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And just like that, the idea for the Zappos Culture Book was born, and it’s been a part of Zappos ever since. Every year, a new edition of the Zappos Culture Book is produced, which we give out to prospective employees, vendors, and even customers. I sent the following e-mail to all of our employees in August 2004: From: Tony Hsieh To: All Zappos Employees Subject: Zappos Culture Book We will be putting together a mini-book as part of the orientation package for all new hires about the Zappos culture. Our culture is the combination of all of our employees’ ideas about the culture, so we would like to include everyone’s thoughts in this book. Please email me 100–500 words about what the Zappos culture means to you. (What is the Zappos culture? What’s different about it compared to other company cultures? What do you like about our culture?) We will compile everyone’s contribution into the book.
We had to communicate with Zappos employees, Zappos vendors, Amazon employees, Amazon vendors, the press calling Amazon, the press calling Zappos, our customers, the SEC, our board of directors, our investors, and the general public all within a two-hour window, and it had to be perfectly coordinated. It felt like we were about to launch a rocket to the moon. Finally, at the predetermined time, I sent the following e-mail to our employees: Date: July 22, 2009 From: Tony Hsieh To: All Zappos Employees Subject: Zappos and Amazon Please set aside 20 minutes to carefully read this entire email. (My apologies for the occasional use of formal-sounding language, as parts of it are written in a particular way for legal reasons.) Today is a big day in Zappos history. This morning, our board approved and we signed what’s known as a “definitive agreement,” in which all of the existing shareholders and investors of Zappos (there are over 100) will be exchanging their Zappos stock for Amazon stock.
If you have any questions about your specific job or department, please talk to your department manager. For all other questions, comments, or thoughts, please feel free to email me. —Tony Hsieh, CEO After the weekend had passed, I sent a follow up e-mail to our remaining employees, which we also publicly posted on our blogs: Date: November 11, 2008 From: Tony Hsieh To: All Zappos Employees Subject: Moving forward Last week was a tough week for everyone, as we went through the process of laying off 8% of the Zappos family. At the same time, it was also heartwarming hearing all the stories of Zappos employees and ex-employees getting together for drinks Thursday night after the layoffs as well as over the weekend. The economic environment we’re in right now is unlike any we’ve ever witnessed in our lifetime.
The Thank You Economy by Gary Vaynerchuk
Apple's 1984 Super Bowl advert, augmented reality, business process, call centre, Chuck Templeton: OpenTable, crowdsourcing, en.wikipedia.org, hiring and firing, intangible asset, Jeff Bezos, new economy, pre–internet, Skype, social software, Tony Hsieh
That’s what capitalism understands and communism doesn’t. Tony Hsieh’s Letter to His Employees When Amazon acquired Zappos, even the way the acquisition was announced was culturally significant. Tony Hsieh, CEO of Zappos, wrote an incredibly personal letter to Zappos employees explaining the details of the transaction, what it meant for the company, and how it would affect their jobs. Date: Wed, 22 Jul 2009 From: Tony Hsieh (CEO—Zappos.com) To: All Zappos Employees Subject: Zappos and Amazon Please set aside 20 minutes to carefully read this entire email. (My apologies for the occasional use of formal-sounding language, as parts of it are written in a particular way for legal reasons.) Today is a big day in Zappos history. This morning, our board approved and we signed what’s known as a “definitive agreement,” in which all of the existing shareholders and investors of Zappos (there are over 100) will be exchanging their Zappos stock for Amazon stock.
The feelings I’m experiencing are similar to what I felt in college on graduation day: excitement about the future mixed with fond memories of the past. The last 10 years were an incredible ride, and I’m excited about what we will accomplish together over the next 10 years as we continue to grow Zappos! —Tony Hsieh CEO—Zappos.com Compare this letter to some of the stiff, jargon-filled letters most CEOs send out to their companies when they make big announcements. They may as well have been written by HAL, from 2001: A Space Odyssey, for all the genuine personality, compassion, and concern they project. Very few employees feel safe after receiving one of those, yet I imagine that most of the Zappos staff who read Hsieh’s letter believed that the decisions made on behalf of the company were made with the right intent. And good intent, as we’ve discussed, goes a long, long way. How Innovation Feeds Culture You can never lose by going out on a creative limb.
He also makes the point that he believes Amazon and Zappos are compatible because they both obsess over customer service (though as Tony Hsieh points out in the letter he wrote to Zappos employees to announce the deal, they do it in different ways). Specifically, what he says is, “When given the choice of obsessing over competitors, or obsessing over customers, we [Amazon] always obsess over customers.” Bezos hasn’t asked for my advice, but I’m going to give it anyway. If he or anyone else wants to dominate in the Thank You Economy, there’s one more obsession that has to take root that isn’t mentioned in his video. Success in the Thank You Economy hinges on obsessively caring about the customer, yes, but a great caring culture stems from the top of a company and cascades through it like a waterfall. If you want that culture to flow outside of the company to the customer, and then get carried even farther by word of mouth, you have to be sure that your messengers live and breathe it the same way you do.
centralized clearinghouse, index card, lone genius, market bubble, Merlin Mann, New Journalism, Results Only Work Environment, rolodex, side project, Silicon Valley, Steve Jobs, Steve Wozniak, supply-chain management, Tim Cook: Apple, Tony Hsieh, young professional
Nevertheless, your ability to make use of many of the benefits that your community can provide for you depends on how transparent you are with your ideas, objectives, and progress. Tony Hsieh, CEO of the online retailing company Zappos, has spoken extensively about how the microblogging and social networking platform Twitter has helped his company build stronger relationships both externally (with customers) and internally (among employees). When Hsieh made the decision to embrace transparency both personally and professionally by using Twitter, the impact was powerful. Hsieh explained in a post on his company blog: Because radical transparency was part of the culture of [T]weeting, I decided to give it a try and be as transparent as possible, both for myself personally and for Zappos. It was also consistent with [one of Zappos’s core values]: “Build Open and Honest Relationships With Communication.”
For a business that puts customer service at the center of its mission, the commitment and contentment of its employees is extremely important—and employee morale at Zappos is legendary. I was struck by the expression of company spirit as my tour guide led me through the company’s cavernous hallways. Every department offered a custom greeting as we passed. The “Kids’ Shoes” team shook their pompoms. The “Clothing” department rang cowbells. The “Company Coach,” Vik, took a photo of me wearing a crown and placed it on the VIP wall—reserved for everyone who comes to visit Zappos. Because, Vik explained, “at a company all about service, everyone is a VIP.” The CEO of Zappos, Tony Hsieh, also serves as the company’s cultural attaché, with a steady stream of speaking engagements, blog posts, and Twitter commentary. Hsieh believes wholeheartedly in the value of happiness as the backbone of a service-based business.
Your team’s chemistry is a reflection of your ability to strike a harmonious balance and constantly make small tweaks in the service of making ideas happen. During my visit with Zappos CEO Tony Hsieh, it was clear that a potential employee’s culture-fit and commitment to serving customers are as important as the technical skills required for the job. To demonstrate this core value, Hsieh tells the story about a key technical hire—a top executive—whom the company recruited and moved from Los Angeles to Zappos’s headquarters in Las Vegas. Upon arriving to solve some critical technology challenges for the company, the new hire made it clear that he wasn’t interested in doing any direct customer support. The company fired him, losing quite a bit of money in the process. The reason? Zappos considers interest in customer support as a basic expectation, a prime element of the company’s DNA.
Exponential Organizations: Why New Organizations Are Ten Times Better, Faster, and Cheaper Than Yours (And What to Do About It) by Salim Ismail, Yuri van Geest
23andMe, 3D printing, Airbnb, Amazon Mechanical Turk, Amazon Web Services, augmented reality, autonomous vehicles, Baxter: Rethink Robotics, bioinformatics, bitcoin, Black Swan, blockchain, Burning Man, business intelligence, business process, call centre, chief data officer, Chris Wanstrath, Clayton Christensen, clean water, cloud computing, cognitive bias, collaborative consumption, collaborative economy, commoditize, corporate social responsibility, cross-subsidies, crowdsourcing, cryptocurrency, dark matter, Dean Kamen, dematerialisation, discounted cash flows, distributed ledger, Edward Snowden, Elon Musk, en.wikipedia.org, ethereum blockchain, Galaxy Zoo, game design, Google Glasses, Google Hangouts, Google X / Alphabet X, gravity well, hiring and firing, Hyperloop, industrial robot, Innovator's Dilemma, intangible asset, Internet of things, Iridium satellite, Isaac Newton, Jeff Bezos, Kevin Kelly, Kickstarter, knowledge worker, Kodak vs Instagram, Law of Accelerating Returns, Lean Startup, life extension, lifelogging, loose coupling, loss aversion, Lyft, Marc Andreessen, Mark Zuckerberg, market design, means of production, minimum viable product, natural language processing, Netflix Prize, Network effects, new economy, Oculus Rift, offshore financial centre, p-value, PageRank, pattern recognition, Paul Graham, peer-to-peer, peer-to-peer model, Peter H. Diamandis: Planetary Resources, Peter Thiel, prediction markets, profit motive, publish or perish, Ray Kurzweil, recommendation engine, RFID, ride hailing / ride sharing, risk tolerance, Ronald Coase, Second Machine Age, self-driving car, sharing economy, Silicon Valley, skunkworks, Skype, smart contracts, Snapchat, social software, software is eating the world, speech recognition, stealth mode startup, Stephen Hawking, Steve Jobs, subscription business, supply-chain management, TaskRabbit, telepresence, telepresence robot, Tony Hsieh, transaction costs, Tyler Cowen: Great Stagnation, urban planning, WikiLeaks, winner-take-all economy, X Prize, Y Combinator, zero-sum game
Any Googler can look up the OKRs of other colleagues and teams to see what they’re trying to achieve and how successful they’ve been in the past. Such transparency takes a considerable amount of cultural and organizational courage, but Google has found that the openness it engenders is worth any discomfort. Tony Hsieh built Zappos into a billion dollar company using this very same philosophy. Everything at Zappos is about customer service and openness. Its publicly available and annually updated 500-page Culture Book defines who and what the company is. According to David Vik, Zappos’ “company coach,” there are five key precepts to Zappos that drive culture across the organization: Vision: What you’re doing Purpose: Why you do it Business model: What will fuel you as you’re doing it Wow and uniqueness factors: What sets you apart from others Values: What matters to you The control frameworks used by traditional organizations were devised because the longer (and slower) feedback loops between management and teams often required considerable oversight and intervention.
They evaluate employees based on their fit within the company culture and offer suggestions on how to improve that fit. To be eligible for raises, employees must pass skill-based tests. Zappos also regularly holds internal incentive competitions and hackathons, most relating to company data and APIs. In 2011 Zappos opened its competitions to the external developer community as well (the API Developer Challenge and the Winter Hackathon), and awarded money and gift certificates to the winners [Engagement]. In December 2013, CEO Tony Hsieh adopted the Holacracy approach and shook up the 1,500-person organization by moving to full Autonomy. After six months, 225 employees had been transitioned from the old hierarchical model, and Zappos is currently stripping all job titles and management layers—eventually, even the CEO job will disappear. This is an extraordinary move for a large firm, perhaps the largest such transition ever attempted.
In 2013, Reddit, which has just fifty-one employees, most of whom manage the platform, saw 731 million unique visitors cast 6.7 billion votes on 41 million stories. Talk about a platform…(More on this later.) Tony Hsieh, CEO of Las Vegas-based Zappos, was inspired by the Burning Man community to combine both physical and trait-based communities within his Las Vegas Downtown Project. The project combines work and play in an urban landscape with homes, infrastructure, hacker spaces, shops, cafe/theater and art. In addition to the goal of helping to transform the downtown area into the most community-focused large city in the world, Hsieh aims to create the smartest place on the planet by maximizing the chances of serendipitous learning between Zappos insiders and outsiders. The result is not only a community built around common passions, but also around a common location. Note that in early stages, many companies find it easier to join an existing community that shares its MTP.
