Tony Hsieh
EPISODE 105
Tony Hsieh (buy on Amazon), the “visionary” developer of online shoe retailer Zappos has died at the age of 46.
Hsieh was an internet pioneer and venture capitalist, he and Harvard classmate Alfred Lin transformed a small business selling shoes online into a $1.2bn company by the time of its acquisition by Amazon in 2009.
The famously generous tech exec was a lifelong believer in cultivating communities where he instilled the importance of shared values and how to make crazy ideas a reality. His motto was to align your company around your people and above all - always be yourself.
SHOW OUTLINE
INTRO
Tony and the importance of Shared Values
Remembering Tony Hsieh (3m27)
BLOCK A: THINKING DIFFERENT
What is Holacracy
Tony Hsieh explains holacracy and why it works for Zappos (2m42)
How to make crazy ideas a reality
Do thought experiments (1m33)
BLOCK B: THE POWER OF PEOPLE
Create the WOW Experience
Maximize customer experience (4m10)
Align your company around your people
Hire the right people (2m43)
Be yourself always
Celebrate each person's individuality (1m09)
OUTRO
Light your path
Simon Sinek and Tony Hsieh: Talking about finding His WHY (4m01)
TRANSCRIPT
And welcome to the moonshots podcast. It's episode one one hundred and five. I’m your co-host Mike Parsons and as always I'm joined by the original thinker himself. Mr. Mark Pearson freeland. Good morning, Mark. Good morning, Mike. It is a day of delivering happiness here in Sydney. Isn't it. How's it going? It totally is.
Those blues guys are bringing me happiness and we are going to delve into the world of somebody that we really want to celebrate, who I think brought a ton of happiness to the world. Yes, that is the, uh, pretty visionary as well as moonshot thinker, actor. And do, uh, Mr. Tony Hsieh (buy on Amazon), he just created so many interesting, uh, businesses products, as well as frameworks.
Mike, I [00:01:00] can't wait to really uncover. What Tony was thinking and what he was all about. He was indeed a busy little bee. Uh, Tony Shay probably most well known for founding, uh, Zappos, uh, which for, for our American listeners, they will be incredibly familiar with. Um, but he also did startups that he sold to Microsoft and you know what.
He had $2 million companies. Um, but if that wasn't a, he also wrote a New York times best seller (buy on Amazon), uh, man, this guy did some stuff and, um, he deserves to be celebrated. Um, and most importantly, because unfortunately we had this terrible news last week that he passed away. So whilst that isn't truly sad moment for such a young guy, Uh, I think it would only be appropriate to celebrate some of the amazing [00:02:00] thinking, uh, that he brought to the world.
He was without a doubt, one of the most original thinkers, uh, as you've said, Mark, he's a bit Elon musky, uh, in the, his capacity to have big ideas, but not only that Mark, he also gets them. Don and that's, what's so special about tourney show. Why, why do you think Tony's Shane matters so much? Yeah, well, I think you've, you've hit the nail on the head there.
He was, uh, an individual who got an idea in his mind. And as we've learned through covering, you know, 104 individuals already, it's once you've got an idea or a framework or a product in mind, it's that resilience to go out and make it happen no matter. Um, you know, how tricky it might seem to other people.
And Tony Shay was definitely one of those individuals, I think who belongs in our innovators long list because, you know, he, he focused so much on, on people and customers and I think he [00:03:00] did rewind it rewrite a couple of, uh, of the frameworks. Mike I'm I'm excited to hear what else he can teach us. Yeah, I think, um, Incredibly brave and original thinker who wasn't scared to put those ideas into action.
And I think if, if you're a moonshot who's tuning in this, this, uh, next, hour's going to be all about delving into the way the world of Tony show of the success. Uh, and we're going to ask ourselves. How did he do it? Uh, and how might we do it too? Cause that's what we do here. We learn out loud and we really are excited to celebrate the life of Tony Shay.
And I think to kick things off, I think what we'll do is we we'll start with, uh, a great clip that really kind of gives you a, a sense of Tony and his life. So let's remember Tony Shea. After graduating from college in 95, I went to work for Oracle in [00:04:00] the Bay area, my college roommate, we decided to start our own business.
And at the time the internet was just getting started. We started a web design and marketing business. During lunch hours, I would go and make sales calls in the evenings at home. We would create websites. And then we realized that all these websites we were creating, they didn't really have a way to market themselves.
And so. That's what led us to start a service called link exchange. We started hiring friends and that whole strategy of hiring friends and friends of friends worked really well until we got to about 20 people. And then we basically ran out of friends. We had to start hiring people through resumes and interviewing, and we also didn't know any better to pay attention to company culture.
And not everyone we hired was good for the culture. And so by the time we got to a hundred people, I dreading getting out of bed in the morning. To go to my own company. And that's really what led us to sell the company to [00:05:00] Microsoft. When we sold link exchange in 1998, for 265 million, I started making lists of all the things that I wanted to buy.
And I realized that I didn't actually have that much on the list. I was really more interested in helping build stuff. When I got involved with Zappos, wanting to make sure that I didn't make the same mistake again. And so that's why from the beginning, Zappa's has always. Paid a lot. Attention to company culture.
Zap was, was founded in 1999 and San Francisco. In 2004, we ended up moving the entire company to Las Vegas. We decided we wanted to build this app as a brand to be about the very best customer service and customer experience. So we literally take thousands and thousands of phone calls every day. We view it as actually our best relationship building opportunity.
Everyone's being inundated with thousands of marketing messages. Every day. When you have a phone call with someone, you actually get to connect with them. One-on-one one of our core values at Zappos is [00:06:00] to create fun and a little weirdness. We really recognize and celebrate each person's individuality, and we want their true personalities to shine in the workplace.
