Creating a Thriving Company Culture with Zappos CEO, Tony Hsieh - I Love Marketing Episode #55

I'm dean jackson, he's joe polish, and this is the I love marketing podcast. Hi, this is Joe Polish and I am here with Ms. Mr. Tony Hsieh, CEO of Zappos.com and in case you haven't noticed, behind Tony and behind me, you will see things that say zappos.com. if you never bought anything from Zappos, go visit the website after you're done watching this interview. Anyway, how you doing, Tony?

Good, how are you?

I'm great. I'm great. We're here in Vegas, your headquarters.

Thanks for coming out.

Yeah, thanks for sitting down. And you're going to speak at my conference this year. So a lot of people watching are going to see you live. But what I want to talk about today is how have you built this organization called Zappos? It's everywhere. I mean, even when I went to the airport today and I was flying out to Vegas, it's there at the bottom of the bin. It's@zappos.com. what does Zappos mean? I just want to kind of get this out of the way. Where did you come up with the name?

So I actually joined Zappos about two months after it started. And the original name that the founder had come up with was shoesight.com because the original idea was let's just sell a lot of shoes online. And he was looking for an investment and basically realized that calling shoesight.com was kind of like calling a store store. And so I wanted to come up with something that didn't really mean anything. And so the Spanish word for shoes is Zapatos. And so he took out a couple letters and added a P and Zappos was born. There you go.

Okay, so how long has the company.

Been in business now? We actually just celebrated our 10 year anniversary, June 1st.

Wonderful.

Now people will typically maybe think of Zappos as a shoe company because from the very beginnings. But what would you prefer people actually think of Zappos as? I mean, what's your vision?

Yeah, so our vision internally, we really think of ourselves as a service company. That's really what we want the Zappos brand to be about. Just the very best customer service and customer experience. Hopefully 10 years from now, people won't even realize we started out selling shoes online. And in fact, today we actually sell clothing bags, kitchenware, housewares and cosmetics and so on. So, yeah, we really just want the brand to be actually, it doesn't even have to be limited to online. We've had customers ask if we would start an airline, for example. And I wouldn't rule that out 20 or 30 years later down the line.

Actually, I hope you do start an airline because the airline industry is terrible, and so we need, like, customer service in the airline business. One thing, you know, I've done trips to Necker island with Richard Branson, and one of the things I said to him is that the motto in the airline industry is we're not happy until you're not happy. And that's basically sort of the theme with, I think, a lot of businesses. And I actually have to give Dan Sullivan credit. He's the one that originally said that statement. But nonetheless, you're so focused on customer service. What's your definition of customer service?

I think it's everything. It's really more, I guess, just about an attitude and then the ability to actually help a customer and go above and beyond. So for us, it's kind of evolved over the years. Originally, it was just, let's make sure we just wow the customer and go above and beyond, and that's all we care about. And then just over time, we realized that part of our culture and therefore part of our brand is really about being really human and personal. And so there are some places that maybe from a process point of view, it's a decent customer experience, but we really want to connect with our customers and our employees on a really personal level. Internally, we use a term called pec, which stands for personal emotional connection.

Got you. What I'm going to do right now, while I was in the airport, I was thinking, what could I buy for you? And so I purchased this item. It's a scorpion banana flavor lollipop. So I just wanted you to have that.

Wow. I didn't know these existed. I'd been looking all over for one.

Right, right. And I was thinking you were looking for one. This is the Arizona rattlesnake eggs bubble gum. So thank you. That's for you also. So just please, on behalf of myself and all of our viewers, those are our gifts. Anyway, now I'm going to get the bio out of the way. I'm going to read something here. This is other than maybe some stuff out of the Zappos culture book, which I may read something just for our viewers. Tony Hsieh, spelled HS I E H. Do people always mess up your name?

Yes.

What do they usually say?

Has she say, I've heard 100 different things.

Okay, well, we'll stick with you.

Just call me Tony.

Okay. Tony originally got involved with Zappos as an Advisor and investor in 1999, about two months after the company was founded. Over time, Tony ended up spending more and more time with the company because it was both the most fun and the most promising out of all the companies that he was involved with. He eventually joined Zappos full time in 2000. Under his leadership, Zappos has grown gross revenue sales from $1.6 million in 2000 to over 1 billion this year. By focusing relentlessly on customer service, Tony focuses on continuing to grow the business at a rapid pace while maintaining the culture and feel of a small company. Prior to joining Zappos, Tony co founded Venture Frogs with Alfred Lin. Venture Frogs is an incubator and investment firm that invested in Internet startups including AskJeeves, Tell Me Networks, and of course Zappos.com. prior to venture Frogs, Tony co founded Link Exchange, an advertising network that was successfully sold to Microsoft for 265 million in 1998. So that means you actually have some.

Money laying around for the investments.

Good. You met Alfred Lynn, who's your CEO CFO in college when you were running a pizza. And is it true that he was your number one customer? Is that really true or did you just make that up?

No, he was. He even had the frequent pizza diner's card and that's really.

You had a frequent pizza's diner's card.

At your pizza place just for Alfred?

Really?

Yeah.

That's fascinating. All right, well, does he still eat a lot of pizza?

Yeah. Although probably not. I mean, he used to eat it every night. I don't think he does anymore.

Okay, so here I am with the lovely Liz. And Liz is known as Tony Shay and Alfred's time ninja. Basically some people would refer to, you know, people that assist them as assistants, but she's a time ninja. So what do you actually do here at Zappos?

I help Tony with the, you know, the day to day scheduling, setting up, helping with meetings, doing some correspondence, and a lot of times I'll help out if, you know, people like Joe come in and, you know, want a chance to talk to him, I'll help set sort of bets thing up. I just do a little bit of everything all day long. And I work very closely with Jerry. He's my go to guy and I'm his go to girl. So we work together very closely.

Yeah. And she actually set this interview up with Tony. So you're awesome. Now Jerry is known as the mayor here at Zappos. And what Jerry's going to do is just literally take you through a Tour of this and show you and point out what everything is and how it works. Because he takes people to Zappos all the time and explains how this billion dollar company works.

Our founder, Nick Swinburne was looking for these pair of shoes in a Mall in 1988. 98. And if you can remember back that far, the Internet was like the space program. It was just kind of out there. So he decided he was going to sell his shoes on the Internet and everybody laughed at him. So he called over to Nordstrom's and got a guy that I worked with, Fred Mosler, and pitched him the idea. And actually Fred left us and went with Nick and the rest is history. We did a billion dollars in gross sales last year. We're number 23 in the Fortune 100 Best Companies to work for. We're actually the fastest new company to get onto the list.

How many employees does Zappos currently have?

We have about 1300 employees and about half are here in Las Vegas. And the other 1300.

Okay, and do you pay them more, less, the same as or how do you actually, what sort of the structure of how you run this million dollar business?

Yeah, for entry level, it's roughly at or maybe slightly above market. And then for the very senior level people, it's actually below market. And our whole philosophy is we really want to make sure that people are fairly compensated. But we're not trying to lure people in by paying them exorbitant salaries. We really focus on the company culture here.

Okay, so. Well, you were recently on the, on the COVID of Inc. Magazine. And in that article you talk about how you pay people a couple thousand bucks to leave after you've hired them for after a couple weeks, I believe. Yeah, talk about that.

