Hsieh’s World
What does a 24-year old who just sold the company that he co-founded to Microsoft for $265 million do next? He begins working on another company, of course. Tony Hsieh, now 35, and CEO of online shoe retailer Zappos.com, is one of the most successful and insightful business leaders of the 21st century. Having recently sold Zappos to Amazon.com for a staggering $928 million in July 2009, and leading Zappos to over $1 Billion in gross revenue in 2008, he is certainly familiar with large figures. But the economic success that he has achieved, particularly with Zappos, does not come from selling the largest number of shoes, per se, but by leading with the right vision and creating a culture that fosters success and fulfillment.
Hsieh is a man of big ideas. He understands that by providing his Zappos teammates with something to reach for beyond themselves, he can inspire them to achieve great personal and professional accomplishments. He achieves this through culture. Walking through the halls of Zappos is more like touring an architect nouveau’s labyrinth than it is viewing the inner workings of an online retail powerhouse. Each division has hand crafted its own personal section providing it with the artistic and creative detail to inspire each of its members to do great, impassioned work. Hsieh wanted to create a culture and work environment that employees love to be a part of and which they designed themselves.
What makes Zappos different from all the other companies out there that sell similar products? It is their focus on customer service and customer experience. While selling shoes and other products is what generates top line revenue, it is the relationships they have with their customers that keep them coming back. Rather than spend a lot of money on marketing, Zappos has an elite team of customer service representatives that are encouraged to provide customers what they need and spend as much time as reasonable to make sure that a connection is made. With 70-75% of orders coming from repeat customers, that strategy has clearly paid off. As Hsieh indicates, selling shoes is, “Not about maximizing transactions, but building a lifelong relationship.” Zappos focuses on providing a peerless customer-service experience, which leads to organic marketing through repeat sales and word of mouth.
Hsieh is as much a philosopher as he is a businessman. He understands business because he understands human nature. What we are missing in today’s day and age of increased technology and social networking is real human connection and relationships. As Hsieh suggested, “The telephone is one of the greatest marketing tools.” Talking to someone on the phone and having real human contact is what allowed Zappos to create such strong relationships with their customers. As most companies were embedding their contact information deeper and deeper into the infrastructure of their websites, Zappos lists their contact number clearly on every page encouraging people to reach out and connect with Zappos “24/7.” The nature of business is relationships.
Hsieh might be a millionaire hundreds of times over having created and sold two prolifically successful companies, but what he is most proud of is his contribution to creating a more conscientious business culture and a more conscious sense of capitalism. But in the humble Hsieh way, Zappos’ success, a feat for which he would rather attribute credit to the Company itself than take for himself, is a total team effort. Hsieh’s first business was selling pizza out of his college dorm and his last he just sold to Amazon.com. But the similarities are having a vision for what you want to achieve, creating a culture that celebrates diversity, passion, fulfillment, and peerless customer service. Hsieh’s path started small and while he has certainly come a long way from his days of selling plain pizza pies, the difference between $1.00 for a slice and $1 Billion for shoes is a lot closer than we think. Practice the right principles, employ some humility, and the results will be sure to follow – personally and professionally.
http://www.inc.com/magazine/20060901/hidi-hsieh.html
http://www.youtube.com/watch?v=BP6a2SHb0b4
