Tony Hsieh

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Tony Hsieh
Tony Hsieh in 2009 (cropped).jpg
Hsieh in 2009
Born(1973-12-12)December 12, 1973
DiedNovember 27, 2020(2020-11-27) (aged 46)
Cause of deathInjuries sustained in house fire
Education Harvard University (BS)
OccupationBusinessman
Years active1995–2020
Known forCEO of Zappos (1999–2020)
Net worthUS$840 million (2018) [1]

Tony Hsieh ( /ˈʃ/ shay; December 12, 1973 November 27, 2020) [2] [3] [4] was an American Internet entrepreneur and venture capitalist. He retired as the CEO of the online shoe and clothing company Zappos in August 2020 after 21 years. [5] Prior to joining Zappos, Hsieh co-founded the Internet advertising network LinkExchange, which he sold to Microsoft in 1998 for $265 million. [6]

Contents

Early life and education

Hsieh was born in Urbana, Illinois, to Richard and Judy Hsieh, immigrants from Taiwan who met in graduate school at the University of Illinois. Hsieh's family moved to Lucas Valley area of Marin County, California when he was five. His mother was a social worker, and his father a chemical engineer at Chevron Corp. [7] [8] He had two younger brothers, Andy and Dave. Hsieh attended the Branson School. [9]

In 1995, Hsieh graduated from Harvard University with a degree in computer science. [10] While at Harvard, he managed the Quincy House Grille selling pizza to the students in his dorm; his best customer, Alfred Lin, was later Zappos's chief financial officer and chief operating officer. [11] After college, Hsieh worked for Oracle Corporation. [12] After five months, he left to co-found the LinkExchange advertising network. [13]

Career

LinkExchange

In 1996, Hsieh started developing the idea for an advertising network called LinkExchange. [14] Members were allowed to advertise their site over LinkExchange's network by displaying banner ads on its website. They launched in March 1996, with Hsieh as CEO, and found their first 30 clients by direct emailing webmasters. [15] The site grew, and within 90 days LinkExchange had over 20,000 participating web pages and had its banner ads displayed over 10 million times. [16] By 1998, the site had over 400,000 members and 5 million ads rotated daily. [17] In November 1998, LinkExchange was sold to Microsoft for $265 million. [18] [19]

Venture Frogs

After LinkExchange sold to Microsoft, Hsieh co-founded Venture Frogs, an incubator and investment firm, with his business partner, Alfred Lin. [20] [21] The name originated from a dare. One of Hsieh's friends said she would invest everything if they chose "Venture Frogs" as the name, and the pair took her up on the bet, although they had not seen any money as of 2011. [22] They invested in a variety of tech and Internet startups, including Ask Jeeves, OpenTable and Zappos. [22]

Zappos

In 1999, Nick Swinmurn approached Hsieh and Lin with the idea of selling shoes online. [11] Hsieh was initially skeptical and almost deleted Swinmurn's initial voice mail. After Swinmurn mentioned that "footwear in the US is a $40 billion market, and 5% of that was already being sold by paper mail order catalogs," Hsieh and Lin decided to invest through Venture Frogs. Two months later, Hsieh joined Zappos as the CEO, starting with $1.6 million of total sales in 2000. [11] By 2009, revenues reached $1 billion. [23] [24]

Tony Hsieh: The best advice I ever got  Interview by Ellen Florian, contributor @Fortune Magazine May 1, 2012  Tony Hsieh: "Focus on friendships as their own reward."  FORTUNE -- "Fred Mossler and I joined Zappos at the same time in 1999. Early on, it was hard to get brands to sign up. The traditional mentality for a lot of retailers was: Squeeze your suppliers. I didn't come from a retail background, but Fred did. Before Zappos he was with Nordstrom (JWN, Fortune 500). I thought I should be negotiating hard, but Fred was focused on coming up with win-win situations. He told me to build relationships for the sake of the relationships. That really shifted my thinking.  "Six years ago Fred had a friendship with a rep for a small brand. The brand's contribution to our sales was insignificant, so going to a dinner with him during a shoe show, when there were hundreds of other brands there, didn't make a lot of sense. But it was still something Fred prioritized, based on the friendship. A week after the dinner, Fred's friend became president of a major brand we had been trying to get. If you're focused on the friendship as its own reward, serendipitous stuff just happens. I know that sounds weird, but I can tell you for our 12 years of existence, it's actually how a lot of stuff happens."

