He kept it under wraps for years until he legally couldn’t.

His shirt is incomplete. I can’t stop thinking about this…

Actually, ignore the article. Look at it. JUST LOOK at it… It’s quite disturbing, isn’t it?

Ughh…

Me: “Hey, what up?” Friend: “All good, watching lord of the rings on amazon prime video.” Me: “Oh, do you know how Amazon grew and became famous?” Friend: “Geek alert…Can I just watch in peace?” Me: “But… Bezos?” Friend: “Let it go, just let it go…”

I can question you, the reader, and start answering instantly without his consent. This far.

Reader, how did Amazon succeed? You'll say, Of course, it was an internet bookstore, then it sold everything.

Mistaken. They moved from zero to one because of this. How did they get from one to thousand? AWS-some. Understand? It's geeky and lame. If not, I'll explain my geekiness.

Over an extended period of time, Amazon was not profitable.

Business basics. You want customers if you own a bakery, right?

Well, 100 clients per day order $5 cheesecakes (because cheesecakes are awesome.)

$5 x 100 consumers x 30 days Equals $15,000 monthly revenue. You proudly work here.

Now you have to pay the barista (unless ChatGPT is doing it haha? Nope..)

• The barista is requesting $5000 a month.

• Each cheesecake costs the cheesecake maker $2.5 ($2.5 × 100 x 30 = $7500).

• The monthly cost of running your bakery, including power, is about $5000.

Assume no extra charges. Your operating costs are $17,500.

Just $15,000? You have income but no profit. You might make money selling coffee with your cheesecake next month.

Is losing money bad? You're broke. Losing money. It's bad for financial statements.

It's almost a business ultimatum. Most startups fail. Amazon took nine years.

I'm reading Amazon Unbound: Jeff Bezos and the Creation of a Global Empire to comprehend how a company has a $1 trillion market cap.

Many things made Amazon big. The book claims that Bezos and Amazon kept a specific product secret for a long period.

Clouds above the bald head.

In 2006, Bezos started a cloud computing initiative. They believed many firms like Snapchat would pay for reliable servers.

In 2006, cloud computing was not what it is today. I'll simplify. 2006 had no iPhone.

Bezos invested in Amazon Web Services (AWS) without disclosing its revenue. That's permitted till a certain degree.

Google and Microsoft would realize Amazon is heavily investing in this market and worry.

Bezos anticipated high demand for this product. Microsoft built its cloud in 2010, and Google in 2008.

If you managed Google or Microsoft, you wouldn't know how much Amazon makes from their cloud computing service. It's enough. Yet, Amazon is an internet store, so they'll focus on that.

All but Bezos were wrong.

Time to come clean now.

They revealed AWS revenue in 2015. Two things were apparent:

1. Bezos made the proper decision to bet on the cloud and keep it a secret.

2. In this race, Amazon is in the lead.

They continued. Let me list some AWS users today.

• Netflix

• Airbnb

• Twitch

More. Amazon was unprofitable for nine years, remember? This article's main graph.

AWS accounted for 74% of Amazon's profit in 2021. This 74% might not exist if they hadn't invested in AWS.

Bring this with you home.

Amazon predated AWS. Yet, it helped the giant reach $1 trillion. Bezos' secrecy? Perhaps, until a time machine is invented (they might host the time machine software on AWS, though.)

Without AWS, Amazon would have been profitable but unimpressive. They may have invested in anything else that would have returned more (like crypto? No? Ok.)

Bezos has business flaws. His success. His failures include:

• introducing the Fire Phone and suffering a $170 million loss.

• Amazon's failure in China In 2011, Amazon had a about 15% market share in China. 2019 saw a decrease of about 1%.

• not offering a higher price to persuade the creator of Netflix to sell the company to him. He offered a rather reasonable $15 million in his proposal. But what if he had offered $30 million instead (Amazon had over $100 million in revenue at the time)? He might have owned Netflix, which has a $156 billion market valuation (and saved billions rather than invest in Amazon Prime Video).

Some he could control. Some were uncontrollable. Nonetheless, every action he made in the foregoing circumstances led him to invest in AWS.

Learn or earn

In 2020, I started software engineering. My base wage has progressed as follows:

Amazon (2020): $112,000

Microsoft (2021): $123,000

Google (2022): $169,000

I didn't major in math, but those jumps appear more than a 7% wage increase. Here's a deeper look at the three.

