June 24, 2010

Tony Hsieh is the CEO of Zappos. He recently published a book called Delivering Happiness: A Path to Profits, Passion, and Purpose. In this interview, I probe, and he responds, to subjects as diverse as raising kids, business plans, and what Asian moms want their sons to be.

Q: Based on your experience with earthworms, The Gobbler, and buttons, do you think that entrepreneurs are made or born?

A: For the vast majority of people, by the time you’re 12, you either have the entrepreneurial spirit or you don’t.

Q: When you raise kids, will you force them to prepare for SATs, take violin and piano, and aspire to be a doctor?

A: No, I think my approach would be to have them try a ton of different things and then figure out which ones they’re passionate about.

Q: What is the math behind the policy of two-way free and overnight shipping?

A: Our philosophy is to take most of the money we would have spent on paid marketing or paid advertising and instead invest it into the customer experience, and let our customers do the marketing for us through word of mouth. We view the free shipping both ways and surprise upgrades to overnight shipping as our marketing costs.

Q: How should entrepreneurs decide which business they should play at?

A: I would say try a lot of different things in different industries and with different people over your life, and eventually the business that you were meant for will find you.

Q: What’s worse for a startup: too much or too little money?

A: Too much money.

Q: What kind of business planning should entrepreneurs do?

A: Think about where you want to be 10 years from now and think about where you want to be up to one year from now. Anything in between doesn’t really matter because nothing ever turns out the way you planned it.

Q: Is customer service the new marketing?

A: What’s new is that we are all hyperconnected and information travels much, much faster than before (through Twitter, blogs, etc.) So customer service stories, good or bad, tend to spread more quickly and therefore can have a much bigger effect on a company’s brand.

Q: What role does the plain old telephone play in Zappos?

A: We believe the telephone is one of the best branding devices out there. We have the customer’s undivided attention for 5-10 minutes—compare that with a 30-second Super Bowl ad when the viewers are probably not paying full attention. If we get the interaction right, what we’ve found is that customers remember that for a very long time and tell their friends and family about us.

Q: What are the core values of Zappos? 

A: 

1. Deliver WOW Through Service
2. Embrace and Drive Change
3. Create Fun and a Little Weirdness
4. Be Adventurous, Creative and Open-Minded
5. Pursue Growth and Learning
6. Build Open and Honest Relationships With Communication
7. Build a Positive Team and Family Spirit
8. Do More with Less
9. Be Passionate and Determined
10. Be Humble

Q: Is a near-death experience good for a company?

A: It can be, if the company learns from it and becomes that much stronger because of it.

Q: Is Amazon changing Zappos or is Zappos changing Amazon?

A: We’re both learning from each other, but true to their word, Amazon has allowed Zappos to remain independent. We continue to make our own decisions and grow our brand and our culture the Zappos way.

Q: What is “happiness” for a person who’s sold companies for $265 million and $1.2 billion?

A:

• Perceived control
• Perceived progress
• Connectedness (number and depth of relationships)
• Higher purpose

Q: From your book, it sure sounds like you’re in bars all the time—do your parents know about this?

A: My dad is actually translating the Chinese version of the book.

Q: Are your parents proud of you now or do they still wish you were a doctor?

A: I think my mom still wants me to be a doctor.

Join the conversation ( 2 )

• Beth Arvin 1 year 7 months and 20 days ago

  

  Thanks for this inspiring interview. The success of Zappos is a great testament to the power of trustcasting – the process of growing business through building and maintaining trust with customers.
  
  In today’s marketplace – where word-of-mouth is increasingly influential in consumer decision-making – it is essential to have an active and passionate community of followers around your brand. By foregoing traditional advertising in favor of demonstrating genuine concern for the customer and their best interests, Zappos has earned a reputation for outstanding service and won the trust of a legion of loyal brand evangelists. As their success shows, when you operate your business with honest intentions and treat your customers with respect, the influence you will command will be unrivaled by any traditional sales or marketing tactic.
  
  Read more about this concept here: http://www.famefoundry.com/1356/trustcasting.
  
  The Communicator
  Fame Foundry
  http://www.famefoundry.com

• Sachin Uppal Online Media Evangelist 1 year 7 months and 21 days ago

  

  Delivering Happiness in a business in India is much harder. Many successful entrepreneurs will agree that running a business in US is much easier than in India. When honesty and integrity of a customer is questionable...especially in an online business where establishing an individual's identity is extremely hard, people inherently take advantage of the business and find ways to scam and derail the happiness path.
  
  Though I like the broader point of Customer Service driven Word of Mouth marketing. With Social Media penetrating more and more of it's roots across the globe and Mark Zuckerberg aiming to hit 1 billion users ...we know information will travel even faster and to more people... there wouldn't be an option left, but to delight customers.