The Warc Blog

The Warc Blog

The Cult of Zappos

After a visit to Zappos HQ in Las Vegas Mark looks at ‘The Cult of Zappos’, its roots in rave culture, and how it might transform capitalism!

As a consumer I’d had first hand experience of the “Wow” Tony Hsieh, Zappos CEO talks about — they delivered overnight (a free of charge upgrade on our first ever order) the only soccer shoes my daughter Cleo would agree to wear (having seen them in a store an hour earlier, but not in her size). No more tears.

Still, I was skeptical about what appeared to be a “Happiness” cult being built, fittingly, just outside Vegas — close enough for the Trekkie conventions to organize day trips. “Happiness?” Really? I’ve been around enough corporate BS to merit a Haz Mat suit. So armed with my tazer, some handy wipes, and a BS detector, off we went to see for ourselves.

Next to the icons is a large bookshelf supporting CEO Tony Hsieh’s extensive collection of Must Read business books — Good to Great is among his favorites he’ll later tell me, his business built on tried and true learning from past masters. “Nothing new here” he seems to be saying, just the messianic application of the perennial wisdom of good business.

In the men’s room I see a series of cave paintings depicting the core values of Zappos. As I snap pictures a voice from the stall next door yells out “that shutter sound is making me really nervous!”

A tattooed member of the staff takes us on a tour. There’s a strong sense of certainty in the commentary. This man believes. Everyone we meet believes. This business is doing well. Everyone understands why it is doing well and how to keep it doing well. There is no doubt.

We pass more ‘cave paintings’ in the more familiar style of The Grove, mind-mapping more of Tony’s favorite books: Peak and Made to Stick. And then still more in the stairwells, this time staff graffiti in the doodling style of High School notebooks, proclaiming “We are all in the process of becoming. The ? is what?” next to “We love Zappotopia”.

Legendary customer service is the key to customer Happiness we’re told. The week-long recruiting/training process rigorously screens out those who don’t “get it” intuitively and those who don’t embody the 10 Zappos core values. The offer of $2,000 to walk away at the end of that week still doesn’t tempt many — it may have to go up again soon says Tony, not enough are walking. The lure of the cult is strong.

And its power is measurable. On the white boards we see the day’s sales numbers scrawled in green marker and how they track against plan. Underneath are the most recent Net Promoter Scores, all in the 90s. It’s this simple it all seems to say: Making them happy makes us money. And in that order. Another metric we learn about is the longest customer service call ever — over 5 hours — a piece of folklore they are fiercely proud of, part of the Bizarro world that is Zappos.

It’s hard to over-emphasize just how at odds that last notion is with the rest of the call center industry, who’s stated internal goals are precisely the opposite — how do we get them off the phone sooner and increase calls per hour further. They worship the god of efficiency, Zappos the god of Wow!

And Wow is applied to suppliers and vendors as much as customers. “You can’t believe how pleasant they are to work with,” says a quote from one supplier in Business Week. Wait a minute? Where’s the Chief Procurement Officer with her thumb screws.

After we pass the napping room and have our photos taken adorned in crown sitting on the Zappos thrown, it’s down to meet Tony Hsieh. He’s not at his cube — nestled inside the jungle area of the cube farm — but the opened can of Coke Zero suggests he’s not far away. When I meet him his low-key demeanor takes me aback. Eric Ryan had told me to expect this, but still, one expects the cult leader to be powerfully charismatic. It’s not that Tony doesn’t have a quiet power in his zen-like thoughtfulness, it’s just not what one has come to expect — corporate Titans that adorn business magazine covers have larger than life profiles. This is odd.

And fascinating.

However I ask my questions Tony’s answers circle back around to the Belief System of Zappos, its 10 core values. Sure, there was an opportunity in shoes back in the dot com heyday that no one else was exploring. But shoes are irrelevant to Tony. It’s about how Wow leads to happiness leads to business success — again, IN THAT ORDER. Once the values were codified and committed to they drove success in a manner that seems inevitable to Tony. “Because” I wanted him to say enigmatically, “it is written”. He stopped just short.

And lest you think it all cuddles at the Happiness Temple, Tony tells a story about his dismissal, after a long, long search, of a really hard to lure technical head just one week into the job after he’d refused to do the mandatory customer service training sessions. Those monks can be ruthless SOBs on the path to Happiness.

Tony’s book Delivering Happiness comes out next month (pre order it at Amazon). He gave me an advance copy and I have to say, it’s a very well told story, written entirely by the man himself – no ghost writers. What’s fascinating is to get not just a glimpse, but a pretty full-on view of the roots of his drive for Happiness, including — and one of the biggest surprises for me — the credit given to rave culture and his self-described “awakening” at one such event that he himself had organized. The book even has some fractal artwork! It took me back, man. And it sure made a change from the “hard scrabble” upbringing, tough-love stories of so many other self-made men.

Here’s a young man who made a ton of money early enough in life that he ended up asking the kind of big “what’s the point?” type of questions in his twenties rather than wait for the midlife crisis. And his Big Fish — the central challenge he has to face down — is Happiness, understanding what it is, how to get it, and how to hang on to it. That his route to Happiness should be a company selling shoes is almost incidental. Framed around Maslow’s hierarchy, for Tony, lasting happiness comes from being part of something bigger than oneself. He got to the top of the pyramid early and set about figuring out how to stay there and take as many people along with him as he could. This is his mission now, inspiring Happiness everywhere.

It’s a radical idea (if not a new one). To start with Happiness as the goal and build a business around it, rather than assume happiness results from business success, up-ends a lot of conventional thinking and why Tony Hsieh is so inherently a challenging figure. It’s business Jim, but not as we know it.

And it puts Tony in the vanguard of business writers trying to move the world in this direction. Both Seth Godin and Daniel Pink have addressed similar themes in Lynchpin and Drive, respectively. But Tony Hsieh’s multi-billion dollar business success makes the results of Happiness very tangible indeed. If more companies adopt his lessons then watch out world.

And then let’s all meet in Vegas for one huge rave.


Mark Barden, West Coast Partner, eatbigfish

For more on Zappos and our resource for Challenger Brands visit  THE CHALLENGER PROJECT .

Subjects: Brands, Marketing

25 May 2010 16:17

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