Achievements
Tony Hsieh became a multimillionaire at the age of 24. He grew his first online advertising company LinkExchange from a side business in his apartment to an ad network that reached over half of the Internet enabled households, and then in 1998, he sold it to Microsoft for $265 million.
Tony joined an online shoe retailer Zappos.com in 2000 as CEO, and under his leadership the company has increased sales from $1.6 million to $597 million in 2006. He has transformed Zappos to a business that holds half the $3 billion market of the online footwear and serves more than 4 million customers.
Career Highlights
Tony Hsieh graduated from Harvard University with a BA in Computer Science. Before finding his entrepreneurial destiny, he served at Oracle as a software engineer. But right the first business of his own – LinkExchange – made him successful, wealthy and famous in the world of Internet projects.
After selling LinkExchange to Microsoft in 1998, Tony co-founded Venture Frogs, an incubator and investment firm that invested in Internet startups. A voice mail from a young entrepreneur Nick Swinmurn brought him to Zappos.com. First Hsieh was about to delete the mail: “Nick left a message saying he wanted to start a company that sold shoes online. I didn't think consumers would buy shoes sight unseen, and Nick didn't have a footwear background. It sounded like the poster child of bad Internet ideas. But right before I hit “Delete”, Nick mentioned the size of the retail shoe market - $40 billion. And the more interesting thing was that 5% was already being done through mail order catalogs. That intrigued me.”
Venture Frogs invested $1 million in Zappos, and Hsieh became its CEO in 2000. After a while Swinmurn moved on, leaving Hsieh at the helm of a company, Tony is still successfully running.
Leadership Experience
As CEO of Zappos Tony Hsieh focuses on continuing growth of the business while maintaining the culture and spirit of a small company. His mantra is: provide great customer service and make the online experience as convenient as possible. Hsieh is a real fan of the excellent customer service. “I'd rather spend money on things that improve the customer experience than on marketing,” he says. To control the entire circle of customer service Hsieh located Zappos’ call center and headquarters in the same place (Las Vegas): “We have to untrain employees' bad habits from previous call centers, where they're trying to be more efficient by minimizing the time they talk to the customer.”
He believes in sharing as much information as possible with vendors, including reposts on sales, inventory, and profitability. “There’s a benefit to having 1,200 pairs of eyes looking at our business trying to help it grow,” Hsieh used to say.
Hiring people Tony Hsieh interviews them for culture fit. And he does not care if they are passionate about shoes, he wants people who are passionate about what Zappos is about - service. Hsieh thinks that the employees need to understand that and be willing to do what it takes to provide actually great service. “If you get the culture right, a lot of the other stuff will take care of itself,” he says.
Top 10 eCommerce Lessons by Tony Hsieh:
- The e-commerce business is built upon repeat customers.
- Word-of-mouth really works online.
- Don’t compete on price.
- Make sure your Website is 100% accurate.
- Centrally locate your distribution.
- Customer service is an investment, not an expense.
- Start small, stay focused.
- Don’t be secretive. Don’t worry about competitors.
- You need to actively manage your company culture.
- Be wary of so-called experts. No one knows your customers better than you.
Background Links
A Shine On Their Shoes, Business Week
How I Did It: Tony Hsieh, CEO, Zappos.com, Inc.com
Shoes Shine, Forbes
Zappos CEO, Tony Hsieh, Shares Top 10 eCommerce Lessons, eCommerce Optimization
