Many people know Tony Hsieh as a 'double-bagger,' a serial entrepreneur who's found success twice in the past 15 years. First with LinkExchange, his very dot-com company which he sold to Microsoft in the late 1990s for more than $250 million and now Zappos.com, the legendarily customer service oriented online shoe retailer which was just sold to Amazon for a cool $1.2 billion.
There's a lot to be learned from someone with such a track record and Tony shared his thoughts with about 50 of the New York-New Jersey-Connecticut area's top business owners and CEOs. Here are some of the highlights…
To begin with, Tony believes deeply that his role as a capitalist/entrepreneur is to create and build great businesses. He goes on to say that making money is a natural by-product of doing that well. That, he says, stands in sharp contrast to most business people who are in it to make money. This point was made most directly when speaking about one of the primary partners in business-building, his financing partners. These included some of the top venture capitalists in Silicon Valley.
In Tony's view, professional investors or business owners who are in business primarily to make money are out of alignment with the rest of the stakeholders, including employees, vendors and customers. Being focused on short-term profits causes companies to under-capitalize long-term culture development inside the company. Tony's belief in the importance of company culture as a driver of overall business success—including profits—is steadfast.
In his book, Delivering Happiness, Tony shares many stories, tips and strategies to develop a company culture. However, behind this methodological approach grounded in organizational behavioral psychology, is a dollars and cents rationale: well-run companies with happy employees who are imbued with a sense of purpose make better decisions, run more efficiently and create greater bonds with the customers and other stakeholders. This cycle of good will is an alternative to traditional marketing so what Tony's really advocating for is to divert marketing funds into a company culture program in order to drive new and repeat business.
Tony's book and his ideas are filled with practical and thoughtful techniques but I was struck by one in particular. It's a lesson he derived from his amateur years of poker playing in Vegas and California. He describes the importance of 'changing tables' as a key strategic decision in poker success and in business, too. Changing tables means looking for a table where the players are not that good at the game but they have a lot of money. In business, he explains, picking the right area to do business in—the right sector, the right part of the value chain, etc. – is just as important as how you play the game.
Tony has a deep belief in the creative capacity of good entrepreneurs. He believes there's no obstacle they can't overcome—especially if they are in alignment with their stakeholders and they've 'chosen the right table' to play with.
On July 27, Inc. Business Owners Council's next 'New Member Invitational' will be held in Manhattan and Brooklyn. The topic: Partnering with the government. Discover new ways to sell to the government and as on expert said, 'get ready for a deluge of business once you're in.'