Business Insider - Tony Hsieh Interview

http://www.businessinsider.com/henry-blodget-tony-hsieh-zappos-2010-10

Watched this 30min BI interview featuring Tony Hsieh from Zappos, pretty cool interview (fanboy.. =p)

It would be so awesome for Richard Branson and Tony Hsieh to do an airline together =) (Tony wants to start a Zappos airline?)

For a person who has so much success, Tony is remarkably humble and down-to-earth. Zappos is his second company after the sale of LinkExchange to Microsoft.

High tech vs High touch customer service

Tony was asked to elaborate on the difference between Amazon's similar focus on customer service versus Zappos. He summed it up as it being high tech versus high touch. Amazon tries to be as efficient as possible in solving customers' problems as fast as possible, while Zappos tries to have a highly engaging interaction with the customer every time.

Zappos also maintains a U.S. based call centre, despite the higher costs compared to outsourcing. This allows them to give a better customer experience.

He also reveals that despite all the hype about social media methods, a phone call is still one of the best ways to leave a lasting impression on the customer. You obtain the customer's undivided attention for 5 - 10 mins, which is much better than any advertisement.

I guess the paradigm shift comes when you start thinking about how to make customers happy, and when you view customer call centres as a profit centre, not a cost centre.

The human intuition

Zappos is mainly into "soft" goods such as footwear and apparel. Unlike "hard" goods like books and electronics, it is still highly dependent on the sense of merchandisers who have to buy inventory 6 months before fashion trends reach the masses.

Bad hires have a domino effect

Tony was also asked about how Zappos' hiring habits affected culture. He emphasized that hiring should be done based on cultural fit, not just on skillsets and experience. Bad hires have a domino effect. Bad hires make bad decisions that hurt the company. Furthermore, they may also hire other bad hires, which snowballs negatively.

To resolve this, Zappos hires for the long term and uses cultural fit as an indicator. They are perfectly happy to fire people if cultural fit is not seen, despite excellent job performance.

"Blah" core values vs committable core values

Often, corporate core values are shown during employee orientation and immortalized as bronze plaques hanging on walls. Nobody really pays attention to them.

To define Zappos' core values, it took them a year of discussion. Tony sent out an email to everyone and it was debated internally within the company as most people had different opinions. Zappos wanted to find commitable core values, not corporate core values.

The results are clear. If you do a google search for any of Zappos' 10 core values, Zapppos is almost always the top result.

Hiring for serenpidity

The core values also affect the interview process for cultural fit. For e.g., taking the core value of "Be Adventurous, Creative and Open-minded", interviewees are asked about how lucky do they perceive themselves to be.

This was inspired by the study conducted by Richard Wiseman (http://www.fastcompany.com/magazine/72/realitycheck.html)

(http://www.richardwiseman.com/) (Incidentally, Paul Buchheit has a similar personal article - http://paulbuchheit.blogspot.com/2010/10/serendipity-finds-you.html)

Culture

There are a few stages of company culture - namely, starting, building, maintaining and scaling. Zappos is currently not just concerned with maintaining it, but scaling and strengthening it as the company grows.

Work-life integration

Zappos allows its employees 10 - 20% of the time to hang out with each other. Initially, this met with some disbelief, as people felt that they had unfinished work left hanging.

However, subsequently, when asked about whether they felt they were more productive, they said that they felt more productive. This was due to lower communications costs and higher levels of trust, as people were doing favours for each other, not tasks.

Negotiations

Tony explicitly negotiated for no retention bonus, which ironically gave him more negotiating power over Amazon. His pay was also fixed at $36,000/year after the acquisition.

Good judgement

Tony also explained that Zappos does not have much policies, as policies often inconvenience the minority (1%) at the expense of the majority (99%). It is far better to rely on human judgement.

School

Tony tried to get decent grades while in school with the minimum effort, given that he was always interested in starting businesses.

Future expansion

Zappos is aiming for the apparel market, which is 4x the footwear market. That's $5 billion in sales.

Zappos also has a consulting company that helps companies find their own corporate culture.

Quote from Darwin

It's not the fastest or intelligent that survives, it's the most adaptable - Charles Darwin

All choices are irreversible =)

As I was on the way home today, I suddenly realized that all the choices we make are irreversible. Since we don't have the power of time travel, any choice we make is irreversible =)

We can choose between being kind and unkind.

We can choose to speak out or to feign ignorance.

We can choose to try very hard on that problem set or to just watch youtube.

We can choose to give a 5 min call to an old friend or just surf facebook.

We can choose to not leave any reserves in training or coast along with the average.

We can choose as our first reaction, anger or a smile.

We can choose to make someone's day special, or we can make it horrible.

We can choose to give snide comments or to give encouragement.

We can choose to listen first or to just start pointing fingers first.

We can choose to eat McDonalds or we can choose to eat something that makes us feel better.

We can choose to go for a slow jog or we can watch some TV.

We can choose to read a book or we can watch a chick flick/rom-com/dude movie(?).

We can choose to buy that awesome new must-have electronic toy or we can think about it.

