Zappos CEO credits success to having fun

Tony Hsieh

Zappos CEO credits success to having fun

Tony Hsieh started his first company when he was just 13 years old, earning $200 a week making customized button pins for customers who sent in $1 and a photo to an address listed by the young entrepreneur in a book called Free Stuff for Kids. Today, as CEO of Zappos, Inc., Hsieh’s customers number not in the hundreds, but in the millions — and this year, even in these troubled economic times, the company projects revenues of $1 billion, up from $848 million in 2007. Hsieh is a major investor in the privately held online shoe, accessory and clothing seller and, as its CEO for the past eight years, has been largely responsible for growing the company from a fledgling startup in 1999 to its current size of 15,000 employees in its call center in Henderson, Nev., and warehouses near Louisville, Ky. But to the 34-year-old Chicago-born, Marin County-raised, Harvard-educated son of Taiwanese immigrants, it’s never been just about growing a bigger business or making more money.

“I got my degree in chemical engineering and went to work as a software engineer for Oracle when I got out of college,” recalls Hsieh. “The only problem was, I hated it. I wanted to be creative, to have fun at work.”
So in 1996, Hsieh and a Harvard buddy started LinkExchange, an online advertising network business.

“We wrote the programming for the system over a weekend, and we never thought it was going to take off like it did,” he notes.

Two years later, LinkExchange was linking ads on over a million Internet sites; the partners sold their company to Microsoft for $265 million.

“We were successful, but at some point, it wasn’t fun anymore and I began to dread going to work,” Hsieh says.

Next, Hsieh co-founded an investment firm, financing 20 startup Internet companies, including Starting off as a business development advisor in 1999, Hsieh found himself spending more and more time at Zappos — and having more and more fun. A year later, he donned his CEO hat but continued to work in a cubicle and earned a $35,000-a-year salary.

The company has a unique family culture, which includes free food from the in-house cafeteria and frequent celebrations that resemble fraternity/sorority parties. Every new employee has to complete a four-week customer service course, and customers who call the Zappos 1-800 number are greeted by the CEO and his friend, tennis star Venus Williams, who introduces the Zappos “joke of the day” for customers who want a laugh. Zappos encourages teamwork and a fun workplace by offering prospective employees a chance to be “bought out” — be paid $2,000 to walk away from their new job if they find that they don’t agree with the company’s ten core values, which includes “creativity and a little weirdness.”

In a recent Oprah interview, the boyish CEO admitted that he still doesn’t own a suit — in fact, he shares one with one of his younger brothers, both of whom also work at Zappos. Hsieh also hired his father, who has finally given up asking his oldest son whether he plans to get his Ph.D or become a doctor.

“My goal is to create a company with the best customer service possible,” said Hsieh of his future plans. “We’re not competing on price — and we don’t offer general discounts on our products. What we offer is free shipping (including returns) and a 365-day, no-questions-asked return policy. We have taken the risk out of buying online — and we offer the best customer shopping experience in the process.” Zappos, which was named for the Spanish word for shoes — zapatos — has recently expanded to electronics, cookware and other home and garden merchandise.

“It almost doesn’t matter what we sell — we are selling service,” Hsieh adds. “We respond to suggestions from our customers, one of whom recently suggested we start an airline. I wouldn’t rule that out — maybe in 30 years.”

One comment on “Zappos CEO credits success to having fun

  1. John
    December 5, 2008

    It’s good to see someone so young be so successful and run a great business.

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This entry was posted on December 5, 2008 by in Entrepreneur and tagged .
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