Without a precedent to guide him, Hsieh learned how to make customers feel comfortable shopping for shoes online. Zappos offered free shipping and free returns, sometimes of several pairs. Hsieh rethought Zappos structure, and in 2013 it became for a time a holacracy without job titles, reflecting his belief in employees and their ability to self-organize. [25] The company hired only about 1% of all applicants. [26] Named for the Spanish word for shoes, "zapatos", Zappos was often listed in Fortune as one of the best companies to work for, and beyond high salaries and being an inviting place to work it delivered extraordinary customer service. [27]

Hsieh loved the game of poker and moved Zappos headquarters to Henderson, Nevada, and eventually to downtown Las Vegas. [27]

On July 22, 2009, Amazon announced the acquisition of Zappos.com in a deal valued at approximately $1.2 billion. [28] Hsieh is said to have made at least $214 million from the sale, not including money made through his former investment firm Venture Frogs. [29] [30]

On August 24, 2020, Hsieh retired as the CEO of Zappos after 21 years at the helm. [5]

JetSuite

Hsieh joined JetSuite's board in 2011. He led a $7 million round of investment in the growing private "very light jet" field with that company. The investment allowed JetSuite to add two new Embraer Phenom 100 jets which have two pilots, two engines and safety features equivalent to large commercial passenger jets but weigh less than 10,000 pounds (4,500 kg) and are consequently highly fuel-efficient. [31]

Real estate rejuvenation projects

Downtown Project – Las Vegas

From 2009 until his death, Hsieh, who was still running the downtown Las Vegas-based Zappos.com business, organized a major re-development and revitalization project for downtown Las Vegas, which had been for the most part left behind compared to the Las Vegas Strip's growth. Hsieh originally planned the Downtown Project as a place where Zappos.com employees could live and work, but the project grew beyond that to a vision where thousands of local tech and other entrepreneurs could live and work. [32] [33] Projects funded include The Writer's Block, the first independent bookseller in Las Vegas. [34]

Park City, Utah

After stepping down as CEO of Zappos in August 2020, Hsieh bought multiple properties in Park City, Utah, with a total market value around $56 million. [35]

Awards

Hsieh was a member of the Harvard University team that won the 1993 ACM International Collegiate Programming Contest in Indianapolis, ranking first of 31 entrants. [36]

Hsieh received an Ernst & Young Entrepreneur of the Year award for the Northern California region in 2007. [37]

Book

Hsieh's book Delivering Happiness focused on his entrepreneurial endeavors. It was profiled in many world publications, including The Washington Post, CNBC, TechCrunch, The Huffington Post and The Wall Street Journal. [38] [39] [40] [41] [42] It debuted at No. 1 on the New York Times Best Seller List and stayed on the list for 27 consecutive weeks. [43] [44]

Personal life

Hsieh resided primarily in Downtown Las Vegas, and also owned a residence in Southern Highlands, Nevada. Hsieh was known for taking extreme challenges regarding his body, including starving himself of oxygen to induce hypoxia and using nitrous oxide as well as a fasting to the point where he was under 100 pounds (45 kg). [45] [46] [47] [48] Singer Jewel said that she was aware of Hsieh's extreme drug abuse and sent him a letter months before his death to warn him. [49]

Death

On the morning of November 18, 2020, Hsieh was injured in a house fire in New London, Connecticut, although his identity was not revealed at the time. [50] It has been reported that he was visiting family for Thanksgiving, and he either became trapped in a pool shed during the fire, [51] or barricaded himself inside and would not answer the door. [52] [53] [54] The exact cause of the fire is under investigation. He was rescued by firefighters and transported to the Connecticut Burn Center at Bridgeport Hospital to undergo treatment for burns and smoke inhalation, where he died on November 27, two weeks before his 47th birthday. [55] [56] The Connecticut medical examiner determined that Hsieh died from smoke inhalation, and ruled his death was an accident. [52] News sources have suggested that his drug use and nitrous oxide use may have played a role in his death. [57] [58]

According to property records, the Wall Street Journal reported that Hsieh was staying at a house that was possibly owned by a former Zappos employee, Rachael Brown. [59] [60]

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Further reading