Part IThe Story
Three Hundred Square Feet
The call reached Thomas Curcio's cell phone at around 3:30 on the morning of November 18, 2020. Fire chiefs learn to hold a dispatcher's first account loosely, and this one was vague: a fire, a person trapped, inside a house or possibly a structure nearby. New London, Connecticut, is six square miles and about 27,000 people. It is a former whaling town on the Thames River, and its fire marshal, Vernon Skau, likes to tell visitors it is "like someone took a slice out of New York City." The department answers roughly 7,500 calls a year. In a large glass cabinet at the station it keeps souvenirs of the memorable ones: pictures and artifacts from a blown fuse that charred the inside of a fast-food restaurant, and a Samsung phone that exploded. Small disasters, preserved behind glass.
The burning structure was a shed behind a waterfront house at 500 Pequot Avenue. Reports called it a pool shed or a storage area. It was about three hundred square feet. Inside, according to the accounting Nick Bilton later published in Vanity Fair, were some old gym equipment, a pink-and-white-striped beach chair, bottles of Fernet-Branca, and nitrous oxide chargers. On the radio that night, one first responder said the man inside was trapped. Another said he was barricaded. Those two words separate an accident from something harder to name, and the gap between them has never been fully closed. Firefighters pulled him out. He was taken first to Lawrence and Memorial Hospital, a mile away, then to the Connecticut Burn Center at Bridgeport Hospital. He died there nine days later, on November 27, the day after Thanksgiving. The state medical examiner ruled the cause smoke inhalation and the manner accidental.
The man was Tony Hsieh. He was forty-six and had recently been, in roughly this order: a teenage mail-order button merchant, a Harvard dorm-grill operator, the twenty-four-year-old seller of a company to Microsoft, the chief executive of the most celebrated customer-service operation in American retail, a New York Times No. 1 bestselling author, the largest private redeveloper of downtown Las Vegas, and the founder of a philosophy that a great many middle managers had tried to tape to their office walls. That philosophy had a name: delivering happiness.
Some context, because the shed is a strange place for this particular man to end. For most of the preceding decade Hsieh had argued, in interviews and on stages and over drinks at two in the morning, that human flourishing was a function of density. "You want to get all these creative people in a statistically small space," he told The New York Times in 2013. He measured neighborhoods in residents per acre. He talked about "collisions," the chance encounters he believed produced trust, ideas, companies, and something like joy. He moved a corporate headquarters so that people would have to walk past each other. He lived in a trailer park among his friends and threw parties designed, down to where the bar stood, to keep people from getting stuck talking to the same few faces.
New London has its own version of that story. It was once the largest of a string of affluent towns on the southeastern Connecticut coast. It went into decline in the 1980s, when the Crystal Mall opened on the outskirts and drew trade away from the shops on State and Bank Streets downtown. A more recent effort to bring the arts back into the city stalled during the pandemic. So the most famous urban-renewal evangelist of his generation died in a small city whose own downtown revival had faltered, in a small room with the door shut, during the year the whole country had been told to keep apart.
There is no moral here, or not one I can state with confidence. What follows is a set of rhymes.
By the Numbers
The Arc of Tony Hsieh
$265MMicrosoft's price for LinkExchange, November 1998, when Hsieh was 24
$1.6M → $1BZappos gross merchandise sales, 2000 to 2008
$1.2BReported value of Amazon's acquisition of Zappos at close, November 2009
$350MHsieh's commitment to the Downtown Project in Las Vegas
27 weeksConsecutive weeks *Delivering Happiness* spent on the NYT bestseller list
18%Share of Zappos employees who took severance rather than adopt holacracy
46Age at death, November 27, 2020
The Worms Escaped
In 1983 a nine-year-old in Marin County ordered a batch of earthworms. He planned to breed them and sell the offspring. Decades later he described the business plan to Barbara Walters on 20/20 as a simple growth model: buy a lot of worms, grow your own, sell them eventually. "Maybe a week or two later," he said, "all the worms had escaped. So that was the end of my worm farm business."
It is a cute anecdote, the sort that gets polished in a founder's retelling until it shines. It also contains the whole pattern in miniature: a system built for compounding, a living inventory, and a containment failure nobody planned for.
Richard and Judy Hsieh were immigrants from Taiwan who met in graduate school at the University of Illinois. Their eldest son was born in Urbana on December 12, 1973. When he was five the family moved to Lucas Valley in Marin County, north of San Francisco, a middle-class enclave with few Asian American families. Richard was a chemical engineer at Chevron. Judy was a social worker. Two more sons followed, Andy and Dave. By the son's later account the expectations were the standard ones for that household and that generation: "My parents wanted me to get good grades and eventually become a lawyer or a doctor." He got the grades. He also ran a mail-order button business in middle school and started a newspaper. In that household, the side ventures were apparently tolerated as long as the grades held. They hint at a boy who already treated commerce partly as play.
He went to the Branson School, a private academy where most of his classmates came from more money than he did, and then to Harvard. There he studied computer science, and in 1993 he was on the Harvard team that won the ACM International Collegiate Programming Contest in Indianapolis, finishing first of thirty-one. That fact gets less attention than it deserves. Before Hsieh was anything else, he was someone who could sit in a room with two teammates and a clock and solve formal problems faster than almost anyone his age. The later Hsieh, the one in faded jeans talking about happiness and Burning Man, never lost the habit of reducing human behavior to something quantifiable. Residents per acre. Collisions per square foot. Ads served per ad shown.
The other Harvard business has become founding scripture. Hsieh ran the grill in Quincy House and sold pizza to students in the dorm. The pizza business was itself financed, according to the reporting behind the 2023 biography Wonder Boy, with money borrowed from a friend's wealthy mother. The same source would later supply two hundred thousand dollars of seed money for one of his first tech ventures. His best customer was a math-minded underclassman named Alfred Lin, who often bought two large pies a night. It took Hsieh some time to work out why. Lin was reselling them by the slice. Lin would later drop out of a Stanford PhD program to become chief financial officer of Hsieh's first real company, then CFO, COO, and chairman of his second, and eventually a partner at Sequoia Capital. He was the steadier, more legible figure, the one who looked at a stack of pizzas and saw unit economics. The two met because one of them was buying in bulk and selling by the slice. Their business partnership never moved far from that arrangement.
The New Yorker, reviewing Wonder Boy in 2023, was unsentimental about all of this. It called Hsieh "a relatively unremarkable high achiever." It said there was nothing exceptional in how his parents raised him and nothing especially illuminating about his time at Harvard, where he, "like many annoying undergraduates there, tested out his entrepreneurial chops in his dorm room." The reviewer had covered the poker world, and the comparison he drew was to the professional gambler: once you strip away the wealth and the self-mythology, how much of the fortune came from skill and how much from a run of lucky cards?
