What San Francisco/Silicon Valley can learn from the Twittering company: Zappos

Zappos Tour

Yesterday I was lucky enough to visit Zappos and get a tour and talk with some of their executives, including Tony Hsieh, CEO.

Up until now most of what I knew about Zappos was that they had a lot of people on Twitter (434 of their 1,500 employees are on Twitter with more joining every day).

I thought I was going to Zappos to study how Zappos uses social media and get an interview about that for Building43, the community Rocky and I are building for people who are fanatical about the Internet.

But within 10 minutes of walking in the front door I realized that there’s a lot more to Zappos than that they get Twitter. More on that later, because Tim O’Reilly demonstrates some of Silicon Valley’s worst beliefs about Twitter when his conferences advertise “learn the secrets of building 100,000 + followers.” Zappos does NOT believe that is the goal of Twitter, more on that later in this post. Aside: if you want to attend a Twitter Conference that focuses on real business value and community engagement, come to 140: The Twitter Conference. (UPDATE: Tim O’Reilly wrote me and said he totally agreed with me that focusing on followers is the wrong thing to do for a Twitterer and he has removed that language from his conference materials).

Before we even got to the front door tons of employees said “hello.” That’s weird, doesn’t happen at most companies, believe it or not. And the way they greeted each other told me something else was up here.

A warm greeting in Zappos headquarters

Then when we got into the front lobby we were warming greeted again, and then as we looked around, we saw this wasn’t going to be a normal visit to a normal company. There was a book store with books free for the taking. There was a popcorn machine. A Dance Dance Revolution machine. A “hall of fame” board for employees who had pushed “reply to all” too quickly. And a video display that showed off how many sales were made yesterday. I had never been in a corporate lobby like this before.

Then I hooked onto a tour given by Zappos’ Mayor, Jerry Tidmor. Oh, yeah, everyone has weird titles. Executives are called “monkeys.” One employee’s title was, simply, “fred.” Causes him a lot of fun when he tries to get a badge at conferences. UPDATE: here’s video of the beginning of that tour.

Along the way Jerry showed us office after office that was decked out with some fun weird theme. I had seen some of this at other places like Google and my new employer, Rackspace, but Zappos gets everyone into it. The lawyers’ offices even hold the Christmas tree (they have Christmas twice a year at Zappos. Why? Why not?).

In one office they set up a bowling alley. That was a lot of fun for the Rackspace employees who were here for discussions.

Total transparency

They are transparent with all their numbers. All employees know how they are doing and so does the public. The numbers are on a white board on the tour for all to see and take pictures of. This picture is of Jerry standing in front of the board with the up-to-date numbers.

During a lunch session with Zappos “monkeys” we asked how they handled a recent layoff. We noted that the employees who were laid off were incredibly positive. The answer: they did it in open with everyone understanding the reasons for it. They did it fast and didn’t drag their feet. So when they did it they had enough cash to give everyone a good severance package. They said if they had waited to see if business conditions would improve they wouldn’t have been able to do that.

Anyway, so what can Silicon Valley learn from Zappos?

1. You don’t need to be in San Francisco to build a great company. Zappos actually started in the same building as Craig’s List. They moved to Las Vegas because it was cheaper and because they saw they could build a better company. The other half of the company is a warehouse in Kentucky. That’s there because that’s where UPS is, so they can take your order in the evening and have it on your doorstep the next day.

Sign with one of core values

2. Focus on culture and build something for long term. Tony’s first company, Link Exchange, was sold because it wasn’t fun anymore, he told me. That’s why he focused so much on culture when he got involved with Zappos. I see so many companies who focus on growth and get exactly what they want: an unfun fast growing company that falls apart later.

3. Get rid of assholes. Zappos has a filtering system before, during, and after hiring to make sure they get rid of people who “don’t fit the culture.” That is the nice way of saying they get rid of assholes and they get rid of them quickly. They even pay candidates $2,000 after they go through training if they can admit they don’t fit into the culture.

Dr. Vic

4. Get a coach. Zappos has its own coach. His name is Dr. Vic. He meets with every employee. Takes their picture. Learns what they are about and helps them get their career moving. Plus he writes a blog for everyone else’s company.