We can choose to switch off our phones and internet while out with friends, or we can all check Facebook on our iPhones while we are sitting less than 1m from each other.

We can choose to be optimistic or pessimistic.

There are so many choices that we make unconsciously every moment of our lives, and we don't realize that they are all irreversible.

Don't Do It

(draft.. not as if I am doing all the following anyway)
Don't do it if..

You think 2 years is too long.

You can't manage your personal finances.
You are not enthusiastic about the idea of working part-time/ consulting/ freelancing/ giving tuition to support your idea.
You think you can ask your parents for business capital.

You cannot say "no".

You don't know what is cashflow and the amount of runway/reserves you need.

You think school is useless.

You cannot build eigencourses.

You think you have an idea.

You can't summarize any idea in 1 sentence so simple anybody (your mum) can understand.
You hate selling.
You've never sold anything in your life before.

You are not a hardcore tech/ marketing or learning intensively on how to be.
You don't like reading.
You can't make yourself learn how to talk to people from other backgrounds and disciplines with different ways of solving/looking at the same problem and synthesizing all the approaches coherently.
You think learning something you've never seen before in your life is painful.

You think you will hate the people you're going to work with. (You will, at certain points in time. They will most definitely hate your guts too. =) )
You think you will lose your friendships.

You have a significant other half who does not understand/ support. (One will give way. I'm not sure which will survive.)

You have no sounding boards/ mentors/ network.

You like home-runs and only home-runs.

You have a backup plan.

You do not like the contrarian investment philosophy.

You don't think you can do four times as much work in one half of the time an average person takes.

You cannot focus like a maniac.

You've never read 80/20, 4 hour work week and applied it on a daily basis.

You think being a boss/CEO is a chillax job.

You do not like looking through legal documents, tax forms, write website copy, do product mockups and 1 gazillion other nitty-gritty things that will suck your time and energy.

You want to have an active social life and paaaaaaaaaaaarrrrtttyyyyyy...

You must have the latest Apple product/ tech gizmo/ fashion accessory.
You think a 15K Rolex watch makes you look professional.

You think you will make a million in 1 year.
You want to drive a sports car, own a private property and eat at expensive restaurants all the time before you're 30.

You think you are the world's biggest genius and the world should shower you with money.

You think you are so smart that good advice just flies over your head (you're probably sinking into a self-created hole..).

You are not as good as finishing as you are at starting.

You never read anything on behavioral economics and psychology.

You like to make well-informed, thoroughly researched and over-analyzed decisions with perfect knowledge of markets, customers and trends.

You don't think of money as an asset, or you don't understand why you need a certain amount of money to do certain stuff.

You don't have some music you listen to, that always gives you an energy boost or calms you down.

You have some hobbies that are totally unrelated to it.

You don't have close friends who have known you since young.

You don't like solving problems.

You don't like people.

You don't have a island to disappear to.

You cannot find humour in any situation =)

You are too optimistic or too pessimistic.

You don't like to say "sorry" to your team and work to make up for it.

You cannot acknowledge that different people pull different weights at different stages.

You are currently not exercising enough.
You are not eating healthily.

You don't believe in karma.

You don't have something spiritual to believe in.

Book - "Running for my Life" by Ray Zahab

Just finished reading a short but nice book titled "Running for my Life".

An ultra-marathoner, Ray Zahab, describes how running changed his aimless life as a chronic smoker. Through ultramarathons (160km desert runs, 333km runs, running in the Artic, runs in the Amazon jungle... ), he talks about failing badly, running through all the interesting places he competes in and the warmness of the hard-as-nails people who run as passionately as him. Through running, besides discovering his life's purpose, he found love too.

He describes running as entering a strangle peaceful state. When running, he just focuses on putting one foot in front of the other, maintaining smooth breathing, just listening to his mp3s and being alone with his thoughts.

Weird how running parallels life, the ultimate marathon.

Mdm Kwa Geok Choo

I guess it's time that people knew her as Mdm Kwa Geok Choo, and not Mrs Lee Kuan Yew.

Caught the mini-documentary on her on TV, and it was a series of flashbacks across Singapore's history imbued with a personal touch. It was no longer about dates, facts and places. It was about people's lives and struggles.

The stories of small nations are stories of individual lives, weaving a tapestry of threads, forming a canvas of history through their daily triumphs and failures.

Intelligence, humility, fierce intolerance for corruption, warmness, genuine concern for people, elegance, witty, hardworking, strength, successful balancing of career and family (And smart businesswoman, look at the water agreements).

One of the most shocking photographs I saw today (TODAY, 5 Oct 2010) was of PM Lee Hsien Loong and his brother, Mr Lee Hsien Yang in mourning attire. It was simply too surreal.

There was a scene in the documentary when Mdm Kwa Geok Choo stood up and wiped the sweat off MM Lee Kuan Yew's forehead, with MM Lee Kuan Yew protesting mildly that it did not matter. Admittedly, she was probably the only one who dared to, but for me, that was the best moment of the documentary.

I read before that you are the average of the people you spend the most time with.

MM Lee Kuan Yew is a lucky man indeed.