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A young entrepreneur has built the “happiest business in the world” – an online shoe retail store so profitable that Amazon bought it in 2009 for more than $ 1 billion.
Years later, the company’s founder asked a question: What if the company’s profits and happiness were fueled by a radical reinvention of the workplace? No bosses, no titles, just creativity, equality and sheer joy.
Was it a utopia? May be. But that was the idea of Tony Hsieh, a visionary who tragically died in 2020, but years earlier he broke the hierarchies of his Las Vegas-based shoe company and tried to reinvent the idea of a “happy business.”
Matthew Syed, writer and presenter for the BBC, told the story of the businessman for the BBC World Service’s Business Daily program.
Who was Tony Hsieh
Hsieh’s childhood dream was simple: to be rich. He was born in Illinois, United States, in 1973, to a family of Taiwanese immigrants.
His parents instilled in him values around the common effort of Asian children in the 1970s.
As a result, he worked hard, achieved top marks, played various musical instruments, and only watched one hour of television a week.
His family’s plan was for him to pursue a respectable career in an office, but the strict diet of his youth made him want to live more freely. So he decided that money was the way to get it.
After graduating from Harvard in 1995, Hsieh co-founded a software company called LinkExchange.
In less than two years, he sold it to Microsoft for $ 265 million. At 24, Hsieh had realized his childhood dream.
But he hadn’t sold the business just for the money.
“What a lot of people don’t know is the real reason we sold the business. The real reason was just that it wasn’t a nice place to work anymore,” he said. Hsieh years later.
When LinkExchange was born, it was run by Hsieh and her friends in their twenties, who dedicated their lives to the business.
“We worked all day, we slept under the desk, we didn’t know what time it was, we tried to remind ourselves to take a bath every now and then,” Hsieh said.
As the business grew, Hsieh ran into a problem: he had no more friends to hire. So he ran ads and hired people with the right skills and experience.
Disenchantment
But some time later, Hsieh saw that this decision had been a big mistake.
When you bring new people into your business, you need to introduce hierarchies. Leaders need to impose their ideas to make sure everyone is aligned.
But Hsieh didn’t like telling people what to do. He liked the idea of people acting according to their own beliefs, coming together around a common vision.
“When we got to 100 people, I myself didn’t want to get up in the morning to go to the office and it was a strange feeling, because it was a company that I had co-founded, and if I felt that way, I wondered how other workers were feeling, ”Hsieh said.
When the entrepreneur became disenchanted with his own business, he learned a crucial lesson.
He didn’t just need money to live. I also wanted to be happy.
Happiest company in the world
With this deceptively simple idea, Hsieh used the money from LinkExchange to fund his next project: Zappos, an online shoe store.
Hsieh planned to do with the shoes what Amazon was doing with the books. Zappos was the opportunity to bring happiness.
Photo: Getty Images
“When I arrived at Zappos, I wondered how someone could complete their tasks,” says Alexis Gonzales-Black, who worked at the company for three years.
“I was wondering what was going on. It was an explosion of glitter, unicorns, there were endless parades, people throwing candy at you. If you weren’t dancing and singing, there was a sort of from buffet to eat whatever you could, ”he describes.
While at LinkExchange, Hsieh hated getting up every day, but now she had built the happiest business in the world.
Difficult entry
“We knew that it was more difficult to enter Zappos than at Harvard. I received tens of thousands of CVs per year. The process was rigorous, it was very selective,” explains Gonzales-Black.
Hsieh wanted generous spirits. If you weren’t nice to the taxi driver who took you to the interview, Hsieh would find out.
You also had to be a little “weird”. During interviews, applicants were asked to answer questions such as: “On a scale of 1 to 10, how weird are you? ”
“I said, ‘I’m weird to the max. 11 “”, details Gonzales-Black.
Other questions were “what’s your favorite swear word?” Or “What would your theme song be when you walked into a room?”
At the end of the hiring process, Hsieh offered the selected candidates $ 2,000 not to accept the position. I wanted people who were totally attached to their culture.
So Hsieh sold Zappos, now a greenhouse filled with charming bonkers, free spirits, and eccentric creatives, allowing them to create a happy workplace.
Photo: Getty Images
Brilliant strategy
“When people can be themselves, that’s when real friendships are made, not just relationships with peers.
The strategy was hugely successful. In eight years, Zappos sales have exceeded $ 1 billion.
