The Zappos Story
A happy tribe built a $1.2 billion company
In 1999 while shopping for shoes Nick became frustrated when the high street retailers he visited did not have the right size and colour of the Airwalk Chukka Boots he required. Confident he was not the only customer having this problem, Nick quit his day job to set up an online shoe retailer ShoeSite.com and left a voicemail for Tony Hsieh at Venture Frogs. Tony in his book “Delivering Happiness : A path to Profits, Passion and Purpose” heralds Nick’s factual voicemail as the hook that led Venture Frogs to invest $2m. The factoid was that 5% of the $40 billion shoe business was already being done through mail order. ‘That was my big statistic. People were already buying shoes without trying them on.”, Nick shared in an interview with Footwear News.
Over the coming five years the company experienced exponential growth under the new company name, Zappos, with Tony as co-CEO. Year 1 saw $1.6m in gross sales, Year 2 $8.6m rising to $184m by 2004. This five year growth attracted a $35m investment to enable further scaling and by 2008, within nine years, Zappos celebrated USD $1 billion in annual sales. In 2009, Amazon acquired Zappos for $1.2 billion.
So what Superpower did the Zappos Founders adopt to go from zero to hero in less than ten years?
The power of a tribe. Hiring the right people passionate about a collaborative way of working where everyone’s idea and opinion mattered, layered with the hypothesis that if the company was good to the employees this would translate through to a happy customer experience. Better service, repeat customers, low marketing costs, long term profits and fast growth. The catch phrase ‘Delivering Wow’ was at the heart of the Zappos culture.
From an early stage Tony took a tribe led approach, from crowdfunding the company’s ‘10 Values’ from Zappos people through to enabling everyone to be active on their social media accounts sharing their life at Zappos. Tony quotes, “There’s three types of happiness and really happiness is about being able to combine pleasure, passion, and purpose in one’s personal life. I think it’s helpful and useful to actually think about all three in terms of how you can make customers happier, employees happier, and ultimately, investors happier”. By hiring a tribe of passionate people keen to live and work in a happiness culture led to exponential growth.
Where are they today?
Nick left Zappos in 2006 and has set up a number of companies since. Tony is the billionaire CEO who famously lives in an Airstream caravan on the Zappos site, called the Downtown Project in Las Vegas, another Zappos social experiment which became successful among employees. His book ‘Delivering Happiness’ is a New York Times bestseller and is seen as a handbook for many corporations on how to build successful community tribes. After 21 years, in August 2020, Tony announced his retirement as CEO of Zappos and plans to support philanthropic causes and entrepreneurs who are working for social good.