Most people they're a different person. At home on weekends, hanging out with their friends, then they are in the office with coworkers. Ideally, you're the same person, your coworkers. Aren't just coworkers, but they're actual friends. Not because we're forcing you to be friends, but because that's what you want because you have the same values, but you want to make sure that the values still include enough room for diversity.
I'm by default, pretty introverted and quiet and shy. If I meet someone for the first time, I've gotten feedback. That sometimes, because I'm not talking as much. They think I secretly hate them or I'm judging them or whatever. Whereas I'm just shy, I guess. Hmm. Inspiring story from Tony Shay who died on Friday.
Just a really nice, full sweet clip for us [00:07:00] to kick off the show. Mike, I mean, there's a lot in there and we're going to really unpack a lot of these concepts and thoughts and, um, you know, behaviors that Tony really brought out throughout all of the different companies that he was involved in. But a couple of things that stand out to me straight off the bat is his focus on people is focused.
Absolutely. You know, starting off right at the get-go, um, I've actually slightly different approach to what I think. Um, we will, I suppose I presume with, with our work and career is that he did start working with friends, you know, up to about the size of 20 individuals in the business. He was hiring people that he liked, that he knew.
And perhaps the lesson here is, um, You can actually work with friends because it does have that, uh, fun, valuable relationship and trust. The trust exists between friends. I think that's what, where [00:08:00] Tony really, really focused a lot of his work in his career. Yeah, I think, I mean that, that, that clip just gave us a bit of a whirlwind tour, all the great stuff, uh, that, um, well actually not all of it.
I think there's even more that we can add, but. What for me stood out. Mark was, um, He he's openly admitting. I'm kind of a shy guy and you can hear in the style of his voice, he truly is an introvert. And I think that's also another incredibly brave thing that he did was get up and talk and do interviews and sort of share his vision even though by nature, he was.
Quite introverted. And so for me, it's just revealing another quality to Tony and what he's achieved and what I would propose to you. And all of our listeners is we've got a bunch of clips that are going to go really deep into some of the ideas, some of the behaviors, [00:09:00] some of the mindsets that Tony really, um, showcased, which he celebrated.
And I think this is just going to be a feast of original thinking of courage. So I think strap yourselves in ladies and gentlemen, because this, this is going to be a great ride into, I mean, what is almost a perfect little, uh, addition to the teamwork series because of our people focus, but don't forget.
There's a lot of thinking different to come in. This show is in their mind. Yeah, there really is. And in fact, Mike, I think the next clip. That we can launch straight into is a good demonstration of exactly that. So like you say, Tony, a real introvert, you can hear from the softness of his voice. Um, but actually underneath all of that, um, I think there was this, this value or this mindset within himself of challenging the way that we would normally go to work structure companies and, um, [00:10:00] have those sort of hierarchies or tears of, of management and so on within a business.
Um, And what's quite interesting as we'll explore through the rest of the show is Tony's different approach to some of these and this first clip mic is, um, something that's quite interesting. And I'm looking forward to hearing what you think about this. And it's Tony Shay explaining quite a different approach to structuring business and that's all about Holacracy.
So this next clip is going to be Tony shade telling us about Holacracy. So it's interesting, cause it's headlines have talked about no hierarchy and that's actually not true. There still is a hierarchy, the differences in a typical organization, it's a hierarchy of people and under Holacracy, it's a hierarchy of purpose.
And so there's a purpose for the bunny and, and, and, and that's general company circle. And then within the circle there's roles and multiple sub circles. And then it kind of cascades down to [00:11:00] that. And the other interesting thing is now imagine this hierarchy of multiple circles and within each circle, there are roles.
You for example, can fill roles and maybe seven different circles that each has its own separate purpose. And so there still is a hierarchy, but it might be, you might be the link of if you and I were in the same circle, you might be a bleed link of that circle. And then another circle I might be lead Lincoln.
So it allows employees to really be involved in different areas of the company. And versus just being pigeonholed into their one specific job function. And so the ultimate goal is for employees to really find that intersection between what they're passionate about, what they're good at, and what's going to move the company forward.
So that's pretty fascinating. This lead link concept, what is the lead link? What's a definition of that. How do we think about that? So it's basically a, [00:12:00] a manager in a typical company has. Wrapped up in the title of manager are a lot of different responsibilities, including basically setting strategy, resource allocation, role assignment, and hiring, firing, and so on.
And lead link is a very specific subset of that, which is basically. Role assignment. So within your circle, you can actually tap the entire company of in our case, 1500, 1600 employees in this side, who you want to offer those roles to, but you actually don't have the power to hire or fire any employee is basically you can add them to a role or remove them from a role.
And so it's very, and they may, it may just turn out that. They're not passionate about that role or they're not a good fit for that role. And then that employee is kind of a free agent and there's 500 circles to go explore, to [00:13:00] find them well, what you can see there, Mark is. He is so prepared to change the construct, this age, old top-down constructive management and structure and TIFF it all upside down.
I mean, this idea of Holacracy, which he has really inspired has been, um, it's been bandied around now for, for several years. Some companies have tried and failed. Some companies have won, but I think what we can learn here is. You can, you can see how, what he's proposing is so different to the way of traditionally working and how comfortable he is.
You can hear in his voice, he's just so comfortable because of the logic to his own argument. Now I'm not saying that Holacracy is for everyone and it certainly hasn't worked for everyone. But what we can learn here is how genuinely prepared he was to think different. That's that's [00:14:00] totally right. You know, he's not necessarily saying here, right.
Everybody go out and do this. This is the ultimate way of achieving success, but you're right. He's challenging. Um, you know, the, the perhaps more traditional setup and just giving it a go. You know, giving it a go exploring, uh, maybe a new, uh, slightly more flexible structure. Like you say, some have tried it and some businesses hasn't worked.
So therefore it's not necessarily the answer, but what's wonderful. As a demonstration of Tony himself, you were right. This is just showing his, you know, unique take and, and his ability as a moonshot or to try and create some new and think originally. Which is very Elon Musk as well. Ian is very comfortable, entertaining ideas, too.