The question is fair, and it is worth holding onto. Hsieh loved poker. He would later move his company to the gambling capital of the world.
After graduating in 1995 he took a job at Oracle. He lasted five months.
The Fun Ran Out
The idea came together in 1996 in an apartment Hsieh shared with a college classmate, Sanjay Madan. In the early web it was considered prestigious to have banner ads on your site. A hobbyist's page about fishing, or a small business selling gourmet coffee, had no way to get those ads or to sell its own space. Hsieh and Madan built a barter system to fix that. Any site could join the Internet Link Exchange. A member pasted a snippet of code onto its page and banners began appearing there. For every two banners a member displayed, it earned one credit, and each credit put the member's own banner somewhere else in the network.
Hsieh later explained the economics to the interviewer Andrew Warner. The trick sat in the gap between those two numbers. If the network displayed ten million ads, five million were members trading exposure with each other. The other five million belonged to the house, and the house sold them to advertisers like Toyota. "So, basically," Hsieh said, "Toyota was funding this cooperative advertising network that was a free service to all the members." It was the Quincy House arrangement again: buy in bulk, resell by the slice.
They launched in March 1996, with Hsieh as CEO. Hsieh and Madan were both twenty-two. They found their first thirty clients by emailing webmasters directly. Within ninety days more than twenty thousand pages had joined and the network had displayed banners more than ten million times. Ali Partovi, another classmate, joined as a third partner in August. Lin left Stanford to run the money. In November 1996, with about ten people on staff, the company moved out of the living room into a San Francisco office. Sequoia Capital invested $3 million in May 1997. By 1998 the network had more than 400,000 members and was rotating five million ads a day. That June the company bought MerchantPlanet, an early shopping-cart and credit-card tool, and Submit It!, which developed ClickTrade and ListBot.
On November 5, 1998, Microsoft announced it had acquired LinkExchange. The Microsoft press release from that day is worth reading as an artifact. It quotes an MSN vice president, Laura Jennings, praising the "hundreds of thousands of high-quality smaller sites" in the network, "which represent the heart of the Web," and promising that MSN members would now have easier access to everything "from buying gourmet coffee to finding the best fishing sites in Alaska." It quotes a satisfied customer, Deborah Edlhuber of Prairie Frontier, who said she now spent her entire marketing budget with LinkExchange. It quotes the company's chief executive, who was not Tony Hsieh. By the time of the sale, the CEO named in Microsoft's announcement was a man named Mark Bozzini. LinkExchange had a hundred employees. The price, undisclosed in the release, was $265 million. Hsieh personally cleared somewhere between $32 million and $40 million, depending on which accounting you trust.
He was twenty-four, rich, and miserable. He said so repeatedly. He told Walters he wasn't having fun anymore. He told Footwear News the problem was speed: "LinkExchange grew so fast that it became impersonal and not as much fun. The priorities were different." The culture had narrowed to a single purpose, raising the value of the firm, and Hsieh found he dreaded going to work at a company he had co-founded. That dread is the founding injury of everything that came after. Most people would call it a business lesson. For Hsieh it was closer to a wound he spent the rest of his life trying to close.
Microsoft eventually let the product die. LinkExchange stopped accepting new members on November 15, 2006. On June 4, 2007, it stopped serving banners.
Hsieh, meanwhile, was throwing parties. He and Lin co-founded an incubator and investment firm, and its name came from a dare. A friend told them she would invest everything if they called it Venture Frogs. They called it Venture Frogs. As of 2011, they had not received her money. The firm backed Ask Jeeves and OpenTable. Its namesake restaurant in San Francisco was covered by AsianWeek in 2000. Hsieh's loft, known by its unit number, 810, became a social hub. In Delivering Happiness he recorded the moment with a programmer's precision: "The first official party of 810 would be on Saturday, December 11, 1999. At midnight, I would turn twenty-six."
That sentence has two clocks in it, the party's and his own. For the next twenty-one years, Hsieh would try to make those clocks run together.
The Voicemail He Almost Deleted
Nick Swinmurn was born in Swindon, England, and came to the United States at seven. His father worked as an engineer for the same company for thirty years. His mother was a teacher. Swinmurn studied film at UC Santa Barbara, graduated in 1995 without knowing what he wanted, and took a job selling tickets for the San Bernardino Stampede, a minor-league baseball team, for $12,000 a year. After that came the San Diego Padres, a failed recreational sports league, eleven months at an online car-buying site called Autoweb whose founders were barely older than he was, and a student portal called 4Students.com, which he shut down rather than sell.
Here was another son of an immigrant engineer who had stayed loyal to one employer, and another son who could not stay put anywhere for long.
One day in a mall Swinmurn couldn't find a pair of Airwalk desert boots in his size. Fortune's account of what came next has an almost Victorian modesty. He walked into Footwear Etc. in Sunnyvale and made the owners an offer: he would photograph their shoes, put the photos online, and if anyone ordered a pair, he would buy it from the store at full retail price. There was no inventory, no margin, and no risk to the store. A few orders came in. He took contract work at Silicon Graphics to cover his rent and raised $150,000 from friends, co-workers, and his chiropractor. He called the company Shoesite.com. When competitors appeared that fall, the name seemed generic, so he took the Spanish word zapatos and spelled it with two p's. He pitched about ten venture firms. They all told him that nobody would buy shoes without trying them on.
Then he called Venture Frogs and left a voicemail.
"I almost deleted the voice mail," Hsieh told Inc. in 2006. He did not believe consumers would buy shoes sight unseen. Swinmurn had no background in footwear. "It sounded like the poster child of bad Internet ideas." Before Hsieh hit delete, though, Swinmurn mentioned two numbers. American footwear was a $40 billion market, and about 5 percent of it was already sold through mail-order catalogs. People were already buying shoes they had never touched; they were just doing it from paper. The internet would obviously outgrow the catalog. Years later Sequoia, recounting the same pitch, used the same phrase about the poster child of money-losing internet companies. The phrase stuck because it was accurate. So, it turned out, was the math.
Venture Frogs put in money, with Hsieh contributing $500,000 by his own account, and Zappos moved into Venture Frogs' space. Hsieh started as an adviser. "But I got sucked in."
Fred Mossler arrived through Swinmurn, at Mel's Drive-In in San Francisco in 1999. Hsieh had told Swinmurn he needed a real shoe person and suggested calling Nordstrom or Macy's. Mossler was that person, a department-store buyer who understood brands and vendors. He became Hsieh's closest partner in the business and, for two decades, one of his closest friends. In 2019 the original crew went back to Mel's, exactly twenty years after that first meeting. People who went back to the diner remembered it more than the funding rounds.