Yeah. So everyone that's hired here in our Las Vegas office, doesn't matter what position you can be an accountant, lawyer, software developer, goes through the exact same training as our call center reps. We call it our customer loyalty team. And part of that is going over company history, our philosophy about customer service, and then actually spending two weeks taking calls from customers. And our whole philosophy is if our brand is going to be about customer service, then customer service should be the entire company, not just a department. So in terms of the offer we make at the end of the first week of training, we basically tell everyone, you know, we're going to make you an offer. And here's the offer. We're going to pay you for the time that you've already worked, plus an extra $2,000 bonus to quit and leave the company right now. And that's actually a standing offer until, I think, six or seven weeks down the line. And the reason for that is because we don't want people that are here for a paycheck. There's plenty of other call centers here. So if you're a call center rep that's making $11 an hour, $2,000 is pretty good incentive that this isn't the right culture or environment for you.

So, I mean, would you recommend other companies do that sort of thing for a screening process or.

Yeah, definitely. I mean, the original thought was these people that aren't really, you know, don't really believe in the company anyways, they're going to probably leave the company anyways three or six months later down the line. And by then you've already paid them much more than $2,000. And actually, our problem has been. So in 2007, I think it was less than 3% of people took the offer. In 2008, less than 1% of people took the offer. So we actually keep upping the offer because not enough people are taking it.

What's it at right now?

Well, no one this year has taken the offer yet, really.

Okay, so you are really trying to encourage. Just to weed people out, just to absolutely make sure they're going to be here for the long term or just totally be into it.

Yeah. And so really, it's part of our philosophy. Employees can view their work as either a job or career or calling. And really we want to move employees up through that path.

Yeah. Well, okay, so the founder originally started it, but you obviously got involved because you're clearly a sharp business guy, but at the same time, you have thousands of business opportunities presented to you. Why did you pick this one and what's the secret sauce behind it?

I think it was just the people. The people that were around were fun. They were people that I would actually hang out with even if we weren't in business together.

Well, let me talk about that, because I think that's sort of an interesting statement. What are your thoughts about. I've heard a lot of CEOs don't become friends with your employees, don't hang out with them socially. Keep a separation between personal and business. What are your thoughts on that?

I guess we take the exact opposite approach. Yeah, it's actually one of our questions when we interview people. How do you feel about socializing with co workers? And if someone says, oh, I think there should be a separation, I'm not okay with that. We won't Hire them.

Really? Okay. So you hang out with your employees and everything?

All the time. And actually, when we do new manager orientations, we actually encourage the managers to spend 10 to 20% of their time outside the office with their co workers.

10 to 20%?

Yep.

That's cool. Well, doing what?

Whatever they want. Yeah. So for different. I mean, it kind of just depends on who's in the group and what they're interested in. But for some people it might be they go hiking together, for others, might be happy hour. For others, I think there's something going on with one of the departments where they're going bowling together, so. And then a lot of departments will mix it up as well.

Do you go out drinking with your, your employees and stuff?

Yeah, we have many parties and celebrations here.

You know, I have a confession to make, really, the videos and everything here, Tony, there were some people that were concerned. This is really an intervention. And we wanted to just make sure that you're aware that we're going to kind of ship you off. And we've got a van waiting downstairs. All right, so just kind of stay tuned. Well, what are some of the biggest mistakes that people. I mean, you say because of the people, but the culture here is developed. It doesn't just happen. There are certain elements that are taking place here. How instrumental are you, the CEO, Tony Shea? I mean, are you the one that has built this up to a billion dollar year business with your leadership?

Or.

I mean, how. Because people want to know, how did this happen? How does he do this sort of stuff? So, I mean, if there is any process to it that you can explain, how responsible are you versus other elements?

Yeah, I mean, I think most, the vast, vast, vast majority of it comes from the employ. And I guess if you want to make an analogy, if you think of employees and their ideas and so on as being plants that you want to grow and so on. My role is not to be the biggest plant that they all aspire to or anything like that. I guess I view my role as architecting the greenhouse where they grow. So it's really more about. I spend my time thinking about, okay, how can we create an environment and what processes can we have where really employees feel like they not only have permission, but are encouraged to just be themselves and let their true individuality and creativity shine. And that's true whether it's talking to customers over the phone, because we don't have any scripts. We just want them to do what's appropriate for their personality. As you walk around into our offices, you'll see the cubes are decorated differently by different teams. And it's really. And I can't predict all the stuff that happens. A lot of times I'll walk by and be like, oh, what's that? That's kind of interesting and new. And what ends up happening is. So we didn't always have all these cubicles or aisles decorated. It was more just one team decided to do it and then the team next to them was like, well, we can outdo you. And then it just very organic and just takes a life of its own.

That's.

Yeah. Or if you look at the conference rooms during the tour, we have a conference room that's a log cabin themed one. And that was the budget for that was just a few hundred dollars. And so it ended up being a great thing where employees, because they knew it was a small budget and it actually cost us less to do that than the normal TI improvement budget, they basically got together and it was our outdoor team that did this got together and they spent the weekend putting the flooring in and running around looking at Craigslist or going to swap meets to find all the parts to fit within the budget. And then that also ended up being a great team building thing.

Well, what I'd like to do is to actually show some of the different rooms to all the people that are watching us right now and they can see some of the different elements.

There's the log cabin themed room built by our outdoor team and there's this room built by the skate and surf team. And as you can see, it's literally a boardroom with all the surfboards and skateboards in it. Our development team built a bowling alley here and our help desk decided to build, I think, is it Rosie the Robot in the Jetsons?

Honestly, I don't even know.

Did you not watch the Jetsons? No.

Four times. Sorry, I did not.

Well, everyone else says yes.

So.

And we have a room that's kind of a Zen like feel and it's built by our comfort team. And this we have another room that's built by our China team and so has China theme to it. So we have a room with you'll see Polaroids all over the wall and a giant throne there. And actually that's the office of Dr. Vick. And his job title is actually just coach. He's a life coach. And basically he's kind of like our own internal version of Anthony Robbins. He gives motivational seminars and does one on one counseling for our employees for anything from career advice, financial Goals, exercise, weight loss goals, whatever goals they want to set for themselves. He'll help them set them and then check on them on a regular basis to make sure they're progressing.

This is actually Dr. Vick's office. He's not here right now, but we'll give you a little history of what it is. So in the beginning, Dr. Vick's a chiropractor from Northern California. Nick, our founder, was going to him for an adjustment and he said, I've got this great idea, give me $20. So Dr. Vick gave him $20, then he gave him another $20, and he gave him another $20. So he's actually one of our first investors. Joe, we're gonna have you go ahead and have a seat in the throne here and we're actually gonna take your picture. We have some crowns and we have tiaras, both whichever way you want. Joe, I think I will pick this one. Alright. And there's a big ruby on the front there. Excellent. You're looking good. All right, so everybody gets one of the pictures here.

Now if Dr. Vic got in a physical fight with Tony Robbins, you think he could take him?

I don't think anyone could overtake Tony Robbins.

He's a big dude. Yeah, he's a big guy. Anyway, I think if you went at the knees, I think you could get him down at least maybe wrestle him to the ground. What is your favorite room in the. Do you have one?