Um, With profound effect, but he's can be so [00:15:00] comfortable to what is often contrarian or what we discovered in the Ilan show. Even some of his childhood heroes are literally talking smack about his ideas. And he said, I'm still stuck with them. I think this is this idea to think big and have the courage to see it through.
I think this is a big lesson for all. Moonshot is right. Yeah, it totally is. You've got to. Get out and try something new, think big, think different and be original like Adam Grant would say, and actually Mike, this next clip that we've got is another great demonstration of Tony's approach to thinking differently and exploring new and innovative directions and, you know, uh, thinking outside the box, perhaps.
So this next clip is again as. Tony's thinking differently a little bit more about bringing ideas to life. So this is Tony telling us a little bit about doing thought [00:16:00] experiments. I always liked doing these, uh, thought experiments. And so one way to think about it is if, uh, if money were no issue, if you had infinite money, what would you do?
Or the counter to it is if everything was free or if this one thing was free, then what would you do differently? And so I think, uh, that can help spark. The initial ideas. And then once you kind of have the crazy out there idea, then you work backwards and make it more into reality. For example, a lot of startup tech companies have problems hiring tech talent.
So what if there's a line out the door of amazing engineers, then what would you do differently? And then. That might shift the thinking into, okay, how do we get a line out the door of a really talented engineers and, and make that the problem, the real problem that you're trying to tackle or, or actually back to Zappos history?
Uh, in the early [00:17:00] days we had trouble hiring people that were really good buyers. I'm good at merchandising. Initially the problem was framed as how do we go and recruit more talented buyers, but then we reframed it as. Well, how do we, the only way we can guarantee kind of an endless supply of talent and buyers is if we basically grow and train them ourselves.
And so now we have a program where we hire people that are entry-level and within three to five years, they have the potential to become a senior leader and the company who, uh, this one is really good. Like for everybody listening right now, this. This is where I think we can do a lot of learning. This is where I think we can all, you know, get a little Tony Shea going on.
Um, so for me, what I love is how he changes the question. He sort of says, take all your constraints away and like, [00:18:00] think about the perfect situation. And then re-engineer from that rather than getting all locked up in the problem that you're experiencing in the here and now. Try and think longterm. Think about your objective.
Think about Nirvana or heaven. Do a thought experiment and almost backwards engineer from there. I think this is a huge lesson for all of us on how we can think like Tony, what do you think Matt? But I think whenever I've had challenges with, um, work or home life, you know, you sort of do get stuck spinning wheels in the mud.
You know, I just cannot get past this particular problem. I can't answer this question. Um, and one of the. I think fantastic ways that Tony is showing us, uh, that original thinking approach to answering potential challenges at work. And then home is exactly, as you say, reframe the question, [00:19:00] think about it in a different way.
So I think what he's saying here is, okay, well, we couldn't find the right buyers. Therefore, we thought about it differently and we realized that the best way of bringing in good value, good culture, good working work ethic. It's to train them ourselves. That's a wonderful way of rethinking that Avenue, that challenge, you know, moving around the structure and looking up differently and thinking, okay, well, how do we scale this?
How do we think about it differently? I think that's a really good lesson or demonstration of how do I take this work problem? And there's a roadblock in the way. How do I get past that? It's rethink differently. Yeah. So, um, let's, let's do a little bit of a deep dive on this. Cause I actually think what we have been very fortunate to do is to actually find, um, from the, uh, original thinking piece of what Tony offers us.
I think we've found one of the key tools he used, which [00:20:00] is thought experiments and, um, I want to give you a few examples of thought experiments and let's see which ones we really think work well. So let's imagine, um, that were planning to launch a brand new product or a brand new company. One of the things you can do is like we often get very excited as founders of companies and so forth.
And so we can have a real bias. We drink our own Kool-Aid and. There's not enough critical thinking going on. One of the things you can do is use the, the thought experiment called rip it to pieces, which is where you just take the opposite point of view that this is the worst idea you've ever heard. And then try and deconstruct your idea from a negative point of view, because what that might do is it might reveal, um, uh, some weaknesses in your thinking.
That you can therefore make stronger. So that's the first one I've got for you. Another one, Mark. And then I want you to give me some [00:21:00] feedback on these. And the other one you can do is you can say, I want you to imagine we get put out of business by a competitor in three years. So we're in three years from now.
We've just been, we've closed the door, hung up. The shingle everything's done. We totally got gazumped by a competitor. What did they do to beat us? Yeah, that that's such a good one. So it's confrontational, isn't it? It's a bit, bit uncomfortable to think like that, but it's so valuable because you can then start to see the chinks in the armor and those weak links.
Right. So, um, All of these are sort of, uh, kind of thought experiments. One that is really classic. Tony Shea is the decade test, essentially. Um, where 10 years from now you write a, a New York times article celebrating your success. What are the things they [00:22:00] would really call out about your success? What state is the business in that it is so successful and then ask yourself, well, what do we need to do no constraints?
What would need to be true for that to happen? That's a very, very good one because Mark you and I both know nobody thinks long term. I love that one. The decade tests. That's great. Yeah. But yeah, you're right. Nobody thinks long term because we were all trying to get over today's problem. Or yesterday's issue instead of thinking, okay, well, how can we grow?
How do we keep an eye on the bigger picture? How do we build that resilience in ourselves as well as the business in order to get over this problem, as well as the future problem. And that decade test is a great one, because you have to remove yourself from the current issues. Oh, look, the I've got a crazy meeting coming up or an email or whatever it is.
And instead thinking, okay, well, what about the business itself? How do [00:23:00] we want to, where do we want to be in 10 years? Or where do we think we might be? And how are people responding to us in 10 years? That's a, that's a really good little, uh, experiment. I like that. Yeah. And I, I, I think what the real moment of liberation here is as we get into these, is that I think that we have the habit of solving problems.