Two months after the voicemail, by Hsieh's telling, he was effectively running the place. He came on full-time in 2000 and was co-CEO with Swinmurn by 2001. Gross sales were $1.6 million in 2000 and $8.6 million in 2001. Then the dot-com bust drained the money. Venture capitalists stopped returning calls, and the Venture Frogs cushion from the LinkExchange sale shrank month by month. Hsieh began selling off his own assets to make payroll. Employees lived rent-free in lofts he owned. The future evangelist of corporate happiness was, in those years, the company's landlord, its lender, and its cafeteria.
The decision that made Zappos came out of that desperation, and it looks backward at first. In the original Swinmurn model, borrowed from the Sunnyvale store, Zappos held no stock. Manufacturers shipped directly to customers. Drop shipping was 25 percent of revenue and nearly all of the company's capital efficiency. Hsieh and his team concluded it was also why they could never be good. A retailer that does not control its inventory cannot promise when the shoes will arrive, or that they will be in stock. It cannot promise much at all.
— Tony Hsieh, to BusinessWeekEven though it was hard to walk away from sales at a time when nobody is offering you money, we couldn't distinguish ourselves in the eyes of our customers if we weren't going to control the entire experience. We had to give up the easy money, manage the inventory, and take the risk.
They gave up drop shipping all at once and expanded the warehouse to 77,000 square feet. "We thought about going under every day," Hsieh said, "until we got a $6 million credit line from Wells Fargo."
Nearly everything later written about Zappos's culture, the parades and the core values and the pay-to-quit offer, traces back to that warehouse. The company could not be happy until it owned the boxes.
A Service Company That Happens to Sell Shoes
In January 2004, over a single lunch, Zappos decided to leave San Francisco. "It was one of those things we started talking about at the beginning of lunch," Hsieh said, "and by the end of lunch, we'd decided." They announced it later that week. People were moving by March.
The reason was labor, and specifically labor that most Bay Area startups looked down on. San Francisco was a terrible place to hire people who wanted customer service as a career. Las Vegas, built on hospitality and full of call centers, was a very good one. Zappos settled in Henderson, a suburb. Most of the San Francisco staff came along, and the bet held. Gross sales were $32 million in 2002, $70 million in 2003, and $184 million in 2004, against a goal of $175 million.
An email Hsieh sent on February 1, 2005, addressed to "Investors, Employees, Partners, and Friends of Zappos," gives an unusually clear view of the machine at that moment. The tone is earnest and slightly dorky, like a graduate student's progress report. It lists the year's milestones: the Las Vegas move, a Wells Fargo credit line now raised to $40 million, a new equity investment from Sequoia, the warehouse expanded from 120,000 to 280,000 square feet and able to hold three million pairs of shoes, a workforce of 500 split between 200 in Las Vegas and 300 in Kentucky, the Customer Loyalty Team now staffed around the clock every day of the year, and more than 400 brands. It also includes a line that most CEOs would never write to investors. January had come in at $28 million against an internal plan of $22.5 million, and so, Hsieh explained, "we've temporarily cut back on some of our marketing efforts in order to slow down our sales while we staff up our Customer Loyalty Team."
He was slowing the company down on purpose so that the phones would keep getting answered.
The doctrine those phones carried came out in pieces over the next several years, and on paper each piece looked like a bad decision. Shipping was free in both directions. The return window was 365 days, at a time when competitors offered thirty. The warehouse ran 24/7, which Hsieh freely admitted was "not the most efficient way to run a warehouse." The toll-free number sat in the upper-left corner of every page of the site, where most e-commerce companies would have buried it. Representatives worked without scripts and without upselling, and weren't timed. "We have to untrain employees' bad habits from previous call centers," Hsieh said, "where they're trying to be more efficient by minimizing the time they talk to the customer." When Zappos didn't have a shoe, reps were told to send the customer to at least three competitors' sites.
"We're a service company that just happens to sell shoes," the leadership team agreed one day early on. The line became famous partly because it was true and partly because it could be quoted. Hsieh did not care whether new hires loved footwear. "I don't care if they're passionate about shoes," he said. He did buy himself a new pair every month, though, which may have been sincere or may have been marketing, and with Hsieh it was often both.
The money that would have gone to advertising went into the experience, and the customers became the marketing. By 2010, Hsieh said, three-quarters of daily sales came from repeat buyers. People called the line at strange hours just to talk. The longest call on record lasted eight hours. Two Zappos fans got married at the Henderson offices, and the company posted the video. In 2008, during his own interview, Andrew Warner conferenced the public customer-service number into the call live to see whether the service was real, and Hsieh let him.
The culture apparatus came next, and Hsieh came to it reluctantly. When people inside the company first began talking about formal corporate values, he admitted later, he was not the first to stand up and cheer. Most corporate values, he told Marketplace's Kai Ryssdal, "read like a press release that the marketing department put out" and end up as "this meaningless plaque on the lobby wall." What he wanted were values he called committable: "meaning we are willing to hire or fire people based on them, independent of their job performance." He emailed the whole company asking what the values should be, and it took a year of back-and-forth to arrive at ten. Number six: Build open and honest relationships with communication. Number ten: Be humble. The one quoted most often: Create fun and a little weirdness.
These values had consequences for hiring. Zappos ran two sets of interviews, one for skills and one for culture, and hired about 1 percent of applicants. Every new hire, whatever their job, worked the phones in the call center. After a few weeks of training, new employees were offered $2,000 to $3,000 to quit. Two to three percent took the money. The point, Hsieh said, was the other 97 percent, who had now been made to ask themselves whether they believed in the place. Half of each performance review measured whether a person lived the culture and inspired it in others. Every year the company published a Culture Book of unedited employee essays and gave it to anyone who asked.
In 2003 Zappos set a goal of $1 billion in gross merchandise sales by 2010. It got there in 2008. Another early goal was a place on Fortune's list of the 100 Best Companies to Work For, and the company debuted at No. 23 in 2009, then ranked 15th in 2010, 6th in 2011, and 11th in 2012. Customers began asking Hsieh to run an airline. He said he wouldn't rule it out thirty years from now.
It is easy, writing this, to drift into hagiography. It is also easy to drift into its opposite, the knowing sneer at the conga lines. Both miss what Hsieh had actually built: an elaborate structure of selection and ritual, sitting on a warehouse that ran all night. The weirdness was real, and so was the 24/7 warehouse. Most imitators copied the first and skipped the second.
Coffee Beans in a Vodka Bottle
By 2008 Zappos's board had split along a line that would follow Hsieh for the rest of his life. Of five directors, two, Hsieh and Lin, cared mainly about preserving the culture. The other three, facing the financial crisis, wanted to maximize returns. Hsieh and Lin looked into buying the board out and estimated it would cost about $200 million. While they were working on that, Amazon called.