The End of the Suburbs: Where the American Dream Is Moving by Leigh Gallagher
Airbnb, big-box store, Burning Man, call centre, car-free, Celebration, Florida, clean water, collaborative consumption, Columbine, commoditize, crack epidemic, East Village, edge city, Edward Glaeser, extreme commuting, helicopter parent, Home mortgage interest deduction, housing crisis, Jane Jacobs, low skilled workers, Mark Zuckerberg, McMansion, Menlo Park, mortgage tax deduction, negative equity, New Urbanism, peak oil, Ponzi scheme, Richard Florida, Robert Shiller, Robert Shiller, Sand Hill Road, Seaside, Florida, Silicon Valley, Steve Jobs, Stewart Brand, the built environment, The Death and Life of Great American Cities, Tony Hsieh, transit-oriented development, upwardly mobile, urban planning, urban sprawl, Victor Gruen, walkable city, white flight, white picket fence, young professional, Zipcar
In the mornings, the traffic on the 101, the main commuting freeway out of San Francisco toward the Valley, is now heavier heading out of the city than the reverse. One of the more interesting company relocations these days is happening in Las Vegas, where Zappos, the online shoe giant, is getting ready to move from a cookie-cutter suburban office park off a highway interchange in Henderson, Nevada, to a brand-new headquarters in Las Vegas’s old city hall. The company’s CEO, Tony Hsieh, is something of a guru when it comes to building workplaces, and the zany, quirky Zappos offices are legendary both for the employees’ cubicles, which are decorated with streamers, foil, kitschy figurines, faux-jungle greenery, and more, and for its stated mission to “create fun and a little weirdness.” But even with all the office whimsy, Hsieh, a big believer in the benefits of the spontaneous “collisions” that occur among employees when they are encouraged to socialize and have places to do so, felt his company’s culture was stifled by its suburban location.
But with people spending so much time in their cars and in their houses, and with many communities lacking a walkable town center or pleasantly walkable residential streets, the spontaneous interaction that comes from, for example, walking down a Main Street or a central square or even down the block is harder to come by. And that spontaneous interaction is important, as a growing body of research has shown. Researchers have found that when people bump into each other, good things happen. Both the Harvard economist and urban scholar Edward Glaeser and the urban theorist Richard Florida have linked higher-density or pedestrian-friendly places to higher levels of innovation. Tony Hsieh, the CEO of Zappos.com, is moving his company from suburban Henderson, Nevada, to downtown Las Vegas precisely because he believes the “serendipitous collisions” that happen when people are freer to walk between the office and local cafés, restaurants, and other public places will make his employees happier, help them forge closer relationships with one another, and lead to the faster cultivation of new ideas.
Katz also points out that having choices is only going to become more important: unlike other mature countries—like, say, Germany or Japan—we’re still experiencing massive rates of growth; the U.S. population is growing at the rate of thirty million a decade. Our racial and ethnic makeup is evolving. We have many different cohorts and a continuum of housing preferences. “People really just want more alternatives,” Katz says. Now, they will undoubtedly get them. But there’s still some of what Chuck Marohn of Minnesota would call “lobster-eating” going on. Driving around the far reaches of Summerlin, Nevada, after my visit with Zappos’s Tony Hsieh, I found myself at what seemed like the end of the earth. It was really just a small subdivision up a hill right off Paseo Breeze Drive, but as I drove up the half-developed street, it seemed like the final frontier, the edge of the developed United States itself. Soon the pavement turned to dirt road, and I pulled over when the road ended and got out of my rental car. There was a chain-link fence with alarming DANGER/NO TRESPASSING!
The Connected Company by Dave Gray, Thomas Vander Wal
A Pattern Language, Albert Einstein, Amazon Mechanical Turk, Amazon Web Services, Atul Gawande, Berlin Wall, business process, call centre, Clayton Christensen, commoditize, complexity theory, creative destruction, David Heinemeier Hansson, en.wikipedia.org, factory automation, Googley, index card, industrial cluster, interchangeable parts, inventory management, Jeff Bezos, John Markoff, Kevin Kelly, loose coupling, market design, minimum viable product, more computing power than Apollo, profit maximization, Richard Florida, Ruby on Rails, self-driving car, shareholder value, side project, Silicon Valley, skunkworks, software as a service, South of Market, San Francisco, Steve Jobs, Steven Levy, Stewart Brand, The Wealth of Nations by Adam Smith, Tony Hsieh, Toyota Production System, Vanguard fund, web application, WikiLeaks, Zipcar
Zappos treats frequent customers well, with surprises like upgrades from standard ground shipping to next-day air. Making customers happy, says CEO Tony Hsieh, leads to cost savings elsewhere, like marketing. “We let our customers do our marketing,” he says. By making sure they get the right people and giving them the autonomy and authority they need to serve customers, Zappos call centers are designed to absorb variety, not contain it. Freedom to Experiment Service leaders like Southwest Airlines, Nordstrom, and Ritz-Carlton give employees wide latitude to resolve issues for customers. At Southwest Airlines, employees are expected to act immediately to take care of customers and to check with a supervisor only if a customer asks for something that makes them feel uncomfortable. At Nordstrom, employees are told to use their best judgment in all situations.
It often involves things that seem like sacrifices in the short term, like trusting a customer and accepting a returned product without questions or skepticism, or promptly paying an insurance claim. This means valuing long-term relationships over transactions and short-term profits. In the long run, the Golden Rule strategy is the most winning strategy of all. Make people feel good. Happiness is contagious. Happy employees create happy customers. Happy customers create happy shareholders. As Tony Hsieh of Zappos has said clearly and often: happiness is a business model. Principles Trump Processes Every connected company stands for something. It has opinions. Its people are bound together by shared purpose and principles. One way to help people make good decisions in uncertain environments is to have a strong, constant purpose so everyone understands the job to be done, and a few clear principles that they can use to guide their decisions about “how” to do that job.
Fred Mosser, who came to online shoe retailer Zappos from Nordstrom to head up merchandising, soon realized that with an online catalog, Zappos would be managing so many brands and styles that they would never be able to staff enough buyers to manage them adequately. So they engaged vendors to help them. Zappos opened up their data and gave vendors the same access to information that their buyers had. Since the average buyer works with 50 brands, by making their buyer data transparent, Zappos multiplies the thinking power of each buyer by 50. Vendors can see inventory levels, prices, and profitability. They can suggest orders to buyers and communicate with Zappos creative teams about marketing and make changes to their brand boutique on the Zappos website. Usually, retailers hide their profits so they can demand lower prices from vendors.
Think Like a Freak by Steven D. Levitt, Stephen J. Dubner
Albert Einstein, Anton Chekhov, autonomous vehicles, Barry Marshall: ulcers, call centre, Cass Sunstein, colonial rule, Edward Glaeser, Everything should be made as simple as possible, food miles, Gary Taubes, income inequality, Internet Archive, Isaac Newton, medical residency, Metcalfe’s law, microbiome, prediction markets, randomized controlled trial, Richard Thaler, Scramble for Africa, self-driving car, Silicon Valley, Tony Hsieh, transatlantic slave trade, éminence grise
DeVoss, “Ping-Pong Diplomacy,” Smithsonian, April 2002; “The Ping Heard Round the World,” Time, April 26, 1971. 128 ZAPPOS: This section was based in part on author interviews with Tony Hsieh and a visit to Zappos headquarters. See also: Hsieh, Delivering Happiness: A Path to Profits, Passion, and Purpose (Business Plus, 2010); Hsieh, “How I Did It: Zappos’s CEO on Going to Extremes for Customers,” Harvard Business Review, July 2010; Robin Wauters, “Amazon Closes Zappos Deal, Ends Up Paying $1.2 Billion,” TechCrunch, November 2, 2009; Hsieh, “Amazon Closing,” Zappos.com, November 2, 2009; Alexandra Jacobs, “Happy Feet,” The New Yorker, September 14, 2009. “You guys are just the best” testimonial on Zappos.com by Jodi M., February 21, 2006. 131 MEXICO CITY HAS LONG SUFFERED FROM DREADFUL TRAFFIC JAMS: See Lucas W.
All they have to do is go through an exit interview and surrender their eligibility to be rehired at Zappos. Doesn’t that sound nuts? What kind of company would offer a new employee $2,000 to not work? A clever company. “It’s really putting the employee in the position of ‘Do you care more about money or do you care more about this culture and the company?’ “ says Tony Hsieh, the company’s CEO. “And if they care more about the easy money, then we probably aren’t the right fit for them.” Hsieh figured that any worker who would take the easy $2,000 was the kind of worker who would end up costing Zappos a lot more in the long run. By one industry estimate, it costs an average of roughly $4,000 to replace a single employee, and one recent survey of 2,500 companies found that a single bad hire can cost more than $25,000 in lost productivity, lower morale, and the like. So Zappos decided to pay a measly $2,000 up front and let the bad hires weed themselves out before they took root.
Retail Compensation and Benefits Survey,” October 2013; Jordan Melnick, “Hiring’s New Frontier,” QSRmagazine.com, September 2012; and Melnick, “More Than Minimum Wage,” QSRmagazine.com, November 2011. 150 A WORKER WITH A FOUR-YEAR DEGREE EARNS ABOUT 75 PERCENT MORE: See “Education at a Glance 2013: OECD Indicators” (OECD, 2013). 150 ZAPPOS AND “THE OFFER”: See Stephen J. Dubner, “The Upside of Quitting,” September 30, 2011; Stacey Vanek-Smith conducted the interview with Tony Hsieh and other Zappos employees. Thanks to various Zappos employees for follow-up interviews. / 151 It costs an average of roughly $4,000 to replace a single employee: See Arindrajit Dube, Eric Freeman, and Michael Reich, “Employee Replacement Costs,” U.C.-Berkeley working paper, 2010. / 151 A single bad hire can cost . . . : Drawn from a CareerBuilder survey by Harris Interactive. 152 THE SECRET BULLET FACTORY AND THE WARM-BEER ALARM: Based primarily on author visit to the site, with follow-up correspondence with Yehudit Ayalon.
3D printing, Amazon Web Services, augmented reality, call centre, clockwatching, cloud computing, Firefox, future of work, ghettoisation, Google Chrome, Google Glasses, Google Hangouts, Khan Academy, Kickstarter, Kodak vs Instagram, Lean Startup, Marc Andreessen, Mark Zuckerberg, Network effects, new economy, Occupy movement, place-making, prediction markets, pre–internet, QR code, recommendation engine, Richard Florida, risk tolerance, self-driving car, Silicon Valley, Silicon Valley startup, Skype, social graph, social web, Steve Jobs, Steve Wozniak, Thomas L Friedman, Tim Cook: Apple, Tony Hsieh, white picket fence, WikiLeaks, zero-sum game
In June 2010, Delivering Happiness was published and became an instant bestseller. The book is written by Tony Hsieh—the CEO of Zappos. Most people know Zappos as the hot footwear/clothing retailer that has taken the e-commerce world by storm, or for the acquisition of Zappos by Amazon (which paid close to $1 billion for the business). Scratching a little deeper beneath the surface, you’ll uncover that what really drives this profitable, likable, and media-friendly company is amazing customer service. Buying shoes seems like one of the more difficult things to do online, but Zappos has overcome this hurdle by initiating a radical (and much-lauded) customer service protocol. Sure, anything you buy is easy, simple, and carefree to return, but it’s the Zappos customer service people and how they interact with their consumers (mail, phone, and online) that has really changed the game.
The major record labels within the music industry are making their struggles even worse because they don’t have a social business framework. They were always in control (of the artists, of the music’s distribution channel, of what the fans would hear), and they took that power on with the kind of pretentious attitude that is similar to how kings used to rule their empires. When the C-suite makes the call, everything changes. Don’t believe me? Just ask Tony Hsieh over at Zappos, Richard Branson at Virgin, or Marc Benioff at Salesforce.com. These business leaders (and there are many more) didn’t sell social business through their organizations as a marketing and communications initiative. They sold it through as customer service. We’re not talking about customer service in terms of the call center, we’re talking about the core of customer service: Why are we in business?
The reality of the future is simple: Again, all businesses must be social. If you don’t turn marketing into a horizontal that runs pervasively throughout the organization, your competitors will. And when they do, they will not only eat your lunch but they will marry your beloved consumers. Want an excellent primer on social business and customer service? Pick up a copy of the blockbuster bestseller Delivering Happiness by Tony Hsieh. You’ll get a terrific understanding of how and why Zappos has become beloved by its millions of customers. THE NEXT #3—RISE OF THE INDIE BRAND. In March 2012, I had the pleasure of delivering the opening keynote address at the Art of Marketing event in Toronto. With more than fifteen hundred business professionals in attendance, I shared the stage with people like Martin Lindstrom (author of Brandwashed and Buyology), Randi Zuckerberg (former head of marketing at Facebook and sister of its founder, Mark Zuckerberg), Scooter Braun (music industry professional and the person who discovered and manages Justin Bieber), and many others.