My favorite one is probably the log cabin themed one that our outdoor team built.

What's your home like? I mean, do you carry the same sort of shenanigans to your house?

A little bit. So I, I basically have each of my guest rooms decorated and themed after a different Vegas casino. So when visitors come, I can just say, oh, you're staying in Mirage or you're staying at the Hard Rock. So it's very easy.

What's it like being in Vegas, doing business in Vegas, such a crazy town?

Well, it's crazy on the Strip and so most people don't really realize that it's completely different as soon as you get off the Strip and you know, off the Strip, it's like any other suburb. But it's nice that the Strip is always there if you need it. And so I personally don't normally go to the Strip unless there are friends in town or vendors in town.

Well, you know, like for instance, here is the Ink magazine that you were on the COVID And this is a fantastic article and it's why everybody loves Zappos. How do you feel about being on the COVID of a magazine?

It's a little weird. I was actually at an airport a couple weeks ago and buying a water, and the cashier had it next to her, and then she looked at the magazine and looked at me, and she's like, oh, you know what? You look just like that person. That's so funny.

What'd you say?

I just nodded.

And you don't strike me as a guy that's like, bragging a lot and wanting to be real famous and out there, you know, swinging from the rafters.

Or whatever the term is. Yeah. So. Well, that's. Yeah. I don't actually personally want to be famous, but I want. I. I want Zappos to be famous. I really enjoy being part of building consumer brands because it's kind of like the best parts of fame without the worst parts of fame.

Gotcha.

Okay.

What I'd like to ask you about is building a brand. What does a brand mean? I mean, I'm in the marketing business. My company, Piranha Marketing. I'm very much against image advertising. Just for the sake of getting your name out there. I very much like getting your name out there, getting a response back. And one of my favorite definitions of branding came from David Ogilvy, which fantastic advertising guy who wrote Ogilvy on advertising. He said, it's the personality of your product or service, what it is you do. What would be the Tony Hsieh definition of a brand?

I guess there's a few different ways you could define it. One is it's basically just a shortcut to an emotion or a set of emotions. And I think it used to be that brands, big companies, could go around and say, okay, what do we want our brand to be? And then they could just broadcast it on tv, and then that was their brand. Whereas today, brand is really no longer completely in the control of the company or the corporation. It's really just what your consumers or customers think of you. Like, that's your brand. So they're really in control of your brand. So we talked about the airline industry earlier in this interview, and the brand of the airline industry is bad customer service. Not any specific airline, but the industry as a whole. And yet no airline set out to say, our brand should be about bad customer service. So how did that happen? And it's because consumers talk to each other, and then they form their own opinions, and they have an emotional response whenever they hear airline industry.

Well, I mean, so you're clearly doing something here that is continually building this culture And I mean, you even talked about in your culture book and in the article and stuff about the importance of culture. What does that actually mean? I mean, for an entrepreneur out there that's watching this right now, I want to create a great culture in my organization, my business. What does that actually mean?

Well, for us, we've kind of formalized the definition of our culture into 10 core values. And so really our belief is that a company's culture and a company's brand are really just two sides of the same coin. And the brand is really just a lagging indicator of the culture. And so, you know, you can get away with your culture going downhill today or this year even, but eventually it's going to catch up in terms of how your brand is perceived.

Did you. Well, let me actually, I have this marked here. It's page 12 of your culture book. Let's see the cultures of Zappos. Okay. Our culture is based on 10 core values. I'm going to read them here. I'd like to actually then go and ask you about a couple of them. One, deliver wow through service. Wow. Two, Embrace and drive change. Three, create fun and a little weirdness. Number four, be adventurous, creative and open minded. Five, pursue growth and learning. Six, build open and honest relationships with communication. Seven, build a positive team and family spirit. Eight, do more with less. Nine, be passionate and determined. And ten, be humble. Let's first talk about wow. What do you mean by wow? Customer service. I wrote a manual for professional cleaners, which is one of the niches that I train. We're actually the largest training organization in the professional cleaning and restoration industry. You've got thousands of small companies that are in that industry. One of the chapters I wrote 15 years ago was wow your clients. So you just leave them with a smile on their face. What does wow mean to you?

Yeah, it's essentially that it's. Are you eliciting a positive emotional response from the customer? There's different ways of doing that. For example, a customer might call our call center and one rep might be really chatty and love to tell jokes and is making the customer laugh. And after the customer hangs up, that's not normal for when you call customer service at most other companies. But then if that customer calls again later and gets a different rep, maybe they don't. That rep is not a joke teller. But they're from the same hometown and then they can bond over that or they hear a baby crying in the background and the other one's also a mom and they can talk about and Bond over that. And that's also very unusual. And so I guess at the end of the day, the criteria would be, is it story worthy? Is it something that the customer is going to not only remember, but tell their friends and family about and have a lot of positive emotion associated with it?

Well, I want to break this down a little bit because in order for someone to do something like that, have a baby or a dog barking in the background, you know, to have that ongoing conversation and bond with people, they need to feel that they're not going to get in trouble for. So do you have a company without boundaries or is it like a self imposed, sort of, no one really crosses the line or how often does it get like over the top?

I don't know if it's ever gotten over top. I mean, we basically, that's part of our training. We're like, here are ways you can connect on a personal, emotional level with customers and you don't have to do these ways. And really we want you to figure out your own personal way that works for you and your personality, and then they'll practice that and get better over time.

Okay, so you say you don't use scripts. So have you ever tried to use scripts and just said, we're done with this?

No, it's just always been part of our, I guess, just general philosophy that it's pretty hard to give great customer service if you're scripted.

Who do you get advice from? I mean, when you're trying to figure out, you know, what could I do here? I want to try something. I mean, how do you take advice and how do you implement things that you think would be worth trying?

I guess I really enjoy reading business books about all different topics. So some are about marketing, some are about just culture or organizational structure and so on. And I personally, I guess I take a little bit away from each book. And then also just like meeting lots of different people from all different backgrounds, not just the business world, and, you know, there's something you can learn from, from everyone. So those are probably the main ways.

Well, there's one here which is, okay, create fun and a little weirdness. All right, so I very much like the way this sounds. So what does that mean to you?

Well, our belief is that everyone's a little weird somehow. And so it's really more just a fun way of saying that we recognize and celebrate each person's personality and individuality and we want their true personality to shine in the workplace. And whether that's over the phone or with coworkers we just want people to feel comfortable being themselves. And then when people actually are comfortable being themselves, it's amazing how many creative ideas come out of that.

Right, right. Do you think most people in the workplace are very uncomfortable being themselves? If you had to look at most.

Businesses, that would be my guess.

Well, I mean it's sort of like a loaded question. I think it's obvious.

Yes, Joe, I do think that.

But you know, again, I don't know. But you think with as many people, people that are spending a third of their life working, how has it become. You'd think that more companies would be like Zappos. Why do you think they're not?

I think it's because it's the way it's always been. If you look at the history of corporations, it used to be really manufacturing and factory base and where there isn't room for a lot of creativity. You don't want someone that's manufacturing certain things where the number one priority is lowering costs and having the least amount of defects possible. You don't want the guy there to just say, oh, I'm going to assemble this thing randomly. And so that made sense in that environment. But we live in a completely different world now. But the management practices, old habits are hard to break, I think.