“Once in the business, there was an incredible desire to surprise the customer… to make them feel like the number one customer,” says Gonzales-Black.
Zappos created such a stir that in 2009 Amazon paid attention to it. With assurances that the tech giant wouldn’t mess with the corporate culture, Hsieh sold the company for $ 1.2 billion.
If at 24 Hsieh had become rich, now at 35 he was happy too.
But as the business grew, it struggled with the internal problem of hierarchy. How could large groups of human beings do things without large bosses directing them? And once you started to hold these bosses accountable, what would happen to the happiness and creativity of those who are forced to follow orders?
The problem of hierarchies
Like many social scientists before him, Hsieh saw an inversely proportional relationship between hierarchy and happiness, between unequal power and prosperity.
Photo: Getty Images
This is why Hsieh attempted to bring about a revolution, which he hoped would challenge the foundations of managerial philosophy and perhaps the way humans work together.
Hsieh believed that one way to save happiness was to strangle hierarchies.
“Tony went to a conference and came back very excited about the idea of holocracy,” says Gonzales-Black.
Holocracy is a term coined by Arthur Koestler, author of “The Spirit in the Machine”, and it became a radical management philosophy thanks to American businessman Brian Robertson.
But what does it consist of?
Radical equality
Holocracy is a deeply decentralized way of running a business. There are no bosses and not even job titles.
The traditional hierarchy is thrown out the window. Instead, there are circles, self-managed teams that develop projects. Employees choose which circles to work in and often work in several.
Holocracy is radical, utopian, and until 2014 had not been tested in a company the size of Zappos. But according to Hsieh, this was the path to organizational utopia.
“It’s exciting and very unsettling for a lot of people. If you are someone who seeks stability in life, who goes to work knowing exactly what to do, holocracy can create a lot of noise around you,” explains Alexis.
Holocracy was confusing to some, and it was also difficult to define people’s salaries.
Also, in a system without hierarchies, no one really knew who was doing what.
In 2015, when Hsieh offered a bonus for leaving the company, 18% of workers accepted it. 11% remaining without bonus.
The happiest company in the world lost almost a third of its workforce in a single year.
Photo: Getty Images
“I thought holocracy was the dumbest thing I ever heard. I still believe it. And I told him so,” said Paul Bradley Carr, author and tech journalist and good friend of Hsieh.
“Suddenly being told that there won’t be any bosses and if you don’t like it you can go, it’s not really ‘having a choice’,” adds Bradley Carr.
At first it seemed like a big success. But time has shown that people love hierarchies.
In companies like Zappos, the absence of formal rules can mask a damaging power structure. There are no checks and balances. Powerful barons may seek to satisfy their whims, with few limits.
“A lot of people felt trapped and intimidated by those who understood the system. What Tony had done was not create a flat structure, a flat administration, but a system in which he was the boss and all. It was flat. It was flat. Was not democratic. It was essentially a king reigning over a kingdom, “adds Bradley Carr.
The irony was that in seeking perfect equality, he inadvertently created the opposite.
In 2018, Zappos began quietly abandoning holocracy.
In 2020, an increasingly erratic Hsieh parted ways with the business. His dream, whatever it was, was dead.
Naked emperor
Upon leaving Zappos, Hsieh began to spend his fortune on a personal system of “holocracy”. He invited people he loved – artists, writers or entrepreneurs – and offered them double the highest salary they had ever received to live with him at his new ranch in Park City, Utah.
In addition, his drug use was getting out of hand and none of the people around him who said “yes” to everything was ready to warn him.
He was the emperor whose subjects could not tell he was naked.
“If you’re as rich and successful and influential as Tony, it’s hard to know who your friends are. He certainly had some good friends, but I don’t know how many were close to him. I guess there aren’t any. wasn’t much, otherwise the story would have been very different, ”he says Bradley Carr.
In November 2020, Hsieh died from smoke inhalation after a fire broke out in a shed in her home. The door was locked from the inside, although it is not known whether this was intentional or accidental.
The mourning displays on social media were amazing.
“I’ve written about a lot of tech millionaires and Tony was unlike any other,” says Bradley Carr. “I wish the billionaires in Silicon Valley were all like Tony Hsieh, spending their money in bold and ridiculous ways. He was just a wonderful, exciting and interesting human being. It’s a cliché to say we won’t see each other again. never his light. But we’ll never see Tony Hsieh’s light again. ”
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