Rework by Jason Fried, David Heinemeier Hansson
Decommoditize your product. Make it something no one else can offer. Look at Zappos.com, a billion-dollar online shoe retailer. A pair of sneakers from Zappos is the same as a pair from Foot Locker or any other retailer. But Zappos sets itself apart by injecting CEO Tony Hsieh’s obsession with customer service into everything it does. At Zappos, customer-service employees don’t use scripts and are allowed to talk at length with customers. The call center and the company’s headquarters are in the same place, not oceans apart. And all Zappos employees—even those who don’t work in customer service or fulfillment—start out by spending four weeks answering phones and working in the warehouse. It’s this devotion to customer service that makes Zappos unique among shoe sellers.* Another example is Polyface, an environmentally friendly Virginia farm owned by Joel Salatin.
More Praise for Rework “In typical 37signals fashion, the wisdom in these pages is edgy yet simple, straightforward, and proven … Read this book multiple times to help give you the courage you need to get out there and make something great.” —Tony Hsieh, CEO, Zappos.com “The brilliance of Rework is that it inspires you to rethink everything you thought you knew about strategy, customers, and getting things done.” —William C. Taylor, founding editor of Fast Company and coauthor of Mavericks at Work “For me, Rework posed a new challenge: stifling the urge to rip out each page and tape it to my wall … Amazing, powerful, inspirational—those adjectives might make me sound like a fawning fan, but Rework is that useful. After you’ve finished it, be prepared for a new feeling of clarity and motivation.”
One Click: Jeff Bezos and the Rise of Amazon.com by Richard L. Brandt
Amazon Web Services, automated trading system, big-box store, call centre, cloud computing, Dynabook, Elon Musk, inventory management, Jeff Bezos, Kevin Kelly, Marc Andreessen, new economy, science of happiness, search inside the book, Silicon Valley, Silicon Valley startup, skunkworks, software patent, Steve Jobs, Stewart Brand, Tony Hsieh, Whole Earth Catalog, Y2K
It shipped products to customers for free (even paying return postage if customers decided to send them back), had a one-year return policy, and provided a customer-service call center open twenty-four hours a day. It also paid 100 percent of employees’ health care premiums. How could Bezos resist a company with such ideals and ambitions ? In 2005, he visited CEO Tony Hsieh at Zappos headquarters in Henderson, Nevada, to discuss buying the company. Hsieh turned him down, worried that being absorbed into Amazon would destroy the unique Zappos culture. “We told Jeff that we weren’t interested in selling at any price,” Hsieh wrote in an essay in Inc. magazine. But Bezos returned four years later. Hsieh still didn’t want to sell. Zappos was now profitable, but the economy was in a recession, and Bezos was offering an astounding amount of money, although in the form of stock rather than cash. In April 2009, Hsieh flew to Seattle to talk about the company and its culture, including Hsieh’s philosophy on “the science of happiness—and how we try to use it to serve our customers and employees better.”
“One of the biggest problems: Tim O’Reilly, “Jeff Bezos at Wired Disruptive by Design Conference,” O’Reilly Radar (blog), June 15, 2009, http://radar.oreilly.com/2009/06/jeff-bezos-at-wired-disruptive.html. Chapter 16: Head in the Clouds 178. Robert Frederick, then: Wade Roush, “Amazon: Giving Away the Store,” Technology Review, January 2005. 184. Hsieh turned him down: Tony Hsieh, “Why I Sold Zappos,” Inc., June 1, 2010. 185. But Bezos was so excited: Video from Jeff Bezos about Amazon and Zappos, July 27, 2009, www.youtube.com/watch?v=-hxX_Q5CnaA. Chapter 17: Step by Step, Courageously 187. It adorned a warehouse: Brad Stone, “Bezos in Space,” Newsweek, May 5, 2003. 188. We want to try: Hof, “Speaking Out: Amazon.com’s Jeff Bezos,” BusinessWeek , August 18–25, 2003. 190. As he explains in a video: www.youtube.com/watch?
“Zappos is a company I have long admired for a very important reason,” he said in the video. “Zappos has a customer obsession. . . . I get all weak-kneed when I see a customer-obsessed company.” In fact, he seems to just love everything about the Zappos culture. “Zappos has a totally unique culture,” he added. “I’ve never seen a company with a culture like Zappos’s. . . . That culture and the Zappos brand are huge assets that I value very much, and I want to see those things continue.” Even when not buying companies to add to Amazon, Bezos likes to invest in other companies he believes are exceptional. Despite a lot of bad dot-com investments in the late 1990s, Bezos has not been shy about trying again. He was an early investor in both Google and Twitter. Bezos has learned not only how to create a great company, but how to recognize other great companies in the making.
Aerotropolis by John D. Kasarda, Greg Lindsay
3D printing, air freight, airline deregulation, airport security, Akira Okazaki, Asian financial crisis, back-to-the-land, barriers to entry, Berlin Wall, big-box store, blood diamonds, borderless world, British Empire, call centre, carbon footprint, Cesare Marchetti: Marchetti’s constant, Clayton Christensen, cleantech, cognitive dissonance, commoditize, conceptual framework, credit crunch, David Brooks, David Ricardo: comparative advantage, Deng Xiaoping, deskilling, digital map, edge city, Edward Glaeser, failed state, food miles, Ford paid five dollars a day, Frank Gehry, fudge factor, full employment, future of work, Geoffrey West, Santa Fe Institute, George Gilder, global supply chain, global village, gravity well, Haber-Bosch Process, Hernando de Soto, hive mind, if you build it, they will come, illegal immigration, inflight wifi, intangible asset, interchangeable parts, Intergovernmental Panel on Climate Change (IPCC), intermodal, invention of the telephone, inventory management, invisible hand, Jane Jacobs, Jeff Bezos, Kangaroo Route, knowledge worker, kremlinology, labour mobility, Marchetti’s constant, Marshall McLuhan, Masdar, mass immigration, McMansion, megacity, Menlo Park, microcredit, Network effects, New Economic Geography, new economy, New Urbanism, oil shale / tar sands, oil shock, peak oil, Pearl River Delta, Peter Thiel, pets.com, pink-collar, pre–internet, RFID, Richard Florida, Ronald Coase, Ronald Reagan, Rubik’s Cube, savings glut, Seaside, Florida, Shenzhen was a fishing village, Silicon Valley, Silicon Valley startup, Skype, smart cities, smart grid, South China Sea, South Sea Bubble, sovereign wealth fund, special economic zone, spice trade, spinning jenny, stem cell, Steve Jobs, supply-chain management, sustainable-tourism, telepresence, the built environment, The Chicago School, The Death and Life of Great American Cities, The Nature of the Firm, thinkpad, Thomas L Friedman, Thomas Malthus, Tony Hsieh, trade route, transcontinental railway, transit-oriented development, traveling salesman, trickle-down economics, upwardly mobile, urban planning, urban renewal, urban sprawl, walkable city, white flight, white picket fence, Yogi Berra, zero-sum game
When Zappos opened in 1999, it relied on the long tail to find its customers—women wearing a size thirteen, for instance—who were frustrated by the selection at shoe stores. Zappos made its mark early by always being in stock. I once called Converse about a pair of Jack Purcells. “We’re out,” the operator said, “but you might want to try Zappos.” Since then, Zappos has rebranded itself around customer service, which it has elevated to an almost saintly ideal. It famously pays new employees to quit—as much as $2,000—if they are insufficiently committed to the cause. The ones who stick it out receive free, comprehensive health insurance and full indoctrination into a cult. The first item on Zappos’ list of core values is “Deliver ‘wow’ through service,” and the last is “Be humble.” In between is “Build open and honest relationships with communication.” Tony Hsieh, its CEO, has taken this to heart, Facebooking and Twittering constantly to a half-million followers.
Which is why it offers free, unlimited returns. Zappos wants you to treat your living room as the store, trying on as many pairs in as many colors and sizes as you like, guilt-free, before sending back what you don’t keep. Customers love it. In the first half of 2009—dark days for retailing— buyers of fashion footwear spent almost 20 percent more online than they had the previous year, while sales at brick-and-mortar stores fell 11 percent. “In the long term,” Tony Hsieh told me, “we want our brand to be about the best service. And we deliver the best brand experience with overnight delivery and free returns. We just happened to start with shoes the same way Amazon just happened to start with books.” In the short term it’s worked, albeit too well. Zappos’ best customers also have the most returns. In 2008, Zappos surpassed $1 billion in gross sales for the first time, a year ahead of schedule.
In chronological order, they are to tell the Zappos database what it is and where it is in the warehouse, to confirm it’s been picked for an order, and to double-check which order it’s been assigned to. No one could find my Jack Purcells without them, because no one else knows how. There is no Dewey decimal system. Arriving inventory is simply dropped in the next available space (increasingly by robot) and stocked randomly on the shelves. Its location is noted by Zappos’ omniscient inventory system, named Genghis, and forgotten by everyone else. Random pick, as it’s called, has been used off and on for twenty years. It was already installed at Zappos when Adkins arrived from a competing retailer still struggling to pinpoint the most logical approach. How did Tony Hsieh figure it out? By imagining his warehouse as Genghis would—as if it were a giant computer.
Groundswell: Winning in a World Transformed by Social Technologies by Charlene Li, Josh Bernoff
business process, call centre, centre right, citizen journalism, crowdsourcing, demand response, Donald Trump, estate planning, Firefox, John Markoff, knowledge worker, Silicon Valley, skunkworks, Tony Hsieh
This demonstrates an incredible amount of trust in both its employees and its customers, but it also makes it clear to anyone considering buying from Zappos that the company’s commitment to service is real, as reflected in the groundswell. Zappos CEO Tony Hsieh, tweeting at @zappos, has gathered 1.7 million followers by behaving just as he expects his employees to behave.3 supporting with twitter We’ve already seen that people who use Twitter are influential. As a result, more and more companies are using Twitter to do support. If you create a Twitter account for your company, people will expect you to respond when they tweet their questions and problems to you. And even if you’re not there, that certainly doesn’t stop people from speaking about you on Twitter. AT&T’s management noticed that the company was a Twitter trending topic—a topic highlighted by Twitter for its popularity—from time to time, and not for reasons the company preferred: many of the tweets were about wireless service problems and its tie-up with the Apple iPhone.
The blog “all.things.fadra” by Fadra Nally is visible at http://allthingsfadra.com. To see her tweets, go to http://www.twitter.com/allthingsfadra. 2. doing “twelve hours in a city.” The blog “Twelve Hours in a City” by Clark Dever and Joe Dinardo is visible at http://www.twelvehoursinacity.com. 3. behaving just as his he expects his employees to behave. Tony Hsieh has made a career out of being Tony Hsieh. As of this writing, he has over 1.7 million followers at http://www.twitter.com/zappos. He’s also written a number-one best-selling book, Delivering Happiness (Business Plus, 2010). The Web site for the book is http://www.deliveringhappinessbook.com. 4. customer service and sales staff to respond to Twitter requests, as we describe in Empowered. Empowered, the follow-on book from Forrester Research to Groundswell, explains how to manage your company in the era of the empowered consumer.
That got Clark and Joe (and Dunkin’) featured on ABC News. When it comes to energizing, though, one company stands out. Zappos, the online shoe retailer that is now a division of Amazon, encourages all its employees to use Twitter. Since Zappos has built its reputation on an over-the-top level of service, listening and responding on Twitter make natural sense (and the company would most likely agree that it uses Twitter mostly for a supporting objective, rather than an energizing objective). But highlighting this support activity is also an objective, which is why Zappos collects all the Twitter mentions of Zappos and posts them publicly on its Web site at http://twitter.zappos.com, along with the list of all tweeting employees and all of their tweets. This demonstrates an incredible amount of trust in both its employees and its customers, but it also makes it clear to anyone considering buying from Zappos that the company’s commitment to service is real, as reflected in the groundswell.
Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else by Chrystia Freeland
activist fund / activist shareholder / activist investor, Albert Einstein, algorithmic trading, assortative mating, banking crisis, barriers to entry, Basel III, battle of ideas, Bernie Madoff, Big bang: deregulation of the City of London, Black Swan, Branko Milanovic, Bretton Woods, BRICs, business climate, call centre, carried interest, Cass Sunstein, Clayton Christensen, collapse of Lehman Brothers, commoditize, conceptual framework, corporate governance, creative destruction, credit crunch, Credit Default Swap, crony capitalism, Deng Xiaoping, don't be evil, double helix, energy security, estate planning, experimental subject, financial deregulation, financial innovation, Flash crash, Frank Gehry, Gini coefficient, global village, Goldman Sachs: Vampire Squid, Gordon Gekko, Guggenheim Bilbao, haute couture, high net worth, income inequality, invention of the steam engine, job automation, John Markoff, joint-stock company, Joseph Schumpeter, knowledge economy, knowledge worker, liberation theology, light touch regulation, linear programming, London Whale, low skilled workers, manufacturing employment, Mark Zuckerberg, Martin Wolf, Mikhail Gorbachev, Moneyball by Michael Lewis explains big data, NetJets, new economy, Occupy movement, open economy, Peter Thiel, place-making, Plutocrats, plutocrats, Plutonomy: Buying Luxury, Explaining Global Imbalances, postindustrial economy, Potemkin village, profit motive, purchasing power parity, race to the bottom, rent-seeking, Rod Stewart played at Stephen Schwarzman birthday party, Ronald Reagan, self-driving car, short selling, Silicon Valley, Silicon Valley startup, Simon Kuznets, Solar eclipse in 1919, sovereign wealth fund, stem cell, Steve Jobs, the new new thing, The Spirit Level, The Wealth of Nations by Adam Smith, Tony Hsieh, too big to fail, trade route, trickle-down economics, Tyler Cowen: Great Stagnation, wage slave, Washington Consensus, winner-take-all economy, zero-sum game
—Adam Smith, The Theory of Moral Sentiments DELIVERING HAPPINESS If you ever have to work at a call center, make sure it is Zappos. The online retailer has built a business around the idea of, as founder Tony Hsieh put it in his bestselling advice book cum autobiography, Delivering Happiness, the unlikely premise that buying and selling stuff over the phone can be an emotionally nurturing experience for both parties. In pursuit of that goal, Zappos has created a corporate culture so widely admired that the online shoe seller now has a business sideline teaching others how to operate the Zappos way—for $5,000 and two days of your time, you and your top team can be trained on how to bring the Zappos culture back to your own cubicles. A cheaper option is to take one of the free company tours Zappos offers to anyone who wants one, including complimentary pickup and return on a bus driven by one of the characteristically upbeat members of what they call “the Zappos family.”
But the most potent currency at this and comparable gatherings is neither fame nor money. Rather, it’s what author Michael Lewis has dubbed “the new new thing”—the insight or algorithm or technology with the potential to change the world. Hence the presence of three Nobel laureates, including Daniel Kahneman, a pioneer in behavioral economics. One of the business stars in attendance was then thirty-six-year-old entrepreneur Tony Hsieh, who had sold his Zappos online shoe retailer to Amazon for more than a billion dollars the previous summer. And the most popular session of all was the one in which Google showed off some of its new inventions, including the Nexus phone. This geeky enthusiasm for innovation and ideas is evident at more intimate gatherings of the global elite as well. Take the elegant Manhattan dinner parties hosted by Marie-Josée Kravis, the economist wife of private equity billionaire Henry Kravis in their elegant Upper East Side apartment.
The mood is part self-improvement seminar—the bookshelf is heavy on the works of Jim Collins and Clay Christensen—part wacky college dorm, and part low-rent version of luxe Silicon Valley firms like Google and Facebook. Zappos, too, has free food and a concierge desk for employees, but neither is quite up to the swish standards of the Valley. When we meet for lunch at a steakhouse a five-minute drive away (this is one of those neighborhoods without sidewalks), Hsieh tells me he moved Zappos from San Francisco to Las Vegas because the city has “a call center population” and a twenty-four/seven culture. That’s a nice way of saying this is a place where you can find the lower-skilled, lower-paid workers you need for customer service. Within that universe, though, Zappos really does deliver on its promise of being “free from boring work environments, go-nowhere jobs, and typical corporate America!” Our tour guide—he proudly informs us that you need to know two hundred things about Zappos to be a certified host—says, “I was working at a call center that was kind of the opposite of this—kind of a sweatshop” before joining two and a half years earlier.
As an introvert, you know: The truth isn’t out there. It’s in you! Company Culture and Values: Not Just for the Big Guys If you’re a solopreneur, chances are you’ve not given a lot of thought to your company culture. And if you have employees, you’ve probably noticed a particular culture developing, and it may or may not be intentional. In reading the enlightening corporate history of Zappos, Delivering Happiness by introverted CEO Tony Hsieh, I was reminded that the concept of culture is highly relevant, whether you are a company of one or one thousand. It’s the place where values, truth, and purpose come together. According to Hsieh, your culture is your brand. They are two sides of the same coin. We all recognize the importance of our brand; have we paid equal attention to our culture? Because culture and brand are on the same coin, alignment is the key to making sure your business cultivates and sustains strong value.
Rather than seeing introversion as a liability (as most of society treats it), this book provides a road map for entrepreneurs who want to cultivate and amplify their natural, internal strengths. What many people, including introverts themselves, may not know is that the strengths and traits of the typical introvert—curiosity, desire for depth over breadth, comfort with going solo, thoroughness and introspection, love of research—lend themselves well to entrepreneurship. Introvert entrepreneurs such as Bill Gates, Larry Page, Mark Zuckerberg, Jeff Bezos, Tony Hsieh, Guy Kawasaki, and others have transformed our lives not by pretending to be extroverts but by applying their introvert strengths to their entrepreneurial endeavors. • • • An introvert trying to be a fake extrovert is just that: a fake extrovert. If you choose to approach your business with that mindset, you won’t solve your problem. You’ll only feed the energetic tug-of-war between your private and public personas.
(Palo Alto, CA: Consulting Psychologists Press, 1998). 2. Fear, Doubt, and Other Icky Stuff 1. Webster’s New World Telecom Dictionary copyright © 2010 by Wiley Publishing Inc., Indianapolis, IN. Used by arrangement with John Wiley & Sons Inc. 3. Finding Your Voice 1. William Deresiewicz, “Solitude and Leadership,” American Scholar essays, March 1, 2010, theamericanscholar.org/solitude-and-leadership. 2. Tony Hsieh, Delivering Happiness: A Path to Profits, Passion and Purpose (New York: Business Plus, 2010). 3. Anahad O’Connor, “The Claim: A Fake Smile Can Be Bad for Your Health,” New York Times, February 21, 2011. 5. “But I’m Not a Salesperson!” 1. Simon Sinek, Simon Sinek: How Great Leaders Inspire Action, TEDxPugetSound, video recorded September 2009, ted.com/talks/simon_sinek_how_great_leaders_inspire_action. 2.
America, You Sexy Bitch: A Love Letter to Freedom by Meghan McCain, Michael Black
Affordable Care Act / Obamacare, carbon footprint, Columbine, fear of failure, feminist movement, glass ceiling, income inequality, obamacare, Ronald Reagan, Silicon Valley, Tony Hsieh, too big to fail, white picket fence
For the record, I have no affiliation with Zappos other than as a customer. On top of that, Zappos CEO Tony Hsieh has established a substantial cult following as a result of the wild success of Zappos and its somewhat unorthodox business environment; or depending on your perspective, the working environment all other working environments should follow and replicate. Zappos made Fortune magazine’s annual Best Companies to Work For list and it grosses over a billion dollars in sales annually. In fact Tony Hsieh’s book, Delivering Happiness: A Path to Profits, Passion, and Purpose, has been an overwhelming success, spending twenty-seven weeks on the New York Times bestseller list. His latest venture is to rejuvenate downtown Las Vegas, where they are preparing to move their headquarters to the city hall building, which was slated to become a homeless shelter until Hsieh stepped in.
Meghan: One of the main things I want to do with Michael while we’re in Vegas is tour the Zappos headquarters. I am a frequent user of the Zappos website to buy shoes and sometimes clothes. Although that is what I use Zappos to shop for, you can find a huge variety of things to purchase on the site that extend past shoes and jeans. Everything the Zappos company touts itself to be is true. My shipments come when they are supposed to, it is easy to print out a return slip from their website, and the customer service is amazing, probably the best I’ve ever encountered. Everything is simple and easy, and the people I have talked to about an order seemed happy to help me. As weird as it sounds, it is really refreshing to do business with a company that seems to truly believe in customer service. For the record, I have no affiliation with Zappos other than as a customer.
Some say he is trying to create a new Silicon Valley right in the center of town. I say, more power to him. Michael: I have never ordered anything from Zappos and do not know anything about them as a company, but Meghan is excited to tour the company because apparently people come from all over the world to observe their amazing corporate culture. In my experience the words “corporate” and “culture” do not coexist well together, sort of like “chocolate” and “martini.” People often put the two together, but why? What’s so special about Zappos that people are freaking out about the company and wanting to emulate its success? As it turns out: construction paper and tambourines. The Zappos corporate culture can basically be boiled down to “adult day camp.” Everything about the place is FUN! The popcorn machine in the lobby: FUN!
Joyce, “What 80% of Employers Do Before Inviting You for an Interview,” Huffington Post (March 1, 2014), http://www.huffingtonpost.com/susan-p-joyce/job-search-tips_b_4834361.html. Chapter 2 1. Jules Pieri, “Happiness Equals Reality Minus Expectations,” Inc. (November 21, 2013), http://www.inc.com/jules-pieri/happiness-equals-reality-minus-expectations.html. Investment 1 1. Will Wei, “Tony Hsieh: Bad Hires Have Cost Zappos Over $100 Million,” Business Insider (October 25, 2010), http://www.businessinsider.com/tony-hsieh-making-the-right-hires-2010-10. Chapter 3 1. Michael Pantalon, Instant Influence: How to Get Anyone to Do Anything—Fast (New York: Little, Brown and Company, 2011), Kindle Edition. 2. Patricia Ann Wade, “Do Students Learn Better by Typing on a Keyboard or Writing with a Pen?” Indiana School of Medicine Newsletter (April 4, 2013), http://msa.medicine.iu.edu/msa-newsletters/20130404/typing-or-writing.
Investment 1: Relationships I get by with a little help from my friends. —THE BEATLES I once worked for a company that paid employees $250 if someone they recommended got hired and stayed longer than ninety days. They paid $2,000 if the person referred was that mythical creature known as a “developer.” They did this because $2,000 was a small amount of money to pay for the right person. The wrong person is always more expensive, which is why Tony Hsieh, the CEO of Zappos, once estimated his bad hires have cost his company “well over $100 million.”1 Finding good people is difficult, and companies know that the fastest, cheapest way is often via a relationship. Long before the term “hacking” was popular, the original way to hack a job search was to know someone. “It’s not what you know, but who you know” might feel cliché but it’s still true. Relationships get you the first gig.
3D printing, Airbnb, Atul Gawande, barriers to entry, big-box store, business process, call centre, carbon footprint, citizen journalism, commoditize, corporate social responsibility, crowdsourcing, disintermediation, Elon Musk, Firefox, glass ceiling, greed is good, housing crisis, informal economy, Jane Jacobs, jimmy wales, Khan Academy, Kickstarter, Lean Startup, means of production, new economy, pattern recognition, Peter Singer: altruism, Peter Thiel, QR code, Ray Oldenburg, remote working, Richard Feynman, Ronald Reagan, selection bias, sharing economy, Silicon Valley, Silicon Valley startup, Steve Jobs, TaskRabbit, Tony Hsieh, too big to fail, underbanked, women in the workforce, young professional, Zipcar
Finally, they avoid all deadlines and structured meetings. He reports it has worked remarkably well. “The team is ruthlessly focused on the right things with a fraction of the input.” Admittedly, they are a small company of what Evan describes as “incredibly well-rounded individuals”. But in spite of its small-scale experiment, it is inspiring others like Debbie at Mozilla, and more recently Tony Hsieh at Zappos, to push the limits of what work can and should be. Debbie and the Mozilla team are at the forefront of the Purpose Economy and wrestling with some of the new challenges that come with it. For example, the non-engineering team members tend to be less purpose-driven. If you are working in accounting, how do you still feel like a strong part of the community? How do you design the culture where accountants can share the passion?
