Why Zappos.com is a Great Company

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Zappos.com is an online store that sells shoes and is slowly adding more and more products. That may not sound very impressive but they are on target for doing $1B in sales for 2008. For an 8 year old company, that’s not too shabby. I only first heard about Zappos.com at SXSW. Tony Hsieh the CEO gave a presentation on Top 10 Lessons Learned in E-Commerce. Below is the slide.

I was very impressed by his talk. It had nothing to do with technology or fads or tricks. Rather his talk was about good old customer service and treating the customer right. Very few companies go above and beyond the way Zappos does. Nowadays, companies want automated machines to be the first line of defense, with an actual human being the last thing they want their customer to interact with. He had many stories about Zappos customer service reps, who on their own, went out of their way to help customers. He’s instilled a culture of excellent service that has generated great word-of-mouth for Zappos.

Just to set the record, I have yet to actually BUY anything from Zappos. As much as I like shoes, I also enjoy the process of trying them on, touching and feeling my merchandise before I make a purchase. I know I can do that by ordering a whole bunch of shoes from Zappos and sending back the ones I don’t want for free. That just seems kinda wrong somehow.

Anyways, all I know from Zappos comes from my episode at SXSW and from various blogs and sites about startups and entrepreneurs. Which takes me to my story. I read somewhere that Zappos publishes an annual culture book for their employees. That book is available for purchase on their website. And since they had such happy customers as well as employees, I wanted to learn more about that by reading their book. Well, I spent a few minutes on the site and could not find it. Since I follow Tony on Twitter (cuz that’s how I roll), I decided to message him to ask where I could find his culture book. A couple hours later he messages me back asking my mailing address so he can mail me the book for free. We email each other back and forth for a bit and he invites me to take a tour of Zappos if I’m ever in Vegas. I was just in awe. This guy probably gets flooded with tweets and email all day, but he’s taking the time to personally respond to me. I’m not even a customer. I also get an email from Zappos saying that the book has been shipped with a tracking number. Having heard stories of their overnight deliveries, I was not suprised to see the book arrive at the office in the morning the next day.

I’ve briefly read bits of the Zappos 2008 Culture book which is basically a collection of every employee’s thoughts on the Zappos culture. It’s my impression that everyone sincerely loves being there. It’s both awe inspiring and contagious. With so many people working at jobs they either hate or have no feelings for, it’s refreshing to see a company that makes people excited to work there.

I want to end with a video that is currently featured on the bottom of the Zappos homepage. I’ll probably have to try buying something from Zappos.com now, but it probably won’t be shoes.

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7/12/2008 Weekly Favorite Links

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I’m a little behind on my blogging. I was wrapping up my old job and started a new job this week. This week’s favorite links features sites that I found useful to me and therefore hopefully to my readers as well:

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“Crossing the Chasm” Book Review

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I think this book was recommended reading on a Y Combinator blog post. Described as a marketing book for engineers, I quickly jumped on this one on Amazon. This book aims to help you take your product from the startup phase across the chasm into the consumer phase. The misconception that entrepreneurs must realize is that the early adopters are a different type of consumers than the majority. Success in one market does not necessarily lead to success in the other unless different tactics are employed.

To be honest, the beginning of this book was pretty dry, and I wasn’t sure that I was going to get through the book, but it does get better. My interest in the book quickly increased when the author Geoffrey Moore gives the D-Day analogy of introducing products to the mainstream:

  • Goal is to enter and take control of the mainstream market that is dominated by an entrenched competitor
  • Assemble an invasion force of other products and companies
  • Immediate goal is to transition from early market base to strategic target market segment
  • Between us and the goal is the chasm
  • Force competitor out of target niche market
  • Then move out to take over additional market segments

That pretty much summarizes the points in his book. I really like his analogies. One that comes to mind is his statement that numeric data is like sausage – meaning that once you know how it’s made, you can’t quite every use them again. His belief is that most numeric data is built on assumptions that are built on assumptions like a house of cards built on more houses of cards.

One thing that really resonated with me was – make products easy to buy vs. easy to sell. You are trying to convince the customer of buying, not yourself of selling the product. Seems like common sense, but that’s not how most engineers think.