5. Share with others. Zappos gives tours to everyone to share what they’ve learned. You can take the tour too, I highly recommend it if you are in Las Vegas. tours@zappos.com will get you a date and a time. Oh, did I mention they pick you up from the airport? And that they carry your bags? And that they are, well, um, nice?

Grab a book and learn

6. Train, train and train some more. Zappos has a whole department that puts together classes. Your pay goes up the more classes you complete. Plus they have all those free books in the lobby.

7. Enable all employees to be spokespeople. Every single new hire at Zappos is asked to start a Twitter account and post a few times to it during training. After that they don’t care if you keep it up. Why do they do that? They want to rub it in that EVERYONE in the company is a public spokesperson for Zappos, not just the CEO or PR team.

Zappos core values

8. Everyone lives by same rules. During the tour we heard of a new hire that was fired during training for not showing up on time and giving some lip. This was a high level technical person that they really could have used. Silicon Valley companies would put up with that kind of behavior. Not at Zappos. Everyone, from executive recruits on down are expected to live to the same rules.

9. The CEO’s office isn’t sacrosanct. Tony enouraged us to throw peanut shells on his office floor. Why? That happens every day, we learned, as tours come through. But it’s a subtle message that Tony isn’t above anyone else in the company and that his door isn’t just open, but that you can come in and mess up his work space.

The Casual department

10. Create a welcoming culture. Every department, as we walked in, said “hi” in a different way. Here’s the casual department who waved these little clappy hands at us. Other departments had other kinds of noise makers. The Fashion department took pictures of us while they played music.

Everyone on tour is a VIP

11. Everyone is a VIP. Both internally and externally everyone gets the VIP treatment. This means all sorts of little things all across the company. Vendors, when they come to Zappos, get their bags carried. That wins them accounts. In our case we had our tripods and cameras carried and our every need catered to.

Lunch with Zappos executives

12. Create an atmosphere for both goofiness and brilliance. Every conference room was decked out with personal touches. It gets you in the mood for creative discussions. Here Rackspace employees are meeting with Zappos employees and learning more about Zappos. Notice all the weird touches on the table, the walls. It’s hard to take yourself too seriously there.

13. Root out hubris and kill it. This is mostly a note to myself, but I know lots of San Francisco companies who this could apply to just as well, too.

14. Follow your employee’s and customers’ passion. How did Zappos get into clothing? Their customers and employees were passionate about it.

15. Don’t be religious about what’s working. Having 400 employees on Twitter is clearly working for Zappos but Tony, at one point, told his employees to talk to me about friendfeed. They are always looking for the next idea. By the way, here’s everyone who is saying something about Zappos on friendfeed. I love this quote from Forrester’s CEO, George Colony (Tony is speaking at the Forrester Conference today): “When asked why he was on Twitter, Tony Hsieh, Zappos CEO said: “People relate to people, not companies.”

16. Be religious about taking care of customers. Tony loves telling the story about when they got pizza ordered for them by Zappos help desk (they didn’t know who was calling). Every employee is empowered to take care of customers and get their problems solved.

17. Reward greatness. Every employee can give a $50 bonus to any other employee. Does it get misused? Not often and when it does it’s easy to solve.

18. Remember most policies are to take care of edge cases. They resist writing new policies at Zappos. When they do write a policy, they make sure it really is needed across the company. Usually policies get killed.

Anyway, there is lots of posts like this one about Zappos and why this company is so interesting. I didn’t get it until I went on a tour and saw it for myself. I’m a fan for life. I wish there were more companies like Zappos.

The fact that there isn’t tells us something about us. And I don’t like what I’m learning.

Back to that quote from the O’Reilly Twitter Camp home page: the goal of a good company as they get on Twitter should NOT be to get more followers. It should be to take care of customers and create an emotional attachment to the company through its people. Zappos gets this at a deep level. Boy do I wish more did.

Comments

  1. If I’m ever in Vegas I’ll definitely take the tour. I mentioned Zappos once in a Tweet and Tony was following within minutes.

  2. Great piece Robert. Zappos are very forward thinking in their use of social media and the way they develop the culture within the company.

  3. Great piece Robert. Zappos are very forward thinking in their use of social media and the way they develop the culture within the company.

