Delivering Happiness explains how mega online shoe retailer Zappos built a unique company culture and customer experience worth remembering, which turned it into a billion dollar business.
I wish I was as creative as Tony Hsieh. The book’s name alone is the perfect company slogan. “Delivering Happiness” – how great is that? It’s simple, poignant, memorable and instantly tells you what you can expect: ridiculously awesome customer service.
Originally started by Nick Swinmurn in 1999, who initially went to shoe stores, took pictures, and bought each pair at full price, once he’d made a sale online (what a business model, huh?), Hsieh’s company invested and the two eventually became co-CEOs.
Swinmurn left in 2006 with all his stock, which ended up being a good decision – Zappos was acquired by Amazon in 2009 for $1.2 billion. Hsieh’s still the CEO, and there’s plenty to learn from him.
Here are 3 great lessons about building an awesome company from his 2010 New York Times bestseller:
- Company culture is more important than customer service.
- Choose one thing you want to be best at, and then focus onthat.
- Invest $0 in marketing and everything in your product.
Want to deliver happiness too? Let’s go learn how to do it!
Lesson 1: Company culture is more important than customer service.
At his first company, Tony Hsieh made the mistake of hiring too many people, way too fast. This hyper growth eventually led to him coming into the office, looking around, and not knowing who half the people even were. Many of these folks turned out to be a horrible fit for the company, which taught Hsieh a valuable lesson:
Your company culture is the most important predictor of success.
Hire slowly, and carefully pick the people you work with. Make sure whoever you hire is someone you can go out for drinks with, because even the greatest programmer won’t do your company any good if he’s a pain in the ass to talk to.
Tony says once he focused on developing a great company culture, the team’s core values developed naturally. This makes company culture even more important than their number one focus: customer service.
Why? Because it’s impossible for people to give their best serving customers when they hate their work environment. If the company culture is great, however, then kick-ass customer service is the only logic consequence.
A big step that helped Tony improve company culture at Zappos was to move everyone to Las Vegas, where their customer service center was, huddle up together, spend face-to-face time and grow together as a team.
Lesson 2: Be the best at one thing, instead of average at many.
Zappos entire strategy can be summarized in one word: WOW. That’s all they want to hear out of their customers’ mouths. They didn’t try to be the cheapest online store for shoes, not the one with the biggest selection, or the rarest shoes.
No. Tony picked one thing, customer service, and decided Zappos would be the best in the world at it.
They could’ve been average in all the above areas, but that would’ve never gotten them to a billion dollars in revenue. Moving everyone to Las Vegas and focusing on company culture was the ultimate commitment to a single focus, because these were directly tied to how customer service would turn out.
If Tony could only teach you one thing, it’d be this: Never outsource the one thing you’re trying to be great at.
You can outsource anything, but not everything. If you decide to create the greatest pizza delivery experience in the world, then you better be the one delivering the pizza. You don’t have to make it, but you can’t let someone else handle what’s supposed to be the thing making you unique.
Lesson 3: Invest everything into your product and let it do your marketing for you.
Being the best in the world is hard. Really hard. Even those companies who might already follow lesson 2 often still spread themselves too thin. Why?
Because there’s marketing to do, sales to be generated and new products to be developed. Instead of doing any of these, Tony says you should just re-invest everything you gain into your number 1 skill.
Of course Zappos could’ve spend its initial profits on marketing campaigns, but instead of paying the press, they focused on improving their core service so much that the press eventually came to them. Customers are constantly wowed with free shipping, surprise overnight deliveries, a 365-day guarantee and genuinely nice conversations whenever they call in with a question.
Great phone service helped them get their customers to spread the word in the beginning, but over the years their above-and-beyond-dedication have generated a huge media buzz – without spending a dime.
My personal take-aways
I do get the message of the Zappos sucess story here. What I’m missing is Tony’s. Not because it isn’t in the book, but because it isn’t in the summary. The book starts with Tony explaining his first attempt at entrepreneurship: a worm farm. He started it when he was 9 years old.
As logical as all the steps above sound, you can’t even remotely guess how much work went into the company and the people behind it by just reading the facts. I recommend you get the book.