iOS app Android app More

Zappos' Tony Hsieh And The Pursuit Of Happiness


First Posted: 06/17/2011 7:49 am Updated: 08/17/2011 5:12 am

The Zappos offices in Las Vegas are housed in a sun-drenched office park on a stretch of highway that could be found pretty much anywhere -- except for the fact that once you step inside, it becomes immediately clear you're at Zappos, Inc.

Desks, ceilings and cubicles are covered with fake flowers, homemade posters, and paraphernalia ranging from mounted longhorns to marshmallow Peeps. Throughout the day there are spontaneous "parades" though the office, complete with noisemakers and homemade costumes. Zappos CEO Tony Hsieh sits under a lush canopy of fake vines and greenery, in an area of the office dubbed -- for reasons that remain unclear to many employees -- "Monkey Row."

A business wunderkind who sold his first company, LinkExchange, to Microsoft for $265 million two years after it was created in his living room, and has since taken Zappos from an online shoe retailer with $1.6 million in sales in 2000 to one that had over $1 billion in 2008, Hsieh is not your average CEO.

Given that he is now worth hundreds of millions of dollars, Hsieh could have easily retired to Bora Bora -- or any other tropical location where the monkeys might actually be real. He has instead decided to stick with the business of selling shoes, trying, in the process, to make the world a happier place. Hsieh's vision is most concretely laid out in his best-selling book, "Delivering Happiness," which chronicles the life lessons he has learned -- beginning with an ill-fated worm farm at age 9 through to the near-billion dollar sale of Zappos to Amazon.

Broadly, "Delivering Happiness" makes the case that happiness is good for business. "[Research shows that] great companies all have strong cultures. That's our number one priority at Zappos," said Hsieh. "The second ingredient is that all great companies have a vision that has a higher purpose, beyond profits or being number one in the market. By having that, it enables companies to generate more profits in the long-term. It's a weird counterintuitive thing, this whole idea of focusing on culture and higher purpose -- using happiness as a business model."

While Hsieh and Lim initially envisioned the book as a business manual, their ideas about what happiness means -- and how to achieve it -- resonated broadly and deeply with the general public. So far, the book has been published in 17 different languages. "One guy said to us, 'This isn't just a business manual, this is a life manual,'" recalled Hsieh's co-author, Jenn Lim.

This April, Hsieh and Lim decided to spin "Delivering Happiness" into an eponymous company that they describe as a "social venture" akin to Tom's Shoes. The company is for-profit -- "We want sustainable revenue to support the company," Lim said -- but profit is not its primary goal. "For us, it's about managing the excitement and inspiration" that the book has created, Lim said. Citing the digital community that has sprung up around the book, as well as an extended cross-country book tour in the highly customized "Delivering Happiness bus," kitted out with a bartender and a balloon artist, Lim said one of the company's main goals will be to "connect sectors of people who have these amazing ideas -- like people who want to create town halls in their own hometowns."

Delivering Happiness, Inc. will also offer advisory services around "culture coaching," strengthening organizational DNA to make businesses places of both profit and pleasure; "culture book" services, wherein employees describe what company culture means to them; and merchandising and publishing divisions. Lim said that potential clients include private sector businesses, non-profit organizations, and international companies.

The success of Hsieh's sermon perhaps says something broader about a disconnected culture in which the notion of happiness seems so revelatory, but the possibilities for how Hsieh & Co. might revolutionize modern communities -- both commercial and otherwise -- remain great.

As evidence, Hsieh has embarked on a mission to revitalize the city of Las Vegas, something its mayor, Oscar Goodman, calls, "Among the five most important things that have happened since I've been mayor in the last twelve years." As an indicator of the city's economic woes, last October Vegas hit a record 15 percent unemployment and was ranked second-to-last among the nation's 100 largest metropolitan areas in terms of progress made toward economic recovery.

Hsieh was looking to "increase the number of serendipitous interactions amongst employees," he said. "That's when ideas come out. That's where communications happens. Very little gets accomplished in scheduled meetings -- I'm super anti-meetings." He soon became interested in the old City Hall building in downtown Vegas as a potential site for a new Zappos office. "We wanted a campus," he explained.

The location will allow all the employees to be housed under one roof, rather than in separate buildings, as they are now. Once Hsieh began examining the downtown city center, he became excited by the possibilities for revitalization. "There are the seeds of what I think can be a huge opportunity to actually create a sense of town and culture and community in the city that's viewed, probably, by the rest of world as antithesis of that," he said. Hsieh encapsulated his vision for Vegas as "From Sin City to Sim City" -- a nod to the digital urban planning game.

Once the company relocates to the City Hall building in 2013, Goodman said that there will be "10,000 Zappos employees [in the area]." He called their presence "the critical mass needed to have a very vibrant downtown." Much like the research he used to determine how to deliver happiness and develop profitable businesses, Hsieh looked at the principle drivers of thriving urban areas, calling on the work of Richard Florida, author of "The Rise of the Creative Class" and "Who's Your City?"

"Research shows that elements of successful cities include supporting the arts scene, the live music scene -- even things like having shorter sidewalks. A lot of those things are things -- both inside and outside of Zappos -- that we're looking at to help bring to this area," said Hsieh.

Hsieh has developed "10 tracks" aimed at rejuvenating the downtown area, ranging from affordable housing to education to tech incubation. Zappos employees are invited to participate in these tracks and lead specific projects around them, including volunteering with local schools to teach students about technology or starting a community kitchen. Said Hsieh, "We're trying to do fifty startups at the same time, in an integrated way."

"It's a big deal for us," Goodman said, about the plans being laid.

While Hsieh could, at this point, be expected to take some time off from the rather significant task of rethinking corporate culture and revitalizing one of the country's most famously downtrodden urban centers to enjoy the fruits of his labor, it's clear that the classic distinctions between work and pleasure do not -- for him -- exist in the same way as they do for the rest of us. Or perhaps he just has a more enlightened view of the whole thing. "People talk about the work-life balance, or work-life separation," Hsieh said. "Here at Zappos, we really think about it as work-life integration. Because at the end of the day, it's just life."

WATCH:

FOLLOW HUFFPOST IMPACT