The courtship included the most Hsieh-like day Fred Mossler can remember, and he told the story to Footwear News after Hsieh's death. Jeff Bezos came to Las Vegas for a secret meeting a few months before any announcement. Hsieh didn't take him to a fine restaurant. He grilled hot dogs at his house and brought in two pizzas, a joke aimed at the man who had coined the "two-pizza rule" for team size. That same day, at 8 a.m., Hsieh and Mossler met the man who drew on the whiteboard in the UPS commercials. They had lunch with Tony Robbins and dinner with Bezos. At midnight Snoop Dogg, who had played a concert in town, asked to see Hsieh at the studio in the Palms, and they talked until three in the morning. Mossler's summary was "Only Tony Hsieh could put together a day like this."
After about an hour with Bezos, Hsieh concluded that Amazon would let Zappos run as an independent company. On July 22, 2009, Amazon announced the deal. Headlines that week put the value variously at $807 million, $847 million, $928 million, and $940 million, depending on who was counting and how. Zappos shareholders would receive about ten million shares of Amazon common stock. A separate $40 million in cash and restricted stock went to Zappos employees. The deal closed in November at a reported $1.2 billion. Hsieh's own take was at least $214 million, not counting what Venture Frogs earned. He stayed on as CEO. In June 2010 he wrote a piece for Inc. headlined "Why I Sold Zappos." The question needed answering. A man who had spent ten years explaining that his company was a family had just sold the family to a company famous for its efficiency, and he said he did it to protect the family.
Two months after the announcement, over Labor Day weekend at Lake Tahoe, he began writing a book.
The way Delivering Happiness was written matters, so here are the details as Hsieh gave them. He wrote mostly in a stream of consciousness, often three thousand words a day, emailing each batch to his editor in New York. He was still running Zappos and still giving paid speeches. He would write for twenty to twenty-four hours straight, sleep four hours or less, and start again. "We tried coffee," he said of staying awake. "And alcohol. And then coffee and alcohol. We actually put coffee beans in a vodka bottle." The whole draft took two and a half weeks.
He told this as a funny story, and it was one. Reading it after New London, it sounds like a description of his whole method.
The book came out in 2010, in three parts titled Profits; Profits and Passion; and Profits, Passion, and Purpose. Hsieh gave free copies to bloggers in exchange for reviews. He partnered with Livestrong on a campaign aiming to raise $33,333 for cancer research, where donors who gave $33 got the book and a chance at a trip to New York. It debuted at No. 1 on the New York Times list and stayed on for twenty-seven straight weeks. Part of that success, as Forbes reported in 2013, came from a firm called ResultSource, which runs bestseller campaigns that include bulk purchases timed to influence the lists. ResultSource's homepage quoted Hsieh calling the firm "a key to the success of my book." Wry though it is to note, he was being honest about it. He was open about almost everything except himself.
Then came a three-month national bus tour. In September 2010 a Chicago communications executive named Gini Dietrich went to hear him speak at an Entrepreneurs' Organization breakfast and wrote, with some surprise, that he was "not a great speaker. He's not charismatic or charming. He's very flat and a little monotone." He had been on the bus for ten days. He told funny stories. She decided he was brilliant anyway.
That flatness ran through everything. He was an introvert running the most extroverted brand in America, a person who, by his own description and many others', found it easier to design a party than to stand in the middle of one. He had more than two million Twitter followers. One tweet sent before a tech conference has stayed with me longer than any of his speeches: "Spilled Coke on left leg of jeans, so poured some water on right leg so looks like the denim fade."
It is a joke, a good one, and it says a lot about him. When an accident happened, Hsieh's first move was to make it symmetrical, so that it looked like a choice.
— Jason Fried, cofounder and CEO of Basecamp, after Hsieh's deathFrom the first moment I met him, he surprised me. He was an artist with a CEO title. … A model for how to live. He was a wonder.
The book became a movement and the movement became a company, Delivering Happiness, run by Hsieh's longtime collaborator Jenn Lim. Zappos already had a consulting arm. Zappos Insights, launched in 2008, sold video subscriptions and three-day bootcamps to executives who wanted to see how it was done. Tours of headquarters became a Las Vegas attraction. Groups came through by the dozen each week. "It's one thing to read about our culture," Hsieh told Ryssdal during one of those tours, "and it's another thing for me to talk about it, but really the best way to get to know what it's like is to come and take a tour."
The culture had become something you could visit. Before long Hsieh would try to turn it into a place you could live.
Return on Collisions
On September 9, 2013, Zappos moved its headquarters out of a Henderson office park and into the former Las Vegas City Hall downtown. Hsieh explained the move in terms of the line he kept trying to erase: he wanted "to be in an area where everyone feels like they can hang out all the time and where there's not a huge distinction between working and playing." About fifteen hundred employees came into the center of a downtown the urbanist Aaron Renn would later call the most "savagely bleak" of any major American city. It had old casinos, government buildings, empty lots, derelict motels, and dark sidewalks between El Cortez and Atomic Liquors.
Oscar Goodman, the former mayor and once a mob lawyer, praised the move as bringing "a critical mass of creative persons to the inner core of Las Vegas." At a public meeting he went further and said that anyone who doubted Hsieh's sincerity should have his legs broken. The Strip had always loved a benefactor, and Bob Coffin, a former councilman, would later compare Hsieh to Howard Hughes.
The headquarters was the anchor of something much bigger. In January 2012 Hsieh had launched the Downtown Project with $350 million of his own money, organized as a for-profit entity. The money was split into $200 million for land and buildings, $100 million for small businesses and tech startups, and $50 million for education. The footprint eventually covered about sixty acres of downtown. The operating theory came from Edward Glaeser's [Triumph of the City], which Hsieh quoted constantly, and it fit in one sentence. Make people dense enough and the encounters take care of themselves. The Downtown Project calculated the area's density at 14.5 residents per acre and set a target of one hundred.
— Tony Hsieh, to MIT Technology Review, 2013Our big bet—which I don't think is really a bet—is just getting lots of people from different perspectives and backgrounds together in a relatively small area with a bias toward sharing and collaboration. Statistically, the magic will just happen on its own.
Look at that sentence closely: which I don't think is really a bet. A poker player was moving into a casino town and telling everyone the odds were certain.
