Insights from Delivering Happiness by Tony Hsieh Happiness Happiness is both an art and a science, and the science part can be learned That which makes us happy is always evolving and requires constant attention Happiness comes from experiences and perspective, not from things The risk/reward payoff in pursuing happiness is better than one thinks Money isn’t the source of happiness. Having a larger amount of money makes it much easier and likely to actually work on things you are passionate about. This can make you happy, too. Money and achievement to prove something to others are both tempting distractions from pursuing more fulfilling activities Happiness isn’t always immediate Happiness is not driven by achieving a goal. It’s driven by figuring out what circumstances make you happy and then creating those circumstances. Higher purpose matters a lot more than immediate pleasure. Friends are vital to creating a successful business and living a successful life. Including others in your success makes your success and happiness that much greater and more rewarding Culture Culture matters Good culture is critical for organizational success because it creates a company’s brand. Culture is not an immediate byproduct of the people working at a company but rather the product of conscious work and effort. Zappos’ success is a clear illustration of the importance of not only strictly adhering to core values but also having them be complementary to each other. The choice of a location has a disproportionate impact on a company, far beyond the location of its physical buildings and employees. General business Do not outsource your competitive advantage Treating vendors well pays off in the long run. Sometimes you have to believe in yourself and your passion, and take a leap of faith, even when no one else does. Find ways to merge your personal passions into your professional life. Customers are king Businesses built on loyalty usually end up driving greater penetration than focusing on penetration alone Many of the services Tony was religious about at Zappos (e.g. free shipping, upgraded overnight service, culture book, customer service) were expensive and had hard-to-quantify ROI’s , yet ultimately drove long-term success for the company. Choosing where to play is the most important decision in business. Questions for Tony Happiness / Life Can a company be happy if its CEO is not happy? What (activities) make you happy? You don’t tell people which particular activities lead to happiness, but you describe the categories that bring the most happiness (vision, meaning, and higher purpose). This flies in the face of “it’s all relative; to each his/her own; whatever floats your boat.” If there are certain categories that make us categorically more happy, then could there be particular activities that make people happy (ie, volunteer for the Red Cross, mentor a child, learn who God is, etc)? What impact did his early entrepreneurial activities (and ensuing wealth) have on his personal life? How did he manage dating or taking care of family along with his busy entrepreneurial pursuits? Can you talk about yourself as a social animal? In the book, you portray yourself as very much of a communal person. Do you have time to yourself? And if so, what do you do with it? Could you have been this happy and self-actualized without having made a lot of money in the first place? Would you agree that if your goal is satisfaction and happiness, the culture you build is more important than the business you’re in? After all, selling shoes online is not exactly what many would call a “life’s purpose,” certainly not like making medical devices that save lives every day. Yet you have made selling shoes online a ‘calling’ for many. Do you think you could build a similar business in any industry? Are there any values in addition to the core values of Zappos that are reflected in your personal life and not necessarily applicable in a business context? Business - General How can our educational system produce more of the types of workers who would thrive at Zappos? In running a business, one often has to make hard choices like the one you had to make in 2008 when you had to let go of 8% of your staff. Knowing that as a CEO you might have to do this again, how does this impact your happiness/motivation to run a business in the future? It seems like many key decisions in your life were influenced by the people close to you (Sanjay, Alfred, Fred, Nick). How did you decide to partner with these people? Did you simply “know” that those were the right people? Or did you also involve a lot of other people in other projects and we simply don’t read much about them in the book? How could we generalize your learnings about partnering with the right people and apply them to our lives? You and your employees reflect on the decisions you made (i.e. quitting Cisco, putting your life savings behind Zappos, moving to Las Vegas). But much of it seems to be “hindsight seems 20/20”. Looking back, regardless of whether you’d still have made the same decisions or not, how would your decision making and evaluation process change? Would you still have considered the same pros / cons and emphasized the same priorities / goals? If it changes, how would it change? At a certain point, Zappos was short on cash, and Tony was