The Three Categories of Compensation

Most software engineering compensation packages at IT organizations follow this format.

Minimum Salary

Base salary is pre-tax income. Most organizations give a base pay. This is paid biweekly, twice monthly, or monthly.

Recruiting Bonus

Sign-On incentives are one-time rewards to new hires. Companies need an incentive to switch. If you leave early, you must pay back the whole cost or a pro-rated amount.

Equity

Equity is complex and requires its own post. A company will promise to give you a certain amount of company stock but when you get it depends on your offer. 25% per year for 4 years, then it's gone.

If a company gives you $100,000 and distributes 25% every year for 4 years, expect $25,000 worth of company stock in your stock brokerage on your 1 year work anniversary.

Performance Bonus

Tech offers may include yearly performance bonuses. Depends on performance and funding. I've only seen 0-20%.

Engineers' overall compensation usually includes:

Base Salary + Sign-On + (Total Equity)/4 + Average Performance Bonus

Amazon: (TC: 150k)

Base Pay System

Amazon pays Seattle employees monthly on the first work day. I'd rather have my money sooner than later, even if it saves processing and pay statements.

The company upped its base pay cap from $160,000 to $350,000 to compete with other tech companies.

Performance Bonus

Amazon has no performance bonus, so you can work as little or as much as you like and get paid the same. Amazon is savvy to avoid promising benefits it can't deliver.

Sign-On Bonus

Amazon gives two two-year sign-up bonuses. First-year workers could receive $20,000 and second-year workers $15,000. It's probably to make up for the company's strange equity structure.

If you leave during the first year, you'll owe the entire money and a prorated amount for the second year bonus.

Equity

Most organizations prefer a 25%, 25%, 25%, 25% equity structure. Amazon takes a different approach with end-heavy equity:

• the first year, 5%

• 15% after one year.

• 20% then every six months

We thought it was constructed this way to keep staff longer.

Microsoft (TC: 185k)

Base Pay System

Microsoft paid biweekly.

Gainful Performance

My offer letter suggested a 0%-20% performance bonus. Everyone will be satisfied with a 10% raise at year's end.

But misleading press where the budget for the bonus is doubled can upset some employees because they won't earn double their expected bonus. Still barely 10% for 2022 average.

Sign-On Bonus

Microsoft's sign-on bonus is a one-time payout. The contract can require 2-year employment. You must negotiate 1 year. It's pro-rated, so that's fair.

Equity

Microsoft is one of those companies that has standard 25% equity structure. Except if you’re a new graduate.

In that case it’ll be

• 25% six months later

• 25% each year following that

New grads will acquire equity in 3.5 years, not 4. I'm guessing it's to keep new grads around longer.

Google (TC: 300k)

Base Pay Structure

Google pays biweekly.

Performance Bonus

Google's offer letter specifies a 15% bonus. It's wonderful there's no cap, but I might still get 0%. A little more than Microsoft’s 10% and a lot more than Amazon’s 0%.

Sign-On Bonus

Google gave a 1-year sign-up incentive. If the contract is only 1 year, I can move without any extra obligations.

Not as fantastic as Amazon's sign-up bonuses, but the remainder of the package might compensate.

Equity

We covered Amazon's tail-heavy compensation structure, so Google's front-heavy equity structure may surprise you.

Annual structure breakdown

• 33% Year 1

• 33% Year 2

• 22% Year 3

• 12% Year 4

The goal is to get them to Google and keep them there.

Final Thoughts

This post hopefully helped you understand the 3 firms' compensation arrangements.

There's always more to discuss, such as refreshers, 401k benefits, and business discounts, but I hope this shows a distinction between these 3 firms.

Steve Jobs' initial mission at Apple in 1997 was to destroy. He killed the Newton PDA and Macintosh clones. Apple stopped trying to please everyone under Jobs.

Afterward, there were few highly targeted moves. First, the pink iMac. Modest success. The iPod, iPhone, and iPad made Apple the world's most valuable firm. Each maneuver changed the company's center of gravity and won.

That's the idea behind Schwerpunkt, a German military term meaning "focus." Jobs didn't need to win everywhere, just where it mattered, so he focused Apple's resources on a few key goods. Finding your Schwerpunkt is more important than charts and analysis for excellent strategy.

