On the afternoon of November 28, according to Sina Technology citing local media reports in Las Vegas, Tony Hsieh, the founder and former CEO of the American shoe e-commerce site Zappos, died today due to a fire in his home. He was only 46 years old. , It is embarrassing.

In August of this year, he just resigned as CEO of Zappos, planning to live a “retirement life”. His current personal wealth is about US$840 million.

Originally, Xie Jiahua will celebrate his 47th birthday in a dozen days. He was born in Illinois, USA on December 12, 1973 and grew up in San Francisco. He is a Chinese American. Xie Jiahua is the eldest son of the family. His parents settled in the United States from Taiwan, China in their early years.

In 1995, after Xie Jiahua obtained a bachelor’s degree in computer science from Harvard University, he briefly joined Oracle as a programmer. Only 5 months later, he left Oracle in early 1996 and used US$20,000 as initial capital with his friends. He started his own business and founded the LinkExchange company, and then in November 1998, he sold it to Microsoft for $265 million in stocks.

After selling LinkExchange, Xie Jiahua and Lin Jun, a college classmate and also from Taiwan, founded the venture capital company “Adventure Frog” to provide start-up capital for startups. Xie Jiahua said: “To become a successful venture capital company, it must be as vigorous as a frog!”

In fact, he showed a talent for business since he was very young. When he was 9 years old, his dream was to multiply and sell earthworms to make a fortune (cutting the earthworms into two pieces); when he was in elementary school, he sold Second-hand goods, make lemonade to make money, study bridge and learn chess; in junior high school, he was forced to learn musical instruments, contract the route of delivering newspapers, carry out mail order business, make photo badges to make money (200 dollars per month income); The roommate bought a pizzeria that was on the verge of closure and sold it upon graduation.

This seems to pave the way for the entrepreneurial path behind him: start a company and then sell him.

In 1999, he met Nick Swinmurn, an entrepreneur who was younger than himself, who came up with an idea of ​​selling shoes online. At first, Xie Jiahua disagreed, but after receiving an email from Sweim, he gave the latter’s online shop ShoeSite

Injected $500,000, but he felt that “ShoeSite” was too straightforward, so he changed his name to Zappos (derived from the Spanish word “shoes” Zapatos). Six months later, Xie Jiahua began to run the company with Sweim. Soon after, Xie Jiahua further invested 10 million US dollars in Zappos. In 2000, Xie Jiahua became the Chief Executive Officer (CEO) of Zappos.

In 2009, Amazon spent $1.2 billion to acquire Zappos. At that time, Xie Jiahua made a direct profit of more than 200 million U.S. dollars in this sale, and Amazon paid for this acquisition in an all-stock way.

In 2012, Xie Jiahua published an autobiography “Delivering Happiness”, which was translated as “Three Pairs of Shoes” in Chinese. The title of the Chinese book is consistent with one of the philosophy of operating Zappos.

The secret of Zappos’s success is to bring customers an “invincible user experience”. Megastep has been written into the Harvard Business School lesson plan three times. Some media have summarized six of its successful experiences:

1. Rich product selection

On the Zappos website, there are more than 1,200 brands, more than 200,000 styles, and more than 4 million shoes, enough for most people to buy their favorite shoes, which is impossible in any shopping mall. Achieved.

2. A photo of a pair of shoes with 8 angles

Since 2008, each color and style of Metrolog has 8 photos, so customers can easily see the whole pair of shoes clearly and completely, including detailed descriptions of the shoes.

3. Fast and convenient delivery experience

Megastep’s warehouse usually has 1.2 million pairs of shoes, and the warehouse is near the airport of the American express giant UPS, operating 24 hours a day, 7 days a week. Although promised to be delivered within 4 days, customers often receive the shoes they want to buy the next day.

4. Buy 1 pair, get 3 pairs to try on, 365 days free return

Each customer who buys a pair of shoes at Metropolis will receive 3 pairs of identical shoes. After trying them on, the customer can keep the most suitable pair and return the other two pairs without postage. Moreover, within 365 days, if you are dissatisfied with the shoes, you can return them unconditionally, and the postage is also free.

5. 90-day deferred payment

Buy shoes at Metropol, Customers can pay 90 days after purchase at the latest, plus 365 days of free return and exchange, customers can be said to buy shoes without psychological burden.

6. Abnormal customer service

If you can’t find the shoes you want in Metropol, the customer service will provide you with at least 3 similar websites (even competitors) to let you find the shoes you want. In addition to buying shoes, Mejip’s customer service can also solve all problems for customers-some customers call and say that they are lonely and want to chat; some customers call to ask, what kind of clothes to wear for a date with a girl tomorrow… …Talk about whatever you want, and talk for as long as you want. There is no problem at all, the longest one even lasted 6 hours.

