Delivering Happiness: A path to profits, passion and purpose
Title: Delivering Happiness: A path to profits, passion and purpose
Author: Tony Hsieh
Publisher: Grand Central Publishing
Delivering happiness is a book about the ups and downs that Zappos went through since its inception until the acquisition by Amazon. It starts with some of Tony’s teenage entrepreneurship ventures, his success with LinkExchange and then goes through the tribulations that Tony, then CEO, and Zappos faced to become the company it is today.
Easy to read and particularly engaging in some parts, such as Tony’s search for happiness and meaning, the book overly details Zappo’s culture, turning a good story of persistence and intuition into an exhaustive self-promoting piece.
- Pin-on button business (p.18)
- Presentation of truth (p.25)
- Fast food business (p.33)
- Poker wisdom (p.78)
- Laying off nonbelievers (p.122)
- Outsource core competency (p.136)
- Zappo’s library (p.141)
- Zappo’s culture book (p.156)
- Customer support (p.164)
- Customer value (p.165)
- Co-workers = family (p.173)
- Pipeline philosophy (p.225)
- Top 10 questions (p.240)
- The happiness frameworks (p.265)
Pin-on button business
“My button business brought in a steady $200 a month during my middle school years. I think the biggest lesson I learned was that it was possible to run a successful business by mail order, without any face-to- face interaction. (…).”
After buying a pin-on button machine advertised in a book, Tony buys a supply of buttons and publicises his (non-existent) business in a book of classifieds and starts getting orders in a few days.
Aside from the regulations in place nowadays and the business’s dubious legality, I can’t stop but wonder how I have never thought about something similar. I remember trying to sell some personalised cards, drawn by a friend of mine and me, but quickly become embarrassed when I had to sell them door-to-door, which quickly terminated my willingness to do business.
These kind of stories are no surprise in successful entrepreneurs. Still, I always wondered what pushes them to keep trying new businesses again and again, when in the same situation, I would stop after my parents told me so. Does a more conservative and risk-averse culture like the European, and specifically Portugal, have such an impact like this? I just know that after my failed business attempt, I never tried to get any form of income if it didn’t have an employer on the other side.
Curiously, Tony states that his small business later became “a family enterprise” after it had been passed down to his brothers, cousins and so on.
Presentation of truth
“I walked away from that experience with the lesson that sometimes the truth alone isn’t enough, and that presentation of the truth was just as important as the truth."
After being accused of stealing someone’s lunch card at school, Tony gets suspended even after saying that he had nothing to do with the missing card.
This simple tale illustrates how, a lot of times, it’s not only about the content but also the form. Suspicions can trump the truth, and our way of communication is as important as the message itself.
Fast food business
“Our dorm housed about three hundred students, and the Quincy House Grille was a late-night gathering spot for students to play foosball and pinball, and satisfy their late-night cravings.
(…) so I decided to take the subway to the next stop to the nearest McDonald’s. I talked to the manager there and he sold me a hundred frozen McDonald’s hamburger patties and buns, I was able to charge $3 for burgers that cost me $1 to buy."
My cautious side can’t understand how was he even allowed to do this in a dorm? How can restaurants sell their ingredients in hundreds of quantities to a student? These stories are fascinating, and I don’t doubt their authenticity, but at the same time, there has to be more to it.
The funny thing is, whenever I noticed any friend of mine trying to do a similar kind of business with me and I knew that I would be paying more than I could, I would always refuse to buy the product, even if it was a good value in the end. I guess that was the old jealous mindset?
“The most important decision I could make was which table to sit at. This included knowing when to change tables. (…) an experienced player can make ten times as much money sitting at a table with nine mediocre players who are tired and have a lot of chips compared with sitting at a table with nine really good players who are focused and don’t have that many chips in front of them."
This quote reminded me of a video I watched from Eric Thomas (the hiphoppreacher) where he mentioned that his book You ain’t the boss of me was written after he noticed that a high percentage of students in the USA had very low reading habits.
So he asked himself something along the lines of “Why am I competing with other writers in writing a book for the most literate? Let’s make it simple, with big letters and make it short.” The result? He sold hundreds of thousands of copies to many different schools.
Laying off the nonbelievers
“Everyone remaining stepped up and worked harder than before, and we were pleasantly surprised to find that the layoffs actually didn’t hurt the company’s productivity. We realized that we had laid off the underperformers and the nonbelievers, but because everyone remaining was so passionate about the company and believed in what we were doing, we could still accomplish just as much work as we had before.”
Perhaps it would have been better to self-reflect and question as he had done in the case of LinkExchange, where did he fail in all of this?
Since it “didn’t hurt the company’s productivity”, shouldn’t he blame the recruiting processes? Why did the “nonbelievers” become so? What if many of these people were working in features that were not critical to the business at that precise moment?
By generalising as underperformers or nonbelievers after he asked the remaining employees to work even harder sounds propagandistic and disrespectful towards his former colleagues.
Outsource core competency
“We learned that we should never outsource our core competency. As an e-commerce company, we should have considered warehousing to be our core competency from the beginning. Outsourcing that to a third party and trusting that they would care about our customers as much as we would was one of our biggest mistakes. If we hadn’t reacted quickly, it would have eventually destroyed Zappos.”