So this is monkey row. This is where Tony, Alfred, Fred, Steve sit. They're right out in the open. The best way we feel to have an open door policy is not to have any doors. And so they're readily accessible. Whenever they're here, come on in and ask them a question. Get some feedback on whatever you need. Actually this is Tony's fun box. So we're kind of. I add to it every day. Our friends from Blue Star jets came in and there's actually some different movies and stuff like that. You can actually eat peanuts here and throw the shells on the floor. We always think that it's a good idea to come out of your shell. This is actually where Liz sits. She's one of the. She's Tony's time ninja and she's also one of the Zap eds so it's very cool. But open door policy, just come on in and have at it.

Do you consider yourself a good businessman?

I mean, how do you.

What do you think of yourself as?

I guess I consider myself to be more open minded than most people in business. And I think that open mindedness and flexibility kind of go hand in hand. And there's actually a quote by Charles Darwin about evolution where he. I don't remember the exact Wording, but it's something like the species that survives is not going to be the smartest species or the fastest ones. It's the one that's the most adaptable to change. And I think the same is true for business.

Okay, so, you know, it's funny, I went to Galapagos recently and I went to the Darwin Research center and that was, it's amazing to actually see that because it's true. There are some very strong creatures that never quite made it because they simply didn't adapt. And so forcing your way through something is not always a solution. In the article, in the Ink magazine article, you know, they talk about your very low key, quiet, reserved sort of guy. I mean, are you like an introvert? Are you shy? I mean, how do you consider your personality? Because we've gone out to dinner before, we've hung out a little bit and you're a guy that always strikes me as hearing a lot. You really listen to a lot of things, but a lot of times you don't always respond. So I think you just take a lot of stuff in. But it's always curious what the heck is going on in your head. How do you consider yourself personality wise?

Oh, definitely introverted, shy and, you know, Eben. And so I think it was he that told me, I think he had read somewhere about, you know, what's the difference between an introvert and an extrovert. And he said extroverts talk as their way of thinking, whereas introverts like think and then talk afterwards. And so for introverts to talk, it's actually like after talking a lot or interacting with a lot of people, I think introverts need to just take a break, be by themselves and decompress and so on. Whereas extroverts afterwards are actually more energized than they were before they started talking.

Gotcha. Oh, actually that's a great way of looking at it too. So if you had to go out and really, you know, do a big team meeting or do a public presentation, then your natural reaction is, I'm going to go kind of decompress for a while.

Yeah. So definitely after I, like when I, when I go speak at your thing, I'll definitely want like a half hour just to chill.

Well, no, the reason I ask about, you know, being introverted or extroverted is you're a guy that puts yourself out there a lot publicly. I mean, you've been on some, you know, major media, you know, channels, news interviews and whatnot. And you're, you know, You're a public figure. Is that something that you want to do because you're challenging yourself or you're kind of. Or do you look at it as doing it for the sake of Zappos or is it something that you really allows you to grow? I mean, what are, what are the reasons for that?

It's, I would say it's for the sake of Zappos. I actually, you know, a lot of organizations only want to talk to the CEO. And so we're trying to figure out internally how do you scale? And we're actually getting more people from different departments to do public speaking and so on. But it's definitely a challenge. And definitely one of the parts of the business I think is not scalable. I really like the Blue man group because they can replicate themselves. So that's something we're considering. We'll just paint ourselves some color.

And honestly, you should do that like.

The Asian Blue man or the other. Well, so. And then the other solution. This has been a challenge I've been thinking about actually for the last couple years and haven't come up with a great solution. But the other idea was. Did you see Total Recall?

Yes.

And you know, the leader of the resistance or whatever was like, is this guy named Quadro or Quadro or something, but no one has ever seen him. And turns out he's actually like this fetus that like comes out of someone's stomach and, you know, but no one has ever seen him. So I was thinking that we could say, you know, our equivalent Plato is, you know, Zato is someone that. And that's the true CEO, but he's, you know, camera shy. And then everyone can become a spokesperson for. Wow.

You know, I'm so glad I mentioned the part about create fun and a little weirdness, because that is one of the strangest things.

Watch the movie and it'll make much more sense.

No, no, but I totally hear what you're saying. I mean, yeah, because the challenge is okay. But this is good though. So you've built a billion dollar a year company here. I mean, you're growing. This is a large organization. You're reaching. I mean, how many, how many thousands of people are you servicing today that are buying stuff off Zappos?

We have close to 11 million paying customers.

So, okay, so for people that are watching this, that are single person entrepreneurs or they've got a handful of employees and they want to get bigger, I mean, you're a pretty big organization that's growing bigger and bigger. What are some tips and suggestions that you would have. Because one thing that absolutely separates you from a lot of people, in spite of saying, hey, I'm an introverted guy, I don't always feel comfortable going out and talking. And when I publicly speak, I feel like decompressing. You're still a huge risk taker and you're still driving. So you're a big thinker. I mean, you think bigger than most people. I mean, is part of success in growing a business, reaching lots of people, creating tons of value in the world just a combination of thinking bigger versus thinking small, or is it something else?

I would say probably the biggest thing is just patience. And I don't mean patience as in terms of just sitting around and hoping something miraculous will happen. But really when you're making decisions for your business, thinking long term and thinking about what is actually going to make a difference 10 years from now, and what's actually going to make a difference even two or three years from now. But I think most people get stuck in what's going to make a difference this week or this quarter or even this year. When you think longer term, the decisions you make end up being very different. And so things like culture, for example, if your culture suddenly goes downhill tomorrow or suddenly improves tomorrow, you're not going to see the effect this quarter or this year even in terms of your bottom line. But two or three years down the road, you will. And same thing with customer service. If we hypothetically stopped answering our phones and fired everyone in our call center, that would actually have a huge gain in our profits for 2009, I don't think it would hurt our top line revenue. We'd still do over a billion in gross sales. But two or three years from now, then we'd start feeling the effect. So I think the biggest thing is just how long term are you thinking?

Gotcha. So for a new business owner out there starting out, what suggestions would you give them to give them the highest possibility success? I mean, what are some tips, advice that you would say?

I'd say the number one thing is figure out what you would be so passionate about doing that you'd be willing to do it for 10 years and not make a dime and chase that vision and that passion instead of the money. Because I think a lot of entrepreneurs fall in love with the idea of money is the end goal. And when that is the end goal, that kind of mentality actually prevents you from becoming a great company.

Well, you've been studying a lot lately about happiness. I mean, you're public about that and that money doesn't provide. I believe that a lot of things that can be purchased and that money gives you access to, can put a big smile on your face that could bring some levels of happiness, but it, it can't buy true friends. It cannot get you your health back if you let your health deteriorate. But you're really big on this whole concept of just feeling good and being happy. What are some things you can speak to about that? That seems sort of like some people might say that's sort of a weird thing for a CEO of a billion dollar company to be. One of his primary focuses is happiness.