Mejibu’s return rate is as high as 25%. Coupled with the abnormal customer service, Mejibu will spend nearly $100 million on this every year. But Megap never advertises, and 75% of its customers are repeat customers. The transaction volume of these repeat customers is 15 times that of new customers, and the maintenance cost is only 1/6 of that of new customers.

In 2004, Sequoia Capital was once again attracted by Xie Jiahua’s project and injected $10 million in venture capital into Zappos. This year, Zappos’ sales reached 184 million US dollars, becoming the largest online shoe seller. By 2008, this figure had reached US$1 billion.

CEO Xie Jiahua wanted to maintain control of the company, but investors led by Sequoia Capital’s Mike Moritz were worried about Zappos’ cash flow. They began to put pressure on Xie Jiahua: “If performance does not improve, the board will Fired me, and then appointed a new CEO who is focused on profit.”

Finally, it was decided to sell Zappos to Amazon and asked Zappos to maintain its independence.

Later, Xie Jiahua elaborated on the ins and outs in “Why I Sold Zappos”, you might as well read it as a memory or useful to entrepreneurs:

It was the summer of 2005. I have devoted 5 years of hard work and all my savings to Zappos, and finally I became a formal one. Zappos sells shoes and apparel online. The difference between us and our competitors is that we put the company culture first. We treat our employees very well, buy 100% medical insurance for them, and invest in their personal development. Huge, our customer service is not just a traditional call center, they have more freedom, through these, we can provide customers with better services than our competitors, better services in exchange for more loyal users, for We bring lessMarket expenses, long-term profits, and rapid growth. These methods worked very well. By 2005, we had sales of 370 million U.S. dollars and entered the 500 fastest-growing companies in the United States. At that time, we were not profitable, but we were close to the breakthrough point, and our sales were rising rapidly.

At the same time, we use all of our money to sell shoes, but hope that one day we can sell all kinds of things. Zappos has become a well-known brand as Virgin. We planned to sell 1 billion in 2010 and go public.

About our company culture, one thing can prove that in 2005, Amazon CEO Jeff Bezos visited Zappos headquarters. I think we are a leading online shoe sales company. If Zappos is sold, our brand and culture Will disappear, so I told Jeff, no matter what price they pay, we will not sell it.

Four years later, Amazon comes again

Four years later, when Amazon came again, my first reaction was still, no. Since 2005, our sales have grown steadily. By 2008, our annual sales have reached 1 billion US dollars, two years ahead of the original plan. We are now profitable and our company culture has become stronger. As before, we hope to operate independently. And strive to be listed. However, our directors had their plans. Although the early Zappos was mainly funded by myself, we later received tens of millions of dollars in investment from other investors, including venture capital from Sequoia Capital, a Silicon Valley 48 million US dollars. Like all investors, Sequoia hopes to get real returns. If they are willing to wait a few years for the economy to recover, it will be better. However, the economic downturn and the credit crisis make Zappos and our investors difficult.

At that time, Zappos needed 100 million U.S. dollars in working capital, but our loan agreement with the bank required us to achieve a certain amount of sales and profit every month. If there is a slight deviation, the bank may refuse to lend us a loan. The theory of cash flow problems The above may crush us. At the beginning of 2009, not many banks were willing to provide us with loans of hundreds of millions of dollars.

This is not our only cash flow problem. Our credit line is based on our assets. We can borrow from the bank 50% to 60% of our inventory. However, our inventory valuationIt’s not based on how much money we spent to get in, but based on how much money can be recovered if we go bankrupt. As the economy deteriorates, our inventories are depreciating, which means that even if we complete the sales and profits specified by the bank, we may not be able to borrow money.

These issues have nothing to do with our operations, but they make our shareholders nervous. Some directors regard our company culture as a social experiment of mine, which I disagree with. I think that having the right culture is the most important thing for a company. However, the directors hold the opposite view. They believe that a company should focus on making profits first, and then do something for employees after making money. The opinion of the directors is that my social experiment can win good public relations for the company, but it cannot promote business development. The directors asked me, or any other CEO, to spend more time selling shoes and not always think about the happiness of employees.

From some levels, I sympathize with the situation of the directors. However, the problem is that if we change the current company culture, in the short term, our financial situation will improve, and our sales will not be immediately affected, but in the long run, everything we have created will collapse.

At the beginning of 2009, we were in trouble because our shareholder background is very complicated. Although I hold a large share, the directors will not force me to sell the company, but in our 5-person board of directors, only the CFO and COO Alfred Lin recognizes my company culture. This means that if the economy continues to deteriorate, the board can fire me and hire another CEO. Although this sense of crisis is not obvious, I feel that it is already developing in that direction.