  4. Very good post, Mister Scoble. I remember meeting the Zappos people briefly at their SXSW booth a few years ago… and I was somehow instantly impressed. The next day, they were outside the convention center in the sprinkly rain, passing out rain ponchos. Do you remember that?

  5. Very good post, Mister Scoble. I remember meeting the Zappos people briefly at their SXSW booth a few years ago… and I was somehow instantly impressed. The next day, they were outside the convention center in the sprinkly rain, passing out rain ponchos. Do you remember that?

  6. Can I say I’m very astonishing by this report, visit & company. Can I say that I don’t think we have such companies here in France, even in the strangest business zones. Can I say -even if if you’ll find me stupid- I don’t really understand what they do… ;-) by reading you. [pause] I’ve checked on their web sites, ok.

  7. Can I say I’m very astonishing by this report, visit & company. Can I say that I don’t think we have such companies here in France, even in the strangest business zones. Can I say -even if if you’ll find me stupid- I don’t really understand what they do… ;-) by reading you. [pause] I’ve checked on their web sites, ok.

  8. Yes, but was everyone wearing 3 or more pieces of flair? Flair is absolutely mandatory for achieving proper levels of Web 5.0 zaniness.

    While the more egalitarian and open aspects of the company sound wonderful, their approach to enforced “goofiness” sounds absolutely soul-killing. Giving everyone inane job descriptions, while possibly hubris-breaking when new, would quickly become a morale-busting form of doublespeak. That room full of “monkeys,” after all, still determine your continued employment.

  9. Yes, but was everyone wearing 3 or more pieces of flair? Flair is absolutely mandatory for achieving proper levels of Web 5.0 zaniness.

    While the more egalitarian and open aspects of the company sound wonderful, their approach to enforced “goofiness” sounds absolutely soul-killing. Giving everyone inane job descriptions, while possibly hubris-breaking when new, would quickly become a morale-busting form of doublespeak. That room full of “monkeys,” after all, still determine your continued employment.

  10. Great insights into what makes Zappos special and successful. It is not about brilliant strategy and rigorous analysis; it’s about how a simple strategy is executed day in day out by the empowered employee base.

  11. Great insights into what makes Zappos special and successful. It is not about brilliant strategy and rigorous analysis; it’s about how a simple strategy is executed day in day out by the empowered employee base.

  12. Mark wrote: That room full of “monkeys,” after all, still determine your continued employment.

    That’s why 360-degree evaluations are important, too, but not every company has the culture to implement them. The “No Asshole” rule is VERY, VERY important.

  13. Mark wrote: That room full of “monkeys,” after all, still determine your continued employment.

    That’s why 360-degree evaluations are important, too, but not every company has the culture to implement them. The “No Asshole” rule is VERY, VERY important.

  14. Maybe a great company but there are still things they have to fix like prices , just checked their computer department , as an example SanDisk Cruzer Micro USB Flash Drive 16 GB -”Sale” price 107.99 $ ( Amazon 27.87 $) and there are many more examples like this, I know their main line of business is clothing but…so culture is not enough to build a company you can trust

  15. Maybe a great company but there are still things they have to fix like prices , just checked their computer department , as an example SanDisk Cruzer Micro USB Flash Drive 16 GB -”Sale” price 107.99 $ ( Amazon 27.87 $) and there are many more examples like this, I know their main line of business is clothing but…so culture is not enough to build a company you can trust

  16. Scobie!

    Nice post. I always liked your writing and deep coverage of entrepreneurial companies.

    PS – hope you make it to FiRe this year http://www.futureinreview.com Ping Sam to get on the press list.

    Otherwise, get your ars up to Washington and we shall pop a bottle of vino.

    Best, Tim Reha (Blog Biz Summit crew)

  17. I’m in Italy and is it really sad to see how our culture is totally different. It should be impossible to build a company like this here… Maybe just Yoox.com has done something a little bit comparable, but the rest of the business really really… “closed”.

  18. I’m in Italy and is it really sad to see how our culture is totally different. It should be impossible to build a company like this here… Maybe just Yoox.com has done something a little bit comparable, but the rest of the business really really… “closed”.