Well, it makes sense from a business perspective because if you can make employees happy and customers happy, then employees are going to be more productive, customers are going to be more loyal. So I don't think it's really, I mean, I think every CEO should be thinking about how to do that. But it's. Yeah. What's interesting is there's a couple great books. There's Good to Great by Jim Collins, and there's also Tribal Leadership. And both of those studied companies, different types of companies in different industries, and looked at what separated the great companies from just the good ones. And what they found was one of the things was about having a vision that has meaning, that has a greater purpose than just making money or being number one in the market. And those are the. So it's not just saying, oh, you should figure out a greater purpose or something you're passionate about just because just for your own personal happiness. It's actually good business like figuring out those are the companies that actually end up becoming great. And on the whole science of happiness thing, like research has shown that the same thing is true on the personal side. If you believe that you're leading a meaningful life that has, you know, higher purpose and there's, you're part of something that's beyond just focusing on you yourself. It actually, the research has shown those people are actually happier, so they kind of run in parallel. And so it's just kind of interesting how, you know, for me, I'm really viewing it from the scientific and research perspective, like this is just what the data says. I'm not out there trying to say you should join, you know, a charity or anything like that, but that's just what the research shows. That's just how we're designed.

Well, so for all of these, you know, thousands of employees and customers and everything that Zappos reaches, touches is going to, over the years, when it's all said and done, I mean, what would you like to have been said about Zappos 20 years from now? What would you like people to say? This. This is what this organization has done for me. This is what it represents.

I'd like them to say that beyond just our employees and our customers, that we've helped improve people's lives and made them happier. Whether it's through what we do with them or there's just so many ways it can happen. Whether they call us and maybe they're having a bad day and they get off the phone and now their mood is lifted because they were laughing or because other organizations are learning that culture is important and learning how to improve their company culture and getting their employees happier or just sharing the stuff that we're learning about the signs of happiness with people that want to learn that stuff and apply it to their own lives or their own businesses.

Well, you know, one of the things I think is cool here that you do is for one, I've had a couple of public speeches that I've given and I've said, you know, let's call Zappos on, you know, speakerphone and just listen to this. And you know, it's amazing because it is really amazing customer service. And I tell people, you know, just call them. If you don't even know what the heck the company does, just call them. And you know, their phone number is right on there. You know, the page of all the pages, I think on your website have your phone number right there. You literally encourage people to call you. Not just try to be an order taking online service. But you know, when people see the tours and they come down here in person, I mean, everything from picking people up at the airport to bringing them in. One of the coolest things that impresses me is you have bookshelves filled with business books and inspirational books and books that you think are just really awesome. You and other people in the company and you just say, take whatever books. Okay, here I am at the front entrance of Zappos and there's a bookshelf behind me. And so when people do a tour, they actually let the people take any of the books that they like off the shelf. For instance, here's a book by Seth Godin. Tony talked about this on our interview Tribes and any book that you want because they believe that educate people, give them knowledge. And so check it out. So you're really big on a philosophy that I don't know if you would think of it this way, but, but I believe that leave people in a better place. Than they were before you came into their life. If you're going to rent somebody's house, don't trash it. When you're done, leave it in, hopefully, a better condition than it was before you showed up. It seems that's kind of the theme that happens with Zappos. You want to put a smile on people's faces. You want people to come here and not only be impressed because part of it's marketing, because hopefully they'll do business with you, but really, you want to impact people. You say, take whatever book you want. You know, we're trying to do good stuff. So, I mean, you know, you're really using entrepreneurism to create, you know, better, happier human beings, which. Which I think is awesome. And so it's part of the reasons, you know, I wanted to interview you and talk about this stuff. If someone has not done that before, I asked you first, if you were at a, you know, started business, what would you do? If you're already in business and you're kind of just not at all happy with it, it's frustrating. You're at a place where you're just not where you want to be. What sort of advice would you say to that person? Do they need to step back? Do they. I mean, what sort of actions would you suggest that they take?

I would say it's true for anyone. Yeah. I would say step back and really evaluate your life. And I think a lot of people get stuck in. Well, so I wrote a blog post about how poker has analogies to business. And I would say a lot of people think the most important thing in poker is how well you bluff or how you bet or so on. But actually, when you go into a poker room, the most important decision that's going to have the biggest impact on how much money you make or lose that night is none of that. It's what table you decide to sit at. And if you sit at a table with bad poker players, you're going to make a lot more money than if you sit at a table with really good poker players. And so if you think of that as an analogy to life, and one table is about making as much money as possible, and another table might be about, say, really just improving your own personal happiness, like, which one is the table? Which game do you want to be playing? And so I think most people just, without even really thinking about it, they're just of the mindset of, some people want to play the money game, and they want to personally earn as much money as possible. Some people want to Play the fame game and just be a recognizer and be a celebrity. When really I think the underlying motivation of all of this is what they really want to play is the happiness game and maximize their happiness. And so if you're not happy with what you're doing, then you should take a step back and ask yourself, what are the assumptions of why you're doing what you're doing right now? And if you really honest with yourself, I think a lot of people will realize, I think a lot of people just assume that making more money is going to make them happier, even though historically that hasn't been the case. Maybe they're happy the day of or a week after. But there's a saying where a raise is only a raise for a month, and after that it's just what you're paid.

No, it's like anyone's ever went out and bought what they think is the most amazing car in the world. There's probably a couple of weeks where you're like, yeah, this is really cool. And it tends to go back to normal.

Yeah. And the research actually supports all this. So they've done lots of studies. And basically what they found is money actually does affect your happiness level when you don't have enough money to have your basic needs met, like food and shelter and so on. But once your basic needs are met, really any incremental amount of money does not, like, they've measured it, different income levels and so on, and it actually does not make people happier.

Yeah. So the key is, as long as you're not in total struggle survival mode, once you've gotten to that level, the amount of impact is incremental at best.

With more money or none at all.

Yeah. Okay.

So that's a very hard concept, too. I mean, even you and I might rationally understand that, but it's still, you know, I think emotionally we're very tied to the just thinking more is better.

I absolutely agree. I agree. I mean, if we were to sit in front of a room of people and say, we've got a million dollars in this hand, or we've got a book on how to make millions and millions of dollars or just how to be happy. But you got to learn it. You got to put time in understanding. You got to develop practices in your life, most people are just going to take the money. They're not going to say, well, let's do that. So I think, yeah, just understanding.

But they've done so many studies on lottery winners where you look at their happiness level right before winning the lottery. And a year later, and it's the same or even lower. And actually the reverse is true, too. People that are dismembered or become blind a year later, they're just as happy as they were before that happened, which. But I bet if we, you know, asked your viewers to, how many of them would be willing to go blind for the rest of their lives? Probably wouldn't get.

Yeah, it wouldn't be a good thing.

And I wouldn't do it either. And so that's interesting. Right. So I don't think neither of us would do it, even though we know the research has shown that's not going to affect our happiness level.

Well, the key, you said it earlier, though, it's about adaptation. So human beings adapt to lots of different stuff. So part of it, I think a lot of people adapt to misery, they adapt to suffering, they adapt to struggle. And I don't know if people really consciously adapt to becoming more happy. I mean, I think you really. Because you say it's just been the way it is. I mean, there's a lot of cultural influences that cause companies and individuals to kind of be the way they are. And I think you almost need to break away from what everyone else is doing and kind of create your own thing, which is exactly what you're doing at Zappa. I mean, you're complete opposite of how most companies run. And look what's happened so far.