That was a period of time when Alfred and I were extremely anxious, but our harder times have come. This is just another challenge we encountered. We started to think about the way out. Naturally, we didn’t want to sell the company. In other words, Zappos is more than just a job, it is a call of duty, so we made the decision to buy back the shares of our board members.

That will cost about 200 million US dollars

While looking for new investors, Amazon found Alfred and talked about the acquisition of Zappos again. Although this is not the best way for me, Amazon asked for the idea of ​​Zappos to operate independently. It seems to be more open, and Amazon’s price is very high, and our fiduciary duty to shareholders requires that we cannot ignore this bid.

In April, I flew to Seattle and talked to Jeff Bezos for an hour. I showed him the company culture of Zappos. Near the end, I talked about social well-being and how we can better serve our customers and employees .

Suddenly, Jeff said, you know, people are very bad at predicting what makes them happy. I was playing the next slide and said, you seem to be good at guessing what the next slide will look like. After that, time began to become more enjoyable. Obviously, Amazon began to identify with our company culture and strong sales.

However, I still have a lot of worries. Jeff’s way of doing business is very different from ours. Amazon relies on low prices, but Zappos never competes on prices. If Amazon receives too many calls from customers, they will study what went wrong. Perhaps the product description confuses users. They will solve these problems to reduce user calls and keep the price low. At Zappos, we We believe that human and emotional communication with customers is the best way for us to provide services.

But after talking to Jeff, I realized that we also have something in common with Amazon. Amazon does everything for customers, even sacrificing short-term profits. Zappos has the same goal. We just have the same goal. Different ways.

When I left Seattle, I was convinced that Amazon would be a better partner for Zappos. Our board wanted immediate results, and we wanted to build a long-term company and spread happiness. Together with Amazon, I believe that Zappos can continue to build its culture, brand and happiness, and we will feel free.

The negotiation with Amazon then began

At first, Amazon wanted to use cash, but in our opinion, it was too much like selling the company to them. We proposed a share swap. Zappos shareholders could exchange their equity for Amazon equity. Our deal is even more important. It’s like a marriage, like a couple putting bank deposits into the same account.

In June, Amazon formally proposed to acquire Zappos as an equity transaction, and our board of directors voted on it on July 20. We persuaded Amazon to let us publish the news ourselves, so at noon on July 22, about an hour and a half before the stock exchange stopped trading,We publicly announced the news. I stood in front of our 50 senior employees and explained why I did this. It was the most important speech in my life, and once again felt the tension of public speaking.

I talked for half an hour and asked them to explain to their subordinates that nothing will change, they will not lose their jobs, and the culture of Zappos will continue to grow. The difference is that we can now do some new things. .

At first, everyone in the room felt nervous. Some people thought I was leaving the company. Slowly, I saw the tension on people’s faces dissolving. They returned to their seats, called their subordinates, and told What happened to them? Within an hour, everyone went back to work. Halfway through, I heard employees say how happy they are to have Amazon’s resources. Two days later, I called our Las Vegas team together. At that time, we had 700 people. We answered more questions to them in a convention center. People were very excited. I felt that I was embarking on a new journey. The journey.

The acquisition is completed on October 1st

This acquisition is valued at US$1.2 billion. Our investor Sequoia received US$248 million. Our new board members now include me, Jeff, two new members of Amazon and two other old members of Zappos . As the CEO, I report to the committee quarterly that Zappos needs to complete certain sales and profits. Unlike the previous board of directors, our new committee seems to understand the importance of Wenhua. In fact, a distribution center of Amazon recently started to try the Amazon version Zappos culture, they pay $2,000 to people who leave to be dissatisfied with their job.

On the other hand, Zappos continues to operate independently. We have a document confirming the uniqueness of the Zappos culture and Amazon’s responsibility to protect this culture. We regard Amazon as a giant consultant to help us achieve some things, such as Design our storage system.

In the first quarter of 2010, Zappos net sales increased by 50%. We added hundreds of employees. This made Amazon very happy, but it also encountered new challenges. I noticed that during the lunch break, different departments There are not as many people hanging out with each other as before.

In order to solve this problem, we started to study the relationship between employees. When they log on to their computers, let them see a picture of other employeesAsk them how familiar they are with the employee. The options include, “Meet and say hello”, “Go out and hang out together”, and “We will become good friends.” I want to know the situation of inter-departmental relations within the company and plan to open a course. I hope that more employees will become good friends.

This is just a small part of how we strengthen the company’s culture and make employees feel happier. We now have close to 1,800 employees. I think Zappos proves that a company may not necessarily lose itself when it grows. When it was acquired.