Which are really just symptoms of something bigger. So we might say, Oh, okay. Um, we can't hire the right people. So let's do more ads. Whereas what you can see, Tony was like, well, maybe it's. So the, the kind of people we want are so scarce, maybe we need to create them. So maybe it's about an internship program or a graduate program.
Rather than actually hiring more. So what I think is really important is, um, by saying there are no constraints, time, money, effort, all that it's all [00:24:00] gone, what would need to be true, even as it sounds ridiculous that you, that you had a hundred amazing people in this very rare skill on your team, but what would need to be true for that to happen.
And then it all, it kind of helps you, um, get over your bias, your assumptions. Uh, about what's possible and what's not. And I think, I don't know. I think that is where the original thinking comes from. Yeah, I think so too. I think if we, if we go back to our Adam Grant's series, all about original thinkers and how to, uh, you know, think originally and differently from others, I think those thought experiments, those challenges or those different ways of approaching a problem.
Um, are exactly where Adam Graham was, was leading us. So remove yourself from the here and now think about if there were no issues such as money or resources and so on. [00:25:00] And imagine where you could get to is, is a, is a, is, uh, an approach. I think that Adam Grant would agree with what I also thought that you mentioned earlier.
Which is another great one is to take the opposite point of view. Yeah. And rebuild it from scratch. So thinking about it from, as we might say, the devil's advocate or the negative response, maybe you all can think is your competitor, how are they going to tear you down? Or how might they be intimidated by your product?
Thinking about it removed entirely from the business constraints right now that I think is the original thinking trait. Right? That's right. That's right. And it reminds me of Ray Dalio, who we've covered on the show. He's got some really great original thinking practices as well. So for all of our listeners, you should definitely check out him as well as Adam Grant.
And let's not forget we are here and celebrating the life of Tony show, um, who was [00:26:00] just. A brave and courageous thinker. And I think this idea of thought experiments, I really do think this is one of the big takeaways from the show. I think that if you are, um, excited about this idea, uh, and all these tools you can use for thinking differently, I think it just starts with questions.
Like, what if, how might we, and really freeing liberating yourself from the constraints of time and money as the here and now, and really thinking to us the future, and then re-engineering back from, from Nevada or from heaven. Pretty good. Fun Reimer. A lot of fun. I mean, remember, there's nothing more exciting, Mike.
And. Giving it a go. Yeah. Trying something new, much like Tony did with Zapples, um, doing this huge large scale experiments to see whether it works. It's pretty risky for sure. You know, but it's, it's certainly an [00:27:00] interesting way to learn. About the, um, the sector learn about people as well as a business and see what happens.
So I think that's, that's a lot. That's where I see a lot of the courage of Tony coming through because he had the confidence to, to implement something like Holacracy, as we heard a couple of flips ago and trying to see whether it worked that's, that's a real, um, radical way of approaching it. I think.
Yeah, absolutely. But that's not, uh, the only, uh, inspiration and learning we can do attorney show in a moment. We're going to delve deep into, uh, all dimensions of people, talent and culture. Um, because this is one of the other big gifts that we can take from Shonie from Tony, but talking about, uh, You know, amazing customer experiences.
This is what Zappos is known for. But I think here at the Mintos podcast, the wow and our customer experience is [00:28:00] really unpacking, uh, amazing innovators, entrepreneurs, and really trying to learn out loud together. And Mark, I think we need a little help on this journey. Don't we don't. We need to call upon the help from our thousands of listeners.
Yeah, I don't think it would be fair for you and I to always get online. And do shows without consulting you, our listeners. We love hearing from all of you. We love it when we receive, um, comments and social media emails, or even contacts via our website. And trust me, we review and reply to absolutely all of them.
So listeners here is our. Big call-out here's our Tony Shay moment. We want to hear from you guys, please navigate away to www.moonshots.io to find not only our huge archive of 104 shows previous to Tony Shea. We've got all of our shows as well as all our show [00:29:00] notes. As well as transcripts, you can find links to all of our social channels.
You can find our contact form. You can email us@helloatmoonshots.io. And you can also leave us a little bit of your suggestions, feedback, box feedback. Yeah. Area within moonshots that I, uh, where you, our listeners can let us know what you like and what you'd like us to cover next. What innovators are you thinking?
And being inspired by that you'd like us to go and learn out loud with as well. Yeah. And. Uh, we got a, um, uh, one of our listeners actually sent in, um, uh, literally I think, uh, in the last day or so we got another one and, uh, this list and said they loved, uh, James James called Jim Collins, uh, and Brenae Brown.
And here's what the listener said because they really went in depth into behavioral drivers of success and successful leadership. [00:30:00] Um, so. That was really great, uh, to all of our listeners. We really, really appreciate, uh, when we get this feedback, we've had feedback from other people when they are nominating new people for us to study.
They like it when we do unusual people, not necessarily always the Simon cynics of this world. That's great too. And we really want to encourage you to tell us. The people that you want to learn from because, you know, chances are, we're going to love learning from them too. So everybody wins. So don't forget to head over to moonshots.io and tell us who you would like us to do.
Next who, because there is so many people out in the world that we can learn from Mark. And I tell you who's really into people and that is Tony Shay, right? You're totally right. Yeah. We've just heard a couple of clips around, uh, Tony Shay really thinking differently, telling us about Holacracy as well as, you know, what inspires him with thought experiments.
Um, but the other side of him, as he caught out in [00:31:00] that first clip behind, he was quite introverted. He hired a lot of his friends at the beginning. And I think as an individual, as a leader, people leader, he was all about customers as well as employees. So this next, these next few clips, Mike, we're going to hear about Tony Shay telling us about the power of people.
