In 2008, Amazon.com purchased Zappos.com, Inc., the world's largest online shoe business for 1.2 billion dollars. While that number is impressive,Tony Hsieh, CEO of Zappos knows there's more to life than money. How does a young man rise to become one of the world's elite entrepreneurs? Hsieh chronicles his journey to Zappos in his new book entitled, Delivering Happiness: The Path to Profits, Passion and Purpose. The first third of Hsieh's narrative introduces the man behind the empire.
Hsieh is the eldest child born to an Asian American couple who emigrated from Taiwan; they settled near San Francisco, California. Hsieh's parents endorsed education; and Hsieh obliged by earning good grades in school. He also had an inherent entrepreneurial spirit, which needed to be cultivated. His early business endeavors included a newspaper route (which he soon abandoned after realizing its paltry pay); and selling buttons via the United States Postal Service, which taught him you could be successful with a mail-order business without ever having face-to-face interaction.
He learned early on to think out-of-the-box. Once, in high school, he was assigned to write a Shakespearian sonnet, something that, to him, seemed foreign. He submitted14 lines of Morse code (a skill he'd recently learned), and hoped for the best. Amazed by his ingenuity, his teacher gave him an "A+++++++++++."
All eight prestigious colleges Hsieh applied to; granted him admission. He chose Harvard to appease his parent's. Once there, he scheduled his classes based on convenient timing vs. academic interest. Courses met on Mon/Wed/Friday and ended by 1 pm; leaving his Tuesdays and Thursdays free. He habitually slept in and rationalized missing class. He ate ramen noodles and watched soap operas throughout his first year of college.
Hsieh worked as a computer programmer after graduation making ,000 a year. Initially allured by the salary, he soon found himself bored and unfulfilled. Employed five months; he quit. Concurrently, the World Wide Web was emerging as a major force. He and a college friend devised LinkExchange. It was a simple way for Web sites with limited budgets to gain increased exposure via banner ads. Their invention skyrocketed, soon drawing the attention of buyers. Hsieh declined to sell LinkExchange, that is, until Microsoft offered 5 million. The deal was a lesson in human behavior and character for Hsieh. "Large amounts of money have a strange way of getting people's true colors to come out," he says.
The Microsoft deal required Hsieh to remain with LinkExchange for one year or forfeit 20 percent of his earnings. How hard could that be, considering his monetary reward (an estimated million)? It was tougher than he realized. The company's culture had lost its appeal for Hsieh. He had reached his turning point. He resigned early from LinkExchange, and forfeited profit. He realized it was time to stop chasing money and discover his passions.
Free time found Hsieh jaunting to Vegas to play poker. It wasn't about the money, but instead, the challenge of figuring out how to beat the game. In poker you're playing against other players, not the casino; which can be advantageous. In several weeks time, Hsieh mastered the mathematical basics to play hold 'em poker. Playing poker taught him the discipline of not confusing the right decision with the individual outcome of any single hand- a philosophy that works well in business too.
Poker illustrates many similarities in business and Hsieh shares those tenets in the book. They include "Differentiate yourself. Do the opposite of what the rest of the table is doing," and, "Be nice and make friends. It's a small community." Hsieh's biggest lesson learned was knowing what table to sit at and when to change tables. "Changing tables" can also be a metaphor for life, as we always have the power to change our direction. Although, Hsieh admits, psychologically, it can be hard because of the all the inertia to overcome. "Without conscious and deliberate effort, inertia always wins," says Hsieh.
During the glory days of raves, Hsieh had an epiphany. A rave is a gathering similar to a nightclub. Wordless, techno-tronic music plays while attendees dance, all facing the DJ as their tribal leader. Hsieh realized it wasn't about the music, but instead, everyone experiencing an overwhelming sense of spirituality. Not in a religious aspect but rather, a deep connection with everyone present and the entire universe. There was no feeling of being judged. Hsieh applied the common rave acronym PLUR: Peace, Love, Unity, and Respect to life and business.
The sale of LinkExchange gave Hsieh (and many of his friends who'd worked for the company), financial freedom. They too exited with Hsieh and contemplated their next moves in life. A new development with lofts was being built in the heart of San Francisco. Hsieh and friends all purchased space and began to build their own community. They also started an investment fund to cultivate new businesses. Initially, million was available. One company was a generic online shoe store (later renamed Zappos-a derivative of the Spanish word zapato which means shoe). Hsieh was confident that venture capitalists would be interested in investing in the site. He was wrong. They questioned its long-term profitability.
Once at a party, Hsieh met a mysterious young lady who told him "Envision, create and believe in your own universe." Those words stuck with him as he decided to continually fund Zappos in its early stages because he believed the company had potential. He also claimed a more active role in the business, eventually being named CEO. He was determined to prove the venture capitalists and everyone else wrong.
Hsieh embodies classic entrepreneurial traits. They include the ability to take risks (deciding to continue to fund Zappos in its early days with no guarantee of success), thinking out-of-the-box (submitting Morse code for a Shakespearian sonnet), and quickly exiting jobs when feeling unfulfilled (leaving LinkExchange with resultant decreased personal profit). These characteristics, and others, along with his life experiences demonstrate he was destined to lead Zappos.com, Inc.
To discover more resources for Delivering Happiness, visit http://www.deliveringhappinessbook.com/resources
