It's not too big. It's just big.

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This a great series from The Guardian about Amazon. A few thoughts -

1. Prepare for the 'too big to fail' tag to be thrown at Amazon for the next six months now that the press is growing ever-more interested in the simple scale of Bezos' accomplishments. 

2. Simply, Amazon isn't 'too big' because something is only too big if it is in danger of reaching capacity.

3. 'Too big to fail' was a term coined by then-Fed chair Bernanke in 2010 to describe firms (financial, mostly) that were so big that IF they sunk, they could take the entire economy with them. The key to the term is the fact that it's laced with a threat - and the threat is that there is potential for it to happen. 

4. That threat existed 10 years ago when top- and middle-tier banks had such bloated balance sheets and no clue about what was on them. They hadn't just reached capacity, they were so far beyond capacity that they were bursting at the seams, ready to explode... which most of them then did. Bernanke was right. They were too big and they almost brought us all down with them. 

5. Amazon is different. It's not 'too big'. It's just big. 

6. Amazon and its story are extraordinary in so many ways. Its growth dwarfs the likes of even Apple and Google, let alone Goldman or JP or Northern Rock... But what's most extraordinary about Amazon is its potential. Even today. Even considering what they’ve done so far.

7. Commentators expecting annual revenue to hit half a trillion in the next decade. But it's not just revenue that is growing. The breadth of service is too. And, crucially, that is what will lead Amazon into the next century and beyond. The only thing that will likely stop it is regulation and/or a megalomaniacal President. 

8. With that caveat in mind, when they say that Amazon is 'too big to fail' just remind them that it' not 'too big' because it won't fail, not anytime soon at least. Amazon is just big and it's growing. In fact, some say it's just getting started. 

 

Edward Playfair