Yeah, but there's people where their assumption might be, oh, I have to make so much money so that I can one day go travel around the world. And there's a great book, Four Hour Workweek, by Tim Ferriss, where he basically woke up one day and realized, if that's what I want to do, I should just go do it. And I don't need a lot of money to be able to do that.

Tim is not a very happy guy, though. I don't really like him.

No, I'm kidding.

No, he was just. We were just hanging out two weeks ago. I spent nine days with him on vacation in Vietnam. So Tim's got some very good insights. The book is fantastic. I've actually interviewed him before. We were talking before the cameras were rolling about relationships, and you had some insights on that.

So what are your thoughts? Well, for us, I just think it's interesting. There's a lot of analogies between personal and business and what works in each. And so our whole philosophy at Zappos is we want to hire for culture. And that basically breaks down into, we have these 10 core values and we want people that basically have the same personal core values, and that's how we interview people, and that's what we hire for. And so I think the same thing is probably true in relationships, really. It's about finding someone that has the same values. And then you guys just have the same long term vision of where you want to go. And I think what a lot of people, when they first meet people, they may find them, maybe it's because of circumstance or they're physically attractive or whatever, and you don't really discover till you're kind of, you know, six months later or three years later that really your values aren't aligned. And so if there was a discussion about values, what your own personal values are, and then you could see how much overlap there is, that might actually prevent a lot of things from going wrong or even from getting into the relationship in the first place. So, you know, what's, and what's interesting is, no, I mean, I've never thought to myself, oh, what are my personal values? But it's actually a tough exercise. And we actually just had a group of entrepreneurs here today where we went through that exercise this morning and asked them, you know, just write down your personal values, you know, in terms of, you know, either who you are or who you want to be. And it's, it's tough. It requires a lot of introspection. And the idea, it's not just something you could do in five minutes, but if you spend time at it, the goal is you want to eventually come up with a list where someone looks at that list and you're like, yeah, that's who I am or who I want to be. And then what would be interesting is if for people that are in relationships to have your partner do that same exercise and then compare notes afterwards. And it would be interesting to see the differences.

Well, I'd say, do you think you work harder than the average person? I mean, when you talk about introspection and doing exercises, I mean, I think for a lot of entrepreneurs and business people that read a lot, that maybe go to seminars, I mean, certainly someone that would spend the time watching me interview a CEO of a successful company, they're trying to learn something. So I think it's more normal for people in business to maybe pursue education than some people. Not always, but certain types of education. Do you think you work harder, try harder, do more than the average person, or have you just found your flow more?

I think that everyone actually, I mean, we're designed to want to learn and grow. I Think a lot of it is that people, just because of the way our education systems are structured, people automatically associate most learning with just being really boring and you're not engaged and so on. So I guess it kind of depends on what you consider work to be. If you're doing what you love, then is that to your previous, is that work or play? Is it something that you're paid for or that you'd be willing to pay for? And if both are true, then that's ideal, right?

Let me ask you about what happens when you have a really crappy day. I mean, do you ever have public meltdowns or what do you do when you're just, you know, a lot of pressure on you, a lot of decisions, maybe a big upset personally, you know, in the company, something went wrong. I mean, with such a positive culture around here and you constantly being the person that's sort of in a leadership position to maintain that, what do you do when you have just really difficult challenges and adversity?

I guess this isn't business specific. What I found is a change of environment can make a huge difference, or a change of who you're surrounding yourself with can make a huge difference. Going to movies can put you in a different mood because you're basically transporting yourself into whatever the movie's about. Running, exercising can have a big impact on mood too. So can I drink?

So can I drink just pounding drinks or just more like social drinking?

That is social, Yeah, I mean, I do any or all of the above.

Okay, well, how do you spend your time? I mean, you clearly are a guy that has a lot of people that would like a piece of your time and you've got decisions to make, so you have to say no to a lot of stuff. And you don't ever come across as a person that would ever be rude or, or just not blow someone off. So how do you be accommodating but at the same time get the work done that you need to get done and stay engaged?

Well, I think it's really about where the decision making happens. I think a lot of businesses kind of have this command control mentality where basically almost all decisions need to come from the top. And that's not empowering to frontline employees. And it's also not. It doesn't scale well. And so our whole philosophy here is the long term vision and the values and so on are kind of, I don't want to say dictated, but for lack of a better word, dictated from the top. But then all the decision making or as Much as possible comes from the frontline employees because they're the ones that are closest to the customer anyways. And so really, they come up with the ideas. And as much as possible, we want the decision making to come from the bottom up.

You don't have a big office. That's elitist. You're right in the middle of everyone else. What's that all about? I mean, you clearly could have, you know, pretty much anything that you wanted in terms of an office in your building, but you choose to not. I mean, is there some strategy behind that, or what are your thoughts?

Well, I mean, one of our core values is about family, team, atmosphere. And so it's interesting because it's not like we have a lot of different, oh, this is. There's some secret reason why we did this or did this or this. Like, it all comes out of our core values. And that's kind of the beauty of the core values is that you can really. If I asked you, knowing what our core values are, is having a corner office where you're away from the employees more in line with our core values, or having a desk where you're amongst the employees? It's. I mean, every employee anywhere or even non employee can say, clearly having a desk that's with everyone is more in line with our core values. Tidiness is clearly not one of our core values.

I would say it's one of not your core values.

But I don't know. Stuff just accumulates because there's always random. You can see there's random gifts from. I don't even know who they're from sometimes. Yesterday, someone left a box of underwear on my desk. I don't know where. I'm assuming it's a vendor sample from one of our apparel.

You're hoping, right? It could.

Yes. And not a hint for, you know, like when someone gives you gum if you have bad breath. I would be very sad if that happened. Yeah, that would be kind of a drag, you know, and there's a lot of people know that I am a fan of Grey Goose, so I have gifts of Grey Goose on my desk.

More vodka than anyone could ever drink. It's.

No, some people do finish drinking.

That's a hint to the viewers if you ever want to send Tony anything. Grey Goose underwear, maybe.

Yeah, between the two, I'd probably prefer the Grey Goose.

Okay, so you have this desk, and it's right in the middle of everywhere. How much time do you spend there?

Whenever I'm in Vegas, unless I'm in a meeting. Or doing an interview.

So you're able to work and focus in that sort of environment.

Yeah, I think it's just one of those things that you just end up adapting to.

Yeah. Do you consider yourself a distractible add sort of entrepreneur?

I would say I prefer to come to be involved with a lot of different ideas and so on, but if I really need to focus on a specific project or task, then I can.

Okay, well, now, in growing an organization like you have here, you're clearly coming from a technology background. What are some of the future trends of things that people really should pay attention to versus things that they shouldn't pay attention to? Because, for instance, you've got how many followers you currently have on Twitter?

I don't know. Probably close to a million. Close to a million.

I mean, it's big. It's big. So why do you use Twitter?

It's a great way to connect with employees and customers on a more personal level. And so if you look through my tweets, if you go to twitter.com zappos you'll see that there's very rarely a mention of shoes or clothing or any type of marketing pitch. It's kind of. It's a combination of basically what's going on in my own personal life.

Like you're eating pizza today or something like that.

Yeah. Or what's going on at Zappos.

So, I mean, what are some things that you would recommend that people look at or use if they're not currently using them? Do you have any tips on using technology in useful ways?