And this first clip from Tony is about customers. So he was very, very obsessed with creating the best experience for customers. And this first clip we're going to hear is about creating the wow experience. These are some of the questions that we ask ourselves in terms of thinking about how to deliver great customer service.
And we internally use the word. Wow. When thinking about. How would you treat customers? But we use it as a verb. We talked about how do we wow. Our customers, and also how do we, wow. Employees and the vendors that we work with. And it starts with the policies you see on our website, we offer free shipping both ways.
So a lot of people will order 10 different pairs of shoes, try them on in the comfort of their living room [00:32:00] with 10 different outfits and then send back the ones that don't fit or they don't like. And we encourage that type of behavior. We have a 365 day return policy for people that. I guess I have trouble committing or making up their minds and, uh, you know, they can take while to return products and, you know, most websites, it's very hard to find contact information.
Usually it's buried five links deep, and maybe it's an email address. You can only email once. Whereas for us, we take the exact opposite approach. We put our one 800 number on the top of every single page of our website, because we actually want to our customers. And it's funny, cause sometimes I'll be speaking at a branding or marketing conference and there's a lot of discussion about consumers being bombarded with thousands and thousands of marketing messages every day.
How'd you get your message to stand out how to get your brand to stand out in, you know, should they be investing millions of dollars in this 32nd Superbowl ad that people may or may not be paying attention to? Or should they be leveraging the latest in the social [00:33:00] media fad? And for us as kind of low tech and unsexy, as it may sound, we found that the telephone is actually one of the best branding devices out there because we have the customers' undivided attention for five to 10 minutes.
And if we get the interaction right. We find that the customers remember that for a very long time and tell their friends and family about us. And we run our call center very differently from most call centers. We don't have scripts. We don't have. Is the concept of average handle time, which most call centers have, which is all about how quickly can you get the customer off the phone in the name of being more efficient, but we're not trying to maximize for efficiency.
We're trying to maximize for the customer experience and we don't upsell. And so going back to the no, no calls, and I actually just got an email last night. A new record was set for the longest phone call ever. It was eight hours and three minutes long. So yeah, I don't know how the bathroom situation worked effort for that one, but [00:34:00] so, and it may seem weird that, you know, for us, we're an internet company, 95% of our sales go through the website.
So why do we focus so much on the telephone? And what we found is actually on average, Almost every customer calls us at least once, sometime during their lifetime. And it's actually usually not to place an order. Most of our phone calls do not result in orders. It might be their first time going through process and they just need help stepping through the process of printing out of the return label for the first time.
Or maybe they have a wedding over the weekend and they just want some fashion advice. And I think we have some customers that call us because they're. Lonely and we'll, um, we'll talk to them as well. So. So that's our call center. And then for our warehouse, we actually run it very differently from most warehouses as well.
Most warehouses, uh, they let the orders pile up so that the picker needs to walk around. There's higher picking density, more [00:35:00] efficient. It doesn't need to walk. As far for us, we run our warehouse 24 seven, which is not the most efficient way to run a warehouse. And, but we're not trying to maximize for efficiency.
And because we run it 24 seven, and because our warehouse is located in Kentucky. Right next to the ups hub. And because we do these surprise upgrades to overnight shipping for a lot of, most of our repeat loyal customers, when you combine all three of those things, a lot of customers order as late as midnight Eastern time, and the shoes show up on their doorstep eight hours later when they're expecting it a week later.
And that creates that whole emotional response. We're trying to elicit in that wow experience that causes them to remember us for a very long time. And tell their friends and family about this. Wow. I mean, do you know Mark? The funniest thing is I had one of the worst customer experiences of recent times just a week ago.
And, um, it was every think Tony was calling out as [00:36:00] being evil. And so I was switching internet providers at home and, um, I actually, uh, could not speak to a human, uh, at the, uh, uh, previous provider, even though they're the biggest telecommunications provider in Australia, they would not accept calls. So they literally said, please go and use our chat.
And the voice message would then hang up the phone call. Can you imagine there's no like, Oh, press option, press two. For, for speaking to a representative, they literally hang up and then they spent an hour in the chat trying to upsell me. They took 20 minutes to come back to me to verify my credentials in a chat.
Um, and. I listened to what Tony's talking about and the power once again, to do things [00:37:00] differently, um, he, he spoke about the eight hour call or, uh, apparently subsequently to that there was one that went for 10 hours. Um, and what you can see here is he. Understood what really drove longterm customer engagement, customer satisfaction and happiness.
And he was prepared to do different things like free shipping, both ways, uh, running the factory and the distribution centers in I'm not so efficient way because he knew it would drive the biggest single thing, customer happiness. This for me is. Brave original thinking in practice. I think it's so inspiring.
I mean, the, the fascinating thing about, um, Tony's approach here is they aren't immediate. Business rewards or, or, [00:38:00] you know, it's not savings Zappos as a business, any money it's not saving them work. It's not really driving for business efficiency. Instead. It's putting the customer at the heart of what they do.
Yeah, they had this benchmark that they were driving every single day, 365 days a year, 2,400 a day in the warehouse. You know, this is, this is Tony, really pushing the boundaries here. And what happened was these wonderful, um, word of mouth, um, advocacy that happened around Zappos that you just couldn't replicate?
I think in any other way, you know, one of the things that stood out to me in that clip. Was that their phone service became their best form of marketing, their best way of, of raising awareness for the brand to existing customers, as well as new ones. Was that phone service on the website? Nothing that they were doing from a paid media perspective.
Instead, [00:39:00] we just are treating our customers as, as human beings, giving them what we need. Uh, you know, we would want from our brands were behaving in the same way and, and that's great. You know, you've had this terrible experience with customer service recently. Mike, so have I actually, funnily enough, this year has been a very tricky one from a customer service perspective, many brands I'm sure, but you know, with, with Tony, at the helm of, of Zappos here where you can already start to see is this sort of ideal customer world where everybody's treated equally and fairly, and it's almost like a good call to action.
