Good morning. Im scott mcgrew. We will talk about amazon. I have two guests. The first is an author of a new business book winner take all. A study in how Online Marketplaces are monopolies. And jason del ray, a reporter, has a similarly titled book called winner sells out. Amazon, walmart, and the battle for our wallets. Jason, lets start with you. Let me start with you. If ecommerce were invented today, i all my money would be on walmart, right . My choices are you bet on walmart, all the product and all the trucks and all the logistics . Or do you bet on some investment banker named jeff bezos . 100 on walmart. I would have been wrong. You would have been wrong, at least for a long period of time. Sort of a classic innovator clem dilemma, case study, is that walmart for many years either was ignoring the future of retail taking place online, or just couldnt come to deal with the tradeoffs that they would have to take in their business in order to be successful going up against amazon in amazons home sector. Lets say you are in charge of the california stores. You would be worried about an online presence. Logically, sales in stores would fall if sales online were successful. Thats right. That was a big issue, not only was it the fear and i think very reasonable fear of online cannibalizing instore sales, and also instore profits, but also over the years as walmart started to allow for pick up at stores if you ordered online, there were all these debates about who gets credit for the sales. It is a complicated situation. One walmart really struckl stru with for a long time. Its easy to point out all the things walmart did wrong. Did walmart do anything right that amazon did wrong . Well, we are looking at amazon today really struggling to figure out the physical retail world. Despite varying efforts. I think walmart was very focused on making sure they could keep prices down in their Super Centers while still making a profit and then also eventually investing in online ordering, picking up at store. And that has become a very lucrative business for walmart and one that i think amazon is probably envious of as we see shipping fees continue to rise and labor costs continue to rise. Theres a lot of talk about amazon. I dont think we can properly call it a monopoly, but monopolylike as far as online ecommerce. But we have proven over and over that the big player doesnt remain the big player forever. I was in iowa in the 80s. Walmart devastated small town economies. We thought to ourself, nothing could ever replace walmart. Now its amazon. Is there something out there that could replace amazon . You know, i wouldnt be surprised. If you look at retails history, sears, very dominant for a long period of time, walmart very dominant for a long period of time, target has had a lot of success, then amazon, online very dominant for a long period of time. History would tell us that Something Else is on the horizon. Whether its five years from now, ten, maybe 20, there is something i think thats a good thing for innovation and consumers and employees. Theres a few players maybe could be that are hovering around and making their way into different parts of the commerce world. I think of shopify, Canadian Technology company. Obviously, theres tiktok, which we think of as a video app. But really, they have their eyes set on making real inroads into commerce or maybe quite possibly, its a company that doesnt even exist today. My hope is we are talking about other companies 10, 20 years from now. One of the things that both walmart and amazon is getting involved in is health care. I suppose theres a lot of money in health care. It seems like completely outside of their areas of expertise. Yeah. Both Companies Really think they can make a better experience for er innovate in health care. Walmart, they have had a long history in the pharmacy space. I chronicle in the book a competition for an Online Pharmacy startup between the two companies that ends up going amazons way. They are trying their hands in other ways. Walmart Health Clinics on the walmart side. Amazon obviously acquiring a 4 billion essentially a primary care chain of doctors offices and virtual care. Amazon, when they see fragmented space, incumbents who have some sort of disdain for consumers, and margin, you know, theyre going to try their hand at it. It is an incredibly unwelcoming space to newcomers. From my reporting, im confident that each is committed to at least giving it a real go over the next few years with serious investments. Lastly, i wanted to point out i dont know if you knew this or not. Your book on amazon is 32 for the hardcover. Its 24. 37 on walmart. Com. I did notice that. Maybe they have different pricing in different parts of the country. They were the same price for a while. I did find that recently and have not talked to the walmart or amazon folks about that. Of course, if you want the book right away, go to walmart online and pick it up at the store. Jason del ray, i appreciate you being with us. He is the author of winner sells all. The next look at amazon is more academic. When we were speaking earlier with our earlier guest about how walmart failed to compete with amazon, it is kind of a chicken and egg problem, isnt it . Its the same thing that, say, an Online Dating service would deal with. You need customers in order to draw in all of the business. But then again, just like dating, if they are not there, nobody is going to come. You have a chicken and egg problem if you are trying to compete with amazon and become the next amazon. Thats absolutely right. Marketplaces like amazon are really hard to get off the ground because of the chicken or egg problem. Once you solve for it and you have a Critical Mass of consumers and suppliers which amazon did, then its a virtual cycle. More suppliers come in because it more consumers are coming and more suppliers and so forth. Walmart had a problem that they were starting very late. Looking at them today, they have, i think, onetenth the number of suppliers that amazon has. Also, in a