Designing an Organisational Culture: Tony Hsieh Wrapping Zappos' Organisational Culture?

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Designing an Organisational Culture: Tony Hsieh Wrapping Zappos'; Organisational Culture?

 

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He unloaded his brainchild because he couldn't stand it anymore. “When it was just five or ten people, it was a lot of fun. We were working around the clock, no idea what day of the week it was, sleeping under our desks. We hired all the right people in terms of skill sets, but by the time was 100 or so, I dreaded going to the office”14, he admitted. In 1998, Tony with the help of his friend Alfred Lin (then Vice President (VP) of finance and administration of Link Exchange) sold the company to Microsoft for $265 million.15 By the time Microsoft acquired Link Exchange, a million different websites were part of this network and it was connecting roughly 45%–50%16 of all the internet enabled houses. Tony said, “I learned early on that it takes a lot more than just a good idea for a business to be successful, and that there is always a lot to learn.”17 Zappos' Organisational Culture – Scripting the DNA

After the sale of Link Exchange, Tony, a millionaire by then, decided to operate as a venture capitalist. Spending $27 million, Tony along with Alfred Lin (Lin) started Venture Frogs that invested in a group of internet startups with Zappos being one among them.¹⁸ Tony joined Zappos.com (Zappos) as an investor and advisor in 1999. The brain child of Nick Swinmurn (Nick), Zappos is an online retail shoe store that derives its name from zapatos, a Spanish word for shoes. In 1999, Nick founded Zappos in San Francisco after he had failed to find a pair of shoes that matched his choice. Knowing that shoes were a $40 billion market in the US with $2 billion sold via mail order catalogues,¹⁹ Nick sensed an opportunity and decided to start an online shoe store, initially called Shoesite.com and then renamed to Zappos.

Zappos was the company that interested Tony the most. As it was the most enjoyable and promising of all his investment companies, Tony began spending more and more time with the company. In 2000, he invested $500,000 and permanently joined the company as a CEO.²⁰ Tony moved the operation to Las Vegas for the cheap real estate and abundant call-center workders, and vowed to avoid a LinkExchange-style fate. In his tenure as a CEO, Tony took Zappos from $1.6 million in revenues to over $1 billion by 2008 . Tony is not one of those larger-than-life personalities. He's probably the least bubbly, most reticent person at Zappos. With a $36,000 annual salary, he's also one of the least well-paid CEOs.

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14] Carey W.P., “Zappos CEO Tony Hsieh: Customer Focus Key to Record Sales During Retail Slump”, http:// knowledge.wpcarey.asu.edu/article.cfm?articleid=1736, January 14th 2009
15] Ibid.
16] “Tony Hsieh speaks at Yanik Silver's Underground Seminar 4”, op.cit.
17] “Interview conducted with Tony Hsieh by Sravanthi Vemulavada and Priti Krishnan”, op.cit.
18] “Button-making, internet advertiser, shoe entrepreneur, Zappos CEO, Tony Hsieh”, op.cit.
19] Wilson Sara, “Build a Billion-Dollar Business”, http://www.entrepreneur.com/magazine/entrepreneur/2009/march/200100.html, March 2009
20] “Button-making, internet advertiser, shoe entrepreneur, Zappos CEO, Tony Hsieh”, op.cit.