Jonathan Guryan, Dr. Erik Hurst, Bob Epstein and Nicole Lederer, Ryan Gravel, Cathy Woolard, Tom Cousins, Ben Cohen and Jerry Greenfield, Craig Jelinek, Bernie Glassman, Juliet Ellis, Freelancers Union, Paul Rice, Charles Montgomery, Jacob Wood & William McNulty, Jennifer Pahlka, Melinda Gates, Jeffrey Stewart, Indra Nooyi, Ryan Howard, Dr. Risa Lavizzo-Mourey, Steve Ells, Ray Oldenburg, Vivek Kundra, Tony Hsieh, Brian Chesky, Joe Gebbia and Nathan Blecharczyk, John Tolva, Rob Spiro and Alon Salant, Yancey Strickler, Charles Adler, Perry Chen, Meg Garlinghouse, Mitchell Baker, Dr. Tom X. Lee, Elon Musk, Peter Koechley & Eli Pariser, David Payne and Michael Tavani, Michael Bloomberg, Rachel Kleinfeld, John Mackey, Michael Pollan, Brad Neuberg, Chris Anderson, David Edinger, Scotty Martin, Dr. Regina Benjamin, Frank Perez, Al Gore, Zack Exley and Judith Freeman, Ben Goldhirsh, Adam Grant, David Javerbaum, Dr.
Happiness is, at any rate, generally quite fleeting; it is really a mood rather than a state of being. Well-being, by contrast, is a more enduring condition. Vital to its attainment, Seligman argues, are five core components: positive emotion, engagement, relationships, meaning, and accomplishment.18 But well-being isn’t just good for people; it’s good for business. 21st-century-born organizations like Zappos and Etsy are making investments in measuring and maximizing the well-being of their employees, levering the emerging research of pioneers like Seligman. Matt Stinchcomb, Etsy’s Vice President of Values and Impact, partnered with the University of Pennsylvania’s Center for Positive Psychology to launch a company-wide study of employee well-being. The team leveraged the PERMA measurement framework—a self-assessment tool developed by Dr.
The Start-Up of You by Reid Hoffman
Airbnb, Andy Kessler, Black Swan, business intelligence, Cal Newport, Clayton Christensen, commoditize, David Brooks, Donald Trump, en.wikipedia.org, fear of failure, follow your passion, future of work, game design, Jeff Bezos, job automation, late fees, Marc Andreessen, Mark Zuckerberg, Menlo Park, out of africa, Paul Graham, Peter Thiel, recommendation engine, Richard Bolles, risk tolerance, rolodex, shareholder value, side project, Silicon Valley, Silicon Valley startup, social web, Steve Jobs, Steve Wozniak, Tony Hsieh, transaction costs
Zappos’ 1-800 number, on the other hand, is displayed “proudly,” in CEO Tony Hsieh’s words, on every single page of its website. Moreover, local employees working at corporate headquarters in Nevada answer every call. There are no scripts and no time limits on such calls—virtually unheard of in an age of quota-driven, outsourced customer service centers. Zappos massively differentiated itself from its competition by building a culture that is customer-centric in every way imaginable. This is what has made Zappos a trusted destination for millions of loyal online shoppers (and it’s also why it was acquired by Amazon for close to a billion dollars). Yes, you are different from an online shoe store. But you are selling your brainpower, your skills, your energy. And you are doing so in the face of massive competition. Possible employers, partners, investors, and other people with power choose between you and someone who looks like you.
They are able to finish the sentence, “Our customers buy from us and not that other company because …” Zappos.com, the online shoe retailer founded in 1999, has a clear answer to that question: insanely good customer service. While other online shoe stores like shoebuy and onlineshoes.com offered 30-day return windows, Zappos made a name for itself by being the first to offer a 365-day return policy on everything they sold. While retailers like L.L. Bean and J. Crew expected customers to pick up the shipping costs each time they returned something from an online order, Zappos offered free shipping on all returns, no questions asked. And even when giants like The Gap mimicked the free shipping and free returns offer in their online shoe store, they buried a customer service phone number in small print at the bottom of the page. Zappos’ 1-800 number, on the other hand, is displayed “proudly,” in CEO Tony Hsieh’s words, on every single page of its website.
If you want to chart a course that differentiates you from other professionals in the marketplace, the first step is being able to complete the sentence, “A company hires me over other professionals because …” How are you first, only, faster, better, or cheaper than other people who want to do what you’re doing in the world? What are you offering that’s hard to come by? What are you offering that’s both rare and valuable? You don’t need to be better or faster or cheaper than everyone. Companies, after all, don’t compete in every product category or offer every conceivable service. Zappos focuses on mainstream shoes and clothes. If it tried to offer over-the-top customer service on a range of high-end luxury products, it couldn’t be the place for quality shoes delivered with terrific service, because its focus would be diluted and its differentiation eroded. In life, there are multiple gold medals. If you try to be the best at everything and better than everyone (that is, if you believe success means ascending one global, mega leaderboard), you’ll be the best at nothing and better than no one.
Drive: The Surprising Truth About What Motivates Us by Daniel H. Pink
affirmative action, call centre, Daniel Kahneman / Amos Tversky, Dean Kamen, deliberate practice, Firefox, Frederick Winslow Taylor, functional fixedness, game design, George Akerlof, Isaac Newton, Jean Tirole, job satisfaction, knowledge worker, performance metric, profit maximization, profit motive, Results Only Work Environment, side project, the built environment, Tony Hsieh, transaction costs, zero-sum game
In some call centers the annual turnover rate exceeds 100 percent, meaning that, on average, none of the people working there today will be there a year from now. Tony Hsieh, founder of the online shoe retailer (now part of ), thought there was a better way to recruit, prepare, and challenge such employees. So new hires at Zappos go through a week of training. Then, at the end of those seven days, Hsieh makes them an offer. If they feel Zappos isn't for them and want to leave, he'll pay them $2,000 no hard feelings. Hsieh is hacking the Motivation 2.0 operating system like a brilliant and benevolent teenage computer whiz. He's using an if-then reward not to motivate people to perform better, but to weed out those who aren't fit for a Motivation 3.0-style workplace. The people who remain receive decent pay, and just as important, they have autonomy over technique. Zappos doesn't monitor its customer service employees' call times or require them to use scripts.
Zappos doesn't monitor its customer service employees' call times or require them to use scripts. The reps handle calls the way they want. Their job is to serve the customer well; how they do it is up to them. The results of this emphasis on autonomy over technique? Turnover at Zappos is minimal. And although it's still young, Zappos consistently ranks as one of the best companies for customer service in the United States ahead of better-known names like Cadillac, BMW, and Apple and roughly equal to ritzy brands like Jaguar and the Ritz-Carlton. Not bad for a shoe company based in the Nevada desert. What Zappos is doing is part of a small but growing move to restore some measure of individual freedom in jobs usually known for the lack of it. For instance, while many enterprises are offshoring work to low-cost providers overseas, some companies are reversing the trend by beginning what's known as homeshoring.
If we pluck people out of controlling environments, when they've known nothing else, and plop them in a ROWE or an environment of undiluted autonomy, they'll struggle. Organizations must provide, as Richard Ryan puts it, scaffolding to help every employee find his footing to make the transition. What's more, different individuals will prize different aspects of autonomy. Some might crave autonomy over a task; others might prefer autonomy over the team. As Zappos CEO Hsieh told me by e-mail, Studies have shown that perceived control is an important component of one's happiness. However, what people feel like they want control over really varies, so I don't think there's one aspect of autonomy that's universally the most important. Different individuals have different desires, so the best strategy for an employer would be to figure out what's important to each individual employee.
The Metropolitan Revolution: How Cities and Metros Are Fixing Our Broken Politics and Fragile Economy by Bruce Katz, Jennifer Bradley
3D printing, additive manufacturing, Affordable Care Act / Obamacare, British Empire, business climate, carbon footprint, clean water, cleantech, collapse of Lehman Brothers, deindustrialization, demographic transition, desegregation, double entry bookkeeping, edge city, Edward Glaeser, global supply chain, immigration reform, income inequality, industrial cluster, intermodal, Jane Jacobs, jitney, Kickstarter, knowledge economy, lone genius, Mark Zuckerberg, Masdar, megacity, Menlo Park, Moneyball by Michael Lewis explains big data, Network effects, new economy, New Urbanism, Occupy movement, place-making, postindustrial economy, purchasing power parity, race to the bottom, Richard Florida, Shenzhen was a fishing village, Silicon Valley, smart cities, smart grid, sovereign wealth fund, the built environment, The Death and Life of Great American Cities, the market place, The Spirit Level, Tony Hsieh, too big to fail, trade route, transit-oriented development, urban planning, white flight
These offices have open floor plans that can be easily reconfigured to create dense, collaborative spaces for new teams and projects.18 The line between private and public spaces is now blurred. When Zappos, the online retail giant that grew to scale in suburban Las Vegas, was looking for new headquarters in 2010, the company’s CEO Tony Hsieh decided to create a denser workplace to increase interaction and collaboration. For Hsieh, that meant not only providing open floor plans and amenities within the office but also embedding the new headquarters (and 2,000 Zappos workers) downtown, in Las Vegas’s Fremont East neighborhood in the city’s old city hall. Hsieh is pairing the move with 06-2151-2 ch6.indd 119 5/20/13 6:53 PM 120 THE RISE OF INNOVATION DISTRICTS a new private investment fund (separate from Zappos) called the Downtown Project to build a dense, multiuse and walkable environment; the strategies include luring new start-ups close to the headquarters and creating more housing and co-working spaces in the district.
Henry Chesbrough, “The Era of Open Innovation,” MIT Sloan Management Review, April 15, 2003. 17. Peter Hall, Cities in Civilization: Culture, Innovation, and Urban Order (London: Phoenix Giant, 1999). 18. Owen Washburn, senior policy analyst at Brookings Metropolitan Policy Program, personal communication with Randy Howder, senior associate and workplace strategist at Gensler, February 20, 2013. 19. Quoted in Leigh Gallagher, “Tony Hsieh’s New $350 Million Startup,” Fortune, January 23, 2012. 20. Arthur C. Nelson, Reshaping Metropolitan America: Development Trends and Opportunities to 2030 (Washington: Island Press, 2013), p. 49. 21. Paul Taylor and others, “Barely Half of U.S. Adults Are Married—A Record Low” (Washington: Pew Research Center, 2011), p. 2. 22. Alan Berube and others, “State of Metropolitan America: On the Front Lines of Demographic Transformation” (Brookings, 2010), p. 93. 23.
The Upstarts: How Uber, Airbnb, and the Killer Companies of the New Silicon Valley Are Changing the World by Brad Stone
Affordable Care Act / Obamacare, Airbnb, AltaVista, Amazon Web Services, Andy Kessler, autonomous vehicles, Burning Man, call centre, Chuck Templeton: OpenTable, collaborative consumption, East Village, fixed income, Google X / Alphabet X, housing crisis, inflight wifi, Jeff Bezos, Justin.tv, Kickstarter, Lyft, Marc Andreessen, Mark Zuckerberg, Menlo Park, Necker cube, obamacare, Paul Graham, peer-to-peer, Peter Thiel, race to the bottom, rent control, ride hailing / ride sharing, Ruby on Rails, Sand Hill Road, self-driving car, semantic web, sharing economy, side project, Silicon Valley, Silicon Valley startup, Skype, South of Market, San Francisco, Startup school, Steve Jobs, TaskRabbit, Tony Hsieh, transportation-network company, Uber and Lyft, Uber for X, Y Combinator, Y2K, Zipcar
The founders realized they had to make customer service a priority. McAdoo suggested they take a few lessons from another Sequoia company, the shoe retailer Zappos, an unconventional e-commerce player that had originally focused solely on shoes and that had won customers’ loyalties with free shipping and by accepting returns with no questions asked. When he spoke to the founders a few days later, they had already taken his advice and been to the Zappos headquarters in Las Vegas; they’d toured the company’s tchotchke-lined offices, where employees stood in unison to warmly cheer guests, and met CEO Tony Hsieh and his COO, future Airbnb board member Alfred Lin. Amazon had acquired Zappos in June 2009, but its slightly madcap vibe remained intact. Around this time, Airbnb returned to Sand Hill Road, the seat of the venture capital industry, to raise more money.