  19. The other day I was reading a post about Yahoo’s problems. The writer was ridiculing Yahoo’s lack of seriousness (from job titles, strategies, etc).

    I guess everything is fine when the company is doing well.

  20. The other day I was reading a post about Yahoo’s problems. The writer was ridiculing Yahoo’s lack of seriousness (from job titles, strategies, etc).

    I guess everything is fine when the company is doing well.

  21. Crazy Eddie (Tony) for shoes? :) Actually I know of them, long been a below the froth-bubbles company. I like their Genghis implementation, and they seem more level-headed than the usual dot.bomb, with really good service, maybe it’s the distance from San Fran, as the greater the, the better the, as hard to find good service in San Fran, everyone’s all too full of themselves, in their own tronish cyberworlds.

    Still when they stray from footware/couture, things get more shaky. And the free overnight shipping went by the wayside, and serious cracks in the pricing system, all in a pretty crowded market. Not perfect, and seemingly too enforced-culture-carbon-copy-cultic, companies are businesses not religions. But overall, one company I’d apply for, assuming their culture allows for the journalistic type. I do like their way of actually TALKING to customers, its not one of those call center deathzones, where the goal is to gettcha off the phone as fast as possible. Service and rooting out hubris is the key, more so than anything else. Hubris kills service, heck it took out the entire Bay Area.

    Still people buy products, not cultures. If a good culture helps them deliver and service, find and price products, so much the better. But running on pure culture is just surgary adrenaline, eventually the protein has to kick in. Good products, good pricing, good delivery, EXCEPTIONAL service, all are needed. If they just run on service, but lose the pricing and product game, it’s still game over.

  22. Crazy Eddie (Tony) for shoes? :) Actually I know of them, long been a below the froth-bubbles company. I like their Genghis implementation, and they seem more level-headed than the usual dot.bomb, with really good service, maybe it’s the distance from San Fran, as the greater the, the better the, as hard to find good service in San Fran, everyone’s all too full of themselves, in their own tronish cyberworlds.

    Still when they stray from footware/couture, things get more shaky. And the free overnight shipping went by the wayside, and serious cracks in the pricing system, all in a pretty crowded market. Not perfect, and seemingly too enforced-culture-carbon-copy-cultic, companies are businesses not religions. But overall, one company I’d apply for, assuming their culture allows for the journalistic type. I do like their way of actually TALKING to customers, its not one of those call center deathzones, where the goal is to gettcha off the phone as fast as possible. Service and rooting out hubris is the key, more so than anything else. Hubris kills service, heck it took out the entire Bay Area.

    Still people buy products, not cultures. If a good culture helps them deliver and service, find and price products, so much the better. But running on pure culture is just surgary adrenaline, eventually the protein has to kick in. Good products, good pricing, good delivery, EXCEPTIONAL service, all are needed. If they just run on service, but lose the pricing and product game, it’s still game over.

  23. I agree that nearly all the items are things that all companies should learn. The lesson isn’t that all companies should have the kind of wacky culture that Zappos has, it’s that they should think carefully about culture from the beginning and make culture a core value.

    The one thing I vociferously disagree with is, “it’s a subtle message that Tony isn’t above anyone else in the company and that his door isn’t just open, but that you can come in and mess up his work space.” I would hope that everyone’s workspace was equally inviolate. I would hate it if people messed up my workspace. (I don’t need any help!) I want to work at a company where if I need to shut the door to concentrate and get things done, that’s acceptable. Right now I work in a place where there’s a strong open door policy. It means that important, careful work gets interrupted all the time for the most minute of requests. After all, it would be rude to ignore someone looking for paper clips in order to concentrate on a major grant proposal. Certainly there are times when the CEO needs to be uninterruptible!

  24. I agree that nearly all the items are things that all companies should learn. The lesson isn’t that all companies should have the kind of wacky culture that Zappos has, it’s that they should think carefully about culture from the beginning and make culture a core value.