Yeah, Well, I would say if you're not already personally using it just for your own personal life, don't try to do it for business. You need to actually enjoy using it on a personal level and have that, whether it's Facebook or Twitter or whatever, use that personally because you actually truly want to use it. And then how to apply it to business becomes pretty straightforward and you don't really even need to think about it.

That's actually a great piece of advice. Although it may sound simple, I don't want to just pass over that. I think what you said is pretty significant. If you don't have a predisposition to using something and you just say, well, you know, everyone says I should use so and so, but I hate doing it. And I don't. I would never use it in my personal life. It's probably something that you're. You're not going to do a great job of utilizing.

Yeah.

And I see a lot of people, they sign up for it. And they just like, I can't stand this. Why? You know, but I'm. But everyone says I should do it, so that's a good hint.

And then you'll figure out, you know, as you're using it that, you know, it's great for maintaining and building relationships of discovering interesting stuff. I'm talking about Twitter. But when you're actually using it, you don't want to receive marketing messages from people. Yet a lot of people go into it with the mentality of how do I use this for marketing? When really it's more about relationship and brand building.

So a couple years ago, Tony sent out an email about what he was really wanted the company to be. And his original company link exchange got to the point where it wasn't really fun to come to work every day. So he sent out 34 different ideas and the team actually boiled it down to our 10 core values. And so this is what drives the business. This is what keeps us going. We don't ask anything hard of anybody. Do more is less. Continue to be humble, be passionate in each other, pursue growth and learning. So we've had a of lot, lot.

Of companies that actually have come on.

Tour and they've gone back to their home office and they've actually brainstormed and come up with their own core values. So we have a lot of folks that interview for a job that don't believe in the core values. Unfortunately, they don't get a chance to get hired. And then we have people that for some reason kind of get off the track and don't believe in the core values or practice them. And then we ask them to go on to their next job. So it's a great equalizer. It's in our court, it's in the culture book. You get a chance to take a look at them and then we just. Again, thank you for coming to visit Zappos today.

Tony, I want to talk a little bit about your culture book. Maybe you know the story behind this. And let me first read something out of here. This is from one of your employees, Abby. She says, I can't say enough of how proud I am to work with and know such wonderful people. When I tell someone who hasn't heard of Zappos, we know you're out there and we're coming for you. I tear it up. I can't help it. It's like Disneyland, but longer lasting. I find myself not taking off my work badge until I'm home because I want to make sure it's known just in case I stop anywhere that I work for the best company in the world. I heart Zappos, and I just wanted to shout it from the top of a mountain. And then another abbey says, zappos is the best thing that has ever happened to me. And then it goes on to tell a story. I mean, these are not normal things that you hear from someone at work. I mean, usually they're wanting to rip the uniform off, get away from work. Escape. And work is drudgery. And here you've got an entire culture book where you have every person that works for you that is writing awesome things. You know Brent C. Who's in your development? What is Zappos Culture? And he has the acronym for culture. Creating an understanding and lifestyle. That translates to utmost respect for everyone. And I'll read one more thing and then have you explain what this book is all about. Then Brittany D. In marketing, she wrote I adore zappos.com. there's so much to say about what Zappos has done for me in such a short paragraph. Moving out to Las Vegas was hard because I had no family or friends frenzy around. Yet when I got hired at Zappos, it all changed. I had a huge family on day one, and it was amazing how I felt the second I walked in the door. I've never met a group of people like the ones we have here at Zappos. My friends from Indiana visited me recently, and I took them on a tour. All they kept saying was, wow. They were amazed at how much fun this company is and how well it fit me, fit my personality. Everyone back home is a little jealous their company does not have the values and culture we have. I'm so proud to say that my job is what I look forward to every morning. I mean, that's pretty awesome stuff. I mean, so, you know, people can say, well, it's pretty cool. They got great customer service. But when you walk around, we had lunch in your cafeteria today, and, you know, I can't. We must add half a dozen people that came up and literally addressed me by first name. How are you doing, Joe? You know, are things going well? You having a good day? And so it's, like, totally ingrained here, but you documented it, and you literally got feedback from everybody. And you put a book that you now distribute, which I imagine is a great marketing piece, but at the same time, it tells a story. So explain this. What is this culture book all about?

So, yeah, it's something we put out once a year. And it's literally that I Just email our employees and ask them to write a few paragraphs about what the Zappos culture means to them. Except for typos, it's unedited. So it includes the good and the bad. And it's organized by department. So you can see how the warehouse culture might be slightly different from the accounting culture. For example, and we're actually about to come out with our fifth edition of it, and we use it to give to prospective employees or even customers, vendors who basically, you know, it's one thing for a company to say, oh, this is what our culture or core values are, but you know, if you read through all of them and you know the expectation isn't. It's close to 500 pages, you're not. You're probably not going to read through all 500 pages. But, you know, once you read through a bunch of them, you get a pretty good sense of what our culture is like here.

Right? Well, and what I like is you're giving all of your people here an ability to voice what it is they think and then have it documented. So I think. And you have a section where you ask vendors to write something in there. I think it's a fantastic idea. Would you recommend people take this sort of concept?

And you know what, we're actually happy to send that out for free to anyone that wants a copy. Just have your viewers email. They can just email me tony t o n yappos.com and it's a physical book, so need their physical mailing address and we'll send one out.

Okay. Well, do you personally check your email or.

I do. I get a couple thousand email messages a day.

A day?

A day. But I read all of them and I don't respond to all of them. But a lot of them are actually very similar types of questions. And so we have a team that we actually call the CEO team that basically, if it's a common, then I bounce it over to them and they'll respond on my behalf.

Okay.

So it'll be clear that it's from them, not from me.

Okay. So you never get yourself getting buried in emails or maybe you do, you just deal with it.

We all do, I think.

Yeah.

How do you.

Let me ask you about that. I mean, how do you handle that? I mean, go on vacation or. You know, some people love being wired electronically. Other people like myself. It absolutely bogs me down. I mean, it'll create overwhelm for me. So what are some suggestions on sheer. It's more like a time management question again. But what are some suggestions you have with dealing with in routing communication.

I would say in general, I guess this isn't. Yeah, I mean this isn't just about email, but just in general work in general. Just I try to think to myself, okay, am I just doing work or am I actually building something that's going to make my life easier later down the line? And so if I catch myself responding to an email, then I'll ask myself, okay, do I. If I just respond to the email, then I consider that to be just doing work because I've done that one thing. But if someone else sends in a similar email two days later, it's not going to get the benefit of my first response. What I've done. And this has worked pretty well for interviews, for example, whether it's with blogs or magazines or whatever. What I've generally done is I've said I won't do any phone interviews or video interviews, but you're special. Yes, I would. So generally all my emails are by email. And what happens is the interview questions come in and a lot of times many of them or even most of them are pretty much the same questions that other reporters or bloggers have already asked. So then the team of people we have answering emails will respond saying, I'm responding on Tony's behalf. So, but here are Tony's answers to your questions. And they actually are my answers because I've answered them before myself. It's not someone ghost writing for me. And then there's a few questions that maybe haven't been asked before. So they'll email me and then I'll respond to those and then they'll add it to kind of the database of all questions that have been asked before. So I feel good about responding though, because I'm actually building up that database as, as opposed to just, okay, I've answered this one reporter and a year later I might be just duplicating my work again.

