Never let a good crisis go to waste!
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PS: Amzn recently spent years ripping out Oracle, something few have attempted. It takes muscle to do hard things, and muscle gets built by doing hard things. The best companies look at every challenge as an opportunity and engrave that mindset into their culture.
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