Delivering Happiness

In Delivering Happiness, the author, co-founder of LinkExchange and CEO of Zappos, talks about his life and Zappos' (successful) way of doing business by focusing on excellent customer service.

My impressions of Delivering Happiness are mixed. I think it would have been better to split the book into an autobiography and a business book instead of having a book that's a mix of both. Also some parts – the core values of Zappos – were copied directly from Zappos' website and didn't fit into the book because of the different writing style. There were also moments while reading when I asked myself: Really, doesn't that invalidate what you wrote earlier? For example, the author talks about Zappos being a "family", and later he writes about firing 8% of the employees proactively... That doesn't fit for me, but anyway, I found the story of Zappos fascinating and liked the anecdotes written by others.

My notes

There's a difference between knowing the path and walking the path.

Profits

In Search of Profits

First, they ignore you, then they laugh at you, then they fight you, then you win.

I failed my way to success.

That was just part of the Asian culture: The accomplishments of the children were the trophies that many parents defined their own success and status by.

My parents, especially my mom, had high hopes that I would eventually go to medical school or get a PhD. They believed that formalized education was the most important thing, but to me, having the first twenty-five years of my life already mapped out seemed too regimented and stifling.

I always fantasized about making money, because to me, money meant that later on in life I would have the freedom to do whatever I wanted. The idea of one day running my own company also meant that I could be creative and eventually live life on my own terms.

Sometimes the truth alone isn't enough, and that presentation of the truth was is just as important as the truth.

I think the skill I honed the most in college was procrastination.

You Win Some, You Lose Some

At the rate we were going, we would actually be making a lot less money than we were at Oracle. But we wanted to run our own business and be in control of our own destiny. This wasn't about the money, it was about not being bored.

By the end of the first week, it dawned on me that neither of us was actually passionate about doing Web design work. We loved the idea of owning and running our own business, but the reality ended up being a lot less fun than the fantasy.

We didn't know what we wanted to do, but we had learned what we didn't want to to. We didn't want to work for Oracle. We didn't want to do any more Web design work. We didn't want to many any more sales calls. And we didn't want to be bored out of our minds.

You're in your best negotiating position if you don't care what the outcome is and you're not afraid to walk away.

At the time, I didn't think it was necessarily a bad thing. If anything, not recognizing people due to our hypergrowth made things even more exciting and fueled the 24/7 adrenaline high that we were all feeling. But looking back, it should have been a huge warning sign for what was to come.

During the first year, we'd hired our friends and people who wanted to be part of building something fun and exciting. Without realizing it, we had together created a company culture that we all enjoyed being a part of. Then, as we grew beyond twenty-five people, we made the mistake of hiring people who were joining the company for other reasons. The good news was that the people we hired were smart and motivated. The bad news was that many of them were motivated by the prospect of either making a lot of money or building their careers and resumes.

I never actually did figure out what a "strategic partnership" meant and how it was different from just a regular partnership, but everyone who said it sounded smarter so we liked to use that phrase a lot.

Large amounts of money have a strange way of getting people's true colors to come out.

I made a list of the happiest periods in my life, and I realized that none of them involved money. I realized that building stuff and being creative and inventive made me happy. Connecting with a friend and talking through the entire night until the sun rose made me happy. [...] I thought about how easily we are all brainwashed by our society and culture to stop thinking and just assume by default that more money equals more success and more happiness, when ultimately happiness is really just about enjoying life.

I thought about how I enjoyed creating, building, and doing stuff that I was passionate about. And there was so much opportunity to create and build stuff, especially with the Internet still exploding, and not enough time to pursue every idea out there. And yet here I was, wasting my time, wasting my life, so that I could make more money even though I had all the money I ever needed for the rest of my life.

Diversify

His [Nick Swinmurn] idea was to build the Amazon of shoes and create the world's largest shoe store online. To me, it sounded like the poster child of bad Internet ideas.

In business, one of the most important decisions for an entrepreneur or a CEO to make is what business to be in. It doesn't matter how flawlessly a business is executed if it's the wrong business or if it's in too small a market.

Ever since selling LinkExchange, I'd committed to living by the philosophy that experiences were much more important to me than material things.

Every interaction with anyone anywhere was an opportunity to gain additional perspective. We are all human at the core, and it can be easy to lose sight of that in a world ruled by business, politics, and social status.

I personally really dislike "business networking" events. At almost every one of these events, it seems like the goal is to walk around and find people to trade business cards with, with the hope of meeting someone who can help you out in business and in exchange you can help that person out somehow. I generally try to avoid those types of events, and I rarely carry any business cards around with me. Instead, really prefer to focus on just building relationships and getting to know people as just people, regardless of their position in the business world or even if they're not from the business world. I believe that there's something interesting about anyone and everyone – you just have to figure out what that something is. If anything, I've found that it's more interesting to build relationships with people that are not in the business world because they almost always can offer unique perspectives and insights, and also because those relationships tend to be more genuine.

If you are able to figure out how to be truly interested in someone you meet, with the goal of building up a friendship instead of trying to get something out of that person, the funny thing is that almost always, something happens later down the line that ends up benefiting either your business or yourself personally.