Comparison of Relative Strength and Relative Weakness

The iPod, Apple's first major hit after Jobs' return, didn't damage Microsoft and the PC, but instead focused Apple's emphasis on a fledgling, fragmented market that generated "sucky" products. Apple couldn't have taken on the computer titans at this stage, yet it beat them.

The move into music players used Apple's particular capabilities, especially its ability to build simple, easy-to-use interfaces. Jobs' charisma and stature, along his understanding of intellectual property rights from Pixar, helped him build up iTunes store, which was a quagmire at the time.

In Good Strategy | Bad Strategy, management researcher Richard Rumelt argues that good strategy uses relative strength to counter relative weakness. To discover your main point, determine your abilities and where to effectively use them.

Steve Jobs did that at Apple. Microsoft and Dell, who controlled the computer sector at the time, couldn't enter the music player business. Both sought to produce iPod competitors but failed. Apple's iPod was nobody else's focus.

Finding The Center of Attention

In a military engagement, leaders decide where to focus their efforts by assessing commanders intent, the situation on the ground, the topography, and the enemy's posture on that terrain. Officers spend their careers learning about schwerpunkt.

Business executives must assess internal strengths including personnel, technology, and information, market context, competitive environment, and external partner ecosystems. Steve Jobs was a master at analyzing forces when he returned to Apple.

He believed Apple could integrate technology and design for the iPod and that the digital music player industry sucked. By analyzing competitors' products, he was convinced he could produce a smash by putting 1000 tunes in my pocket.

The only difficulty was there wasn't the necessary technology. External ecosystems were needed. On a trip to Japan to meet with suppliers, a Toshiba engineer claimed the company had produced a tiny memory drive approximately the size of a silver dollar.

Jobs knew the memory drive was his focus. He wrote a $10 million cheque and acquired exclusive technical rights. For a time, none of his competitors would be able to recreate his iPod with the 1000 songs in my pocket.

How to Enter the OODA Loop

John Boyd invented the OODA loop as a pilot to better his own decision-making. First OBSERVE your surroundings, then ORIENT that information using previous knowledge and experiences. Then you DECIDE and ACT, which changes the circumstance you must observe, orient, decide, and act on.

Steve Jobs used the OODA loop to decide to give Toshiba $10 million for a technology it had no use for. He compared the new information with earlier observations about the digital music market.

Then something much more interesting happened. The iPod was an instant hit, changing competition. Other computer businesses that competed in laptops, desktops, and servers created digital music players. Microsoft's Zune came out in 2006, Dell's Digital Jukebox in 2004. Both flopped.

By then, Apple was poised to unveil the iPhone, which would cause its competitors to Observe, Orient, Decide, and Act. Boyd named this OODA Loop infiltration. They couldn't gain the initiative by constantly reacting to Apple.

Microsoft and Dell were titans back then, but it's hard to recall. Apple went from near bankruptcy to crushing its competition via Schwerpunkt.

Rather than a destination, it is a journey

Trying to win everywhere is a strategic blunder. Win significant fights, not trivial skirmishes. Identifying a focal point to direct resources and efforts is the essence of Schwerpunkt.

When Steve Jobs returned to Apple, PC firms were competing, but he focused on digital music players, and the iPod made Apple a player. He launched the iPhone when his competitors were still reacting. When Steve Jobs said, "One more thing," at the end of a product presentation, he had a new focus.

Schwerpunkt isn't static; it's dynamic. Jobs' ability to observe, refocus, and modify the competitive backdrop allowed Apple to innovate consistently. His strategy was tailored to Apple's capabilities, customers, and ecosystem. Microsoft or Dell, better suited for the enterprise sector, couldn't succeed with a comparable approach.

There is no optimal strategy, only ones suited to a given environment, when relative strength might be used against relative weakness. Discovering the center of gravity where you can break through is more of a journey than a destination; it will become evident after you reach.

DeCap is DeFi's killer app.

“Software is eating the world.” Marc Andreesen, venture capitalist

DeFi. Imagine a blockchain-based alternative financial system that offers the same products and services as traditional finance, but with more variety, faster, more secure, lower cost, and simpler access.

Decentralised finance (DeFi) is a marketplace without gatekeepers or central authority managing the flow of money, where customers engage directly with smart contracts running on a blockchain.

DeFi grew exponentially in 2020/21, with Total Value Locked (an inadequate estimate for market size) topping at $100 billion. After that, it crashed.

