I never met Tony Hsieh (pronounced “shay”). But we were in an investment together decades ago, before there was a Zappos, before he was famous, and during the Dot-Com Bubble.
When I was working on an investment (Ask Jeeves, which went IPO), I saw “Venture Frogs” listed on the cap table. I asked Rob Wrubel, the CEO, who they were. “Oh, the LinkExchange founders,” he said. “They’re great guys.”
I recall having a phone call with Tony about Ask Jeeves. It was a different time: there were very few Asian-American start-up CEOs or VCs then. It made sense to connect.
When Tony died a few days ago, I read about how he lived in a 240 square-foot trailer, even though he had oodles of money after Zappos sold to Amazon. That made me decide to read his book, Delivering Happiness. I mean, who does something like that when you have loads of cash?
The book is excellent.
Tony very clearly wrote about his upbringing and how he always felt compelled to start and run a business, which he did throughout his life. He talked about the emptiness of materialism; once he sold LinkExchange and had some money, he started to accumulate some possessions, only to find that they didn’t satisfy him. Tony wrote about how being an angel investor as part of his seed fund, Venture Frogs, wasn’t that fulfilling for him, that he felt that he was on the sidelines.
He wrote about happiness and what studies discovered about its drivers, and he resolved to build those facets into Zappos, a seed investment of his at which he eventually became CEO.
And, he talked about how Zappos very nearly failed many times after the Dot-Com Crash, and no one would invest. He in the end poured his entire net worth into the company. And, after more near-failures, Zappos became a huge enterprise and ultimately sold to Amazon for $1.2 billion. In retrospect, now, it all seemed so easy and obvious.
It is very sad that Tony died so young, and I suspect he had another company or two in him. But he wrote his book and shared his business and personal insights with the world. And he clearly touched many people’s lives, evident when you read the spontaneous tributes online about him.
He was definitely a different type of person. He never married and didn’t have children. He lived in a trailer park. And he created a culture at Zappos that emphasized transparency and quirkiness. And his colleagues loved him for it and viewed Zappos as a family.
As I tell my business school students, the older you get, the more you realize that leadership is contingent on the “soft” skills of reading and influencing people. As you get more senior, you let others do the “hard”-skill tasks, such as running financial models.
In the end, IMO, it’s not what leaders do that matters. It’s how they make you feel. When a team feels that they have a leader whom they can trust, magic can happen. That team will bond together, forge through the hard times, and take on more challenges over time to grow themselves and develop the company.
Thank you for your book, Tony. What a legacy!