BlankTony Hsieh, Who Turned Zappos Into an Internet Giant, Is Dead at 46. By
Glenn Rifkin.
In the early days of online retailing, he realized that the key to success was
making people
feel comfortable and secure shopping on the internet. Tony Hsieh, the
technology
entrepreneur and venture capitalist who built Zappos into a $1 billion internet
shoes and
clothing powerhouse, died on Friday. He was 46. The cause was injuries suffered
in a house
fire on Nov. 18 in New London, Conn., according to Megan Fazio, a spokeswoman
for the
Downtown Project in Las Vegas, a revitalization effort which Mr. Hsieh oversaw.
Mr. Hsieh
(pronounced shay) was apparently visiting family at the time. His death was
confirmed by
Zappos in a statement from the company's chief executive, Kedar Deshpande.
Further details
about the fire or where Mr. Hsieh died were not immediately available.
Mr. Hsieh stepped down as chief executive in August after 21 years with the
company, which
began selling shoes online in 1999. Having sold his first company,
LinkExchange, an online
advertising network, to Microsoft in 1998 for $265 million, Mr. Hsieh became a
venture
capitalist and invested in a San Francisco-based retail shoe start-up, then
called
ShoeSite.com.
He quickly took over as C.E.O. and focused his efforts on building the company
into an
internet giant. (The name was changed to Zappos.com, an adaptation of
'zapatos,' the Spanish
word for shoes, according to the company website.)
In the nascent period of internet commerce, Mr. Hsieh was a visionary who
realized that
getting customers to feel comfortable and secure buying online was the key to
success and
growth. To do that, employees in the call center had to engage customers as if
speaking to
an old friend, with authentic-sounding welcoming banter. He also realized that
buyers needed
to try on shoes, so Zappos offered free overnight shipping and free return
shipping, often
sending customers multiple pairs at a time. Mr. Hsieh surprised the Silicon
Valley world by
moving the company from San Francisco to a suburb of Las Vegas, where he built
a culture of
'fun and a little weirdness' that resulted in skyrocketing growth. From $1.6
million in
sales in 2000, Zappos surpassed $1 billion in revenues by 2009. In July 2009,
Mr. Hsieh sold
the company for $1.2 billion to Amazon. Mr. Hsieh, a soft-spoken and
introspective
executive, developed a philosophy of business built around the idea that happy
employees
were the conduit to satisfied customers who would return again and again. An
avid reader, he
wrote a best-selling book, 'Delivering Happiness,' in 2010, describing his
customer service
philosophy. During his tenure at Zappos, Mr. Hsieh launched the Downtown
Project, aimed at
revitalizing the once-neglected downtown of Las Vegas and turning it into a
vibrant area
where Zappos employees would live. The effort grew beyond Mr. Hsieh's original
concept and
the area has attracted thousands of technology workers and entrepreneurs. 'Tony
Hsieh played
a pivotal role in helping transform Downtown Las Vegas,' Gov. Steve Sisolak of
Nevada wrote
on Twitter. Tony Hsieh was born on Dec. 12, 1973, in Illinois to Richard and
Judy Hsieh,
immigrants from Taiwan who met in graduate school at the University of
Illinois. His father
was a chemical engineer and his mother was a social worker. The family moved to
California
when Tony was 5. The oldest of three boys, he grew up in the San Francisco Bay
Area.
Survivors include his parents and his brothers Andy and Dave, Ms. Fazio said.
Mr. Hsieh
graduated from Harvard with a degree in computer science in 1995 and after a
short stint at
the Oracle Corporation, he co-founded LinkExchange. Approached by Nick Swinmurn
in 1999 with
the idea of selling shoes online, Mr. Hsieh overcame initial skepticism and
invested. As the
concept gained traction, he contemplated ways to spur growth. In a 2009 profile
in Briefings
magazine, Mr. Hsieh described himself as a lifelong skeptic who sneered at
psychology and
philosophy. But his computer science background led him to believe that
happiness could be
studied as a science. Rather than assuming happiness is achieved haphazardly,
he began to
read about the distinct characteristics that made people happy. People assume
that achieving
a certain goal or winning the lottery will bring lasting happiness, he said,
but it rarely
does. 'Most of the frameworks for happiness conclude that there are four things
required:
perceived control, perceived progress, connectedness (meaning the depths of
relationships)
and being part of something bigger than yourself. To that end, he argued that
building a
culture based on these tenets would lead to Zappos long-term success. The
company attracted
both technology types as well as refugees from the gaming and hospitality
industries in Las
Vegas. Zappos was extremely choosy, hiring just 1 percent of applicants. Word
spread quickly
about the corporate culture, and people started showing up at the company's
headquarters to
take tours. Over time, Mr. Hsieh pushed the culture envelope. In 2013, he
announced that the
company would eliminate all titles and managers to embrace a 'holacratic'
structure. A world
without bosses had an appeal, but not to everyone. A few hundred employees, or
14 percent of
the work force, uncomfortable in that structure, accepted a buyout and left.
Mr. Hsieh
refused to embrace the trappings of a conventional chief executive. He lived in
a
240-square-foot Airstream trailer in a small trailer park that he built in
downtown Las
Vegas. He insisted on a $36,000 annual salary and he sat in an unassuming
cubicle among the
other employees. When Zappos set up a new warehouse in Kentucky, he packed a
pickup truck
with materials, drove to Kentucky and got to work bolting together shelves and
unpacking
shoes. Amazon had approached Mr. Hsieh about an acquisition in 2005 and Mr.
Hsieh refused.
But in 2008, with a recession hammering the economy, Amazon made a second
overture and this
time the Zappos board insisted that Mr. Hsieh take the offer. The feeling among
some board
members was that Mr. Hsieh's business philosophy made for good public relations
but would
not spur growth in a difficult economy. Visiting Jeff Bezos, Amazon's chairman
in Seattle,
Mr. Hsieh was impressed by the similarities in the two corporate cultures and
also, the
offer by Mr. Bezos that Zappos would operate as an independent entity with the
same
management team. 'I get all weak-kneed when I see a customer-obsessed company
and Zappos is
definitely that,' Mr. Bezos said in a video welcome to Zappos employees. 'I've
seen a lot of
companies and I've never seen a culture like Zappos.