The accumulation of funds by individuals with high discretionary income during the epidemic, the novelty of crypto trading, and the high yields given (5% APY for stablecoins on established platforms to 100%+ for risky assets) are among the primary elements explaining this exponential increase.

No longer your older brothers DeFi

Since transactions are anonymous, borrowers had to overcollateralize DeFi 1.0. To borrow $100 in stablecoins, you must deposit $150 in ETH. DeFi 1.0's business strategy raises two problems.

• Why does DeFi offer interest rates that are higher than those of the conventional financial system?;

• Why would somebody put down more cash than they intended to borrow?

Maxed out on their own resources, investors took loans to acquire more crypto; the demand for those loans raised DeFi yields, which kept crypto prices increasing; as crypto prices rose, investors made a return on their positions, allowing them to deposit more money and borrow more crypto.

This is a bull market game. DeFi 1.0's overcollateralization speculation is dead. Cryptocrash sank it.

The “speculation by overcollateralisation” world of DeFi 1.0 is dead

At a JP Morgan digital assets conference, institutional investors were more interested in DeFi than crypto or fintech. To me, that shows DeFi 2.0's institutional future.

DeFi 2.0 protocols must handle KYC/AML, tax compliance, market abuse, and cybersecurity problems to be institutional-ready.

Stablecoins gaining market share under benign regulation and more CBDCs coming online in the next couple of years could help DeFi 2.0 separate from crypto volatility.

DeFi 2.0 will have a better footing to finally decouple from crypto volatility

Then we can transition from speculation through overcollateralization to DeFi's genuine comparative advantages: cheaper transaction costs, near-instant settlement, more efficient price discovery, faster time-to-market for financial innovation, and a superior audit trail.

Akin to Amazon for financial goods

Amazon decimated brick-and-mortar shops by offering millions of things online, warehouses by keeping just-in-time inventory, and back-offices by automating invoicing and payments. Software devoured retail. DeFi will eat banking with software.

DeFi is the Amazon for financial items that will replace fintech. Even the most advanced internet brokers offer only 100 currency pairings and limited bonds, equities, and ETFs.

Old banks settlement systems and inefficient, hard-to-upgrade outdated software harm them. For advanced gamers, it's like driving an F1 vehicle on dirt.

It is like driving a F1 car on a dirt road, for the most sophisticated players

Central bankers throughout the world know how expensive and difficult it is to handle cross-border payments using the US dollar as the reserve currency, which is vulnerable to the economic cycle and geopolitical tensions.

Decentralization is the only method to deliver 24h global financial markets. DeFi 2.0 lets you buy and sell startup shares like Google or Tesla. VC funds will trade like mutual funds. Or create a bundle coverage for your car, house, and NFTs. Defi 2.0 consumes banking and creates Global Wall Street.

Defi 2.0 is how software eats banking and delivers the global Wall Street

Decentralized Capitalism is Emerging

90% of markets are digital. 10% is hardest to digitalize. That's money creation, ID, and asset tokenization.

90% of financial markets are already digital. The only problem is that the 10% left is the hardest to digitalize

Debt helped Athens construct a powerful navy that secured trade routes. Bonds financed the Renaissance's wars and supply chains. Equity fueled industrial growth. FX drove globalization's payments system. DeFi's plans:

If the 20th century was a conflict between governments and markets over economic drivers, the 21st century will be between centralized and decentralized corporate structures.

Offices vs. telecommuting. China vs. onshoring/friendshoring. Oil & gas vs. diverse energy matrix. National vs. multilateral policymaking. DAOs vs. corporations Fiat vs. crypto. TradFi vs.

An age where the network effects of the sharing economy will overtake the gains of scale of the monopolistic competition economy

This is the dawn of Decentralized Capitalism (or DeCap), an age where the network effects of the sharing economy will reach a tipping point and surpass the scale gains of the monopolistic competition economy, further eliminating inefficiencies and creating a more robust economy through better data and automation. DeFi 2.0 enables this.

DeFi needs to pay the piper now.

DeCap won't be Web3.0's Shangri-La, though. That's too much for an ailing Atlas. When push comes to shove, DeFi folks want to survive and fight another day for the revolution. If feasible, make a tidy profit.

Decentralization wasn't meant to circumvent regulation. It circumvents censorship. On-ramp, off-ramp measures (control DeFi's entry and exit points, not what happens in between) sound like a good compromise for DeFi 2.0.