To Moore, it’s all about positioning your product. The key is to occupy and solidify the space inside the target customer’s head. You have to be just one thing to the customer or else he won’t remember it. By this he means that if you try to be too many things, the customer cannot remember it. Think about all the major brands like Nike, Coke, Apple. Those brands really only embody a few if only just 1 single thing in your mind.

One thing to keep in mind though is that this book is a bit dated. It talks about companies that may or may not have fared so well after the Internet bubble burst, but I think the theories are just as applicable today as they were 10 years ago.

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Entrepreneurs: A Different Species Altogether

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I am not sure what it is about entrepreneurs and startup folks. They seem to be a different breed altogether in the way that high level martial artists are a different breed from regular people. They seem to be able to have a stick-to-it-ness and maintain a high energy level to always overcome whatever obstacles they face. For most people, the only time you ever hear about these people is when they’ve already made it big. You look at them, and they make it look so easy that you think you could probably do it too. I mean, if they could do it why can’t you? Heck, Tim Ferriss seems to think all you need is 4 hours a week.

What they don’t tell you and what you don’t know is that often times, going at it by yourself and starting something from the ground up with no help and infrastructure is hard grueling work. So hard that the statistics for startups and small businesses is very depressing to look at. Most rational people would look it and say, “you know what? I’m perfectly happy with my 9 to 5.” Most any person I know would rather get out of work by 5, come home and relax with a movie, tv show or a book. What compels a person to pull insane hours working for very little pay (if any) and hope that there may be a light at the end of the tunnel. Doesn’t the prospect of having squandered away precious days of your life enough to deter you to undertake such a grand endeavor? The alternative is so much more seductive. The dark side, the easy road – just veg on the couch and hold that remote. Just turn on that Xbox. Every little thing beckons you from your goal.

Take for example bloggers. The majority of bloggers earn less than $100/month. Heck, in my first month, I made the equivalent of 12 cents and hour. Yet they keep on writing. Why in God’s name why? Either they are all narcissists who want to see their own words published on the internet or they hope to eventually make a decent buck out of it. Sadly, for the majority, this will never happen. Same is probably true with most startups. They’re better off taking a second job. I know many people who do and have made decent money over the years supplementing their income with a second job. These people are yet another breed different from entrepreneurs, but I won’t get into that.

My question is, what makes them different. What compels them to propel? How do they do it? Where do they find the will and energy? Why?

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Speed Demon Entrepreneurs: Develop 50 Games in 1 Semester

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I found this on slashdot – an article on Gamasutra about 4 grad students who created over 50 casual games in 1 semester. I wrote about my thoughts on casual games in a previous post. As a part of the Experimental Gameplay Project at Carnegie Mellon’s Entertainment Technology Center, a team of 4 grad students set out to create as many games as possible under the following conditions:

  1. Each game must be made in less than seven days,
  2. Each game must be made by exactly one person,
  3. Each game must be based around a common theme i.e. “gravity”, “vegetation”, “swarms”, etc.

I think this is a great idea and exercise. Ideas are cheap, so throw them out there, as many as possible. Let a thousand flowers bloom. I’m a believer in rapid prototyping. Rapid prototyping allows you to fail. Build it quick and cheap and if it does not work, then scrap it and try something new. You’re hedging your bets. Rather than putting all your eggs in one basket, you put them in many smaller baskets. I think this mentality doesn’t have to just apply to startups but even projects. Instead of creating these ridiculous 2-4 year projects with 1000s of developers, bring down the scope and/or cut up the project into multiple smaller projects. I do believe that you get diminishing returns when stretching out projects as well. You might hit the dirt running, but the longer you run, the more steam you lose. Just like in a real race, if you can see the finish line you’ll keep on pushing. If you don’t make goals that you can see or accomplish, you’re prone to just throw your hands up and give up.

It’s funny. I was just extolling the virtues of small casual simple games that cost next to nothing to make. In the wake of this, Grand Theft Auto IV, a $100 million game with over 1000 developers just got released, and it made $500 million the first week. Just goes to show, there are many ways to skin a cat.

Tangentially, the famous Petronas Twin Towers in Malaysia wasn’t built by one company. One tower was contracted to a Japanese company and the other was contracted to a Korean company. Playing off the rivalry between the countries, the two companies tried to outdo each other at every stage of the development. Break up the project into 2 parallel pieces among two competitive groups pitting them against each other. Interesting.

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