business news in context, analysis with attitude

The Washington Post reports that Amazon “has chosen the Crystal City area of Arlington, Va., and the Long Island City neighborhood in New York, both of which boast highly educated workforces and deep talent pools,” to be the split locations of its second North American headquarters. An official announcement could be made as soon as today.

Amazon’s HQ2, as it has been called, is “expected to have a dramatic impact on those regions’ economies, housing markets and transportation,” as the company pledged to invest billions of dollars and hire tends of thousands of employees for whatever location it chose. The selection process has taken more than a year, with hundreds of communities submitting initial proposals; 20 made the final cut … and then there were two.

The Post writes that “Amazon’s decision to split the project rather than open a second headquarters on par with its Seattle campus has angered some who said the company had ginned up competition among cities only to change the rules midstream. Some said it was unfair that the company seemed to be considering only sites in more affluent communities.”

However, “others said a split makes sense for Amazon because of the difficulty of finding 50,000 qualified workers - many of them computer engineers - in a single region. Dividing the project also could ease concerns about the pressure that the company’s growth could put on housing, transportation networks and schools.”
KC's View:
I’ve been sort of interested in some of the reactions since the early reports about Amazon’s split decision, with some people saying that Amazon “lied” or committed some sort of “fraud.” Words like “farce,” “sham” and “stunt” were tossed around on social media. People were looking for any angle from which to criticize Amazon and owner-CEO Jeff Bezos, even suggesting that an early leak of the decision to the Post and the Wall Street Journal represented some sort of “stumble” for the company.

This all may be true.

But let me suggest that there is another scenario to consider.

To start with the last one, I think it is a big assumption that this was an unauthorized leak. I certainly wouldn’t bet on that. (I’m not even 100 percent sure that this isn’t a head fake, and that Amazon won’t choose Austin or Toronto. Pretty sure it isn’t, but not 100 percent.)

As for the criticisms of Amazon’s process and final decision, I certainly can understand why the communities not chosen would have hurt feelings. But it seems entirely reasonable to me that once Amazon’s brain trust went through the culling process, it saw an opportunity to do something different than originally planned … in fact, this would be in character, since Amazon’s whole business model is based on challenging expectations and not following the road most traveled. And sure, the process gave Amazon access to tons of information and insights about the hundreds of communities that submitted proposals, but nobody forced them to apply.

In fact, I’d argue that these communities learned a lot about what a 21st century technology company is looking for in terms of infrastructure, demographics, education, and priorities. If I were running a city (a possibility that, I grant you, is a scary thought), those are things I’d want to know this stuff, so I could put in place public policies, public-private initiatives, and cultural imperatives that would attract the business growth engines of the future.

And, by the way, Amazon isn’t done. The information it gathered also serves as fodder as it makes decisions down the road. Communities should want to be in that mix, keeping channels of communication open.

By the way, if I were at Amazon, I’d be adopting a very specific line when talking about HQ2/2A. I’d be saying, “Sure, we’ve announced two new headquarters cities, and we continue to staff up in communities all over the country. But our real headquarters is in the hearts and minds and homes and workplaces of every Amazon customer, as we work to not just be in touch with their hopes and dreams and needs and wants, but to anticipate them.”

Or, conversely, that’d be the approach I’d be taking if I were an Amazon competitor.

Of course, I’m just a lowly pundit. What do I know?