My advice is to stop trying to "network" in the traditional business sense, and instead just try to build up the number and depth of your friendships, where the friendship itself is its own reward. The more diverse your set of friendships are, the more likely you'll derive both personal and business benefits from your friendships later down the road. You won't know exactly what those benefits will be, but if your friendships are genuine, those benefits will magically appear 2-3 years later down the road.

You can't stop the waves, but you can learn to surf.

Profits and Passion

Concentrate Your Position

Even though it would hurt our growth, we decided to cut most of our marketing expenses, and refocused our efforts on trying to get the customers who had already bought from us to purchase again and more frequently. Little did we know that this was actually a blessing in disguise, as it forced us to focus more on delivering better customer service.

We learned that we should never outsource our core competency. As an e-commerce company, we should have considered warehousing to be our core competency from the beginning. Outsourcing that to a third party and trusting that they would care about our customers as much as we would was one of our biggest mistakes.

Platform for Growth: Brand, Culture, Pipeline

Probably the biggest benefit of moving to Vegas was that nobody had any friends outside of Zappos, so we were all sort of forced to hang out with each other outside the office. It was an exciting time. We were all beginning a new chapter of our lives together and forming a new social network. We worked together and hung out together during almost all of our waking hours.

Now that we were in Vegas with nobody else to lean on except each other, culture became our number one priority, even more important than customer service. We thought that if we got the culture right, then building our brand to be about the very best customer service would happen naturally on its own.

Looking back, a big reason we hit our goal [reaching $1 billion in sales] early was that we decided to invest our time, money, and resources into three key areas: customer service (which would build our brand and drive word of mouth), culture (which would lead to the formation of our core values), and employee training and development (which would eventually lead to the creation of our Pipeline Team). Even today, our belief is that our Brand, our Culture, and our Pipeline are the only competitive advantages that we will have in the long run. Everything else can and will eventually be copied.

Before you create a culture book of your own, ask yourself: Would you be comfortable printing everything your employees, customers, and partners have to say about your culture? If not, what would it take for you to get there?

When you're trying to build a sustainable brand and create customer loyalty, sometimes saving money is not the point. The return you get from passionate people vouching for your company and culture, and the word of mouth that generates, is going to be intangible at the beginning. But over time, as it did for Zappos, the investments will pay off manyfold.

Our philosophy has been to take most of the money we would have spent on paid advertising and invest it into customer service and the customer experience instead, letting our customers do the marketing for us through word of mouth.

Top 10 ways to instill customer service into your company:

1. Make customer service a priority for the whole company, not just a department. A customer service attitude needs to come from the top.
2. Make WOW a verb that is part of your company's everyday vocabulary.
3. Empower and trust your customer service reps. Trust that they want to provide great service... because they actually do. Escalations to a supervisor should be rare.
4. Realize that it's okay to fire customers who are insatiable or abuse your employees.
5. Don't measure call times, don't force employees to upsell, and don't use scripts.
6. Don't hide your 1-800 number. It's a message not just to your customers, but to your employees as well.
7. View each call as an investment in building a customer service brand, not as an expense you're seeking to minimize,
8. Have the entire company celebrate great service. Tell stories of WOW experiences to everyone in the company.
9. Find and hire people who are already passionate about customer service.
10. Give great service to everyone: customers, employees, and vendors.

Every employee can affect your company's brand, not just the front-line employees that are paid to talk to your customers.

Open, honest communication is the best foundation for any relationship, but remember that at the end of the day it's not what you say or what you do, but how you make people feel that matters the most.

Rather than focusing on individuals as assets, we instead focus on building as our asset a pipeline of people in every single department with varying levels of skills and experience, ranging from entry level all the way up through senior management and leadership positions. Our vision is for almost all of our hires to be entry level, but for the company to provide all the training and mentorship necessary so that any employee has the opportunity to become a senior leader within the company within five to seven years.

Profits, Passion, and Purpose

Taking It to the Next Level

If you just focus on making sure that your product or service continually WOWs people, eventually the press will find out about it. You don't need to put a lot of effort into reaching out to the press if your company naturally creates interesting stories as a by-product of delivering a great product or experience.

[...] you never know when something you perceive as a negative will ultimately turn out to be a good thing.

End Game

What's interesting is that if you keep asking yourself "Why?" enough times, you'll find yourself arriving at the same answer that most people do when they repeatedly ask themselves why they are doing what they are doing: They believe that whatever they are pursuing in life will ultimately make them happier.

[...] for most people, finally achieving their goal in life, whatever it was – whether it was making money, getting married, or running faster – would not actually bring them sustained happiness. And yet, many people have spent their entire lives pursuing what they thought would make them happy.

Happiness is really just about four things: perceived control, perceived progress, connectedness (number and depth of your relationships), and vision/meaning (being part of something bigger than yourself).

Thousands of candles can be lit from a single candle, and the life of the candle will not be shortened. Happiness never decreases by being shared.

Life isn't about finding yourself. Life is about creating yourself.