The market value of Amazon is circa $1T, meaning that it has managed to capture at least that much value, and likely produced much more consumer surplus.
I’m confused about your assessment of Bezos, and more generally about how you assess value creation via businesses.
My core concern here is counterfactual impact. If Bezos didn’t exist, presumably another Amazon-equivalent would have come into existence, perhaps several years later. So he doesn’t get full credit for Amazon existing, but rather for such an org existing for a few more years. And maybe for it being predictably better or worse than counterfactual competitors, if we can think of any predictable effects there.
Both points (competitor catch-up and trajectory change) also apply to the Google cofounders, though maybe there’s a clearer story for their impact via e.g. Google providing more free high-quality services (like GDocs) than competitors like Yahoo likely would have, had they been in the lead.
For companies that don’t occupy a ‘natural niche’ but rather are idiosyncratic, it seems more reasonable to evaluate the founder’s impact based on something like the company’s factual value creation, and not worry about counterfactuals. Examples might be Berkshire Hathaway and some of Elon’s companies, esp Neuralink and the Boring Company. (SpaceX has had a large counterfactual effect, but Elon didn’t start it; not sure how to evaluate his effect on the space launch industry.) I’d be interested in a counterfactual analysis of Tesla’s effect on e.g. battery cost and electric vehicle growth trend in the US / world. (My best guess is it’s a small effect, but maybe it’s a moderately important one.)
SpaceX has had a large counterfactual effect, but Elon didn’t start it; not sure how to evaluate his effect on the space launch industry.
Hm, what’s your source for the “Elon didn’t start SpaceX” claim? Wikipedia seems to disagree:
In early 2002, Musk started to look for staff for his new space company, soon to be named SpaceX. Musk approached rocket engineer Tom Mueller [...] and invited him to become his business partner. Mueller agreed to work for Musk, and thus SpaceX was born. [...] Early SpaceX employees such as Tom Mueller (CTO), Gwynne Shotwell (COO) and Chris Thompson (VP of Operations) came from neighboring TRW and Boeing corporations following the cancellation of the Brilliant Pebbles program. [...] Musk personally interviewed and approved all of SpaceX’s early employees.
Ah, sorry, I was thinking of Tesla, where Musk was an early investor and gradually took a more active role in the company.
In February 2004, the company raised $7.5 million in series A funding, including $6.5 million from Elon Musk, who had received $100 million from the sale of his interest in PayPal two years earlier. Musk became the chairman of the board of directors and the largest shareholder of Tesla.[15][16][13]J. B. Straubel joined Tesla in May 2004 as chief technical officer.[17]
A lawsuit settlement agreed to by Eberhard and Tesla in September 2009 allows all five – Eberhard, Tarpenning, Wright, Musk, and Straubel – to call themselves co-founders.
My sense is that Amazon still provided significant consumer value on top of exploiting a “natural niche”, but I agree that this could use more analysis.
I’m confused about your assessment of Bezos, and more generally about how you assess value creation via businesses.
My core concern here is counterfactual impact. If Bezos didn’t exist, presumably another Amazon-equivalent would have come into existence, perhaps several years later. So he doesn’t get full credit for Amazon existing, but rather for such an org existing for a few more years. And maybe for it being predictably better or worse than counterfactual competitors, if we can think of any predictable effects there.
Both points (competitor catch-up and trajectory change) also apply to the Google cofounders, though maybe there’s a clearer story for their impact via e.g. Google providing more free high-quality services (like GDocs) than competitors like Yahoo likely would have, had they been in the lead.
For companies that don’t occupy a ‘natural niche’ but rather are idiosyncratic, it seems more reasonable to evaluate the founder’s impact based on something like the company’s factual value creation, and not worry about counterfactuals. Examples might be Berkshire Hathaway and some of Elon’s companies, esp Neuralink and the Boring Company. (SpaceX has had a large counterfactual effect, but Elon didn’t start it; not sure how to evaluate his effect on the space launch industry.) I’d be interested in a counterfactual analysis of Tesla’s effect on e.g. battery cost and electric vehicle growth trend in the US / world. (My best guess is it’s a small effect, but maybe it’s a moderately important one.)
Hm, what’s your source for the “Elon didn’t start SpaceX” claim? Wikipedia seems to disagree:
Ah, sorry, I was thinking of Tesla, where Musk was an early investor and gradually took a more active role in the company.
For other readers, there was a recent post by Scott Alexander which goes into some depth on this: <https://astralcodexten.substack.com/p/billionaires-surplus-and-replaceability>.
My sense is that Amazon still provided significant consumer value on top of exploiting a “natural niche”, but I agree that this could use more analysis.