If the individual was energized by the opportunity and likable, Jung sent him or her to San Francisco, where Chesky had the final say. Airbnb furnished each new manager with a set of online tools to monitor the health of the business and with something Chesky called an “office in a box.” It contained a guidebook to setting up an Airbnb-like working environment and included various props, like a portable Ping-Pong table and the books Delivering Happiness by Zappos founder Tony Hsieh and Oh, the Places You’ll Go by Dr. Seuss. “Brian was always worried about how do we scale our culture—how does every Airbnb office feel?” says Dubost, who joined Airbnb’s business travel team and left the company in 2016. Some of the new regional managers modeled themselves after Chesky. In Moscow, Jung hired Eugen Miropolski, a former Groupon exec, who promptly rented out his home and started living in Airbnbs around town, just as Chesky had done in San Francisco.
Kalanick found a few willing backers there, including Calacanis himself, who for the next ten years would revisit his investment decision on various podcasts, in blogs, and on the Q-and-A website Quora. But as much as they might want to cast their decisions as intuition, most of the early investors would have to bow to that unpredictable Silicon Valley divinity—luck. “It was controversial to invest in the company,” says Alfred Lin, then the chief operating officer at the online shoe retailer Zappos. When Lin heard about the deal, he doubted Uber could ever work back at his home in Las Vegas. He had serious misgivings. “I just thought that founders who are passionate about the idea would run the company,” he says. But he ponied up anyway after trying out the service in San Francisco and deciding he’d rather not be left out. David Cohen, co-founder of the Colorado-based startup school Techstars, got a chance to invest only because of a geographic accident.
The Everything Store: Jeff Bezos and the Age of Amazon by Brad Stone
3D printing, airport security, AltaVista, Amazon Mechanical Turk, Amazon Web Services, bank run, Bernie Madoff, big-box store, Black Swan, book scanning, Brewster Kahle, call centre, centre right, Chuck Templeton: OpenTable, Clayton Christensen, cloud computing, collapse of Lehman Brothers, crowdsourcing, cuban missile crisis, Danny Hillis, Douglas Hofstadter, Elon Musk, facts on the ground, game design, housing crisis, invention of movable type, inventory management, James Dyson, Jeff Bezos, John Markoff, Kevin Kelly, Kodak vs Instagram, late fees, loose coupling, low skilled workers, Maui Hawaii, Menlo Park, Network effects, new economy, optical character recognition, pets.com, Ponzi scheme, quantitative hedge fund, recommendation engine, Renaissance Technologies, RFID, Rodney Brooks, search inside the book, shareholder value, Silicon Valley, Silicon Valley startup, six sigma, skunkworks, Skype, statistical arbitrage, Steve Ballmer, Steve Jobs, Steven Levy, Stewart Brand, Thomas L Friedman, Tony Hsieh, Whole Earth Catalog, why are manhole covers round?, zero-sum game
For Bezos and Amazon, the irresistible temptation was Zappos.com, the online footwear and apparel retailer founded in 1999 by a soft-spoken but unnaturally persistent entrepreneur named Nick Swinmurn. By all measures, Swinmurn’s unlikely idea—to let people buy shoes over the Web without trying them on first—should have drifted off with the other flotsam in the dot-com bust. But after getting turned away from a dozen venture-capital firms, Swinmurn finally solicited an investment from an equally tenacious entrepreneur named Tony Hsieh, the son of Taiwanese immigrants and a seasoned poker player who had sold his first company, LinkExchange, to Microsoft for $250 million in stock. Hsieh and Alfred Lin, a Harvard classmate and former chief financial officer of LinkExchange, placed a tentative $500,000 bet on the startup Zappos via their investment firm Venture Frogs, and Hsieh later joined it as CEO.
But Amazon was walking an almost impossible precarious tightrope, trying to assuage the fears of brand-name companies with industry-standard pricing while also using Endless as a way to undercut Zappos on price. In early 2007, with apparel brands watching closely for any signs of discounting, Amazon added a five-dollar bonus to its free overnight shipping. In other words, a customer was given five dollars just to buy something on the site. It was a clever but transparent ploy, an effort to inflict further pain on Zappos. Employees who worked on Endless say that, naturally, this was Jeff Bezos’s idea. Yet Zappos still continued to grow. Its 2007 gross sales hit $840 million and in 2008 it topped $1 billion. That year, Bezos learned that Zappos was advertising on the bottoms of the plastic bins at airport-security checkpoints. “They are outthinking us!” he snapped at a meeting. But inside Zappos, a big problem had emerged. It had been acquiring inventory with a revolving $100 million line of credit, and the financial crisis, which intensified with the collapse of Lehman Brothers in the fall of 2008, froze the capital markets.
Hsieh brought Nick Swinmurn, Michael Moritz, and Alfred Lin, who had just joined Zappos as chairman and chief operating officer. Playing off Amazon’s famous two-pizza-team culture, the Zappos executives served two pizzas, one with pepperoni and one with jalapeño peppers, from a local restaurant. The meeting was brief and awkward. The Zappos executives suggested potential partnership arrangements, but Bezos politely said he would rather own the whole business. Hsieh replied flatly that he was set on building an independent company. Later, Amazon executives got the impression that Zappos could be acquired for around $500 million, but Bezos, who’d become a chronically frugal acquirer, imagined paying only a fraction of that amount. At this point, the competitive landscape must have looked to Bezos like the chessboards of his youth.
The Compound Effect by Darren Hardy
Let this powerful guide show you how to make better choices, develop better habits, and think better thoughts. Your success is truly in your hands... in this book.” —Jim Cathcart, speaker and author of The Acorn Principle “At Zappos, one of our core values is to Pursue Growth and Learning. In the lobby of our headquarters, we have a giving library where we give away books to employees and visitors that we think will help with their growth, both personally and professionally. I can’t wait to add The Compound Effect to our library.” —Tony Hsieh, author of Delivering Happiness and CEO of Zappos “If there were ever a person who has his finger on the pulse of success, it’s Darren Hardy, publisher and editorial director of SUCCESS magazine. I always look forward to reading what he has to say. He is a great synthesizer of great ideas.”
If You're So Smart, Why Aren't You Happy? by Raj Raghunathan
Broken windows theory, business process, cognitive dissonance, deliberate practice, en.wikipedia.org, epigenetics, fundamental attribution error, job satisfaction, Mahatma Gandhi, market clearing, meta analysis, meta-analysis, new economy, Phillip Zimbardo, placebo effect, science of happiness, Skype, The Fortune at the Bottom of the Pyramid, Thorstein Veblen, Tony Hsieh, working poor, zero-sum game, Zipcar
Another company that serves as an example of trust begetting trustworthiness is Zappos. As Tony Hsieh, CEO of Zappos, notes in his book Delivering Happiness, “We don’t have scripts (for our customer service employees) because we trust our employees to use their best judgment when dealing with each and every customer.” As a result of such trust, Hsieh goes on to note, “escalations to a supervisor” (whereby customers wish to speak to someone higher up at Zappos) were very rare in the company. Trusting customers was also a core element of the Zappos business model. Customers could, after ordering shoes from the store, try them on and return them without spending a single penny. And—get this—the return period at Zappos was (and continues to be) a full year. What did Zappos get in return for trusting employees and customers? Financial success, for one. Zappos was one of the few bright stars in an otherwise bleak landscape after the 2007 financial crisis that sent the world economy into recession.
Zappos was one of the few bright stars in an otherwise bleak landscape after the 2007 financial crisis that sent the world economy into recession. Zappos was eventually bought out by Amazon for an incredible $1.2 billion in 2009. To this day, Zappos continues to be one of the best companies to work for, ranking eighty-sixth in Fortune’s 2014 list. According to Hsieh, Zappos achieved remarkable success not despite trusting its employees and customers, but because of it. Default Distrust Most of us can understand the idea that trusting others will build mutual trust. And yet, we also feel uncomfortable taking the first step to trust others. In a survey I gave to my students on the first day of class, I found that less than 25 percent were willing to trust another student enough to reveal one of their “insecurities” to them.
pg=about. Grameen Bank: For more on Grameen Bank, see www.grameenfoundation.org/. an incredible 98 percent: This statistic is from S. M. Covey, G. Link, and R. R. Merrill, Smart Trust: Creating Prosperity, Energy, and Joy in a Low-Trust World (New York: Simon & Schuster, 2012). Zappos: Information and details about Zappos are from T. Hsieh, Delivering Happiness (New York: Business Plus, 2010), 147. ranking eighty-sixth in Fortune’s 2014 list: Source: http://fortune.com/best-companies/zappos-com-38/. because of our hardwired cynicism: For more on this topic, see I. Bohnet and R. Zeckhauser, “Trust, Risk and Betrayal,” Journal of Economic Behavior & Organization 55(4) (2004): 467–84; C. A. Holt and S. K. Laury, “Risk Aversion and Incentive Effects,” American Economic Review 92(5) (2002): 1644–55; E.
big-box store, clean water, fixed income, follow your passion, if you build it, they will come, index card, informal economy, Kevin Kelly, Kickstarter, knowledge economy, late fees, price anchoring, Ralph Waldo Emerson, side project, Silicon Valley, Skype, Steve Jobs, Tony Hsieh, web application
†Corbett Barr maintains a helpful (and free) set of resources on building traffic at ThinkTraffic.net. ‡John Jantsch wrote a great book called The Referral Engine, which is all about creating a systemized process for encouraging referrals. Highly recommended. §A little-known secret at Zappos is that they do cut people off who abuse the generous return policy. CEO Tony Hsieh explained to me that if a customer blatantly takes advantage of them—returning worn shoes on day 364 of the 365-day return period, for example—they’ll honor the refund once, but they’ll also gently advise that customer not to purchase from Zappos anymore. Fortunately, he also said, most people are honest. INSTRUCTIONS ON CLONING YOURSELF FOR FUN AND PROFIT. “I’m not a businessman; I’m a business, man.” —JAY-Z As business models go, buying a franchise that is based on someone else’s company is usually a bad idea.
Most businesses have boring guarantees: If you don’t like this, you’ll get your money back. But when we buy something, our money isn’t all we’re concerned with. We’re also concerned about time and validation. If I have to return something, will it be a pain in the ass? Make it the opposite of a pain in the ass—some businesses provide a guarantee of 110 percent, ensuring that the burden is on the business to deliver. Zappos famously created free shipping both ways to take away the hesitation about buying shoes without trying them on. A host of competitors had to follow suit.§ ALTERNATIVELY, MAKE A BIG DEAL ABOUT OFFERING NO GUARANTEE. Instead of providing an incredible guarantee, provide no guarantee—and make a big deal about this fact. Note that this strategy usually works better for high-end products. It will likely decrease overall sales but increase the commitment level from those who do purchase.
Curation Nation by Rosenbaum, Steven
Amazon Mechanical Turk, Andrew Keen, barriers to entry, citizen journalism, cognitive dissonance, commoditize, creative destruction, crowdsourcing, disintermediation, en.wikipedia.org, future of journalism, Jason Scott: textfiles.com, means of production, PageRank, pattern recognition, postindustrial economy, pre–internet, Sand Hill Road, Silicon Valley, Skype, social graph, social web, Steve Jobs, Tony Hsieh, Yogi Berra
Those are just 6 of the more than 70 people I interviewed for this book. From corporate leaders like News Corp’s Jonathan Miller to Edelman’s Steve Rubel. From BlogHer’s Lisa Stone to Modem Media’s Jean-Philippe Maheu. There’s a whole new world of content strategists, with Brain Traffic’s Kristina Halvorson leading the charge. And there’s a groundbreaking group of brand marketers and e-tailers like Zappos’ Tony Hsieh and Pepsi’s Bonin Bough. Privacy is emerging as a critical issue in this era of both purposeful and accidental sharing, so Jules Polonetsky from the Future of Privacy Forum and Stanford University’s Lauren Gellman are critically important voices. And then there are the content makers both old and new—some embracing, some struggling with this new era of consumer curation. The team at AOL is thinking hard about content and folks like Michael Silberman at New York Magazine and Renee Jordon at Readers Digest’s Taste of Home are exploring new and exciting ways to mix created, contributed, and curated content.