The tactics show how literally he meant it. Hsieh evaluated storefronts by what he called return on collisions. "You can think about, 'Well, if the flower shop takes up so many square feet, how valuable is that from a collisions perspective versus a restaurant or a bar?'" At Zappos the parking lot was behind the building, and staff were made to walk around to the front entrance. Downtown Project workers parked two blocks away so they would pass people on the sidewalk. City Hall's air-conditioned sky bridge was taken down so that workers and townspeople would run into each other in an open plaza. "When someone moves twice as far away," he told the Times, "it's exponentially less contact." He wanted managers spending ten to twenty percent of their time outside the office with their teams. He claimed that dinners and hikes raised productivity by anywhere from 20 to 100 percent, through "more use of shorthand in e-mails, because people weren't afraid of miscommunication."
He had been running this experiment his whole life, at a smaller scale. "I was always interested in flow," he said, "and how to get people not stuck into always talking with the same people." He meant parties: change the entertainment, move the bar during the evening, make guests pass through rooms of different sizes. The Downtown Project was the party at 810 enlarged to the size of a neighborhood.
He leased two floors of the Ogden, the one luxury tower downtown, and turned about fifty apartments into free crash pads for journalists, prospective hires, and potential investors. "Hanging around," he said, "is its own recruiting tool." He took visitors on tours personally. Renn, who was one of those guests, wrote that "never has a modern local business magnate so directly and extensively marketed his city." Everyone passes through Las Vegas eventually, for a convention or a bachelor party, so Hsieh asked famous visitors to give a talk downtown while they were in town, and branded the program "Las Vegas Makes You Smarter."
The place filled with color and oddities. Once a month during baseball season a llama named Cusco led a parade from Fremont Street to Cashman Field, and the marchers got free caps and noisemakers. Hsieh, it should be said, did not much like sports. He liked llamas and community gatherings. Container Park opened in 2013, a little mall of about thirty businesses housed in repurposed shipping containers. A giant fire-breathing praying mantis, adopted from Burning Man, stood at its entrance. The Writer's Block opened as the first independent bookstore in Las Vegas. On a January afternoon a few years later a Washington Post travel writer found Hsieh behind the bar at Atomic Liquors talking with a woman dressed as a mermaid while soap bubbles floated around them. A stranger in a red dress came up, ordered a shot, linked arms with him, and they drank together.
Hsieh himself moved out of the Ogden into an Airstream trailer park he built on a downtown lot. It was a ring of small silver trailers around a shared fire pit, with residents chosen partly for how well they would get along. He kept two alpacas. He explained the choice in terms of density, as he explained most things, but the press treated it as asceticism, the near-billionaire living in a trailer.
People came from far away. Paul Carr, a thirty-three-year-old British writer who had turned entrepreneur, moved to town and told The Guardian in 2013, "Las Vegas is the last big city that's still being invented." Andrew Crump, twenty-seven, decided to move his sports startup from London. Connie Yeh, a former derivatives trader at Citibank, founded the 9th Bridge School, a preschool where, as Recode reported, entrepreneurship training began at six weeks. "It's mostly about teaching them that it's okay to fail," she said. One of her preschoolers already had a website.
And there was Lou Filardo, sixty-nine, who walked around downtown every day and believed that low-income and elderly residents were being pushed out. In 2014 he was photographed by the Los Angeles Times standing in an empty lot across from the Ogden, where Hsieh then lived. Uncle Joe's Pizza had been on Fremont Street for more than seventeen years. It was holding on.
Suicides Happen Anywhere
In January 2013, Jody Sherman, forty-eight, the founder of Ecomom, one of the best-known startups funded by the Downtown Project, shot himself in his car. His company had been failing. In January 2014, Ovik Banerjee, twenty-four, part of the first Venture for America cohort sent to Las Vegas and a central member of the Downtown Project team, jumped from his apartment at Town Terrace. In May 2014, Matt Berman, fifty, founder of Bolt Barber, the flagship shop in Container Park, was found dead at home in an apparent suicide.
The community was about three hundred entrepreneurs. Three of them died by suicide in about sixteen months.
Nellie Bowles, reporting for Re/code that fall, found that people in the community felt the deaths had been barely acknowledged. There were few counseling resources, no large gatherings, and nothing in the way of public mourning. Hsieh, she wrote, "seemed to work hard to keep each suicide quiet." She asked him about it one evening on folding chairs in the Learning Village, a lecture space downtown.
— Tony Hsieh, to Nellie Bowles of Re/code, 2014Suicides happen anywhere. Look at the stats.
He went on: "It's harder for people who are really good students in school. Then they move in to this, where there is no instruction manual, and you have to be MacGyver on your own." Bowles noted that he seemed agitated, and that he moved two seats away from her.
In that moment the statistician's reflex, the habit of thinking in averages and per-acre rates, had become a way of not feeling something. I don't think it was cruelty. It looks more like a man trying to keep the numbers between himself and what had happened.
A therapist who worked with downtown founders, Kimberly Knoll, described it more carefully than anyone else did. "The difference here is the focus on happiness—that's a goal," she told Bowles. "But if we negate the negative emotions in our lives, it takes us away from happiness and brings around shame." An anonymous entrepreneur put it more bluntly: "It's lonely. There's a pressure to socialize and go out. There's a pressure to party."
The money was going wrong at the same time. In September 2014 Hsieh called a surprise all-hands meeting at the Inspire Theater and said he was stepping back from leadership of the project. "I see myself as adviser and investor," one attendee recalled him saying, and he handed operations to his lawyer, Millie Chou. He also said he had never considered himself the project's CEO. On September 30, about 30 percent of the staff, roughly thirty people, were laid off. The cuts fell mostly on parts of the project that brought in no revenue: the Learning Village, tours, music programs. Factorli, a $10 million manufacturing facility that had opened only that year, had already closed. Sources told Re/code the businesses were "bleeding money." One said, "It seems like it's being run by kids—that's because it's being run by kids." Another put it this way: "Tony is not always altogether the most wise judge of character. There's a lot of family. There's a lot of drinking buddies. And some poor choices were made."
David Gould had been a professor at the University of Iowa until Hsieh's ideas persuaded him to quit and move to Las Vegas earlier that year. He published an open letter in Las Vegas Weekly. Some 400 to 600 people a month, he wrote, came to walk Hsieh's nineteen-block footprint and consider the idea that return on investment was not enough, that a city of the future also needed return on community. "The story you crafted was not only visionary, but attainable," Gould wrote. "So what happened?"
Hsieh had more or less answered that question in advance, and nobody had heard it as a warning. "My vision is more entrepreneur-focused," he told Bowles. "It's more a philosophy, it's not a plan."