This, this is what it should be. It is. And I think the lesson inside of this is the thought is very original because when he talked about his, everybody does things in a cost efficient way, which doesn't lead to customer happiness because he's prioritized customer happiness. There's a certain set of things that should be done, even if they are contradictory to best [00:40:00] practice or so-called defacto standards, he's prepared to do it.
Differently. And, um, I just, I really want us old SIS to embrace. This is the great thing about Tony. He doesn't only think differently. He has the capacity to put it into action. And I think, um, this is, uh, this is, should be so celebrated because much like, um, uh, Elon Musk who has brave audacious ideas, but.
You know, Elon will sleep on the couch at Tesla just to make sure those cars really do ship. And I think is such a powerful lesson for us. So when you have these big ideas, um, that's not job done. It's also getting them, uh, getting the, the ideas into life, making them happen and making them happen is not only about the thinking.
It's not only about customers. But it's also about having the right people and you know what Tony Shay [00:41:00] has even got thoughts on this. So let's have a listen now to what Tony Shay thinks about hiring the right people. Company culture was always important and myself and Fred and I interviewed everyone when we were still in San Francisco.
Uh, basically until we can do that anymore, because there were too many employees do interview, but, but basically we wanted to, we had, we had this criteria of. Yes interview for the normal business technical stuff, but I didn't meet the bar. Right. So do the normal set of interviews, but then you kind of had this final test of like, is this someone I was choose to hang out with or grab a drink with?
And if the answer was, if we weren't in business together, if the answer was no, then we wouldn't hire them. That goes against a lot of the things that I've heard out there. Uh, in the past, it's like, keep your work and personal relationships separate, you know, like that's kind of been like a thing that's been stated out there.
Like there should be this firewall [00:42:00] between the two, but you went in and said, okay, it's very important that I can actually get along with this person. This is someone I can go out and have a beer with. Why was that so important to you? Um, I guess I have two answers. There's that one is yes. There are companies that focus on work-life separation or work-life balance.
And at Zappos, we really focused on work, life integration, and, you know, at the end of the day, it's just life. So you might as, and especially if you spend so much time at work, like you better hopefully enjoy the time that you're spending there and the people that you're with. So that's one answer and then.
The other answer is, and I don't think the book existed at the time Zappos was founded, but, uh, Jim Collins, uh, his book, good to great and researched and looked at what separated the great companies. In terms of long-term financial performance from just the good ones are mediocre ones and found that the great ones had two important ingredients that separated them from just the good ones are mediocre [00:43:00] ones.
And one of them was that they all had strong cultures and, um, and we formalized the definition of our culture into we have 10 core values at Zappos. And one of the actually really interesting things I found from the research was that it actually doesn't matter what your values are, what matters is that you have them and that you align the organization around them.
And the power actually comes from the alignment, not from the actual value. So there's no judgment in the values. We're not out there telling people, Oh, you should adopt the Zappos values and culture and so on because actually that would probably not work in most cases where our message is more. You should figure out where your values are and then align the entire organization.
Right? Oh, that was a good meaty clip. Mike that's so much good stuff. Um, I. I feel as though [00:44:00] once again, Tony, Shay's demonstrating to us in that clip, why he belongs in this moon shotting space, you know, he's, he's coming out with so much consistency. With what you and I, uh, learn from these innovators in every episode, you know, at Martin murky, he was talking about Jim Collins, right?
Aye, aye, aye. Struggling to put it into, into words. I'm becoming a real fan boy of Tony Shay. Um, I think there's, you know, if we, if we try and break it down from the very beginning, what I. Think is really valuable reminding ourselves within that clip is this consistency with, uh, actually Patrick Lencioni's ideal team player.
You want to be able to get on with the people that you work with. If you want to go and grab a drink or whether you want to help, um, then move house, whatever it is, that's a great demonstration of, um, The right alignment from a [00:45:00] personal relationship perspective. And I think that builds nicely into this, uh, work life integration idea.
What did you think about that, Mike? Uh, well, I think, you know, once again, he's showing traditionally you never mixed, uh, personal and work, right? Uh, they, it was, you would almost be someone else. Um, Which is quite interesting, isn't it? Um, as a, as a concept that you would actually be someone else when obviously you're not somebody else, you're still the same person I love the idea of, and I think Jeff Bezos speaks to this as well.
The idea of work in life being totally separate things. It is so not true. You cannot spend 40 plus hours. We're doing a thing and saying it has no relationship to what I do do with the other, uh, days of the week or when I get home from work, [00:46:00] it just doesn't work. They've got to be able to work together.
They've got to be natural partners in life itself. How have you found, you know, This idea of trying to have what Tony Shay would call work-life integrate. I think this year is a really good opportunity for all of us to take a look at that. Um, you know, for me, my past few years in my career have been quite, um, international, I suppose you can say a lot of remote working, a lot of managing, uh, Clients and customers in different time zones.
And that, you know, sometimes means you do calls at funny hours. And you know, the, the flow is a little bit less traditional than a typical nine to five. I think this year of 2020 has forced a lot of businesses into a similar. Uh, concept of [00:47:00] flexibility or a dynamic working day. And I think all of us have now experienced this, this question of, okay, well, what is my work life balance?
And I think where Tony Shay's taking us here. Okay, well maybe remove the pressure of considering when do I stop working or when do I start? And instead of thinking, okay, well, how do I just allow it to integrate with my. Um, happiness with my productivity and efficiency in my day. How do I get the stuff?
Uh, the important stuff that my family at the same time as getting my work life. Yeah. And you, you start to see how it might come together, because if you're working with good folks and you're working hard to make your clients happy, then it doesn't have that traditional burden of Oh, it's work. Right. Um, and I think this comes back to a lot that we learned from Simon Sinek.