In time, these curators will bring more utility and order to the social web. In doing so, they will help to add a voice and point of view to organizations and companies that can connect them with customers—creating an entirely new dialogue based on valued content rather than just brand created marketing messages. It’s worth remembering that content isn’t the same thing it used to be. In fact, you may be surprised to know the folks at Zappos, the Web e-commerce site that is legendarily known for its customer service, consider every item they sell on their site content. There’s a team photo on the wall of their Las Vegas headquarters with a caption that reads: “The Content Team, formerly known as Product Information.” Information about shoes, headlines in the New York Times, data about New York City subway arrival times—it’s all content.
The site’s founders think it offers a new way to learn about deals and new products. And knowing your spending habits are being transmitted to a flock of friends might make you think twice before spending $500 on a pair of designer shoes. Kaplan assured the Wall Street Journal that the idea is not quite a creepy as it might sound at first. “You can choose on a vendor-by-vendor basis,” he says. “Like automatically post all my iTunes or Zappos purchases. You can connect a credit card to Blippy. A lot of people connect just one card to Blippy and use a different one if they don’t want it shared. You can also connect without any credit card. You can just connect it to your iTunes account to just show what you’re buying on iTunes.” And if you think there’s danger of sharing too much personal information, Kaplan says there’s more danger in being perceived as lame: “A woman tweeted and said ‘Everyone’s going to know about the vibrator I bought last week!’
The Airbnb Story: How Three Ordinary Guys Disrupted an Industry, Made Billions...and Created Plenty of Controversy by Leigh Gallagher
Airbnb, Amazon Web Services, barriers to entry, Bernie Sanders, cloud computing, crowdsourcing, don't be evil, Donald Trump, East Village, Elon Musk, housing crisis, iterative process, Jeff Bezos, Jony Ive, Justin.tv, Lyft, Marc Andreessen, Mark Zuckerberg, medical residency, Menlo Park, Network effects, Paul Buchheit, Paul Graham, performance metric, Peter Thiel, RFID, Sand Hill Road, Saturday Night Live, sharing economy, side project, Silicon Valley, Silicon Valley startup, South of Market, San Francisco, Startup school, Steve Jobs, TaskRabbit, the payments system, Tony Hsieh, Y Combinator, yield management
Now possessing the ability to access high-level introductions through the Sequoia network—Greg McAdoo had become a close adviser, and they all were having breakfast once or twice a week together at Rocco’s, a neighborhood spot around the corner—Chesky, Gebbia, and Blecharczyk were able to reach out to companies like Zappos, whose culture of friendliness and “zaniness” they particularly admired, as well as Starbucks, Apple, Nike, and others. During one breakfast meeting, they asked McAdoo for an introduction to Zappos CEO Tony Hsieh, whom McAdoo knew since Zappos was a Sequoia portfolio company. McAdoo fired off a quick e-mail introduction as he was on his way to his car, and the next day when he called Chesky was surprised to learn that the founders were already on the ground in Las Vegas, touring Zappos’s headquarters. One thing the founders noticed was that all the companies they admired had a strong mission and a set of defined “core values,” a somewhat overused term for the general principles that guide an organization’s internal conduct as well as its relationship with its customers, shareholders, and other stakeholders.
But now they were entering the big leagues. And they were about to face some big-league problems. A Few “Punches Right in the Face” During the first Internet boom, a trio of brothers in Germany—Marc, Alexander, and Oliver Samwer—started making a living taking the ideas of the most successful U.S. tech start-ups and cloning them abroad. Their Berlin-based venture capital firm had funded the launch of clones of eBay, Zappos, and Amazon. In 2007 they started another firm, Rocket Internet, to apply this same strategy to the new crop of Internet start-ups. Their playbook was always the same: start copycat websites in Europe early, while the originals were still focused primarily on the United States and before they had the bandwidth and capital for overseas expansion; spend lavishly to grow them almost overnight to dominate the market; and then sell the idea back to the original company, which would by that point pay a huge premium to reclaim “ownership” of its own brand overseas.
assortative mating, Atul Gawande, Bernie Madoff, call centre, cognitive dissonance, David Brooks, delayed gratification, Edward Glaeser, epigenetics, Erik Brynjolfsson, estate planning, facts on the ground, game design, happiness index / gross national happiness, indoor plumbing, invisible hand, Mark Zuckerberg, medical residency, Menlo Park, meta analysis, meta-analysis, neurotypical, Occupy movement, old-boy network, place-making, Ponzi scheme, Ralph Waldo Emerson, randomized controlled trial, Ray Oldenburg, Silicon Valley, Skype, Steven Pinker, The Great Good Place, The Wisdom of Crowds, theory of mind, Tony Hsieh, urban planning, Yogi Berra
But if, as an entrepreneur, you wanted your staff to connect with clients to sell them stuff or to come up with creative solutions to their problems, then you’d want them to be in a good—if not a fabulous—mood, which, with any luck, would be contagious. Social contact would facilitate matters at the front end, making staff at all levels feel relaxed and happy about their work. And it would also affect their output as they extended that feeling of magnanimity and connection to clients. Tony Hsieh, co-founder of the online shoe retailer Zappos, discovered this for himself early on. After selling his Internet banner business LinkExchange to Microsoft for $265 million in 1998, he was asked to stay on to help with the transition, a scenario that would net him $40 million. If he left, he’d forfeit 20 percent of that sum. He was twenty-four at the time. “The practice of sticking around but not really doing anything was actually pretty common practice in Silicon Valley in acquisition scenarios.
Roberts and Dunbar, “The Costs of Family and Friends”; Gerald Mollenhorst, “Networks in Context: How Meeting Opportunities Affect Personal Relationships,” unpublished paper, University of Utrecht, 2009); Gerald Mollenhorst, Beate Volker, and Henk Flap, “Social Contexts and Personal Relationships: The Effect of Meeting Opportunities on Similarity for Relationships of Different Strength,” Social Networks 30, no. 1 (2008). 43. William Taylor, “Your Call Should Be Important to Us, But It’s Not,” New York Times, February 26, 2006. 44. Daniel Kahneman et al., “A Survey Method for Characterizing Daily Life Experience: The Day Reconstruction Method,” Science 306, no. 5702 (2004). 45. Kahneman, Thinking Fast and Slow. 46. Tony Hsieh, Delivering Happiness: A Path to Profits, Passion and Purpose (New York: Grand Central, 2010). 47. Alexandra Jacobs, “Happy Feet,” New Yorker, September 14, 2009. 48. Zeynep Ton, “Why ‘Good Jobs’ Are Good for Retailers,” Harvard Business Review 90, no. 1/2 (2012). 49. James Surowiecki, “The More the Merrier,” New Yorker, March 26, 2012. 50. Charles Duhigg, “What Does Your Credit-Card Company Know about You?”
I realized that building stuff and being creative and inventive made me happy. Connecting with a friend and talking through the entire night until the sun rose made me happy. Trick-or-treating in middle school with a group of my closest friends made me happy. Eating a baked potato after a swim meet made me happy.” He concluded that, along with creating something new, social contact was key to his happiness.46 He turned his back on that $8 million and moved to Zappos, which he had helped launch as an investor a year earlier. He couldn’t care less about shoes and cared even less about fashion. “Long term, it’s not even about e-commerce necessarily,” he told the New York Times. “I guess it’s about an experiential brand that’s really about making people happy, or improving their life somehow.” To delight his customers with just the right pair of shoes at just the right time, he created a corporate culture that fostered a gleeful, self-directed, zany social atmosphere among his sales staff, which he hoped would spill over into their connections with clients.
The Self-Made Billionaire Effect: How Extreme Producers Create Massive Value by John Sviokla, Mitch Cohen
Cass Sunstein, Colonization of Mars, corporate raider, Daniel Kahneman / Amos Tversky, Elon Musk, Frederick Winslow Taylor, game design, global supply chain, James Dyson, Jeff Bezos, John Harrison: Longitude, Jony Ive, loss aversion, Mark Zuckerberg, market design, old-boy network, paper trading, RAND corporation, randomized controlled trial, Richard Thaler, risk tolerance, self-driving car, Silicon Valley, smart meter, Steve Ballmer, Steve Jobs, Steve Wozniak, Tony Hsieh, Toyota Production System, young professional
This not only gives organizations an option in a new market, it also serves as another way for you to discover Producers in your organization—those with a long-standing interest in or commitment to an idea or a vector will gravitate to the new venture as a way to learn more and be involved in a way that is real. Mergers and Acquisitions Acquirers are clearly motivated by the desire to acquire resources, positioning in a new market, or the potential for scale. Sometimes, mergers are overtly about the people running the operation and their ability to pursue ideas. The acquisition of Zappos by Amazon is an example of the Producer Jeff Bezos recognizing another Producer in CEO Tony Hsieh, and buying not only the business asset but the skills and vision of its leader. Warren Buffett, in contrast, could be said to be a Producer who has made his billions by acquiring cash flow in established, unchanging Performer industries. And the acquisition of Climate Corporation by the agricultural science firm Monsanto reads to us as an effort by a diversified agrigiant to grow Producer capability in an area with enormous potential.
., 40, 217 Westbeach Surf, 39, 40, 89 Whitman, Meg, 153 Williams College, 43, 68 Wilson, Chip, 38–39, 40, 52, 75, 88–89, 92–93, 217 Windows, 203 Windsor Mountain, 39 Winfrey, Oprah, 4, 36, 162, 198, 217–18 Wonderful Pistachios, 212 Woodall, Martin, 129, 153–54, 185, 201 World Bank, 90, 99, 142, 213 World Economic Forum, 178 World War II, 106, 114, 195, 207 Wozniak, Steve, 134, 148, 150, 155, 207 Wynn, Steve, 130, 131, 218 Wynn Macau, 219 Wynn Resorts, 130 X.com, 211 Xerox, 170 Yahoo, 170, 201 Yale University, 102, 103–4, 106, 216 Yanai, Tadashi, 65–66, 219 Yoovidhya, Chaleo, 8, 210 Yoovidhya, Chalerm, 210 Zappos, 180 Zara, 148 Zuckerberg, Mark, 11, 153, 213, 219 Looking for more? Visit Penguin.com for more about this author and a complete list of their books. Discover your next great read!
8-hour work day, Albert Einstein, barriers to entry, Bernie Madoff, butterfly effect, buy low sell high, California gold rush, Donald Trump, financial independence, high net worth, intangible asset, Mark Zuckerberg, negative equity, passive income, payday loans, self-driving car, Snapchat, Stephen Hawking, Steve Jobs, Tony Hsieh, Y2K
Believe money will come to you in good ways and in great quantities—truly believe it—and once you take action, it will happen! Your perspective is your reality. Perspective is everything. Everything you see will be filtered through your mindset. Your perspective is your reality. If you don't like the way things are, change your mindset…sometimes that's the only thing you can change. Tony Hsieh is a hugely successful entrepreneur and the CEO of Zappos, an online clothing and shoe company. At some point in the company's early days the board sent a marketing executive to India to see what the business opportunities were like there. He came back and said, “It's terrible. No opportunity at all. No one wears shoes there.” A few months later the board sent a different marketing executive there. When he returned the board asked him what the business opportunities were like.
See Undesirable truths Twain, Mark Undesirable truths education failure friendship frugality greed investments jobs money mortgages overview of pensions risk saving time work United States flipping property in higher education in multilevel marketing schemes repossession in Valuation of property Value, vs. cost Value investing Value of money Van Gogh, Vincent Visualization boards Vujicic, Nick Wages Wales, dragon national emblem WamBamBoo.com Warhol, Andy Wealth definition of fear as roadblock to get-rich-quick schemes hard work and monetary wealth vs. moral wealth more money mindset negative people as roadblock to parallel universe perspective rat race trap as roadblock to strategy for building undesirable truths about Wealth Dragons first international tour founding of significance of name top principles of Wealth education Wealth strategy asset building business creation importance of infinite wealth achievement path overview of steps passive income generation See also Property investment Wealthy people, characteristics of Wilde, Oscar Williamson, Marianne Without Risk There’s No Reward (Mayer) Wong, Annika Wong, Vincent auctions Bruce Lee influence celebrity lifestyles daughter’s egg business education failure family background and childhood fear financial abundance financial experts hard work learning curve lease options lotteries luck making commitment to success moral obligation to be wealthy negative people off-plan property investments people skills property investment advantages property investment beginnings property investment deal making tips property investment experiences property investment learning curve rat race trap recessions as opportunity to make money relationship with John Lee taking action unglamorous nature of property investing Wealth Dragon origins wealth journey of Work, finding passion for. See also Hard work Working for yourself Worth, vs. cost Ying Tan Youngman, Henny Zappos Ziglar, Zig Zuckerberg, Mark WILEY END USER LICENSE AGREEMENT Go to www.wiley.com/go/eula to access Wiley’s ebook EULA.
