In Graves We Trust

Presented by Tony Hsieh    –   Zappos CEO   –   tony@zappos.com

This entry was completely unintended, as was my presence for this presentation, but I was sitting in the Adobe Day Cafe (where the quick and dirty 30 minute presentations happen), and the SXSW opening keynote was simulcasted on a big projector screen—for those of you not in the know, “simulcasting” is basically a dressed up term for watching something live on tv; fancy fancy.  At any rate, the CEO from Zappos delivered the opening comments, which sounds weird and kind of lame, but was actually pretty awesome.  First of all, the dude is a great speaker, but his whole thing is that it is all about the customer, and just relating to them on a basic human level.  This “branding”, as he referred to it, involves rad things like their 800 number being posted at the top of every page (which is awesome because they don’t have scripts, they don’t have call time limits or up-sales), they do surprise upgrades to overnight shipping for repeat customers, etc.

Things like surprise shipping upgrades is rather expensive, but rather than dumping a ton of money in marketing, they put that money back into wowing their customers so that their customers will be loyal and also pass along how bad ass Zappos is to their friends and family

Though they really focus on customer service, their company culture is actually even more important to them.  There are two separate interviews: a standard one with management, and a “culture-fit” interview with HR.  New hires have to go through a culture training for 5 weeks in Las Vegas, then 1 week in the Kentucky warehouse, where ALL hires have to train for every job—they have to work in the call center talking to customers, and do warehouse shipments etc.  Dude, this is crazy!  They make EVERYONE do it, even like accountants.  They have this standing offer that at any point during your training, you can just quit and walk away and they will give you $2k.  They want you to make sure that you want to commit to, that you like them and the culture enough to give up the possibility of $2k.  Only about 3% of people take this offer.

They make a Zappos cultural handbook every year, where everyone that works for Zappos writes an entry about how they feel about the company’s culture.  The entries in this 500 page book are completely unedited, save typos, so the good and bad are all there.  They also promote the use of Twitter in the company to promote interpersonal communication—this helps employees see each other as humans, rather than just coworkers, and it helps out their company culture a great deal.  zappos.twitter.com.

A company’s culture and a company’s brand are just two sides of the same coin.  Think about the airline industry: almost everyone feels that the airline industry as a whole is synonymous with bad customer service.  He was talking about this chick that ordered a wallet from Zappos, and she tried it out and didn’t really care for it, so she sent it back to Zappos for a return—but forgot to take her $150 out of it first.  She chased her two kids around the house for a few days, trying to get one of them to fess up to stealing the money, etc.  But a few days later, she received a letter from the warehouse worker that processed her return, telling her that she had forgotten to take her money out of the wallet prior to returning it, and Zappos returned her money to her.  Dude, this was a warehouse worker, and those dudes usually don’t make a lot of money—this is a reflection of the company culture.

“Zappos is religious about delivering happiness, whether it is to customers, or workers.” Their culture is all about 10 “committable core values”, meaning that they are willing to hire and fire based on these values—they don’t just disappear after training.

Zappos looks for employees that exhibit the following personality traits

3. Create fun and a little weirdness.  A hiring question is “How weird are you?”  Awesome, they are into celebrating each employees individuality and encourage them to bring their actual personalities into the company’s culture.

4.  Be adventurous, creative and open-minded.  Another question “on a scale of 1–10, how lucky are you in life?”  The question was inspired by a research study done a few years ago, asking random people how lucky they were.  Then they would give them a fake newspaper and ask them to count the photos.  One of the headlines int he fake newspaper is “there are 37 photos in this newspaper.  tell this to the researcher and we’ll give you and extra $100″.  The unlucky people would just count the photos, but the lucky people would try out the headline and get the extra flow.  They were open to new possibilities and weren’t pessimistic about their tasks.

10.  Be Humble.  Talent does not justify egotism, and making compromised like this causes the company culture to go down hill.

Zappos 7 steps for creating a sustainable brand

1. Decide if you’re trying to build a long-term sustainable brand
2. Figure out your company’s vaules & culture, even if you’re company starts as just 2 people.  They asked all of their employees “what should our core values be?” over the course of a year.  (what are your personal values, what is the company’s vaules, start early, it is harder than you think because it requires a lot of introspection)
3. Commit to transparency.  Be real and use your best judgement are their guidelines—rather than forcing their employees to regurgitate marketing pr statements, they let them use their judgement to purvey the company’s branding.
4. Vision.  Customer service was great because when employees realized that they were working for something so much more than just the bottom/top line, they worked more passionately, and were more interested in relating to customers.  Chase the vision and not the money—the money will follow.  What would you be passionate about doing for the next 10 years and never make a dime.  What’s the greater purpose in your work beyond financial compensation? Motivation vs. Inspiration.
5. Build relationships—not networking, be interested rather than interesting.  Swapping business cards is lame, but if you become interested in someone as a person, you can actually develop a more tangible relationship with them.
6. Build your dream. If you want to go quickly, go alone, if you want to go far, go together (Al Gore quoting Aftrican proverb).
7. Think long term.  Repeat customers, great customer service, there is no “get rich quick” formula.

What is your goal in life?
“When I get ____, I will be happy.”
“When I achieve ____, I will be happy.”

The science of happiness is interesting, and you should figure out what will make you, your employees, and your customers happy via the why game:

What is your goal in life?
To grow a company

Why?
So that I can retire early

Why?
So that I can spend time w/ family and friends.

Why?
That is my true happiness.

All answers to the first question always boil down to this final answer, but the steps to get there are important, and it helps you identify your desires, needs, and motivations.

There are 3 types of happiness (star rated):

1. * Rockstar – Pleasure, chasing the next high
2. ** Flow – engagement, time flies
3. *** Meaning/Higher Purpose – being part of something larger than yourself.

Recommended reading (zapposinsights.com)

• Tribal Leadership (free audiobook dl on zappos)
• Happiness Hypothesis by Jonathan Haidt.
• 4 hour work week by Tim Ferriss

Email tony@zappos.com for a copy of the presentation.

As a side not, apparently if you are in Vegas, Zappos will pick you up at the airport, take you on a tour of their facility, and then drop you off at your hotel.  Awesome!