Growing up in Marin County, Calif., just north of San Francisco, Hsieh spent his formative years devising ways to make money. One of his first successful ventures was producing picture buttons via mail order. Customers sent him a picture and a dollar; he made a button and sent it back.
As a college student at Harvard, he ran a pizza business in a dorm, learning what would be one of the most valuable business lessons of his life from a fellow student who bought a pie from him every night and resold it by the slice. “He made about 10 times more money than me per hour by arbitraging pizza,” Hsieh writes in his book. (That customer was Alfred Lin, who was Zappos’ chief operating officer and chief financial officer until recently, when he left to join Sequoia Capital.)
After college, Hsieh worked at the software developer Oracle but quit after five months because he was bored. With his roommate, Sanjay Madan, he started a Web advertising business called LinkExchange in 1996. By 1998, LinkExchange had more than 100 employees. It was something of a revelation, Hsieh writes, when he would walk by people in the hallways that he didn’t recognize. The newcomers were smart and motivated, but many were in it for themselves. “They wanted to put a few years of hard work into LinkExchange and then move on to their next résumé-building job at another company. Or, if things worked out well, make a lot of money and retire.” For Hsieh, LinkExchange became about “politics, positioning and rumors.” He and his partners sold it to Microsoft in November 1998 for $265 million.
Hsieh found Zappos first as an investor and joined the company in 1999 as an executive. That was when the dot-com bubble was bursting, so the first job was just to survive. By 2003, Hsieh fixed his sights on exceptional customer service as the way to grow the company, and by 2005 he’d concluded that culture was the foundation of customer service.
These days he’s into the science of happiness — hence the title of his book, the last chapter of which he uses to discuss the science of well-being, finishing his tome on a note more appropriate for a prophet than a CEO. “It was no longer about Zappos,” he writes about establishing Zappos Insights. “We were helping to change the world.”
Hsieh has honed his hiring techniques to avoid the pitfalls of his LinkExchange days; prospective employees must pass two sets of interviews to land a job. One interview focuses on skills, experience, abilities, etc. The standard stuff. The second interview is about the intangibles.
“They asked me if I was a superhero, what kind of superhero would I be,” says Alicia D’Amico-Snyder, who works in the call center. “They asked me what my theme song would be.” (Michael Jackson’s “P.Y.T. [Pretty Young Thing],” if you must know.)