Reinventing Organizations: A Guide to Creating Organizations Inspired by the Next Stage of Human Consciousness by Frederic Laloux, Ken Wilber
Albert Einstein, augmented reality, blue-collar work, Buckminster Fuller, call centre, carbon footprint, conceptual framework, corporate social responsibility, crowdsourcing, failed state, future of work, hiring and firing, index card, interchangeable parts, invisible hand, job satisfaction, Johann Wolfgang von Goethe, Kenneth Rogoff, meta analysis, meta-analysis, pattern recognition, post-industrial society, quantitative trading / quantitative ﬁnance, randomized controlled trial, selection bias, shareholder value, Silicon Valley, the market place, the scientific method, Tony Hsieh, zero-sum game
Whenever the percentage of people taking the check draws too close to zero, Zappos increases the amount (it started with $100, then raised it to $200, and raised it again and again up to its current level). The practice, in essence, boils down to a real-life barometer of the health of the organization’s culture. (Zappos.com is famous for its Green cultural practices described in the bestseller Delivering Happiness, written by CEO Tony Hsieh. The 1,500-employee company is currently making the leap to Holacracy, which will make it the largest holacratic organization to date.) Onboarding The onboarding process in many organizations today is rather basic. People might receive a few brochures about the company’s history, mission statement and values, or there might be a two-hour session where some senior leader talks about these topics. But mostly, the first steps are often mundane: there are papers to sign, a desk and computer to find, and a password to be assigned in order to access the firm’s network.
Some organizations, such as FAVI, make extended use of the trial period for both parties to test whether the match works out. Zappos.com, an online shoe retailer, offers its new hires a $3,000 check if they have second thoughts and choose to quit during the four-week orientation. The idea is that everyone will be better off not staying in a marriage that isn’t meant to be. Three thousand dollars is a lot of money for people working in call centers or moving boxes in fulfillment centers, which is what most Zappos employees do. It’s a tribute to Zappos’ outstanding culture that the percentage of people taking the money and leaving is only around one or two percent. Whenever the percentage of people taking the check draws too close to zero, Zappos increases the amount (it started with $100, then raised it to $200, and raised it again and again up to its current level).
But it’s turned out that the more honest and open and candid we are with what’s going on, the more our customers are wanting to engage with us in our efforts to be a better global citizen.117 I believe we will increasingly witness companies choosing a radical level of honesty when dealing with outside parties that can help their purpose materialize. With fewer ego-fears, there is less need for PR polish, less urge to hide failures. Outsiders can be granted a deep view inside the organization, in all sorts of ways. Clients can participate in workshops to listen in to the purpose; all-hands meetings can be streamed live over the Internet (a regular practice at Zappos.com, for instance); or, like Patagonia, companies can choose to film their key production processes and publish them online. HolacracyOne has developed an intranet-type software called Glassfrog that captures people’s roles and accountabilities, the structure of the organization, meeting notes and metrics. Traditionally this kind of data is deemed sensitive and restricted to employees of the organization.
Without Their Permission: How the 21st Century Will Be Made, Not Managed by Alexis Ohanian
Airbnb, barriers to entry, carbon-based life, cloud computing, crowdsourcing, en.wikipedia.org, Hans Rosling, hiring and firing, Internet Archive, Justin.tv, Kickstarter, Marc Andreessen, Mark Zuckerberg, means of production, Menlo Park, minimum viable product, Occupy movement, Paul Graham, Silicon Valley, Skype, slashdot, social web, software is eating the world, Startup school, Tony Hsieh, unpaid internship, Y Combinator
And it makes a difference. I routinely see people chortling about this online. And that’s just one example of many—not unique to hipmunk but unique to a new generation of companies building products and services that actually give a damn about the end customer. How bad has it gotten? My friend and fellow author Tony Hsieh, who’s also published by Business Plus, wrote a major international bestseller, Delivering Happiness, that essentially boiled down to two points: excellent customer service is vital to Zappos, and it should be vital in your business, too. Think about that. What does it say about the state of business when CEOs everywhere hear that and think, “Wow! That’s a revolutionary idea—we should be treating our customers well!” There’s a huge opportunity here for startups. It’s one more reason why the best time is now to get started—so many incumbents are still figuring this out.
The Education of Millionaires: It's Not What You Think and It's Not Too Late by Michael Ellsberg
affirmative action, Black Swan, Burning Man, corporate governance, creative destruction, financial independence, follow your passion, future of work, hiring and firing, job automation, knowledge worker, Lean Startup, Mark Zuckerberg, means of production, mega-rich, meta analysis, meta-analysis, new economy, Norman Mailer, Peter Thiel, profit motive, race to the bottom, Sand Hill Road, shareholder value, side project, Silicon Valley, Skype, Steve Ballmer, survivorship bias, telemarketer, Tony Hsieh
For three days, they were stopping their lives and meeting amazing other people, doing business together, learning from each other. We made these great friendships,” Elliott said. The trip went so well, in fact, that Elliott decided to do another trip six months later, for sixty young business leaders. Naturally, he found sponsors to pay for that as well. Dustin Moskovitz attended the second gathering, as did Tony Hsieh from Zappos. The trips took on a life of their own, grew and grew. Elliott brought on some friends to help him, Jeremy Schwartz (a Berklee College of Music dropout), Brett Leve, and Jeff Rosenthal, and the gatherings morphed into what is now Summit Series (http://www.summitseries.com), an annual invitation-only gathering of young entrepreneurs, innovators, and thought leaders, which has been called by Forbes “the Davos for Generation Y.”
See Mentors TED (Technology Entertainment and Design) TheFacebook.com Therisetothetop.com Thiel, Peter and Facebook higher education, critique of Thiel Fellowship criticism of elements of Thievery Corporation Third tribe marketing Thrillist TOMS Shoes Tracy, Brian, on money, connection to value Treasure Island Hotel and Casino Turner, Ted Twain, Mark Twitter Value, relationship to money Van Veen, Ricky Vimeo Vlogging Vocational training Wallerstein, Michael, education debt of Weisberg, Jacob, Thiel Fellowship, criticism of Whitehottruth.com Williams, Evan Word of mouth, power of WordPress Work ethic, versus cash-generation ethic Worry, common sources of Zappos Ziglar, Zig Zivity Zuckerberg, Mark as college non-graduate success, evolution of
The Year Without Pants: Wordpress.com and the Future of Work by Scott Berkun
barriers to entry, blue-collar work, Broken windows theory, en.wikipedia.org, Firefox, future of work, Google Hangouts, Jane Jacobs, job satisfaction, Lean Startup, lone genius, Mark Zuckerberg, minimum viable product, remote working, Results Only Work Environment, Richard Stallman, Seaside, Florida, side project, Silicon Valley, six sigma, Skype, stealth mode startup, Steve Jobs, The Death and Life of Great American Cities, the map is not the territory, Tony Hsieh, trade route, zero-sum game
—Joe Belfiore, corporate vice president, Microsoft “Most talk of the future of work is just speculation, but Berkun has actually worked there. The Year Without Pants is a brilliant, honest, and funny insider's story of life at a great company.” —Eric Ries, author, New York Times bestseller The Lean Startup “WordPress.com has discovered a better way to work, and The Year Without Pants allows the reader to learn from the organization's fun and entertaining story.” —Tony Hsieh, author, New York Times bestseller Delivering Happiness, and CEO, Zappos.com, Inc. “The Year Without Pants is a highly unusual business book, full of ideas and lessons for a business of any size, but a truly insightful and entertaining read as well. Scott Berkun's willingness to take us behind the scenes of WordPress.com uncovers some of the tenets of a great company: transparency, teamwork, hard work, talent, and fun, to name a few.
Are You Smart Enough to Work at Google?: Trick Questions, Zen-Like Riddles, Insanely Difficult Puzzles, and Other Devious Interviewing Techniques You ... Know to Get a Job Anywhere in the New Economy by William Poundstone
affirmative action, Albert Einstein, big-box store, Buckminster Fuller, car-free, cloud computing, creative destruction, en.wikipedia.org, full text search, hiring and firing, index card, Isaac Newton, John von Neumann, loss aversion, mental accounting, new economy, Paul Erdős, RAND corporation, random walk, Richard Feynman, Richard Feynman, rolodex, Rubik’s Cube, Silicon Valley, Silicon Valley startup, sorting algorithm, Steve Ballmer, Steve Jobs, The Spirit Level, Tony Hsieh, why are manhole covers round?, William Shockley: the traitorous eight
There is much speculation about how best to answer the “scale of 1 to 10” questions that have become popular lately. For example, Wells Fargo has candidates rate their competitiveness on a 1-to-10 scale. In practice, almost everyone rates himself 8 or higher, and if you want the job, you should avoid false modesty. Online retailer Zappos has a trickier question: “On a scale of 1 to 10, how weird are you?” The preferred answer there is somewhere in the middle, CEO Tony Hsieh explained. A 1 is “probably a little bit too straight-laced for us,” and a 10 “might be too psychotic.” It’s possible to flunk a litmus test without realizing it. According to one recruiter, Nordstrom screens out more than 90 percent of female applicants with a simple three-part test: Is the applicant wearing black? Is she wearing heels?
The Righteous Mind: Why Good People Are Divided by Politics and Religion by Jonathan Haidt
4chan, affirmative action, Black Swan, cognitive bias, illegal immigration, impulse control, income inequality, index card, invisible hand, meta analysis, meta-analysis, Necker cube, out of africa, Peter Singer: altruism, phenotype, Ralph Waldo Emerson, Richard Thaler, Ronald Reagan, social web, stem cell, Steven Pinker, The Spirit Level, theory of mind, Thomas Malthus, Tony Hsieh, ultimatum game
(Revealingly, the colloquial name for MDMA is ecstasy.) When some or all of these ingredients were combined, the result was so deeply appealing that young people began converging by the thousands for all-night dance parties, first in the United Kingdom and then, in the 1990s, throughout the developed world. There’s a description of a rave experience in Tony Hsieh’s autobiography Delivering Happiness. Hsieh (pronounced “Shay”) is the CEO of the online retailer Zappos.com. He made a fortune at the age of twenty-four when he sold his start-up tech company to Microsoft. For the next few years Hsieh wondered what to do with his life. He had a small group of friends who hung out together in San Francisco. The first time Hsieh and his “tribe” (as they called themselves) attended a rave, it flipped his hive switch.
I benefited immensely from their generosity with advice, criticism, and suggested readings on conservatism. Many friends and colleagues gave me advice on one or several chapters. I thank them all: Gerard Alexander, Scott Atran, Simon Baron-Cohen, Paul Bloomfield, Chris Boehm, Rob Boyd, Arthur Brooks, Teddy Downey, Dan Fessler, Mike Gazzaniga, Sarah Estes Graham, Josh Greene, Rebecca Haidt, Henry Haslam, Robert Hogan, Tony Hsieh, Darrell Icenogle, Brad Jones, Rob Kaiser, Doug Kenrick, Judd King, Rob Kurzban, Brian Lowe, Jonathan Moreno, Lesley Newson, Richard Nisbett, Ara Norenzayan, Steve Pinker, David Pizarro, Robert Posacki, N. Sriram, Don Reed, Pete Richerson, Robert Sapolsky, Azim Shariff, Mark Shepp, Richard Shweder, Richard Sosis, Phil Tetlock, Richard Thaler, Mike Tomasello, Steve Vaisey, Nicholas Wade, Will Wilkinson, David Sloan Wilson, Dave Winsborough, Keith Winsten, and Paul Zak.