    The one thing I vociferously disagree with is, “it’s a subtle message that Tony isn’t above anyone else in the company and that his door isn’t just open, but that you can come in and mess up his work space.” I would hope that everyone’s workspace was equally inviolate. I would hate it if people messed up my workspace. (I don’t need any help!) I want to work at a company where if I need to shut the door to concentrate and get things done, that’s acceptable. Right now I work in a place where there’s a strong open door policy. It means that important, careful work gets interrupted all the time for the most minute of requests. After all, it would be rude to ignore someone looking for paper clips in order to concentrate on a major grant proposal. Certainly there are times when the CEO needs to be uninterruptible!

  25. [...] What San Francisco/Silicon Valley can learn from the Twittering company: Zappos Yesterday I was lucky enough to visit Zappos and get a tour and talk with some of their executives, including Tony [...] [...]

  26. I love the Zappos corporate culture concept – wrote a paper about them for my class on HR management. Great model. Wished they could have afforded to stay in SF. Hoping to pick Tony’s brain one day if he comes through SF again and organizes another Tweetup.

    By the way, am really looking forward to hearing you speak at the Twitter Conference in Mtn View!

  27. I love the Zappos corporate culture concept – wrote a paper about them for my class on HR management. Great model. Wished they could have afforded to stay in SF. Hoping to pick Tony’s brain one day if he comes through SF again and organizes another Tweetup.

    By the way, am really looking forward to hearing you speak at the Twitter Conference in Mtn View!

  28. [...] 18 Things You Can Learn From Zappos. What Other Company’s Should We Be Learning From? This is a guest posting by Robert Scoble (@scobleizer). He recently joined Rackspace to help develop Building 43, positioned to be a content and social networking site.  He’s previously worked for FastCompany.TV and Microsoft. You can find him around numerous social networking sites. See original post on Scobleizer here [...]

  29. I am still suspicious of places that have trendy religious-like cultures, aka Google and such. Values come from outside, companies aren’t life, family and church…as much at dot.commers try to hold onto that idealistic Utopia. It all starts breaking down, when the employee-base gets over 30 to 35. Suddenly the corporate rah-rah enforced-culture cheerleading to sell shoes (of all things) rings flat when having to choose between that and family. And you get a Walmart world, low pay, long hours, no recourse, all in a boxed-in commodity middle-man market, but it’s become your family, your social outlet, your fun-play, you won’t dare leave, you can’t.

    But lots of things they get right, more so than most ecomm companies.

    Still “culture fit” can be code for “yes men”, steering you directly into icebergs. Real leadership is stocking yourself with people that can speak freely without fear of retribution.

  30. I am still suspicious of places that have trendy religious-like cultures, aka Google and such. Values come from outside, companies aren’t life, family and church…as much at dot.commers try to hold onto that idealistic Utopia. It all starts breaking down, when the employee-base gets over 30 to 35. Suddenly the corporate rah-rah enforced-culture cheerleading to sell shoes (of all things) rings flat when having to choose between that and family. And you get a Walmart world, low pay, long hours, no recourse, all in a boxed-in commodity middle-man market, but it’s become your family, your social outlet, your fun-play, you won’t dare leave, you can’t.

    But lots of things they get right, more so than most ecomm companies.

    Still “culture fit” can be code for “yes men”, steering you directly into icebergs. Real leadership is stocking yourself with people that can speak freely without fear of retribution.

  31. [...] check out my other post Happy employees get their own book and Robert Scoble’s recent post summarizing his visit to the company’s headquarters. Related PostsHappy employees get their own bookZappos knows [...]

  32. [...] What You Can Learn Zappos by Robert Scoble – “6. Train, train and train some more. Zappos has a whole department that puts together classes. Your pay goes up the more classes you complete. 18. Remember most policies are to take care of edge cases. They resist writing new policies at Zappos. When they do write a policy, they make sure it really is needed across the company. Usually policies get killed. [...]

  33. Damn straight. I was furious when I saw that someone in our marketing department had made the claim that getting lots of followers was one of the things we’d teach in the Twitter Boot Camp. I totally agree with Tony, and with Robert, that this is not why anyone should use twitter. It’s a conversational medium. I use it to learn from my community and share what I learn.

  34. Damn straight. I was furious when I saw that someone in our marketing department had made the claim that getting lots of followers was one of the things we’d teach in the Twitter Boot Camp. I totally agree with Tony, and with Robert, that this is not why anyone should use twitter. It’s a conversational medium. I use it to learn from my community and share what I learn.

