In this Draper University presentation, Zappos CEO Tony Hsieh explains that the company's number‑one priority is not customer service but a strong, deliberately cultivated culture. He describes Zappos' dual‑track interview system—one for role fit and a separate HR interview for culture fit— and notes that both hiring and firing decisions are made on cultural alignment. Hsieh introduces the "3 C's" (clothing, customer service, company culture) as facets of Zappos' overarching mission to deliver happiness to customers, employees, and partners. He outlines Zappos' core values, emphasizing humility as a critical, hard‑to‑measure trait, and shares concrete hiring anecdotes (airport shuttle test) that illustrate how cultural fit is assessed. Drawing on the books Good to Great and Tribal Leadership, Hsieh explains that great companies share two ingredients: a strong, shared culture and a higher‑purpose vision beyond profit. He argues that pursuing a compelling vision fuels long‑term profitability and urges entrepreneurs to "chase the vision, not the money," using a pop‑culture reference to reinforce the point. The talk blends practical HR tactics, cultural philosophy, and strategic insight into why culture ultimately drives superior customer service and business performance.
Chapters
So, for all this focus on customer service and customer experience, the number one priority of the company is actually not customer service. Our number one priority is company culture, and our whole belief is that if we get the culture right, then most of the other stuff like delivering great customer service, uh, or building a long-term brand or business will just be a natural byproduct of that. And there's a lot of stuff that we do on the hiring side, the firing side, And the training side. So, for example, for everyone that we hire, we actually do 2 sets of interviews. The hiring manager and his or her team will interview for the standard stuff like fit within team, relevant experience, technical ability, and so on. But then our HR department does a separate set of interviews purely for culture fit, and they have to pass both in order to be hired. So we've actually passed on a lot of super smart, talented people that we know can make an immediate impact on our top or bottom line, but if they're not good for our culture, we won't hire them for, for that reason alone. And, and, and the reverse is true too. Even if someone's doing their specific job function perfectly well, if they're bad for our culture, we'll fire them for that reason alone. So in terms of how over the years we've, we now think of our brand at Zappos, we have something we refer to as the 3 C's: clothing, customer service, and company culture. And whether it's the happiness that customers feel from getting that perfect outfit or perfect pair of shoes, or the happiness that customers feel from experiencing great customer service, or the happiness that employees feel from being part of a culture where the values of the company match their own personal values, the thing that we realized ties all of these 3 things together is that Zappos is really just about delivering happiness, whether it's to customers or employees or vendor partners. And, and hence the title of my book that came out a few years ago. So, I'm gonna give you a super fast Cliff Notes summary of the book, but basically the main takeaways is actually, it talks about these 2 books, Good to Great and Tribal Leadership, and these are actually books that we teach our own employees. We, we teach, we have classes on, and, and I wish these books actually existed prior to Zappos being founded, 'cause it would have saved us a lot of trial and error. throughout the years. And the reason why I think both of these books are really important is because the authors researched and looked at what separated the great companies in terms of long-term financial performance from just the good ones or mediocre ones. And they were actually kind of surprised by their findings. They found that the great companies had 2 important ingredients that the good ones or mediocre ones generally didn't have. And they weren't ingredients that you would typically naturally think of. The first ingredient they found was that the great companies all had strong cultures. And this wasn't, at Zappos, it wasn't a business strategy from the beginning. It was just something that I just didn't want to repeat the same mistake that I had made at my previous company. It was more just about going into an office surrounded by people that I enjoyed being around. But as it turned out through the research, coincidentally, it's actually also a really good long-term business strategy. And so we have a bunch of core values, and I'll make this presentation available for anyone that's interested, but we actually have interview questions based on each and every one of these core values. The last one, be humble, is actually probably the one that messes us up the most during the interview process, because there's a lot of smart, talented people that are also egotistical, and for us, it's not even a question. We just won't hire them. But it's also the one that's hardest to interview for, because how do you interview You can't, you can't just ask a job candidate, how humble are you? And they say, I'm the most humble person in the whole wide world. Come hire me. And so one of the ways we test this is when a lot of our candidates are from out of town, we'll pick them up from the airport in a Zappos shuttle, give them a tour, and then they'll spend the rest of the day interviewing. Well, at the end of the day of interviews, the recruiter will actually circle back with the shuttle driver and ask how she was treated. And if she wasn't treated well, it's not even a question. We just won't hire that person. And so one of the comments we get back after people tour Zappos is, okay, you guys have this crazy culture because there's all these decorations and sometimes employees will think up a random theme for a parade and just start parading. There was one I remember which was during October. They had an Oktoberfest-themed parade and went through the office and started throwing out sausages, and it was weird. And then, but it, you know, brings a smile to the employees, and people say, okay, happy for you, Zappos, you've made the Fortune Best Companies to Work For list several years in a row, but the stuff you're talking about would never work at my company. And what I found that was super, really super, super interesting from the research from those books, is that it actually doesn't matter what your values are. What matters is that you have them, and the power actually comes from the alignment of the entire organization when you hire people whose values match those values. So we're not out there saying, oh, other companies should adopt the Zappos values. It's more about figure out what your values are and make sure that you're consistent in aligning the entire organization around them. The second ingredient that they found that all these— and they studied these companies over a long period of time to see what really separated the great ones in terms of long-term financial performance from just the mediocre ones. The second one, actually, I found really counterintuitive. The second ingredient they found was that companies all had a vision that had a higher purpose beyond just money or profits or being number one in the market or beating the competition. And the irony was by having a higher— a vision that had a higher purpose that wasn't about profits, over the long term, it actually enabled these companies to generate significantly more profits than their peers. And so sometimes I'll get approached by entrepreneurs who ask me, okay, what's a good business to get into? What's a good market to get into where I can make a lot of money? And my advice to them is rather than have money be your primary motivator, Think about what would you be so passionate about doing that you'd be happy doing it for 10 years, even if you didn't make any money, and that's what you should be doing. And the funny thing about that is, if you're doing what you're truly passionate about, then that will actually greatly increase your chances of making more money, because that passion is going to rub off onto your employees and then have this ripple effect onto your customers and your business partners. So I like to say chase the vision. Not the money. There was a movie that came out several years ago called Notorious. Did anyone in this room happen to see it? Oh wow, this is actually— I've never seen more than one or two people raise their hands before. So in this movie, which I thought I was the only one that saw because it only lasted a week in the theaters, Sean Combs, also known as Puff Daddy— is that his name anymore? Now it's just Diddy? Now it's just Diddy. Okay. Says to Diddy— he said— Diddy says to rapper Biggie Smalls, also known as Notorious B.I.G., don't chase the paper, chase the dream. I just want an excuse to use this photo in a business presentation, so that's—