forced to look to his own resources, which were also running pretty low. Did he ever at that time regret not having stayed with Microsoft through the rest of the year? I loved the casualness and quirkiness of the Zappos culture, and was very impressed at the company’s ability to get themselves taken seriously while keeping it fun for employees and customers. How did they manage this? Were there people who just thought they weren’t serious enough and didn’t give them business or money because of that? What do you want to do after Zappos? Culture In times of high growth (size of business and number of employees) it can be hard to step out of the weeds and think of big, ambiguous things like company culture and how to shape the culture you want for your company. What advice would you give leaders of high-growth companies whose culture is still ill-defined and seems to change with every wave of new hires? I buy into the concept of company as tribe, but it occurs to me that some people don’t want a tribe. They may want a nice work environment and a low-stress job, but they may not have the capacity to really invest a lot of their personal energy into the company culture. Is it possible to design a culture that incorporates the pieces you describe without necessitating the level of engagement at Zappos? Do you think that the constant adversities and being strapped for cash were the things that made your company’s culture? Or would you say the culture would have naturally evolved given your leadership style? In the book you say that “Others can copy our images, our shipping, and the overall look of our Website, but they cannot, copy our people, our culture, or our service.” Why not? A cynical reader could argue that Zappos’ brand promise (i.e. to “deliver happiness”) is, in some fundamental way, at odds with its core value to “be humble.” Zappos is an ecommerce platform for shoes, apparel, and accessories, albeit a very successful and service-oriented one. To paint the company’s mission in such broad, poetic strokes seems to fly in the face of humility. While I’m not sure that I would condone that cynicism myself, I wonder how Tony reconciles these two core tenets of the Zappos brand/culture. Organizationally: How much of is the happiness of Zappos employees derived from working at Zappos (participating in the purpose) versus a hiring selection process that may select for “happy” people? Tony, you discuss the mission of Zappos as “delivering happiness,” what has been the biggest challenge with maintaining authenticity with this mission. Zappos Where would you be today if Zappos had run out of money and been forced to shut down? When you sold basically everything to keep Zappos running, how much did you think about the potential negative outcomes? Did you consciously consider the potential unhappiness of winning big with LinkExchange and then losing it all? How did the pervasive unhappiness in the tech sector influence you at the time? How far do you think Zappos can move from its core categories today in terms of shoes, handbags, etc. without losing focus and brand equity as the “undisputed shoe leader” in e-commerce? What made you think that creating a culture book would be a good idea? What value did you think having that book would bring to Zappos? (pg 140) Do you think you could build an organization with such higher purpose around any product? Or was there something unique about online shoe selling? Can you be passionate about a business without being passionate about the product? What are the management processes (other than culture and hiring the right people) Tony employed to ensure the quality of call center without scripts? Regarding the Amazon-Zappos “marriage”, in the past year have you been able to maintain the relationship that you initially anticipated? How has the Zappos business been impacted (both intentionally or not)? What newish company excites you the most (either from a cultural or business model perspective)? If you had to pick a company, other than Zappos, to go and run right now, which company would you choose and why? I’d also like to hear about the times he had to re-center the company: Have you ever taken it too far? Have you ever had to pull someone back for being too weird? Do you think there’s a certain time, size or part of the business which suffers by being weird? How does Zappos measure customer satisfaction? What’s the key performance indicator of Zappo’s customer service team? Without any experience in the shoe business or retail segment, how were you able to confidently put all of your financial resources and time into Zappos? What gave you faith in that endeavor? How did you think of Moritz when he refused to invest in Zappos when it was small? Did he add lots of value later? Book details How can a person “sort of” have a cat? In the final section of the book you talk about happiness as a fractal, but the book doesn’t give much more on this idea. Can you expand on how it ties into parallels for business? As a side question, given your past positive experiences with raves and your company’s location in Vegas, have you even been to Burning Man? What happened to the blond girl you met at your New Year’s party? “Envision, create, and believe in your own universe, and the universe will form around you.” Seems like an unfinished story.