Never outsourcing the core competency is excellent advice. I’ve seen countless stories of software projects being discontinued or losing millions of dollars, after the company outsourced their development to faraway countries with no knowledge or the expertise necessary, to save money.
Each case is different, and it’s important to stress that outsourcing is not a bad solution per se, given that the requirements and goals are adequately defined, clear and well implemented. But more often than not, companies need to adapt their strategies to their users' needs over time, which requires a closer look and care, especially when these companies modus operandi, or product offering, is different than the existent competitors.
“Maybe a cool way of encouraging people to read would be to create a board with everyone’s names down one side and recommended books along the top. When a person completes one, they would get a check mark in the box. Perhaps, you would take to lunch once a month, the people that have completed the recommended books? Or maybe they would get movie tickets or gift certificates for completing three books, etc.”
I’ve worked in a few companies with “libraries”, but none had a rewarding system like this one. Compensating the employees with simple gestures is something I have been advocating for a long time, but I never thought of it as a way to push employees to read more.
Zappo’s culture book
“We will be putting together a mini-book (…) about the Zappos culture. (…) so we would like to include everyone’s thoughts in this book. Please email me 100–500 words about what the Zappos culture means to you. (…) If you wish for your entry to be anonymous, please indicate so in your response.”
It takes some courage to assemble all the employees' opinions in a single book, without any filter, and publish it every year. At first glance, it seems like a bold decision, but in practice, I would argue that only the engaged employees will be honest in their submission, which would lead to a biased culture book.
Nonetheless, I looked at its 2019 edition, and I have to say that it does portray a fun company to work.
“At most Web sites, the contact information is usually buried at least five links deep and even when you find it, it’s a form or e-mail address that you can only contact once. (…) We put our phone number at the top of every single page of our Web site, because we actually want to talk to our customers.”
Putting the number at the top is a simple yet bold and innovative strategy. In today’s online services, to hinder the user and hide the contacts section has, unfortunately, become the norm. So much so that all my recent interactions with customer support in which I wanted to cancel my orders or subscriptions, I faced a lot of obstacles to get in touch with them.
“Usually marketing departments assume that the lifetime value of a customer is fixed when doing their ROI calculations. We view the lifetime value of a customer to be a moving target that can increase if we can create more and more positive emotional associations with our brand through every interaction that a person has with us. (…) A lot of people may think it’s strange (…) when only about 5 percent of our sales happen through the telephone. But what we’ve found is that on average, every customer contacts us at least once sometime during his or her lifetime.”
This type of customer service is rare in today’s companies, and it is satisfying to see such positive results out of this strategic bet. If we compound this decision with Zappos in-house continuous learning plans for its employees, which invests in customer service careers instead of treating them as secondary roles, the result can only be net positive in the long run.
It is true that customer support is challenging, expensive and rarely the marketed reason for a company’s success. But stories like this are a reminder of what proper customer services can do to a company’s future. Paid marketing is no match for a client’s word of mouth.
Co-workers = family
“I consider my co-workers to be like my family and friends.”
I don’t see it this way. I believe a friendly and supportive culture is essential in a company’s success, but in no way should be seen as a family. The reason being that I have seen (and heard) numerous examples where companies pushed this narrative so that employees feel the need to work unpaid overtime. Because that’s what you do for your family, right? You sacrifice and go the extra mile for everything it has done for you. But the reality is, companies very seldom do the same for you or compensate proportionally.
Aside from that, having a separation between work and family/friends is crucial in the pursuit of a work-life balance, which by itself, positively contributes to one’s general wellbeing.
“There are specific training programs that are unique to each department, but we also have a Pipeline Team that offers courses for all departments. Many of the courses are required in order for an employee to be promoted to certain levels within the company(…) Once our pipeline is filled for every department, then anytime a single individual leaves the company, there will always be someone (…) in the pipeline to take over his responsibilities. In this way, the pipeline becomes the true asset of the company, not any single individual.”
What a fascinating take on progression! For someone who has been actively interested in ways to avoid a dependency on a certain individual within an organisation, mostly through proper documentation, a pipeline solution like this brings a different perspective in a fight against the reliance of a (usually troublesome) “10x engineer”.
My only concern is that it can “normalise” each employee in comparison to its colleagues due to a focus on a specific set of courses and competencies for each particular role. This can then lead to a suppression of its own unique personal/professional traits and create a feeling of uselessness and insignificance derived by becoming “just another piece” in the pipeline.
Perhaps I am overthinking and, in a way or another, lining up a few individuals to replace someone in the future already happens nowadays. Maybe what surprises me the most is a planned, varied and detailed training plan for each role, inside a company.
Top 10 questions
Tony’s top 10 questions to ask when looking for investors or board members, should be asked by anyone considering venture capital to support its business. These are simple questions but your answers will define whether you should do it or not, with whom and in which way.
The happiness frameworks
In the end, Tony describes the outcome of his quest for happiness in the form of frameworks. These simple frameworks provide insight on why you may be unsatisfied at your current job or explain why you felt the need to leave the one before.
I took the time to apply them to all my past professional experiences and I can say that by the time I left, there was always (at least) one component missing.