Remembering Former Zappos CEO Tony Hseih
A customer service visionary gone too soon. CEO of Zappos, Tony Hseih, has died from injuries sustained in a house fire in Connecticut. He was 46.
Hseih was best known for his leadership of Zappos. He joined the company as CEO in 1999 after co-founder Nick Swinmurn left him a voicemail. Initially skeptical of a company that sells shoes online without customer try-on options, Hseih was ultimately swayed by Swinmurn mentioning that footwear was a 40 billion dollar industry with 5% of that total coming from paper catalogs. Within 10 years of its conception, Zappos had cleared a billion dollars in revenue.
A New Way of Doing Things
Much of Zappos success is credited to Hseih’s pioneering customer service and company culture methodologies–ideas and skills he perfected during and following his graduation from Harvard in 1995.
With his computer science degree, Hseih envisioned and developed LinkExchange, one of the first online advertising networks, and Venture Frogs, an investment firm.
Hseih was CEO of Zappos for 21 years and spearheaded company culture changes that would lead Zappos to be voted one of the best places to work by Fortune multiple times. These initiatives included moving the company towards a holacratic way of management. In a holacracy, there are no typical bosses and employees have the autonomy and support to make decisions that would be typically left to management positions.
In a 2017 interview with Guy Raz, host of NPR’s “How I Built This” segment, Hseih talked about how he sees himself in the role of CEO:
“I’m probably different from a lot of typical CEOs. Imagine a greenhouse, where maybe at a typical company, the CEO might be the strongest and tallest, most charismatic plant that all the other plants strive to one day become. … For me, I really think of my role as more about being the architect of the greenhouse, and then all the plants inside will flourish and thrive on their own.”
A Game-Saving Pivot
This kind of hands off management style was what attracted top talent to Zappos and paved the road for an Amazon acquisition worth 1.2 billion dollars in 2009.
However, the journey to multi-million dollar success was not an easy one. Like most ecommerce companies, Zappos had to survive the dot com crash of 2000. Investments were hard to come by, especially for online shoe retailers.
“It was pretty much impossible to raise money from anyone. And also, if someone wanted to invest in an internet company, the last thing they wanted to do was invest in an online shoe company…because no one would ever buy shoes online,” said Hseih.
The game-saving pivot for Zappos would come in the form of an unyielding commitment to customer service and customer experience.
“I think for us a big turning point was really deciding we wanted to build our brand to be about the very best customer service and customer experience. It led us to do a lot of things that would not have made any sense if that wasn’t our north store.”
A Brand that Stands for Something
An example of Zappos commitment to customer experience was offering free shipping both ways. According to Hseih, that customer service decision was made with long term brand in mind:
“We would have made more money in the short term during those days but then we wouldn’t have built our brand and reputation… When you want your brand to stand for something or have some sort of purpose, you do things that are kind of nonsensical in some ways and that your competition would never do.”
Being different has always been considered an asset to the Zappos team. One of the questions the hiring team asks potential talent is “How weird are you?”
When it came to being weird, on a scale of one to ten, Hseih considered himself an “8.” He notoriously didn’t have strong feelings for shoes and made daily commitments to challenge his introverted nature by doing things that made him uncomfortable.
“I’m not passionate about shoes at all. I’m passionate about customer service and company culture, but I can’t say anything about shoes,” said Hseih.
A Legacy to Remember
Hseih’s commitment to customer service and company culture changed the way ecommerce interacts with customers and pushed the bounds of what is expected out of an internet retailer. From turning down acquisition offers for fear of diluting Zappos culture, to the publication of his book, “Delivering Happiness,” Hseih remained unwavered in doing things not just different, but better.
“So many people are unhappy at their jobs for various reasons. It could be the work itself, the culture, the lack of autonomy, all of those things are things that we want to hopefully show that there’s a different and better way of not just work, but life.”