This book about the story of Tony Hseih and Zappos, which was later sold to Amazon.com for around $1.2 billion. Tony initially takes us through the story of his first startup LinkExchange and how he sold it to Miscrosoft for $265 million. He was particularly unsatisfied by the culture and people they hired in rapid growth period, which eventually led him and his partner to sell the business to Microsoft. This experience eventually helped him designing better hiring process and also unparalleled culture at Zappos.

Tony also tells us one of experiences at the rave parties he attended, how he was mesmerized by the laser lights, fog and especially how everyone was dancing together with no self-conscientiousness as if individual consciousness had disappeared and been replaced by a single unifying group consciousness. He quotes,

“I didn’t know it at the time, but ten years later I would learn that research from the field of the science of happiness would confirm that the combination of physical synchrony with other humans and being part of something bigger than oneself (and thus losing momentarily a sense of self) leads to a greater sense of happiness, and that the rave scene was simply the modern-day version of similar experiences that humans have been having for tens of thousands of years.”

This experience was profound and inspirational in shaping Zappos culture.

Zappos was facing major financial difficulties in the initial phases. Tony even had to scarifies most of his property in funding the company. In the midst of such situation they had to make strategic decision core to their business between choosing drop shipping which was easy money, and managing inventory by themselves, which was cumbersome but allowed them better customer service. They chose to the higher road and decided to manage inventory by themselves making customer satisfaction their ultimate goal than just making profits. Tony recalls the core takeaway from the book Good to Great by Jim Collins,

“Yeah, you should definitely read it,” I replied. “He talks about what separates the great companies from just the good ones over the long term. One of the things that he found from his research was that great companies have a greater purpose and bigger vision beyond just making money or being number one in a market. A lot of companies fall into the trap of just focusing on making money, and then they never become a great company.”       

In this process they also decide to burn their option of drop shipping immediately to completely focus on managing inventory themselves as a business. I think this level commitment helped them create a far greater company than mere profitable business.

Moving Zappos entire business from San Francisco to Las Vegas and not outsourcing their core competency allowed them to create better company culture and focus on the customer service. Zappos on focused three main things in their company to achieve the success they had, customer service (which would build their brand and drive word of mouth), culture (which would lead to the formation of their core values), and employee training and development (which would eventually lead to the creation of our Pipeline Team).

 

– Kuldeep