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Tony Hsieh on Empowerment

Zappos CEO finds success by breaking the old-school business rules.
April 10, 2011
URL: http://www.entrepreneur.com/article/219449

Editor's note: 'Trep Talk is a new column with personal insights from the people behind the big ideas.

When it comes to happiness, Tony Hsieh has made it his mission to deliver. As Zappos CEO, he built an online footwear and clothing retailer that has become for some a gold standard for customer service and company culture. Hsieh (pronounced: shay) is also the author of the New York Times best-seller Delivering Happiness, which has its own online community and even a bus tour that's attracted star power with the likes of Ashton Kutcher and Demi Moore.

Hsieh got his entrepreneurial start as co-founder of online advertising company LinkExchange, then sold it to Microsoft for $265 million in 1999. He was 24. After dabbling as an investor in dozens of businesses, Hsieh joined Zappos where he remains -- even though the Las Vegas-based company was acquired by Amazon in a 2009 deal valued at $1.2 billion.

In this interview with 'Trep Talk, Hsieh, now 37, offers insight on chasing the vision, empowering employees, and his own customer-service crush. Edited interview excerpts follow.

On becoming an entrepreneur: My parents were pretty typical of Asian parents. They wanted me to go to school and get a Ph.D. or become a doctor or lawyer. Being an entrepreneur was my way of rebelling. Having the first 30 years of my life planned out didn't set well with me. My mom still wants me to be a doctor.

Biggest surprise as an investor: I felt like I was sitting on the sidelines all the time. I missed being part of building something.

I joined Zappos full time within a year of investing because: It's not just another investment, it's a lifestyle.

What makes me happy: Going into the office, the culture and the people. The relationships we form at Zappos are true friendships. It's pretty special.

Favorite shoes: I used to buy one pair of shoes every two years, wear it until there were holes in it, then buy the same pair again. Now, I have three different styles: running shoes, dress shoes and slippers. That's a 300% improvement. (Laughs.) 

When building a business… Chase the vision not the money. Passion will get you through the tough times, rub off on employees and have a ripple effect on customers, suppliers and business partners.

On the contrarian view: A lot of things in business don't make sense, but people assume you have to do them because that's the way it's always been done. But at Zappos we ask, why or why not? For example, some companies don't allow managers to go out drinking with people who report to them, but we encourage [socializing outside of work] because, in a lot of ways, that's where you develop personal connections. 

Conventional wisdom may consider this risky but… it's about maximizing the benefit to the company, it's not about minimizing legal or human resources risk. Company culture is everything. 

On empowering individuality: A lot of people [act] different on the weekends versus the office. It's like they leave a big part of themselves at home. We encourage our employees to be themselves. We want them to be the same person at home and the office. 

When I meet someone new… I'm inspired to figure out that one thing that they're passionate about, and it gives me a new appreciation for that. 

Three people I wish I could invite to dinner: Ben Franklin, Ray Kurzweil, Thomas Edison. All [three inventors] seemed to think outside the box about the possibilities of the future.

Commitment to customer service: Everyone hired in our Las Vegas headquarters goes through four weeks of customer-service training before they start. We want to hire people who are passionate about customer service, even if they don't work in our call center. We do two sets of interviews. The first is by the hiring manager looking for technical ability and experience. Then, there's a human-resources interview purely for culture fit. People have to pass both to be hired.

Customer-service crush: The West coast burger chain, In-N-Out Burger. Every one I've been to has always been friendly with fast service, and the environment and food are great. 

Company culture tip: Get rid of the people who are bad for the culture -- and let people know that's why. If you get the culture right, then most of the other stuff will happen naturally.

Parting advice: Be true to yourself. If you follow that principle, a lot of decisions are actually pretty easy.