Delivering Happiness – Tony Hsieh

Delivering Happiness – Tony Hsieh

Tony Hsieh’s story is fascinating. On paper he’s built, scaled and sold two very successful companies. In reality, he built a culture and implemented it into his businesses. His business insights are often contrarian and his management strategy is quite peculiar. Hsieh has been covered extensively in the past, but hearing it straight from the source has been most informative (albeit this was written in 2010). In his book, Hsieh shares personal stories about merging passion, business and opportunity to create the ultimate life fulfilling experience.

Building a business should be about building a lifestyle that delivers happiness to customers, employees, founders, investors, and yourself

  • To achieve astronomical success, take risks by going all-in, which will result in skewed success/failure. Tony risked the majority of his $40M savings to bet on an unprofitable business, Zappos.

Simply telling the truth isn’t enough; presentation of the truth is as important.

  • Tony was given detention for ‘stealing’ a lunch card when he never did. Even when you are innocent, ‘I didn’t do it’ is not a persuasive attempt to present the truth.

A passion will deteriorate in the happiness it brings as it becomes more like ‘work’.

  • When Tony and his friend quit Oracle to run a web design business – which at the time they were building on the side – they found they were not as passionate about the ‘work’ when it became their full time jobs. This is why culture is so important to a business, the more the work becomes ‘work’, the less passionate employees become – of course, the opposite is also true, and this is how Tony has built Zappos.

You are in the best negotiating position if you don’t care what the outcome is.

  • Tony was offered $1M to sell LinkExchange. He countered with $2M, thinking that $1M for each partner would satisfy, but growing and scaling a successful business would also be preferable. The offer was ultimately rejected, and they sold LinkExchange to Microsoft for $265M.

Knowing when to quit.

  • When you snooze the alarm clock for the tenth time, for the hundredth day in a row, and still feel like you’ve only slept two hours. Typically, quitting is not something an individual should do on impulse, but if you wake up every day thinking this is not what you would do if this was your last day, you should begin to think about alternatives.

Experiences are more valuable than material possessions.

  • This is Tony’s mantra. Enjoying friends, family and co-workers, exploring the world, building things. All of these are more valuable to Tony than sitting in a cubicle. Realizing he should not be valuing money, Microsoft, and other internal possessions, Tony set out to fully experience and enjoy his passions, which led him to Zappos.

In the beginning growth stages, throw ideas against the wall and see if they stick, then begin to improvise and take action.

  • We often get consumed by analysis paralysis and what-if loops. In the beginning stages of Zappos, every idea was explored and none were outright rejected. In the beginning, there is no clear path to scaling, ideas are vulnerable and time is sensitive. Agility and improvising are key to short-term success, while persistence and direction are key to long-term stability.

The most important decision you can make: Deciding what table to sit at.

  • Now days everyone is afraid of competing against Amazon. With Zappos, Tony knew the only way to succeed was to differentiate. He knew he couldn’t compete with traditional brick-and-mortar stores, so he decided to sit at a different table: first scale a business based on a drop shipping model, then stock a warehouse all while focusing on customer service.

Proximity is essential for maintaining the culture in a tribe.

  • In each of his companies, Tony built a culture that succeeded and failed together. But as his companies grew, his tribe – and culture – deteriorated. Individuals pitted themselves up against each other and decisions became political. He found small teams work best and for individuals to succeed they needed to be close to each other physically and emotionally.

As companies grow, it becomes more important to filter out bad opportunities than to look for new ones.

  • Packard’s Law: a great company is more likely to die of indigestion from too much opportunity than starvation from too little.

Do not outsource your core competency.

  • In Zappos early days they used a third party to maintain their warehouse and explored outsourcing their call centers. When both of those didn’t work, Tony made the decision to run their own warehouse and have every employee participate in customer service, from the CFO to warehouse workers.

Have a little fun, but always be serious.

  • Tony notes, “As it turned out, many of [our] best ideas came about while having drinks at a local bar.”

Build on a company on a competitive advantage. Understand everything else can – and will – be copied.

  • Brand, culture, and the pipeline of talent are Zappos only competitive advantages. In the long-run, everything else can – and will – be copied.

Most changes in a company are driven from the bottom up.

  • While corporate CEOs and Harvard Business School graduates will proclaim change and direction are driven from senior leadership, most change comes from the bottom up. Most modern management has no idea what is happening on the front lines. Corporate America has gone far away from Sam Zemurray-type leadership. While there are always outliers – Steve Jobs and the iPhone, Jeff Bezos and online retail – employees and customers ultimately dictate the direction of a company.

Companies that get in trouble are historically the ones that aren’t able to adapt to change and respond quickly enough.

  • Never accept or be too comfortable with the status quo. The most dangerous words in business and investing are: “Because it’s always been this way.”

Ask yourself: What is your goal in life? Then ask Why? Why? Why? Why? Why?

  • It’s not surprising that mostly everyone’s goal in life is to be happy. What is surprising is that mostly everyone does exactly what doesn’t make them happy.

If you can’t admit what truly makes you happy, tell yourself whatever you’re doing makes you happy; you’ll be sure to have plenty of friends traveling down the same river.

  • We rationalize our unhappiness by telling ourselves, “When I get [blank], I will be happy,” and, “When I achieve [blank], I will feel accomplished.” They believe whatever they are pursuing in life will ultimately make them happier.

Happiness is about four things: perceived control, perceived progress, connectedness (number and depth of your relationships), and vision/meaning (being part of something higher than yourself).

  • Once a person’s basic needs are met, money is farther down the list of importance than intangibles such as the quality of the relationship with one’s manager and professional growth opportunities.

The question to ask yourself is, “Will what you think you want to pursue actually get you the happiness you think it will get you?”