The sooner authorities realize that DeFi regulation is made ex-ante by writing code and constructing smart contracts with rules, the faster DeFi 2.0 will become the more efficient and safe financial marketplace.

More crucially, we must boost system liquidity. DeFi's financial stability risks are downplayed. DeFi must improve its liquidity management if it's to become mainstream, just as banks rely on capital constraints.

This reveals the complex and, frankly, inadequate governance arrangements for DeFi protocols. They redistribute control from tokenholders to developers, which is bad governance regardless of the economic model.

But crypto can only ride the existing banking system for so long before forming its own economy. DeFi will upgrade web2.0's financial rails till then.

Prudence is advised. Be debt-free. Be frugal. Spend less.

This advice sounds nice, but it rarely works.

Most people never learn these two money rules. Both approaches will impact how you see personal finance.

It may safeguard you from inflation or the inability to preserve money.

Let’s dive in.

#1: Making long-term debt your ally

High-interest debt hurts consumers. Many credit cards carry 25% yearly interest (or more), so always pay on time. Otherwise, you’re losing money.

Some low-interest debt is good. Especially when buying an appreciating asset with borrowed money.

Inflation helps you.

If you borrow $800,000 at 3% interest and invest it at 7%, you'll make $32,000 (4%).

As money loses value, fixed payments get cheaper. Your assets' value and cash flow rise.

The never-in-debt crowd doesn't know this. They lose money paying off mortgages and low-interest loans early when they could have bought assets instead.

#2: How To Buy Or Build Assets To Make Inflation Irrelevant

Dozens of studies demonstrate actual wage growth is static; $2.50 in 1964 was equivalent to $22.65 now.

These reports never give solutions unless they're selling gold.

But there is one.

Assets beat inflation.

$100 invested into the S&P 500 would have an inflation-adjusted return of 17,739.30%.

Likewise, you can build assets from nothing.  Doing is easy and quick. The returns can boost your income by 10% or more.

The people who obsess over inflation inadvertently make the problem worse for themselves.  They wait for The Big Crash to buy assets. Or they moan about debt clocks and spending bills instead of seeking a solution.

Conclusion

Being ultra-prudent is like playing golf with a putter to avoid hitting the ball into the water. Sure, you might not slice a drive into the pond. But, you aren’t going to play well either. Or have very much fun.

Money has rules.

Avoiding debt or investment risks will limit your rewards. Long-term, being too cautious hurts your finances.

Disclaimer: This article is for entertainment purposes only. It is not financial advice, always do your own research.

Interpol has issued a red alert on Terraform Labs' CEO, South Korean prosecutors said.

After the May crash of Terra Luna revealed tax evasion issues, South Korean officials filed an arrest warrant for Do Kwon, but he is missing.

Do Kwon is now a fugitive in 195 countries after Seoul prosecutors placed him to Interpol's red list. Do Kwon hasn't commented since then. The red list allows any country's local authorities to apprehend Do Kwon.

Do Dwon and Terraform Labs were believed to have moved to Singapore days before the $40 billion wipeout, but Singapore authorities said he fled the country on September 17. Do Kwon tweeted that he wasn't on the run and cited privacy concerns.

Do Kwon was not on the red list at the time and said he wasn't "running," only to reply to his own tweet saying he hasn't jogged in a while and needed to trim calories.

Whether or not it makes sense to read too much into this, the reality is that Do Kwon is now on Interpol red list, despite the firmly asserts on twitter that he does absolutely nothing to hide.

UPDATE:

South Korean authorities are investigating alleged withdrawals of over $60 million U.S. and seeking to freeze these assets. Korean authorities believe a new wallet exchanged over 3000 BTC through OKX and Kucoin.

Do Kwon and the Luna Foundation Guard (of whom Do Kwon is a key member of) have declined all charges and dubbed this disinformation.

Singapore's Luna Foundation Guard (LFG) manages the Terra Ecosystem.

The Legal Situation

Multiple governments are searching for Do Kwon and five other Terraform Labs employees for financial markets legislation crimes.

South Korean authorities arrested a man suspected of tax fraud and Ponzi scheme.

The U.S. SEC is also examining Terraform Labs on how UST was advertised as a stablecoin. No legal precedent exists, so it's unclear what's illegal.

The future of Terraform Labs, Terra, and Terra 2 is unknown, and despite what Twitter shills say about LUNC, the company remains in limbo awaiting a decision that will determine its fate. This project isn't a wise investment.