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Zappos Milestone: Q&A With Tony Hsieh

Zappos.com CEO Tony Hsieh's mission is to spread happiness to his customers and employees — and quite possibly change the tone of business as we know it.



FN: But this is something you’ve created.
TH: It’s more that I allowed it to be created. It’s making sure that employees not only feel comfortable being themselves, it’s them actually feeling like part of their job is to help make this culture grow stronger and stronger every day. For me, my role is about unleashing what people already have inside them that is maybe suppressed in most work environments.

FN: How has your role changed over the years?
TH: I joined the company about two months after it started. I come from a technical background, so I was doing a lot of the computer programming for the Website and our systems. When we needed to set up the warehouse, I moved to Kentucky for five months to set up operations there. Now we’re trying to train people to be less about doing it yourself and more about helping develop other people and training them. We didn’t have a training team five years ago, and now we do. Five years from now, the goal is to have almost all our hires be entry-level employees, but we’ll provide all of them with the training to become a senior leader within five to seven years, and that also helps to protect our corporate culture because we won’t need to bring in senior-level people from the outside.

FN: Why did you decide to make customer service the central mission of the company?
TH: We always, even from the beginning, thought customer service was important, but that actually wasn’t the original plan for the business when we first started. Originally, we just wanted to be the largest online footwear retailer. We did that for two or three years. Then, we sat around and asked ourselves, “Do we want to be about footwear, or about something bigger and more meaningful?” We decided it was going to be about customer service, and that’s what we wanted to build our brand around.

FN: What keeps you motivated?
TH: A lot of people talk about work-life balance, and the implication is that work isn’t as much fun. What we’re trying to create is something where Zappos is a lifestyle and people look forward to coming to the office. And when they leave the office, they go and hang out with other Zappos employees. There’s no real separation between work and life. If you’re passionate about what you’re doing and you believe in the long-term vision of the company, then it doesn’t feel like work.

FN: What’s been more fun, the startup phase or now growing the company?
TH: For me, the most fun is change or growth. There are definitely elements of both that I like. Launching a business is kind of like a motorboat: You can go very quickly and turn fast. A bigger business is like a cruise ship: There are lots of amenities and you can go a lot further, but it’s harder to turn quickly. There are advantages and disadvantages to both. There’s always going to be a new set of challenges. I’d get bored if business was just steady and there weren’t new things happening all the time.

FN: What projects are you working on right now?
TH: For this year, we’re making a big push into clothing. For people who just know us for shoes, it’s about getting the message out there that we have a pretty good selection of clothing, and that’s going to be growing over time. It’s four times the size of the footwear market, so there’s a lot of opportunity there. Our customers might intellectually know that we sell clothing, but when they want to buy a new pair of jeans, the first thing that comes to their minds might not be Zappos. Part of it is a merchandising issue, too. While we have a pretty decent selection of clothing now, there are lots of brands that we would like to have that we don’t currently have.

FN: What other categories would you like to be in?
TH: Any product category that isn’t a commodity is something we might consider selling online, but it doesn’t have to be limited to online. Our brand is about service. We’ve had companies ask if we would want to start an airline. Now, that’s probably not something we’d do 10 years from now, but maybe 20 or 30 years. Think of Virgin and all the different things it does. The difference is that they’re about being hip and cool, and we’re about customer service.

FN: What’s the best advice anyone has ever given you?
TH: Robert Greenberg from Skechers USA Inc. told me two years ago that the most important thing in life is the quality of life. That’s the philosophy he used to build up Skechers, and that’s similar to what we’re trying to do here at Zappos.

FN: What advice do you give people just starting out or struggling in business?
TH: It depends on what stage they’re in. First, figure out the larger vision and greater purpose for the company, beyond just making money or being No. 1 in your market. Along with that, figure out what core values you want for your company, specifically values that you’ll commit to and make hiring and firing decisions based on. It actually doesn’t matter what your values are. It’s about whether you’re consistent with them and are willing to do performance reviews based on them. If you are, you can build an organization that’s aligned and where everyone is moving in the same direction. Then it takes a lot less thinking because you’re just living your brand.

FN: What would you be doing if you weren’t running Zappos?
TH: I’ve always been interested in building a consumer brand, just what that is doesn’t really matter. I think of it as a way of having the best parts of fame without the worst parts of fame.

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