Cover photo

Picture yourself calculating the # of bytes sent on the web

The web's astronomical growth rate convinced Jeff Bezos to leave D. E. Shaw

gm creators!

I hope everyone is enjoying their long weekend 😎

In my last post, I covered the origin stories of the browser with the launch of Mosaic & Netscape. Check out my 3 key takeaways from chapter 1 of How the internet happened.

  1. Netscape signaled a new kind of energy in tech startup culture that we take for granted today.

  2. It's always early on the internet. If you think there's no ideas left to build, think again.

  3. Netscape won because it focused on their ecosystem over their product. Open source always wins.

You can read the full post here!

If you're new to The Bigger Picture, welcome! In this newsletter, I share interesting & insightful stories from the history of tech.

Subscribe below so you don't miss any future TBP posts 🥂


Today at a Glance 👓

Picture yourself as the youngest VP at D. E. Shaw (quant firm) in the early 90s.

Big Wall Street money, tons of opportunities, & a bright future.

Then your boss, David Shaw, puts you in charge of learning how the firm can utilize the internet and find new revenue streams.

This leads you through a intellectual rabbithole that makes you realize that there is no new tech more important than the web.

Eventually, you see this chart in 1994 and decide to quit your lucrative job and start a internet company.

The Matrix

What you're picturing is exactly how Jeff Bezos was inspired to start Amazon.

Here are 3 things I learned after reading chapter 1 of The Everything Store by Brad Stone.

  1. Amazon wasn't the first digital bookstore, Bezos just realized they did a poor job and there was a huge untapped opportunity.

  2. David Shaw's high conviction in the internet was what intrigued Bezos to learn more in the first place.

  3. When telling stories about complex systems/institutions, it can be easy to oversimplify the events into a simple story. This is known as the Narrative Fallacy.

Let's dive in 🚀


1) Amazon wasn't the first digital bookstore

I didn't know there were digital bookstores such as Words Worth and Book Stack already out there. Bezos tested them with a colleague and the book they ordered came a bit damaged.

That was enough signal for him to realize this was a big, untapped opportunity.

In 1992 Charles Stack founded an online bookstore selling new physical books. Stack's store began as a dial-up bulletin board located in Cleveland, Ohio. It moved to the Internet as Books.com eventually attracting a half million visitors each month. This was two years before Jeff Bezos founded Amazon. - History of Information


2) David Shaw understood the internet

Apparently Bezos was surprised that Shaw was so passionate about building around the internet.

In fact, all D. E. Shaw employees were equipped with the internet as well and Bezos was appointed the head of the internet research team.

He knew Shaw was smart, so Jeff started reading John Quarterman's newsletter Matrix News. That's where he saw the graph above.

The chart shows the number of bytes sent on the world wide web in its first year (Jan 1993 - Jan 1994). The growth rate was astronomical and Jeff realized that there is literally nothing that grows this fast. If he wasn't participating in the web, he was doing his ambitious self a disservice.

Soon after, he went on a walk with Shaw and told him he was going to quit and start a digital bookstore.

If it wasn't for David's strong conviction on the future of the web, there's a good chance Bezos would have continued his Wall Street life.

Check out the headlines on the Matrix News archive - quite amazing to see Quarterman's research and bullishness of the web in it's very first year.

It gives me similar vibes to seeing early crypto bloggers (i.e. Bitcoin Magazine) convincing talented engineers to start building for the decentralized web.


3) Taleb's Narrative Fallacy

When Brad Stone (author of The Everything Store) went to go ask Bezos if he was interested in working with him on the biography, Jeff asked how he was going to handle the "narrative fallacy".

Basically, it means how do you avoid taking a complex sequence of events and not make it sound like a well fit story?

More often that not, the road to success involves a ton of chaos, randomness, etc. It's important to acknowledge that biographies have their upper limits on how well the story matches the sequence of events.

Stone says the best way to deal with this is to think in experiments and data when writing a biography. For example, how many interviews did you conduct? Which stakeholders were involved? Is there any uncovered periods in your timeline? Did you make an effort to find a counter to all your points?

The narrative fallacy leads us to see events as stories, with logical chains of cause and effect. Stories help us make sense of the world. However, if we’re not aware of the narrative fallacy it can lead us to believe we understand the world more than we really do. - Farnam Street


By learning tech history, it's easier to identify tricks & techniques that can help founders approach the idea maze even today.

That's all for today's post - if you enjoyed, I'd love for you to share with your friends in crypto :)

Remember, all posts are collectible as well! Just connect your wallet and mint away.

Also, if you haven't already, please join The Bigger Picture community by hitting the subscribe button below. You can connect your wallet or add your email!

Loading...
highlight
Collect this post to permanently own it.
The Bigger Picture by Yash Bora logo
Subscribe to The Bigger Picture by Yash Bora and never miss a post.
  • Loading comments...