I mean, you can feel better today if you know the stuff that you're doing each day. Is connected [00:48:00] to related to part of you achieving your purpose. And, um, then you get also to magic when you're doing your thing, which is to realize your purpose, but that actually. Has some shared value for the organization, from which you work, because then the company is realizing its purpose and as are you, and it's all good in the world.
And just to top it off, you're helping the customer achieve their purpose as well. But all of this Mark, I would propose to you comes down, not just to companies and teams and customers, but it comes down to the capacity of the individual. Doesn't it? Yeah, it really does. And this next clip is now moving.
Um, uh, I suppose, pulling out in the microscope, isn't it, Mike, you know, we've learned about customers. We've just heard about, um, hiring the right people or getting the right people on the bus. As we add. Exactly. Um, [00:49:00] and now thinking about ourselves. So as we work with, uh, teamwork, uh, teams and colleagues and individuals around the world, how do we really turn the microscope, uh, down into that person's DNA?
So this next clip from Tony Shea. Is telling us how we should celebrate each person's individuality questions is on a scale one to 10. How weird are you? And, uh, you know, if you're one, you might be a little bit too straight laced for the Zappos culture, 10, maybe a little bit too psychotic for us. Um, but really it's not so much the number that we care about.
It's how they answer, because our belief is that everyone is a little weird somehow, and this is really more, just a fun way of saying that. We really recognize and celebrate each person's individuality. And we want their true personalities to come out and shine in the workplace. You know, there's so many people where there are different person at home on weekends, versus when they're inside the office and people in corporate [00:50:00] America leave a little bit of themselves or in a lot of cases, big part of themselves at home.
And we really strive to create an environment where people are just comfortable. Being themselves. So instead of worrying about work life separation, it's about work-life integration where it's just the same person. And, uh, you know, not only are you comfortable being yourself, but when you connect with your coworkers, it's not just coworker relationships, but true friendships that ended up forming where you would choose to hang out with these people.
Even if you weren't working at the same company. Yeah. I love the, uh, I love the idea of trying to. Get people just to relax a bit and just be who they are naturally, you know, like I remember my early career, like, you're so conscious of the archetype you're trying to be right. You're trying to be a bit more grown up than you really are.
And I think somehow traditional working cultures, um, do create [00:51:00] this sort of, um, I dunno, They create these false personas that we get so busy trying to be, that, that we sort of withhold what I think is the sad part. The real magic is when we can just be the very best version of ourselves and not pretend to be anything else.
And I feel like he's really kind of. Lifting the curtain on this one and just, I love the invitation. Just try and be yourself, except yourself for who you are, be, who you are and be the best version of who you are. And I think that's really great advice. Don't you, man? Yeah. It's a great call to action, really.
Um, you know, as a, exactly to your point, I think there's a lot of bravado or a lot of, um, Masking of your character in order to become more confident or to almost do your own private thought experiment and think, okay, well I'll just put on a grin and get through it. I'll I'll power through it. [00:52:00] Um, and actually will turn you're saying here is, Hey, look, if you want to be happy, if you want to enjoy yourself, work with those individuals that you have friendships with.
And I think that's a really valuable reminder, isn't it? You know? Instead of kind of grimacing just to get through the day thing. Okay. Well, how can I, um, enjoy my day? How can I help somebody else? One of my colleagues have a good day themselves. And, and through doing that much, like interacting with your friends or your family by treating your colleagues almost in the same way I feel as though that's going to be a pretty nice day for all of us.
Yeah. Yeah. And I, I think, um, you know, after the year that we've had in 2020, I think, um, celebration of, uh, and this giving this permission, if you will, to be yourself and, and just to, um, show the very best version of yourself, I think is great, great advice. I mean, that's a ton of stuff that we've just [00:53:00] unpacked around people like.
The obsession with the customer experience at whatever the cost, because it actually drives growth in the end, the real search to hire the right people and to really see people as individuals. I mean, on top of the fact that we talked about this really original thinking and thought experience, I mean, that is a big bucket of learning for us today.
Isn't it? Yeah. The one for me that really stood out is, is this, uh, Reference the Tony had in, in, um, one of the early eclipse around company values. And we didn't actually dig into it, Mike, but I I'd like to, to bring this up just before we move into sort of agile, it's the fact that you don't necessarily, it doesn't necessarily matter what the company values are specifically it's that you have them in place.
Because once you've got alignment of all of the team players, all of the colleagues working towards that one goal, that's what matters. Well, I would do a [00:54:00] build on that and say he made a very specific reference to organizing to those values, not just having 'em, but then you organize around them. So if you say you're about the wow customer experience, he demonstrated.
Did they were really doing that. Um, so it's a question of not only having them, but organizing to those, I like as that's where mission and the clarity and the everything builds from there. Yeah, well, Mike, we've actually got just one more clip from Mr. Tony Shea. And this one I feel is going to be a really great way to close out the show because it's exactly that it's about values and it's keeping one organizing thought at the center of everything that you do as a, as a team player, as well as a leader, as one, as a colleague, as well as a business.
And this final clip, Mike is. [00:55:00] Tony Shay and our friends, Simon Sinek talking about finding Tony. Shay's why a lot of people in your position, and I've talked to a few who are in your position, um, um, more visionary leaders or more sort of evolved the way they think about business. And I say, do you know what your, why is they go?
Yeah, I know. I'm like, well, have you ever tried to put it into words? They're like, don't need to. I'm like, why? Like everybody knows there's this assumption because it's crystal clear to you in your gut that it's automatically crystal clear to everybody. And it's not always, that's why we had lunch together.
So we had, so, yeah. And so it wasn't a formal session, but, uh, because you do these discover your why workshops for companies, humans, and companies. And so we were just talking over. Lunch. And, and he was asking me about my earliest childhood memory or, or something like that. And, [00:56:00] uh, I actually was born in Illinois and moved to California when I was five.