  35. [...] Link | More about Zappos at World of Usability: Why Zappos Works This entry was posted on Wednesday, May 13th, 2009 at 4:01 amand is filed under Neatorama. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed. [...]

  36. Zappos sounds like a GREAT company to work for! I wonder if they have a place I could keep my penguins during the day if I were to work there. My current employer wants everyone to be part of a bland herd.

  37. Zappos sounds like a GREAT company to work for! I wonder if they have a place I could keep my penguins during the day if I were to work there. My current employer wants everyone to be part of a bland herd.

  38. Very thorough post! I’ve read bits and pieces of the “2008 Zappos Culture” Book.

    I really like #16:
    “Be religious about taking care of customers. Tony loves telling the story about when they got pizza ordered for them by Zappos help desk (they didn’t know who was calling). Every employee is empowered to take care of customers and get their problems solved.”

    If only more companies empowered their employees to take care of problems. Twitter will force companies everywhere to be better at what they do today. A few complaints from a sub shop store in a small town could ruin the experience for would-be customers; that company could be out of business if they aren’t “listening” and rectifying the problems.

    Zappos is passionate and cares about their customers; they’ve done it right!

  39. Very thorough post! I’ve read bits and pieces of the “2008 Zappos Culture” Book.

    I really like #16:
    “Be religious about taking care of customers. Tony loves telling the story about when they got pizza ordered for them by Zappos help desk (they didn’t know who was calling). Every employee is empowered to take care of customers and get their problems solved.”

    If only more companies empowered their employees to take care of problems. Twitter will force companies everywhere to be better at what they do today. A few complaints from a sub shop store in a small town could ruin the experience for would-be customers; that company could be out of business if they aren’t “listening” and rectifying the problems.

    Zappos is passionate and cares about their customers; they’ve done it right!

  40. Zappos – where everyone is different, just like everybody else. The company’s hiring policies reek of corporate fascism. I’d rather have intelligent, competent coworkers than any of the above-mentioned perks. Although to be fair I’m sure Zappos attracts extremely weird and extremely talented workers so this probably isn’t an issue. But think of the wasteful spending, too; I’d rather have a bonus check than a VIP room at work. And as an introverted, very private individual, I’d probably be horrified to work with these people.

  41. Zappos – where everyone is different, just like everybody else. The company’s hiring policies reek of corporate fascism. I’d rather have intelligent, competent coworkers than any of the above-mentioned perks. Although to be fair I’m sure Zappos attracts extremely weird and extremely talented workers so this probably isn’t an issue. But think of the wasteful spending, too; I’d rather have a bonus check than a VIP room at work. And as an introverted, very private individual, I’d probably be horrified to work with these people.

  42. Since I first began hearing and reading about Tony Hsieh's passion for corporate culture and service I've been following his message and incorporating the Zappos.com story into my talks on how to create what I call a Champion Organization, http://www.ChampionOrganization.com. The Zappos.com story is one of the case studies I use and its a philosophy my clients are starting to embrace. It is very inspiring to work with business owners and CEOs who are open to embracing this approach.

  43. Since I first began hearing and reading about Tony Hsieh's passion for corporate culture and service I've been following his message and incorporating the Zappos.com story into my talks on how to create what I call a Champion Organization, http://www.ChampionOrganization.com. The Zappos.com story is one of the case studies I use and its a philosophy my clients are starting to embrace. It is very inspiring to work with business owners and CEOs who are open to embracing this approach.

  44. Ah! I want so badly to work for Zappo's now. I totally agree with the idea of relating to people instead of companies. I do wonder if the zaniness could get oppressive, but the idea behind it, the idea of not having any sacred cows, is pretty great. Hearing about some of the perks, they kind of remind me of what I've heard about life in the Googleplex.

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  46. Scobie!

    Nice post. I always liked your writing and deep coverage of entrepreneurial companies.

    PS – hope you make it to FiRe this year http://www.futureinreview.com Ping Sam to get on the press list.

    Otherwise, get your ars up to Washington and we shall pop a bottle of vino.

    Best, Tim Reha (Blog Biz Summit crew)