Home Technology Tony Hseih, Former Zappos’ CEO, Passes Away at 46

Tony Hseih, Former Zappos’ CEO, Passes Away at 46

by Khushi Lokapur

On Friday, technology revolutionary and former CEO of Zappos, Tony Hseih passed away at the age of 46, suffering severe burns and injuries in a fire at his house in Connecticut, according to Megan Fazio, a spokesperson for the Downtown Project, Las Vegas. It was under his leadership that Zappos became a $1 billion online shoes and clothing powerhouse and received praise for its customer service and employee-focused company culture. The technology entrepreneur and venture capitalist was also the author of the best-selling autobiography, “Delivering Happiness” which elaborated his philosophy on customer service.

Kedar Deshpande, the present chief executive of Zappos, confirmed Mr. Hsieh’s (pronounced shay) death in an official statement on Saturday, who was apparently visiting family at the time. Mr. Hsieh had stepped down as chief executive in August after spending 21 years at the helm with the company. 

Mr. Hseih was born on 12 December 1973 in Illinois, to Richard and Judy Hsieh, who were immigrants from Taiwan. Richard was a chemical engineer and Judy was a social worker. His family moved to California when he was 5. He was the oldest of three boys and grew up in San Francisco. Tony completed graduation in 1995 from Harvard, with a degree in computer science. After a short stretch at the Oracle Corporation, he co-founded LinkExchange; which was later sold to Microsoft in 1998 for $265 million.

After that, Mr. Hseih became a venture capitalist. It was at this time that he was approached by Nick Swinmurn. He presented the idea of selling shoes online to Hseih, who was skeptical at first but later went on to invest in the retail shoe start-up, which was then called ShoeSite.com. He then took over as C.E.O. and built the company into an internet giant. (The name was later changed to Zappos.com, an adaptation of the Spanish word for shoes, “Zapatos.”)

Mr. Hseih was the one to realize that the key to success and development was getting customers to feel comfortable and secure buying online. To fulfill the same, he encouraged his employees to talk to customers as if speaking to an old friend, with an authentic-sounding friendly banter. He was also the genius behind the concept of “Try before Buy,” offering customers free overnight shipping and return shipping and often sending multiple pairs at a time. 

The visionary surprised Silicon Valley by relocating the company from San Francisco to a suburb of Las Vegas, where he built a culture of “fun and a little weirdness” which resulted in skyrocketing growth. Zappos surpassed $1 billion in revenues in 2009 starting from only $1.6 million in 2000. Mr. Hseih built his business around the idea happy employees were the channel to satisfied customers who in turn would return again and again.

During this time, Mr. Hsieh launched the Downtown Project whose aim was to revitalize the once-forsaken downtown of Las Vegas and turn it into a vibrant area where Zappos employees could live. But this project grew beyond his original concept and the area attracted thousands of technology workers and tycoons. Quoting Gov. Steve Sisolak of Nevada, “Tony Hsieh played a pivotal role in helping transform Downtown Las Vegas.”

In a 2009 profile in Briefings magazine, Mr. Hsieh had said that people believe that fulfilling a certain objective or winning the lottery will bring long-lasting happiness, but it doesn’t. He said,

“Most of the frameworks for happiness conclude that there are four things required: perceived control, perceived progress, connectedness (meaning the depths of relationships), and being part of something bigger than yourself.”

Tony Hseih

Zappos was built on the same ideology.

Zappos was very choosy, hiring just 1 percent of applicants. Word quickly spread about the corporate culture at Zappos, and people started showing up at the company’s headquarters for taking tours. Over some time, Mr. Hsieh pushed the culture envelope. He announced in 2013, that the company would be eliminating all titles and managers to embrace a “holacratic” structure. But this world without bosses didn’t have an appeal to everyone and 14 percent of the workforce who were uncomfortable in that structure, accepted a buyout and left.

In spite of Zappos transforming into a multi-million dollar business, one thing that remained constant was the humility of Mr. Hseih. He didn’t accept the trappings of a conventional CEO and lived in a small trailer park that he built in downtown Las Vegas. He accepted an annual salary of only $36,000 and sat in an ordinary cubicle among all the other employees. In fact, when a new Zappos warehouse was set up in Kentucky, he drove to Kentucky a pickup truck and got to work bolting together shelves and unpacking shoes.

Mr. Hsieh was approached by Amazon about an acquisition in 2005 but he refused at the time. But in 2008, with a recession hammering the economy, Mr. Hsieh decided to reconsider. He visited Jeff Bezos in Seattle and was influenced by the indistinguishability in the two corporate cultures and also, Mr. Bezos’ offer that Zappos would operate as an independent entity with the same management team. In July 2009, the company was sold for $1.2 billion to Amazon. In a video welcome to Zappos employees, Mr. Bezos said, “I get all weak-kneed when I see a customer-obsessed company and Zappos is definitely that.”

Such was the legacy of the late Mr. Hseih. Many renowned entities took to Twitter to express their grief and share their memories with Tony which included Ivanka Trump, Kara Swisher, and many others.

Condolences to the family of Mr. Hseih and may his soul rest in peace. 

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