Quick Skim: Delivering Happiness

Zappos_logo-1IN A NUTSHELL: In Delivering Happiness, serial entrepreneur Tony Hsieh (pronounced “shay”) tells the story of online shoe merchant Zappos.

Before Zappos, Hsieh’s first home run was LinkExchange which he founded in 1996. The company quickly grew without a lot of thought about the company’s culture. As a result, Hsieh no longer even enjoyed going to work at the company he had founded just a couple years earlier.

Fortunately for him, he was able to sell LinkExchange for $265 million. Hsieh invested part of that money in a company called Zappos (little more than an idea at the time), eventually becoming its CEO. Learning from his past experiences, Hsieh took this new opportunity to be very intentional about culture, creating one of the most unique and “happy” company cultures in the world.

The company grew from almost no sales in 1999 to over over $1 billion annually and in 2009 sold to Amazon for $1.2 billion. This easy read is a business biography written from Hsieh’s perspective. Included are brief excerpts from key partners and actual internal company emails from Hsieh communicating at key times such as during their 2008 layoffs.

This story from 20/20 highlights many of the same concepts in the book:

GOLDEN NUGGET:

Lots of great stuff about creating a company culture that makes you and your employees want to go to work everyday. Even bigger than that was the story of someone willing to risk it all for his passion. After the LinkExchange sale, Hsieh personally walked with a cool $32 million. Instead of riding into the sunset, he invested in several start ups and when Zappos initially didn’t take off like a rocket, he continued to invest his personal fortune to meet payroll. He sold assets until he was down to only his personal residence, and then it happened. Zappos turned the corner and the rest, as they say, is history.

When we see these “overnight successes,” it is easy to assume it was a bed of roses from start to finish. That guys like Hsieh, Jobs, and other “successful people” have some sort of pixie dust they simply sprinkle and *poof* – instant success! Not so.

So my Golden Nugget? Delivering Happiness is the story of the passionate pursuit of a dream. But most of all it is the story of a regular guy with a passion for business making a series of regular decisions – some that worked and some that didn’t. It gives me hope the the rest of us “regular folks” have a shot after all.

Zappos teamAnother nugget was Zappos’ approach to marketing. Instead of having a huge marketing budget, they consider providing a “wow” to the customer as their primary marketing expense and then rely on customers to evangelize their friends. A couple of practical examples:

  • Prominently display your 1-800 customer service number on every page of your website and view customer service as a relationship building opportunity to invest in rather than a necessary evil that should be streamlined.
  • Offer free shipping to and from the customer, then surprise with a free upgrade to 2 day shipping.
  • No scripts for the customer service team, just full indoctrination in company core values which guide their interactions with customers.
  • Hire and fire based on culture match.

ABOUT THE AUTHOR:

TonyHsieh2Hsieh has obviously been wildly successful and is currently estimated to be worth in excess of $800 million. I do not subscribe to Hsieh’s worldview expressed in the last chapter, End Game, in which he asserts that man’s end goal is personal happiness but I think there is a ton to learn from him as it relates to running a successful company.

RECOMMENDED FOR:

Anyone who wants to change their company culture, needs to get re-inspired in their entrepreneurial journey, or is looking for practical insight into business in a story format. This book is also helpful for anyone who wants to know how to do this:

Zappos Gross Merchandise sales:

  • 1999: Almost nothing
  • 2000: $ 1.6 mm
  • 2001: $ 8.6 mm
  • 2002: $ 32 mm
  • 2003: $ 70 mm
  • 2004: $184 mm
  • 2005: $370 mm
  • 2006: $597 mm
  • 2007: $840 mm
  • 2008: Over $1 billion

-RPY

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