The verdict on the Downtown Project is still mixed, and more than one honest summary is possible. A 2017 Applied Analysis report credited the project with 407 completed or ongoing construction projects, nearly $210 million in economic output, more than 1,500 jobs, and about $70 million in wages, along with 61 small-business investments and roughly 45 acres still owned, much of it undeveloped. East Fremont stopped being skid row and became a place people went in the evening. Asked about all this by CNBC in 2016, Hsieh gave the answer he gave about most things: "To see kids and families walking around in a place that was previously pretty dangerous, that's progress, and [I'm] pretty happy about that." He also named two regrets. He should have started building apartments in year three rather than year four, since a neighborhood of bars with nobody living nearby has no steady foot traffic. And he should have made the goals "much more explicit," ranking collisions ahead of learning, connectedness, and even financial return.
In other words, he had built the party and then noticed there was nowhere for the guests to sleep.
The Default Future Is Death
At the end of 2013, while Downtown Project storefronts were still opening and closing, Hsieh announced that Zappos would get rid of traditional managers. The new system was holacracy. It had been created and trademarked by Brian Robertson, a software developer who had become disillusioned with top-down hierarchy and founded a consultancy, HolacracyOne, to sell the alternative. Under holacracy job titles disappeared. Work was organized into "circles" built around purposes, and each circle was made up of "roles" that people filled, several at a time if they liked. Coordination ran through "lead links" rather than bosses. Hsieh told every employee to read Frederic Laloux's book on self-managing organizations.
His reasoning was mortality. "As companies get bigger, you become slower moving; there's more bureaucracy," he told CNBC. "And I don't think any manager is purposely thinking, 'How can I become more bureaucratic?'" He cited the first Fortune 500 list, from 1955. "If you look at the original list, 88 percent of those companies are no longer on that list. So the default future for companies is death." He cited Glaeser again. Cities, he pointed out, tend to get more productive per person as they grow, while companies tend to get less. He wanted Zappos to behave like a city.
He had made the same argument downtown. He kept trying to solve the problem of human organization by making it more like a dense, self-organizing crowd and less like a ladder. At Zappos, at least, he had the authority to require it.
The transition went slowly, and in the spring of 2015 Hsieh pushed it forward in a long memo to staff. Anyone who did not want to work under self-management could take a severance package and leave. It was the pay-to-quit offer again, applied to the whole company at once. Eighteen percent of employees took it. The press called holacracy confusing, a radical experiment, a mess. What frustrated Hsieh most was that few articles mentioned the 82 percent who stayed. Asked what he would change, he gave the same answer he gave about the apartment buildings: "There's never a good time to make a transition and we probably hesitated too long. So if I could do anything differently, I would actually do it earlier."
In two separate experiments his only stated regret was that he hadn't moved faster.
The pay-to-quit idea, at least, was adopted elsewhere. Amazon took it on. The culture Hsieh had built to keep Zappos different from its new owner ended up, in that one respect, changing the owner.
Live in the Wow
On August 24, 2020, after twenty-one years, Tony Hsieh retired as CEO of Zappos. The chief operating officer, Kedar Deshpande, took over. The announcement went to Footwear News, the trade paper that had named Hsieh its Person of the Year in 2009 and quoted Stuart Weitzman calling him a pioneer in "an industry that has been around since the time of Moses." By then Hsieh was already in Park City, Utah, buying property: multiple houses with a combined market value of around $56 million, part of a plan to build a new community from scratch.
Kirsten Grind and Katherine Sayre of the Wall Street Journal, whose reporting later became Happy at Any Cost, pieced together what that last year looked like, along with Angel Au-Yeung and David Jeans in Wonder Boy. The details are hard to read. He was drinking heavily and using mushrooms, ecstasy, and ketamine. He inhaled nitrous oxide cartridges for hours, the kind sold as whipped-cream chargers. He deliberately starved himself of oxygen to induce hypoxia. He fasted until he weighed under a hundred pounds. For twenty-six days he ate according to an "alphabet diet," each day only foods beginning with a single letter. In a TEDx talk to high school students in March 2019 he had urged the audience to "get comfortable with discomfort" and described how cold showers had changed his life. By 2020 that comfort with discomfort no longer looked like discipline. It looked like an addiction to dismantling himself.
The pandemic had cut him off from crowds. He was surrounded instead by people he was paying. Bilton reported that he was paying "friends" to be around him in Park City. Wonder Boy describes a man shielded from his family's interventions by yes-men on his payroll. He promised large sums of money on sticky notes left around his house. The singer Jewel, a longtime friend, wrote him a letter months before the fire warning him about his drug use. By August, friends and family were planning an intervention. The day before the fire, according to the Journal, he had arranged to check into a rehab facility in Hawaii.
He had gone east for Thanksgiving to see family. The house on Pequot Avenue may have belonged to a former Zappos employee, Rachael Brown. The New York Times later described the night as including an argument, drugs, a locked door, and a sudden fire. Then came the shed and the beach chair. A week after he died, a Las Vegas Review-Journal reporter walked through New London in cold rain. The Broadway Creamery on the public beach was closed for the season. The Waterslide was closed. At Mr. G's, a working-class diner selling grinders and pizza, the waitresses were saddened to learn that someone that famous had been in their town.
The family's statement, released by a DTP Companies spokesperson, said he had died "peacefully and surrounded by family." It asked people to celebrate rather than mourn "his transition." Of his mantra it said simply: delivering happiness. Back in Las Vegas, people left tributes along Fremont East, and city officials talked about renaming a street after him.
He left no known will. He was unmarried and had no children. His parents, Richard and Judy, became administrators of an estate later estimated at about $500 million, with his brother Andrew as co-administrator. The estate was soon under pressure from claims: unpaid debts, and promises Hsieh had made in his final months. The sticky notes were now being argued over by lawyers.
Then, in early 2025, a document arrived at a law firm in Reno with an anonymous sender and a strange story. It was a will dated March 13, 2015. According to the cover letter, it had been found among the belongings of a ninety-one-year-old man in Pakistan named Pir Muhammad, who had died of Alzheimer's disease. Muhammad was supposedly one of the witnesses and had been given "exclusive possession" of the original to prevent tampering. The will left $3 million to Harvard; $500,000 each to UNICEF and the American Red Cross; $250,000 each to the Buffett Foundation, Americares, and the Gates Foundation; and $500,000 each to his mother, his father, and his brothers Andrew and David. It contained a no-contest clause. It also sounded, almost too well, like him. "I have structured my way of surprising and leaving essentially all my beneficiaries to experience the 'WOW' factor in their life," it read. "I want my beneficiaries to 'live in the wow.'"
The family called it a forgery. They said Hsieh had no connection to Pakistan and that no one had ever heard of Pir Muhammad. The witnesses turned out to be impossible to find or fictitious. The New York Times, in March 2026, ran the story under the headline "The $500 Million Mystery Will, Signed by Ghosts." The lawyers on both sides prepared for litigation, with the costs paid out of the estate.