way, its very desirable as a consumer to have something that is essentially a monopoly like amazon, because i know i can go on amazon, find the product im looking for no matter how ridiculously strange it might be, and get it at a reasonable price and get it probably tomorrow. Absolutely. In fact, today amazon is a threat to google because in the old days, you would go on google to search for a product and then select from the choices presented. Today, most consumers, including myself, we go directly to amazon and look up products. You are right, i have typed in some strange requests. Theres usually a product out there that meets my needs. Do you foresee a day in which amazon says, okay, were big enough now and it unrealistic to you this 2 nail clipper overnight and deliver it to your house for no money, now we will start charging because we have this dominance and the whole thing changes . I think you will see higher prices in the future in a number of different ways. One is, amazon prime, which really locks you in as you know, because it you think of shipping as free. They have been slowly increasing the pricing for amazon prime over the years. They will continue to do that in the future, especially as they add more services to that. Or they may take away features. Theres talk about amazon prime video, for example, now introducing advertising when you watch amazon prime video. Then you have to pay extra to get adfree experiences. Then they have bots that scour the internet to find out the best price out there. They will basically try to match that price if its prominent. If not, they are more likely to charge a higher price. I think you will see higher prices in the future. Do you ever see someone unseeding amazon . Back in the days of when woried barnes noble were taking over, we couldnt imagine anyone would replace them. It was replaced by amazon. Do you see a day in which we look back at amazon and say, they never saw that coming . It is possible in the future. A lot of kids these days are on tiktok. Tiktok makes it easy for retailers to show their products in an interesting and engaging way. Its possible for Fashion Retail a lot of shopping could take place on tiktok or instagram. Then you have vr coming probably in the next five to ten years. That could transform the whole experience. It is only through what i Call Technology shifts or new technologies emerging that you have a chance of displacing somebody like amazon. Probably in specific sectors. I dont see that amazon as a whole will disappear. In certain sectors like fashion and so forth, you may have other retailers shining through. Winner takes all is the book. I appreciate you joining us this morning. Press here will be right back. Welcome back to press here. The men and women at otter a. I. Showed me something this week. They show Subscription Services to me. I have been using it for years. Here is the cool new thing. Using Artificial Intelligence to summarize those transcriptions. The programers sent me an example from my own interview. In the righthand margin, you can see someone can ask, who is being interviewed . Whats the conversation about . What are the main points . Based on the transcript that shows everything that we talked about. The ceo is here. Welcome back to the show. If i can run through the transcript and ask it questions, i will find out all the things i needed to know. I dont need to be bogged down with the actual meeting. Thank you for having me. Good to see you again, scott. Yes, you mentioned otter pioneered the use of a. I. To transcribe meetings. We have transcribed over 1 million. Thats a lot of talking. A lot of the research showed that corporate workers spend 30 of their time in all kinds of meetings. For me, as ceo and founder of a startup, i talk to customers, doing interviews all the time. I can easily have 30 or 40 hours. We want to use a. I. To make people more productive and reduce their meeting time. Its extraordinary to watch it. It does pick up on here are the points everyone hit that are important, got repeated. Here maybe is the conclusion of what we decided. Then you can send that summary to whoever, whoever is on the calendar. Here is what we talked about. Here is what we agreed on. Yeah. You can easily share the summary. You can easily share the action with your colleague or send an email to other guests or for public interviews, you can share it on social networks. Every is crazy about chatchatgp. But it only has internet knowledge. You cannot ask it any questions about your own interviews or your own meetings. How are you training your a. I. . You mentioned you have you have transcribed a million hours of conversations or meetings. You have not using that to teach your a. I. , right . Those meetings were private. Thats correct. However, some of our users, when they public interviews or when they record a panel discussion, they contribute that data to us. So we have actually millions of hours of data contributed by users which we can use to train our model. Sam, thinking of ten years down the road or whatnot, i would have this incredible a. I. Powered archive of all the meetings that we have had in my particular company so that if we ran into a problem, we could actually ask a. I. , have we dealt with this before, and a. I. Would say, yeah, in march of 2025, you ran into a similar problem and here is what you decided to do about it. That would be incredibly powerful. Its actually not far away. It wont take five years to get there. We will release a product later this year to do just that. Not only can it answer any questions about meetings in your enterprise, it actually knows the history and knows how opinions evolve. What did the ceo say, what did the vp of sales say about certain products . The vp of engineering or the designers, what did they say . Its tid to a specific speaker. It creates Institutional Knowledge in a box. Fast forward again, theres this theory in my head that if you know what the ceo said over the course of ten years, you could almost make the a. I. Answer the way the ceo