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in their efforts to provide better products than their competitors and earn higher prices and margins, suppliers often “overshoot” their market: They give customers more than they need or ultimately are willing to pay for. And more importantly, it means that disruptive technologies that may underperform today, relative to what users in the market demand, may be fully performance-competitive in that same market tomorrow. This was the basis for insisting that the iPhone must have a low-price model: surely Apple would soon run out of new technology to justify the prices it charged for high-end iPhones, and consumers would start buying much cheaper Android phones instead! In fact, as I discussed in after January’s earnings results, the company has gone in the other direction: more devices per customer, higher prices per device, and an increased focus on ongoing revenue from those same customers.

Apple seems to have mostly saturated the high end, slowly adding switchers even as existing iPhone users hold on to their phones longer; what is not happening, though, is what disruption predicts: Apple isn’t losing customers to low-cost competitors for having “overshot” and overpriced its phones. It seems my thesis was right: a superior experience can never be too good — or perhaps I didn’t go far enough.

Jeff Bezos has been writing an annual letter to shareholders since 1997, and he attaches that original letter to one he pens every year. It included this section entitled Obsess Over Customers: From the beginning, our focus has been on offering our customers compelling value. We realized that the Web was, and still is, the World Wide Wait. Therefore, we set out to offer customers something they simply could not get any other way, and began serving them with books. We brought them much more selection than was possible in a physical store (our store would now occupy 6 football fields), and presented it in a useful, easy-to-search, and easy-to-browse format in a store open 365 days a year, 24 hours a day. We maintained a dogged focus on improving the shopping experience, and in 1997 substantially enhanced our store. We now offer customers gift certificates, 1-Click shopping, and vastly more reviews, content, browsing options, and recommendation features. We dramatically lowered prices, further increasing customer value. Word of mouth remains the most powerful customer acquisition tool we have, and we are grateful for the trust our customers have placed in us. Repeat purchases and word of mouth have combined to make Amazon.com the market leader in online bookselling.

This year, after highlighting just how much customers love Amazon (answer: a lot), Bezos wrote: One thing I love about customers is that they are divinely discontent. Their expectations are never static — they go up. It’s human nature. We didn’t ascend from our hunter-gatherer days by being satisfied. People have a voracious appetite for a better way, and yesterday’s ‘wow’ quickly becomes today’s ‘ordinary’. I see that cycle of improvement happening at a faster rate than ever before. It may be because customers have such easy access to more information than ever before — in only a few seconds and with a couple taps on their phones, customers can read reviews, compare prices from multiple retailers, see whether something’s in stock, find out how fast it will ship or be available for pick-up, and more. These examples are from retail, but I sense that the same customer empowerment phenomenon is happening broadly across everything we do at Amazon and most other industries as well. You cannot rest on your laurels in this world. Customers won’t have it.

when it comes to Internet-based services, this customer focus does not come at the expense of a focus on infrastructure or distribution or suppliers: while those were the means to customers in the analog world, in the online world controlling the customer relationship gives a company power over its suppliers, the capital to build out infrastructure, and control over distribution. Bezos is not so much choosing to prioritize customers insomuch as he has unlocked the key to controlling value chains in an era of aggregation.

consumer expectations are not static: they are, as Bezos’ memorably states, “divinely discontent”. What is amazing today is table stakes tomorrow, and, perhaps surprisingly, that makes for a tremendous business opportunity: if your company is predicated on delivering the best possible experience for consumers, then your company will never achieve its goal.

In the case of Amazon, that this unattainable and ever-changing objective is embedded in the company’s culture is, in conjunction with the company’s demonstrated ability to spin up new businesses on the profits of established ones, a sort of perpetual motion machine

Owning the customer relationship by means of delivering a superior experience is how these companies became dominant, and, when they fall, it will be because consumers deserted them, either because the companies lost control of the user experience (a danger for Facebook and Google), or because a paradigm shift made new experiences matter more (a danger for Google and Apple).

what I cheered as an analyst was Altman’s clear articulation of the company’s priorities: lower price first, speed later. You can certainly debate whether that is the right set of priorities (I think it is, because the biggest need now is for increased experimentation, not optimization), but what I appreciated was the clarity.

The fact that Microsoft is benefiting from OpenAI is obvious; what this makes clear is that OpenAI uniquely benefits from Microsoft as well, in a way they would not from another cloud provider: because Microsoft is also a product company investing in the infrastructure to run OpenAI’s models for said products, it can afford to optimize and invest ahead of usage in a way that OpenAI alone, even with the support of another cloud provider, could not. In this case that is paying off in developers needing to pay less, or, ideally, have more latitude to discover use cases that result in them paying far more because usage is exploding.

You can, in effect, program a GPT, with language, just by talking to it. It’s easy to customize the behavior so that it fits what you want. This makes building them very accessible, and it gives agency to everyone.

Stephen Wolfram explained: For decades there’s been a dichotomy in thinking about AI between “statistical approaches” of the kind ChatGPT uses, and “symbolic approaches” that are in effect the starting point for Wolfram|Alpha. But now—thanks to the success of ChatGPT—as well as all the work we’ve done in making Wolfram|Alpha understand natural language—there’s finally the opportunity to combine these to make something much stronger than either could ever achieve on their own.

This new model somewhat alleviates the problem: now, instead of having to select the correct plug-in (and thus restart your chat), you simply go directly to the GPT in question. In other words, if I want to create a poster, I don’t enable the Canva plugin in ChatGPT, I go to Canva GPT in the sidebar. Notice that this doesn’t actually solve the problem of needing to have selected the right tool; what it does do is make the choice more apparent to the user at a more appropriate stage in the process, and that’s no small thing.

ChatGPT will seamlessly switch between text generation, image generation, and web browsing, without the user needing to change context. What is necessary for the plug-in/GPT idea to ultimately take root is for the same capabilities to be extended broadly: if my conversation involved math, ChatGPT should know to use Wolfram|Alpha on its own, without me adding the plug-in or going to a specialized GPT.

the obvious technical challenges of properly exposing capabilities and training the model to know when to invoke those capabilities are a textbook example of Professor Clayton Christensen’s theory of integration and modularity, wherein integration works better when a product isn’t good enough; it is only when a product exceeds expectation that there is room for standardization and modularity.

To summarize the argument, consumers care about things in ways that are inconsistent with whatever price you might attach to their utility, they prioritize ease-of-use, and they care about the quality of the user experience and are thus especially bothered by the seams inherent in a modular solution. This means that integrated solutions win because nothing is ever “good enough”

the fact of the matter is that a lot of people use ChatGPT for information despite the fact it has a well-documented flaw when it comes to the truth; that flaw is acceptable, because to the customer ease-of-use is worth the loss of accuracy. Or look at plug-ins: the concept as originally implemented has already been abandoned, because the complexity in the user interface was more detrimental than whatever utility might have been possible. It seems likely this pattern will continue: of course customers will say that they want accuracy and 3rd-party tools; their actions will continue to demonstrate that convenience and ease-of-use matter most.

numerous sources say they cannot discern what kind of material Salke and head of television Vernon Sanders want to make. A showrunner with ample experience at the studio says, “There’s no vision for what an Amazon Prime show is. You can’t say, ‘They stand for this kind of storytelling.’ It’s completely random what they make and how they make it.” Another showrunner with multiple series at Amazon finds it baffling that the streamer hasn’t had more success: Amazon has “more money than God,” this person says. “If they wanted to produce unbelievable television, they certainly have the resources to do it.”