Well, first off, that's fantastic because you're not taking personal time to duplicate efforts, but at the same time you're giving someone what it is they're requesting in the first place.

And it's truly me saying it because I had originally said it.

That's awesome. That's awesome. I like that.

So trying to think of how do you maybe it might be more personal to do that in video form as well. So that's kind of an idea floating out there. I don't know whether we'll actually end up doing it. But then questions that come in, they could literally the Staff. You could even have people outsource staff do it where they just copy and paste a video link to that one question.

Well, the other thing that you can do for. Because I'm asking you pretty dull, mundane questions that you probably get asked all the time is you could, like, have someone take this video and they could post other people's faces over it. Like one of those little. That would be an idea.

Yeah. Or pay for plastic surgery.

Well, I'll ask you a question. I don't know if you've been asked a lot, if you had any superpowers, any in the world, and you had your choice of only one, what would it be?

Maybe mind reading.

Yeah, that would be good. What are you most proud of that you've accomplished?

That's a good question. I think just knowing that what we're doing here at Zappos is not just about Zappos, it's actually affecting other people's businesses and their lives. So I get emails from people that say they came and toured our offices and met with some of our folks, and six months later, they've implemented a lot of those same things in their company, and now their company is on a very different path from where it was six months prior. Or I've gotten emails from employees that moved to, say, New York two years ago, and then out of the blue will email me and say even though they're no longer with Zappos and they miss Zappos, they've taken our core values and adopted them as their own personal core values. And that. That's really helped them personally. Right.

Well, you're speaking at my conference this year, and I've seen you speak twice. You're awesome. I mean, you really share. You have a great presentation. And I'm sure it's different every time because I don't ever see you, like, using notes or anything. You just talk about what it is you're doing and how you do it. But you have a thing called Zappos Insights, and you're such a transparent company. And what's really cool about the fact that you do tours here is you don't hide things from people. You tell them, here's how we ship, here's how many orders we're doing. I mean, here's what it looks like. Here's people on the phone. I mean, you let people come in and videotape it if they want to. So what are some for people that are watching that would want to learn what it is you do, how you do it? How can they get a How can they subscribe or become a member of some of these programs that you're doing that are now training people how to run a company and build a culture?

Yeah. So there's a few different things you can do. One is I mentioned get the culture book and that's free. And then you can email toursappos.com and we give tours Monday through Thursday. So next time you're in Vegas, it takes about an hour and it's a lot of fun. And we will basically you'll meet every department briefly. And then the third thing, which is what you're talking about is called Zappos Insights. So if you go to www.zapposinsights.com, there's some free videos there, but basically it's a monthly subscription service for 40 bucks a month. And it's a combination of just getting interviews with different people, the heads of HR or merchandising or whatever people are interested in, and getting those questions answered in video format. We also have a lot of authors and other entrepreneurs and businesses come that we interview and put on there as well. And then also it's meant to be kind of a really like a, I guess, sort of a Q and A consulting service as well. So if you, if there's a question where you didn't see answered in a video that you'd like to ask, then just ask and then we'll find the most appropriate person in Zappos to answer it. Sometimes it's me, sometimes it's the head of some other department. And then that answer is shared with the entire community. So the idea is we'll build up more and more knowledge and videos over time as the community grows.

That's fantastic. So I mean, did you ever think of yourself that you'd one day be a teacher or did that something you kind of just sort of fell into in the process of building a fun based culture with a bunch of wackiness?

Well, I think it was, it actually kind of evolved from, you know, we're doing tours so often there's sometimes we have companies like Southwest Airlines or Lego come and they actually spend an entire day or two here with us. And with all the different departments they'll spend a couple hours with recruiting, a couple hours with our customer loyalty team and so on. And we realized that all this, we're doing it anyways, we might as well videotape it and put it online for those that can't afford to make the trip out to Vegas. And then the other part of it is we have a Lot of different training classes for our own employees to help them progress to the next level. Leadership classes, management classes and so on. And we want to, since we're doing those anyways, we want to videotape those and then make those available through Zappos Insights.

Awesome. A couple more questions I want to ask you. What keeps you awake at night if you do ever stay?

Probably the number one thing is just thinking about how do you stay ahead of the curve so that our culture doesn't go downhill. And, you know, it takes active planning and management, and most companies don't pay attention to that, which is why most company cultures go downhill as the company grows.

So with, you know, at the time we're doing this interview, there's a lot of unemployment in the United States, recession. A lot of people are struggling. A lot of entrepreneurs trying to make it. Any advice you would give for people that are out there. I mean, obviously you employ lots of people and you offer a great service to thousands of people.

I think it's actually one of the best time to start a business or grow your market share. It's, you know, it's easier to find talented employees. It's, you know, for office space or rent or whatever. It's. You can get better deals. You can get better deals from suppliers, vendors that other people are afraid of starting business. So it's less competitive.

It's really.

I mean, if I had a choice between starting from scratch in a recession environment or in kind of like a crazy, like in the early dot com days, I would definitely do it in the recession environment.

Okay, Tony, so what's next for you and for Zappos?

So I think for us, just because we're building the Zappos brand around the best customer service and customer experience, the cool thing about that is really, it's kind of like Virgin, where the number of businesses we can get into is unlimited. So for me, I'm definitely an idea person and love coming up with new ideas for business concepts. But really, Zappos is a great platform for almost any business concept that I might come up with.

So it's just. It's your home, it's the place you're going to work out all your creativity.

Yeah. Well, not just mine, but employee. Our employees too. We really encourage our employees, if they have an idea they're passionate about, to just take it and run with it, and we'll see what happens.

Awesome. Okay. Well, for everyone that is watching this, that has never done business with Zappos, I'm going to encourage them to do it. Because in and of itself, it's a lesson in how to provide fantastic customer service. Just to experience calling, ordering. I mean, you guys do a ton of things to wow people. If anyone has an opportunity to come down here and get a tour, it's a fantastic place. I mean, something you really don't quite get until you actually experience it in person. So for people that have never bought anything from Zappos, I'd like to do a plug for why they should do that. I mean, out of all the different places that people can buy things, why should they buy stuff from Zappos?

Well, initially, I think people come just because we have a huge, huge selection of shoes and clothing. And our warehouse is the size of 17 football fields. And so it's a lot of 17 football fields.

That's big.

Yeah. And I'm not talking about, you know, the leprechaun football fields, like human sized football fields. And so a lot of people, initially, they're like, oh, I would never buy shoes online or never buy clothes online because of fit issues. But it's free shipping both ways. And so that's actually our business model. And the shipping back and forth is just part of the service. So a lot of people order 10 different pairs of shoes, try them on with 10 different outfits, and then ship back the ones they don't like. And they have 365 days to do so. And it's funny because initially what we found is the hardest thing is getting people to try it the first time. But once they try it the first time, then it's kind of like crack. They're hooked and they tell their friends.

About us, but in a good way.

In a good way, yeah. The good crack, the healthy crack.

Exactly. No, and it's true. You actually encourage people, if they're not happy, send it back. Because your whole thing is really, I mean, talking about happiness. You're really trying to just make very happy customers, very happy vendors, very happy employees. And that's what's allowed Zappa to grow to the level that it has. So you're doing an absolutely fantastic job here. Very impressive company.