did. The ceo could send the a. I. To the meeting. Exactly. This is what be aim to do to built a pilot that can represent any person, can represent any designer or product manager or ceo. For example, you are busy, double booked for three meetings at the same time, you can send the pilot to represent you. They can answer most questions on your behalf because it has all your knowledge in the last five years. Only when it is facing a really complicated question, it cannot answer, it comes back to you and say, scott, i dont know how to answer this. Can you help me . Right now, i talk to you. And when we have a question, we ask chatgpt to help. In the future, maybe my otter pilot just talked to your otter pilot in a meeting. It only pings me when it needs my help. Thats completely insane and i love it. Sam is the ceo of otter. Its nice to see you again. Press here will be right back. Welcome back to press here. We have talked about how students are using a. I. For good or for ill. But teachers are using it as well. It is easy. Let me give you an example. If i were a fifth grade teacher i would ask, a. I. , write a lesson plan on the fifth grade level on refraction and reflection of idea. Include ideas for experiments that could be conducted in the classroom. The a. I. Im using chatgpt turns out the whole thing from introduction to experiments using everyday objects to the summary. This man thinks theres a market out there for teachers in a. I. He is the ceo of merlin mind. Before that he was with ibm watson. Watson, everyone is familiar with that. Thats the machine that beat ken jennings. Yes. Watson was one of the milestones in a. I. In 2011. It was the first demonstration of a system that could understand very complex human language. Jeopardy clues are full of puns and so on and puzzles. You have to unpack them and get a response to the query. Watson was the first logical demonstration of a system that could do it. It beat the two most winning champions. It was a huge moment. Congratulations on your win. Thats very cool. Whats amazing i realize when i sign on to chatgpt, theres a computer somewhere doing the calculations. Its extraordinary that we went from this giant black box to my phone. My phone can do this now. Indeed. In fact, the last decade has been an enormous decade in the history of a. I. Development after development. Its one of those things where theres a bunch of things happening in the background. Suddenly, they all started coming together. We have this huge moment of explosion where a. I. Suddenly is capable of deeply understanding human language. Its a really exciting time for us in the field. I was demonstrating how i could create a fifth grade science lesson plan. Im not a teacher. I was impressed with what chatgpt came up with. Its very complete. Instructs students to shine a flashlight through the object and observe what happens to the light. Ask them to describe the changes in the light discretion. This looks like a teachers lesson plan to me. That was free for me. But you want to create this into a business. Why wouldnt the teacher just use chatgpt . Education is one of those endeavors where the sanctity of information is enormously important. Using some of these what you call generalist models, they tend to make up information. Some of the openai cautions about the use of it in health care or education. In education, you cant afford to be wrong. You candidate afford in the responses the language model generates it making stuff up. In addition, of course, safety the model, its important. The most important aspect of getting to use generative a. I. In the context of teaching and learning is School Teachers and districts spend enormous amounts of time choosing the content they want to operate on. We want to enable them to use their own contact. Every single interaction has to be in the context of the teachers chosen curriculum and content. I understand its going to depend on the data the teacher wants it to see. If you have a large language model here, it has to get training from somewhere. Where did your overall data come from . Thats a great question. The way to think about it is, you can train models on highly trained sources. Understand language. Understand the rules of language. Understand the grammar, understand how to conversion deeply and naturally with human beings. Thats all we use the pretraining information for. We train it on wikipedia. The most important thing they are doing is teaching the language how to converse with human beings. On top of that, they are giving it instructions. Then we say to it, when a teacher or student interacts with you, draw upon the purpose of material that the School District thinks is the safe method or that the teacher thinks is. Thats a huge distinction. One of the attributes is we practically illuminate hallucinations, all the problems i mentioned a couple minutes ago. We ensure that the responses are highly aligned to whatever it is that the teacher is trying to teach. I think its one of those things that sounds futuristic, but five years from now, we will giggle about a time when teachers didnt use a. I. I agree. The last year or two is transformative. Indeed. The ceo of merlin mind. I appreciate you joining us this morning. Press here will be right back. [narrator] covered california is a free service from the state thats already helped millions of people like you get and pay for health insurance. With Financial Health to lower the cost of health coverage, you could get a Quality Health plan for less than 10 a month. Every plan covers preventive care, doctor visits, emergency care, and more. If you have questions, were here to help every step of the way. Covered california. This way to health insurance. Enroll by december 31 at coveredca. Com. Thats our show this week. My thanks to my guests. Thank you for making us part of your sunday morning. Damian trujillo hello and welcome to comunidad del valle im damian trujillo. We hope youre enjoying your holiday weekend, today is our holiday special show on your comunidad del valle. [music] [music]