The family also pulled his schedule for March 13, 2015, the day the ghosts supposedly gathered to witness his signature. His calendar showed Zappos meetings and calls, all day.
Part IIThe Playbook
What follows separates the methods that built a billion-dollar retailer from the ones that hurt the man who used them. Many of Hsieh's best ideas look like bad decisions on a spreadsheet: free shipping both ways, a warehouse running all night, paying new hires to leave. His worst ideas looked brilliant in a keynote: happiness as a civic target, a city run as a philosophy rather than a plan, a life with no line at all between work and play. The principles below draw on both, because a useful playbook should include the warning labels.
The principles
- 1.Treat the experience as the product.
- 2.Own the unglamorous layer, even when it costs you revenue.
- 3.Move to where your hardest hire is abundant.
- 4.Write only values you would fire someone over.
- 5.Pay people to leave.
- 6.Throttle growth to protect the core.
- 7.Engineer collisions, and measure them.
- 8.Sell the cap table to save the culture.
- 9.When you are going to change, change sooner.
- 10.A philosophy is not a plan.
- 11.Never make happiness a mandate.
- 12.Keep someone on the perimeter who can tell you no.
Principle 1
Treat the experience as the product
"We're a service company that just happens to sell shoes" sounds like a slogan, but it was an accounting decision. Hsieh moved money that competitors spent on paid advertising into free two-way shipping, a 365-day return window, a 24/7 warehouse, and an unscripted phone line staffed around the clock. "All those things are very expensive," he told Forbes, "but we think of them as basically our marketing dollars." Once the experience became the main expense, the customer became the main channel. By 2010 three-quarters of daily sales came from repeat buyers.
The discipline was in refusing to count service as overhead. Most companies treat service as a cost to minimize, which is why they time calls and hide their phone numbers. Zappos put its number in the top-left corner of every page because, as Hsieh noted, nearly every customer contacts the company at some point. That contact was the most valuable advertising inventory the company had, so it chose to own it instead of avoiding it.
Tactic: Find the budget line you currently call "customer support," rename it "acquisition," and evaluate it the way you evaluate your ad spend.
Principle 2
Own the unglamorous layer, even when it costs you revenue
The most important decision in Zappos's history was giving up 25 percent of its revenue, the drop-ship business, in the middle of a funding drought. It feels counterintuitive, and it was. Drop shipping was capital-light and already worked. But a retailer that cannot see its own inventory cannot keep its own promises, and a company built on promises cannot outsource the part where they get kept.
"We had to give up the easy money, manage the inventory, and take the risk." Look at what that cost: a warehouse expansion with no visible funding, a CEO selling his personal assets, and daily fear of collapse until Wells Fargo provided the first $6 million credit line. The payoff was control over delivery speed, stock accuracy, and returns, which were exactly the variables the brand promise depended on.
Tactic: List every customer promise you make, trace each one to the system that actually fulfills it, and bring in-house any you don't control, starting with the one customers complain about most.
Principle 3
Move to where your hardest hire is abundant
Zappos left San Francisco in a single lunch in January 2004 because it couldn't hire the people its strategy depended on. Startups in the Bay Area competed for engineers. Zappos needed people who wanted customer service as a career, and Las Vegas, a city of hotels and call centers, was full of them. The move went against every status signal in tech, and that was why it worked: nobody was competing for those workers.
Notice how fast they decided. Lunch to announcement took less than a week, and people were moving within two months. Hsieh treated location as a variable in the strategy, not a fixed part of the company's identity.
Tactic: Name the single role your strategy most depends on, then rank cities by how plentiful and undervalued that role is there, not by where your peers are based.
Principle 4
Write only values you would fire someone over
Hsieh disliked corporate values until he figured out what made them meaningless. They were never enforced. His fix was the word committable: a value counted only if the company would "hire or fire people based on them, independent of their job performance." That standard is hard to meet, which is why it took Zappos a year and a company-wide email to agree on ten.
The enforcement had to be built into the plumbing. There was a separate culture interview, half of every performance review was based on living the values, and value number ten, Be humble, explicitly ruled out talented egotists. "While other companies might ignore that trait," Hsieh said, "for us it's not a question—we just won't hire them." He told Marketplace that studies suggested the particular values mattered less than the commitment to them. What mattered was alignment.
Tactic: For each of your stated values, name one person you've hired or let go because of it; if you can't name anyone, delete the value.
Principle 5
Pay people to leave
The pay-to-quit offer, $2,000 to $3,000 to walk away after training, is usually described as a filter. It was more of a ritual. Two or three percent took the money. The other 97 percent had been made to ask themselves, in Hsieh's words, "Is this a company I really believe in?" Choosing to stay turned an employee into a participant.
Hsieh used the same mechanism at scale in 2015, when holacracy stalled, offering severance to anyone unwilling to adopt it. Eighteen percent left. The headlines focused on the departures; Hsieh focused on the 82 percent who had now actively chosen the new system. Amazon later adopted the idea, a sign of how well it works.
Tactic: Before any major cultural transition, offer a clean, generous exit to everyone, and treat the people who stay as having opted in.
Principle 6
Throttle growth to protect the core
In January 2005 Zappos beat its plan by more than 24 percent and then pulled back marketing to slow sales until the phone team could catch up. Few founders would write that to investors. Hsieh did, because LinkExchange had taught him that speed without capacity turns a company impersonal and turns its founder unhappy.
Z
The Zappos Growth Curve
Gross merchandise sales, as reported by Hsieh and the company. The steepest years were also the years he deliberately slowed demand.
1999
"Almost nothing." Shoesite.com renamed Zappos.
2000
$1.6 million. Hsieh joins full-time.
2001
$8.6 million. Drop shipping later abandoned; survival on a Wells Fargo credit line.
2002
$32 million.
2003
$70 million. Goal set: $1 billion by 2010.
2004
$184 million. Move to Las Vegas; warehouse grows to 280,000 sq ft.
2005
Marketing cut back in January to slow sales while service staffing caught up.
2007
$840 million. Expansion into handbags, eyewear, clothing.
2008
$1 billion, two years ahead of goal.
2015
"In excess of $2 billion," per Forbes.
The billion-dollar goal arrived two years early anyway. Holding back demand didn't slow the company in any way that mattered. It protected the thing that produced the growth.
Tactic: Define the one capacity metric your brand promise depends on, such as response time or delivery speed, and pull back acquisition spending whenever it degrades, even during a record month.
Principle 7
Engineer collisions, and measure them
Hsieh believed chance encounters could be designed. He routed employees past the front entrance on the way in from the parking lot, had the City Hall sky bridge removed, parked Downtown Project staff two blocks from their offices, and tracked density in residents per acre. "When someone moves twice as far away, it's exponentially less contact." He gave the outcome a name, return on collisions, and put it on the same level as return on investment.
