Tony Hsieh, founder and CEO of Zappos, is widely regarded as one of the most successful CEOs of our time. He has successfully built and sold not one, but two companies. Link Exchange sold for $265 million to Microsoft and online shoe retailer sold for $1.2 billion to Amazon.

Under Tony’s leadership, Zappos has ushered in a new era of customer service and values-based business culture — a model that many businesses are trying to emulate.


Here are the 10 success lessons from Tony Hsieh – “Zappos Founder” for entrepreneurs,

1. Understand what really motivates people

Tony Hsieh mentions that how direct rewards such as bonuses or increased salaries can actually reduce productivity for many types of work. He also suggests that intrinsic factors such as being inspired by your work are actually much more important for motivation. Tony Hsieh illustrates this principle perfectly with his mission to create a company that you would want to work at even if you weren’t being paid to be there.

Zappos actually offers their new hires $4,000 to quit. Only about 3% have so far taken the money since the program was started. This concept was designed to weed out those who are only in it for the money and not in pursuit of a place where they can be part of a great working culture.

2. Talk to your employees

While we may understand that making our employees happy will increase their productivity how we achieve this can sometimes seem unclear. However Tony offers a simple prescription – “just talk to your employees. Ask them what would make them happy” Asking your employees what would make them happy and then giving it to them might sound simple but as Zappos has shown it can be incredibly effective. This includes ideas such as the laughing yoga classes, a full-time life coach and free lunches.

3. Being passionate increases your chance of success

If you want to be successful then you need to find something that you are passionate about. A lot of entrepreneurs are too caught up with the money that they can make. However this can actually hinder their chances of finding success. As Tony says “business that are run by people who are passionate about whatever the business is about tend to have a much higher” When you are passionate about something you are able to work harder and inspire others to do the same. When faced with adversity you will have the passion to keep going.

4. Learn from your mistakes

Building and selling Link Exchange for $265 million might seem like the kind of mistake that any entrepreneur would be happy to make but Tony has stated he was not happy with his first company. The mistake he made was to try and build a company culture too late. With Zappos he didn’t want to make the same mistake and established the company culture at the very beginning.

5. Focus on the customer not the product

Many entrepreneurs become so focused on the product or service that they are offering that they end up forgetting about their customer. Tony Hsieh wants to be known not as the best online shoe retailer but as the company with the best customer service. He has stated that he is actually not that passionate about shoes but providing the best customer service is something that inspires him.

6. Understand what makes you happy

Tony Hsieh was running his own venture capital business when he initially invested in Zappos. At the time it was just one investment among many. However Tony realized within a year that what he really enjoyed in business was operating fledgling businesses not just being an investor in them.

7. See yourself as an enabler

A desire to micro manage is something that many entrepreneurs find it difficult to avoid. However Tony Hsieh believes that the primary purpose of an entrepreneur is to enable people to do their best work. Tony also knows what it is like to be stifled by corporate culture. He quit his first job at Oracle after only five months. At Zappos he intended to create an environment which allows people to realize their full potential.

8. A great brand is a story that never stops unfolding

In Tony’s view, Nike, Apple, and Google are known for having great cultures, but they could do more for the community. Tony launched the DowntownProject in Las Vegas with a footprint that’s analogous to the NYU campus. It’s the most community-based place Tony has lived. Owners hang out in each other’s cafes to support each other and he’s proactively funding high- and low-tech startups that enrich the fabric of the community.

9. Foster co-learning and connectedness

Tony’s vision for community building extends to the idea of creating and enabling serendipitous “collisions” in the DowntownProject — chance encounters that foster co-learning and connectedness, which in turn lead to increases in innovation and productivity.

10. Stand for something bigger than what you do today

Zappos is a customer service company that just happens to sell shoes. One day, there could be a Zappos airline or hotel because Zappos is about providing the very best customer service.

About Author

Biplab Ghosh

Biplab lives his life around technology and is particularly keen to explore the intersection of technology and human behaviour. Always looking for new ideas, and ways that can make things simpler. He is a geek with the flair for travel and has great passion for music and theatres.

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