DELIVERING HAPPINESSA PATH TO PROFITS, PASSION, AND PURPOSE

Tony Hsieh

B.I.G. SummitNovember 19, 2009

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A Little About Me (Tony)

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Shepherdsville,

Kentucky

Las Vegas,Nevada

1400employees

Founded in 1999*

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1000+ brands

5 million

+warehous

editems

“We are a service company

that happens to sell stuff.”

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Public recognition is nice, but remember to pay more attention to customers.

TV Stories Oprah (2008/2009) ABC Nightline (2008) 60 Minutes (2007)

Fortune “100 Best Companies to Work For” #23 (2009) – Highest ranking newcomer to list

Fast Company “50 Most Innovative Companies” #20 (2009)

BusinessWeek Top 25 “Customer Service Champs” #7 (2009)

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The Power of WOW

‘01 ‘02 ‘06‘03 ‘04 ‘05 ‘07‘00 ‘08

Gro

ss S

ale

s $M

M

$1,000

800

600

400

200

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What customers notice firstSERVICE

800 number on every page

Free shipping

Free return shipping

24/7 customer service

365-day return policy

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Building Customer Loyalty

No call times

Every phone call is a brand-building opportunity

No upselling

No scripts

SERVICE

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What customers experience next

Redirect to competitors’ sites

Fast, accurate fulfillment

Surprise upgrades to overnight shipping

Above-and-beyond customer service

SERVICE

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the #1 priorityCULTURE

5 weeks of training

Culture book

$2000 to quit

Hiring for culture

Twitter helps build culture

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Clothing, Customer Service, Culture

Customer Service

Clothing

Culture

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Clothing

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Customer Service

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Culture

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Clothing, Customer Service, Culture

Customer Service

Clothing

Culture

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Delivering Happiness(customers and employees)

“People may not remember exactly what you did or what you said, but they will always remember

how you made them feel.”

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Building Great

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CULTURE“Committable Core Values”

Don’t make your core values just a meaningless plaque on the wall…

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Example: Core Values

1. Deliver WOW Through Service2. Embrace and Drive Change3. Create Fun and a Little Weirdness4. Be Adventurous, Creative, and Open-Minded5. Pursue Growth and Learning6. Build Open and Honest Relationships With Communication7. Build a Positive Team and Family Spirit8. Do More with Less9. Be Passionate and Determined10. Be Humble

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COMMIT TO TRANSPARENCY

“Be real and you have nothing to fear”

Your culture is your brand

Don’t try to be someone you are not

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Examples of Transparency

Twitter

“Ask Anything” employee newsletter

Openness with vendors

Tours

Reporter visits

Sharing internal information with other companies

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“That’s great,but it would

never work at my company…”

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ALIGNMENTIt doesn’t matter what your

core values are…as long as you

commit to them.

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VISION

“Whatever you’re thinking, think bigger.”

Does the vision have meaning?

Chase the vision, not the money…

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VISION

“Don’t chase the paper, chase the dream.”

Sean Combs aka “Puff Daddy” to rapper Biggie Smalls aka “Notorious B.I.G.” in Notorious

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ENTREPRENEURS:

“What would you be passionate about doing for 10 years even if you never made a dime?”

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EMPLOYEES:

What’s the larger vision and greater purpose in

their work beyond money or profits?

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VISION

MOTIVATIONvs.

INSPIRATION

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Evolution of a Brand

1999 Selection

2003 Customer Service

2005 Culture and core values as our platform

2007 Personal Emotional Connection

2009 Delivering Happiness

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TAKE A STEP BACK…

WHAT IS YOUR GOAL IN LIFE?

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WHAT IS YOUR GOAL IN LIFE?

Grow Company

Get a Great Job

Boyfriend / Girlfriend Be Healthy

Retire Early Make Money Find Soul Mate Run Faster

Spend Time w/ Family Buy A Home Get Married Run A

Marathon

why? why? why? why?

why? why? why? why?

HAPPINESSwhy? why? why? why?

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RESEARCH HAS SHOWN

HAPPINESSPeople are very bad at predicting what

will bring them sustained happiness.

“When I get ___, I will be happy.”

“When I achieve ___, I will be happy.”

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HAPPINESS

There is a SCIENCE behind many aspects of business including: conversion psychology of buying direct marketing customer acquisition metrics repeat customer behavior, etc.

What if you spent just 10% of your time studying and learning the SCIENCE of HAPPINESS?

How much HAPPIER could you be?

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WHAT IS YOUR GOAL IN LIFE?

Grow Company

Get a Great Job

Boyfriend / Girlfriend Be Healthy

Retire Early Make Money Find Soul Mate Run Faster

Spend Time w/ Family Buy A Home Get Married Run A

Marathon

why? why? why? why?

why? why? why? why?

why? why? why? why?

HAPPINESS

A FEW DIFFERENT FRAMEWORKS OF

HAPPINESS

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A FEW DIFFERENT FRAMEWORKS ON

HAPPINESSPerceived Control

Perceived Progress

Connectedness

Vision / Meaning(Being part of something bigger than yourself)

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Maslow’s Hierarchy

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3 TYPES OF HAPPINESS

Rock Star(Pleasure – chasing the next high)

Flow(Engagement – time flies)

Meaning / Higher Purpose(Being part of something bigger than yourself)

time

time

time

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RECOMMENDED BOOKS

PEAKChip Conley

TRIBAL LEADERSHIPDave Logan, John King & Halee Fischer-Wright

FOUR HOUR WORK WEEKTim Ferriss

HAPPINESS HYPOTHESISJonathan Haidt

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Contact info and tours!

Email ceo@zappos.com for:

This presentation

Free culture book (need physical mailing address)

Go to http://tours.zappos.com for:

Tour of our offices when you’re next in Las Vegas (takes about an hour)

We’ll pick you up from the airport or your hotel in a Zappos Shuttle!

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Profits

Passion

Purpose

GREAT BUSINESS

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HAPPINESS

time

time

time

GREAT BUSINESS

Profits

Passion

Purpose

Pleasure

Passion

Purpose

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What % of your time do you want to spend learning about the

SCIENCE of HAPPINESS?

How can the SCIENCE of HAPPINESS help your business, your brand, and yourself?

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If the research shows that vision / meaning / higher purpose

leads to HAPPINESS…

What is your company’s higher purpose?

What is your higher purpose?

Delivering HAPPINESS