At company scale the evidence held up. Managers spending 10 to 20 percent of their time outside the office with their teams produced, by his account, more trust and shorter emails. At city scale it ran into the realities of housing and foot traffic. The principle works. The measurement problem gets harder as the scale grows.
Tactic: Audit your office or remote setup for the one structural change, a shared entrance or a standing cross-team dinner, that would most increase unplanned contact between teams that rarely talk.
Principle 8
Sell the cap table to save the culture
By 2008 Zappos's board was split three to two between people who wanted returns and people who wanted the culture preserved. Hsieh's first plan was to buy out the other directors for about $200 million. His second, faster plan was to sell the whole company to an acquirer he believed would leave it alone. He spent an hour with Bezos, served hot dogs and a two-pizza joke, and negotiated for independence as much as for price.
It is a counterintuitive move: give up ownership to keep autonomy. It also has costs. The Kentucky warehouse went to Amazon in 2012. But Zappos kept its name, its headquarters, its weirdness, and its CEO for another eleven years.
Tactic: When your board and your culture are in conflict, treat finding an aligned owner as a strategic option on par with raising money, and negotiate operating independence explicitly, in writing.
Principle 9
When you are going to change, change sooner
Hsieh's regrets were remarkably consistent. On holacracy: "We probably hesitated too long. So if I could do anything differently, I would actually do it earlier." On the Downtown Project: start the apartment buildings in year three, not year four. Both times the cost of waiting was the same, an awkward middle period in which the old structure had lost its legitimacy and the new one hadn't yet earned any.
⏱
Hsieh's Self-Diagnosed Delays
In each case, his stated regret was timing, not direction.
| Initiative | What happened | His stated regret |
|---|---|---|
| Holacracy at Zappos | Announced late 2013; slow adoption forced a 2015 ultimatum; 18% left. | Too slow "I would actually do it earlier." |
| Downtown housing | Bars and restaurants opened before residents arrived; Fremont9 broke ground in year four. | Too slow Should have started in year three. |
| Drop-ship exit | 25% of revenue abandoned all at once. | Fast No regret recorded; it made the company. |
| Las Vegas relocation | Decided over lunch; staff moving within two months. | Fast Became the foundation of the service model. |
The moves he made quickly and all at once were the ones that worked. The ones he phased in were the ones he regretted.
Tactic: Once you've decided a structural change is right, shorten the transition period by half, because the in-between state usually costs more than the disruption.
Principle 10
A philosophy is not a plan
"My vision is more entrepreneur-focused. It's more a philosophy, it's not a plan." Hsieh said this as a point of pride, and it explains much of what went wrong downtown. The project ran on several objectives at once (collisions, co-learning, connectedness, return on investment) without ranking them, so every bad decision could be defended on one of them. A doughnut shop that lost money still "generated collisions." A $10 million factory could be justified as inspiration.
Hsieh saw this himself by 2016: he would have "made our goals much more explicit." At Zappos, culture came wrapped in hard targets: $1 billion by 2010, a spot on the Fortune list. Downtown, the culture had nothing around it to keep it in check.
Tactic: For any mission-driven initiative, rank its goals in writing, and name in advance the metric that will decide disputes when they conflict.
Principle 11
Never make happiness a mandate
This principle is a warning. Three suicides in a community of three hundred, followed by what entrepreneurs described as near-silence from leadership and a founder answering with statistics, show what happens when an organization's stated purpose makes ordinary grief feel like failure. Kimberly Knoll's diagnosis applies far beyond Las Vegas: when happiness becomes the goal, negative emotions turn into something shameful. "There's a pressure to party," one founder said.
At Zappos the happiness was aimed outward, at customers, and supported by real jobs, real pay, and a working business. Downtown it was aimed at the residents themselves, with weaker economics underneath. Hsieh's most famous idea worked as a service standard. It did not work as a demand placed on people's inner lives.
Tactic: Build into your culture visible, funded, routine ways to deal with failure and loss, so that people who are struggling are never also out of step with the official mood.
Principle 12
Keep someone on the perimeter who can tell you no
Hsieh's working life was full of strong partners: Lin, who saw unit economics in a pizza order; Mossler, who knew the shoe business; a board that pushed back. His later years were full of what Re/code's sources called "family" and "drinking buddies," and then, in Park City, people on his payroll. The pattern is clear. As the people around him lost the standing to refuse him, his judgment declined with them, on the Downtown Project's hires, on his own body, and on an estate he never put in order.
The absence of a will is the clearest example. A man who planned parties down to where the bar stood left a half-billion-dollar estate unplanned. The result was years of claims, sticky-note promises, and a purported will "signed by ghosts," with the legal fees paid out of the estate.
Tactic: Designate at least one person, someone you don't pay and who doesn't depend on you, with standing authority to stop your biggest personal and financial decisions, and put your own succession in writing before you need it.
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Part IIIQuotes and Maxims
In their words
— Tony Hsieh, Inc., 2006I almost deleted the voice mail. … I didn't think consumers would buy shoes sight unseen, and Nick didn't have a footwear background. It sounded like the poster child of bad Internet ideas.
— Tony Hsieh, to Kai Ryssdal, Marketplace, 2010We wanted to come up with committable core values and by committable, meaning we are willing to hire or fire people based on them, independent of their job performance.
— Tony Hsieh, Stanford Graduate School of Business, 2010We're not trying to maximize efficiency. We're trying to maximize the customer experience.
— Tony Hsieh, to CNBC, 2016If you look at the original list, 88 percent of those companies are no longer on that list. So the default future for companies is death.
— Tony Hsieh, to the Las Vegas Review-Journal, 2012I guess it is kind of analogous to the whole happiness thing. It isn't trying to achieve some end goal.
For Hsieh's own account of the Zappos years, in his voice and with his blind spots, read Delivering Happiness.
Maxims
- Read the voicemail to the end. The detail that saves a bad-sounding idea is often in the last sentence, like the 5 percent already sold through catalogs.
- Own the boxes. You cannot promise an experience that someone else fulfills.
- Spend on the customer, not on the ad. Service you pay for once gets repeated for free by the people you served.
- Values are only real if someone was fired for them. If no one has been, it's a plaque on the wall.
- Make staying a choice. People who turn down the money to leave become owners of the decision.
- Slow down to stay good. A record month means nothing if the phones stop getting answered.
- Design for collisions, but rank your goals. Density helps, but it doesn't replace a plan.
- Don't pay for the chorus. People on your payroll can't help you once you need someone to say no.
- Happiness is a result, not a requirement. Leave room for grief, or people will hide it from you.
- Write it down. A legacy without a will ends up decided by lawyers and strangers.