But the only, uh, memory I really have is like catching these fireflies and Mason jars at night. And then basically that was like my portable. Flashlight. And the question that I asked when you told me the story is of all the amazing and wonderful, beautiful things that you did as a child. What do you think?
Was it about that memory that stands out to you? What is it, what is it that makes that memory? Why would you even tell what is so important about that memory that you would tell me about that or that because you asked what the earliest memory? No, I know, but there are many other things that happened and you chose to tell that one.
What is it about that one that stands out to you that makes it special. I think it was just the, um, I know like fireflies are already cool. They do their things, but then this was a way of like creating or inventing in my mind. I had invented it and no one else had ever done that before. And so [00:57:00] it was just, I know a huge fun, and here's why I ask questions like that because, because how Tony sees the world and how we all see the world, we are products of our upbringing.
We're products of the experiences we had when we were young that make us who we are. And that it forms our worldview. And so if you, Tony, he is at his best. And more importantly, the organization that he, that he's trying to help build is he sees everybody as a Firefly. He sees the entire world as people with bright lights, he doesn't distinguish who are the bright ones and who, the dumb ones.
Everybody has a bright light, and everybody's out there doing their thing. And what Zappos is as a container for bright lights. And if you can build a fire, if you can build, if you can take all these wonderful fireflies that are all by themselves, beautiful and fantastic. But if you put them in a container where all of their brightness comes together, you create a flashlight.
You can actually [00:58:00] light a path for somebody else. And I, and I firmly believe that when you are at your best, that is what you are doing with Zappos. Zappos is the jar and the people that are in this company, which is all of you, you are lighting a path, not only for the people you serve internally, the people you serve externally, but you're showing the rest of us how a business should be built.
And if quite frankly, you were doing the exact same thing now, as you were doing, when you were five.
Thank you for that. I didn't realize that that had so much meaning, um, and. It now then, because of the why Tony's, why is actually the why of the company and even I debated this. It is now everyone's job that all of you to not only fireflies in the jar that we call Zappos, but every single one of you has a responsibility to build a jar yourselves and find the fireflies to put in whether they're customers you're talking to and you create a bright light together or their fellow team members in your circles.
[00:59:00] The everybody has taken responsibility for the maintenance of the jar and make sure that all of the fireflies inside are burning bright. So we all have a macro and micro responses. Holy smoke. You just so Simon Sinek reveal. One of the most amazing people's why, how good was that? Tony Shay Simon Sinek.
It just, yeah, it's just such a nice, um, little experience for Tony Shay as well as all of the Zappos crew too, to be a part of, right. It's it's inventing the why himself, you know, thinking about everybody or every opportunity as a Firefly. And, and revealing that that's actually, what's been driving Tony Shay forever three.
Each of those different businesses we heard about through harrowing individuals and celebrating people and culture and customers. I mean, that's Simon doing his best, right. It really, really is. And [01:00:00] what a fantastic way to bring together an almighty show, looking at someone who is just so special attorneys, Shea, may he rest in peace?
What a, what a, so much to learn Mark so much to learn. It's been a fantastic episode. I've thoroughly enjoyed, um, learning from Tony and, and I thank him for having the courage and the confidence to go out and give all of these different thought models and frameworks go. Um, so what changes, if you could pick one of the things we touched on today, what's, what's changed you the most.
What made you go home? I think the reminder that customers are at the heart or should be at the heart of what everybody is doing. You know, I navigated to the Zappos website at the top of the screen. You've still got that customer service number. It sits right up there ready than anybody to pick up the phone and go [01:01:00] and do that for me is again, just a great reminder of, Hey.
You're not serving. You're not trying to serve yourself necessarily. You're serving your customers to God there and give them the best service possible. Yep. And in service to our customers, you, our listeners, we've got a rising star series coming for the next four shows. Mark who've. We got in our rising stars.
We've got some hugely popular as well as amazing innovators. We've got Michelle Obama, the first lady we've got the ice man himself. Mr. VIM Hoff. We've got a man who just cannot be stopped. Mr. David log-ins and I'm a man. And he's going to remind us all about keeping good habits. Mr. James Claire, the four individuals in our rising star series.
I'm excited, Mike. Yeah. And we thought that those, those four would be really great. Not only because we got so much positive feedback about those shows, but we felt that they were perfect for kind of the end of year, start of year kind of thing, where you [01:02:00] might be doing some reflecting and you might be recharging a little bit and getting ready to launch it 20.
21. So I really do encourage you all to get those shows and whether you're out on a walk or snuggling up in the Northern hemisphere in winter time, it doesn't matter. I think each of those four people have something to teach us, don't they? Yep. We're going to learn a lot of good stuff and we're going to be reminded of some of the key lessons and frameworks and innovation approaches that each of those individuals had.
I can't wait, Mike. Yeah, good stuff. Good stuff. Well, I tell you what was good stuff was hanging out with you, Mark. Thank you for being part of this show. It was, uh, there was quite a lot in Tony Shay. Wasn't there a lot. Great lessons. Frameworks approaches to customers as well as people really focusing on that is what Tony Shay did best.
And, uh, I think it's fantastic that we got a chance to really dig [01:03:00] into his, his career as well as his key ideologies. Yeah. Well, thank you to you, Mark. And thank you. You, our listeners for celebrating the life of Tony Shea, founder of Zappos, because this journey really started with him, teaching us how to think differently.
And that's really no small feat. It's a very courageous thing. So, if you want to go out and make those ideas happen, you have to do radical, brave, and audacious things. And it comes down to one simple thing. It's about the people it's about wowing customers. It's about hiring the right teams. And most of the most importantly, they're made up of individuals.
So let's celebrate the individuals so that all of us, every single one of us can be the very best of ourselves. We can. Can be the very best version of ourselves because in the end, as Tony Shay would say, we're all lighting the [01:04:00] path because we're all five flies. So that's it from the moonshots podcast.