FINAL PROJECT REPORT

THIRD SEMESTER

MASTER OF BUSINESS ADMINISTRATION

(Entrepreneurship)

TOPIC

Case Study on Tony Hsieh

SUBMITTED BY

Name of Student University Roll No

Muhammad Adil Bhatti 1306720-021

SUBMITTED TO
Prof. Dr Jamil A Ch

School of Business and Informatics

Department of Management Sciences

Submitted Date: March 13, 2015

Case study on Tony Hsieh Page 1

Table of Contents
1. Family Background..................................................................................................................3
2. Entrepreneurial Activities...........................................................................................................3
3. Business Environment (local and international).....................................................................5
4. Business opportunities...........................................................................................................6
5. Business Skills.........................................................................................................................6
6. Start up and opportunities......................................................................................................7
7. Handling Of Business..............................................................................................................7
8. Limitations..............................................................................................................................7
9. Secret Of Success....................................................................................................................7
10. Crisis Management.............................................................................................................8
11. Membership of organization and association.....................................................................8
12. Use of local and foreign contacts/ relationships/connections............................................8
13. Success Factors...................................................................................................................8
14. Major Contributions............................................................................................................9
15. References:.......................................................................................................................10

1. Family Background
Name of entrepreneur Name of business

Case study on Tony Hsieh Page 2

 Tony Hsieh Zappos.Com
Date of birth year of start of business
December 12, 1973 He started his entrepreneurial activities in
Nature of business 1996
Online Retail Store (shoes, cloth, bags) Country
Background: Family USA
His parents (Richard and Judy) came from Taiwan. Experiences
Tony Hsieh was born in Illinois and grew up in the Worked for Oracle Corporation. Co-found Link
Exchange and Venture Frogs.
San Francisco Bay area of California. He has two In 2000 became the CEO & still so on.
younger brothers, Andy Hsieh and Dave Hsieh.
Education
In 1995, he graduated from
Harvard University with a degree in computer
science.
Personal qualities, hobbies, interests, jobs
His hobby is writing books that why In June 2010,
Hsieh released Delivering Happiness, a book about
his entrepreneurial activities.
Hsieh received the Ernst & Young Entrepreneur Of
The Year Award in 2007.
1993 World Champions - ACM International
Collegiate Programming Contest.

2. Entrepreneurial Activities
In early age

Business/venture name
Internet advertising network name Link Exchange

Nature of business (products, services- details)

He provides Services; members were allowed to advertise their site over Link Exchange’s
network by displaying banner ads on their website.

How did he/she finance it( sources of finance)

He and his friend put money on this project.

What was his motivation to build the business?

He saw the opportunities for advertisers who want to consolidate large ad buys into a
single package that why he launched link Exchange in early 1995.

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Marketing strategies:
It is an online advertising company that internet is the marketing strategy and positive
word of mouth. Members were allowed to advertise their site over Link Exchange's
network by displaying banner ads on their website.

Did he/she succeed?

Yes he succeed the site grow, and within 90 days Link Exchange had over 20,000
participating web pages and had its banner ads displayed over 10 million times. By 1998,
the site had over 400,000 members and 5 million ads rotated daily.

Competitors:
Microsoft is the competitor.

In November 1998, Link Exchange sold to Microsoft for $265 million.

Middle and late years

Business/venture name
Hsieh co-founded an investment firm called Venture Frogs.

And in 1999,invested in an online shoe retailer called Zappos.com

Nature of business (products, services- details)

The nature of business is both services in shape of online retailer and product in shape of
shoes, Cloths, bags.

How did he/she finance it( sources of finance)

They invested in a variety of Internet startups, including Ask Jeeves, OpenTable Tellme
network and Zappos.com. He get finance from venture Frog.

What was his motivation to build the business?

As an investor of venture frog he looks seriously at the long term potential of
zapoos.com. He saw footwear Industry in the US is a $40 billion market, and 5% of that
was already being sold by paper mail order catalogs.

Marketing strategies:

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It is an online advertising company that internet is the marketing strategy and positive
word of mouth He provide quick customer service.

Did he/she succeed?

Yes he succeed when he joined Zappos as the CEO, starting with $1.6 million in 2000.By
2009, revenues reached $1 billion.

Competitors:
Amazon

3. Business Environment (local and international)

In first 20-40 years
Hsieh enjoyed working with Link Exchange in the beginning because he would hire his
friends or Friends of friends, and everyone got along. but the company ran into a
problem. CEO of Zappos.com, Hsieh knew he couldn’t be successful unless corporate
culture was at the very heart of the business.

Hsieh explained to me: “I realized that if I spent most of my waking life working with
people with the same values as I have, then we would be successful. So up to the first 100
people I’d interview every employee.”

After the first 100 employees, he went on, they had to systemize the process. As CEO of
Zappos, Hsieh now puts all employees through two interview processes: The first to
ensure the candidate has the requisite background and could add value to the company;
the second to determine whether there is a culture fit. If candidates don’t pass the second
interview, they don’t get hired, irrespective of how well they could have added their
unique skills to the company. As CEO Tony Hsieh sits at a desk that is the same size and
model as the ones given to new employees at the company's call center, Business 2
Community reports.

In last 41+ years

Now he is at 41 year old that nothing more to explain about after 41 year old.

4. Business opportunities
At beginning level

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He saw the opportunities for advertisers who want to consolidate large ad buys into a
single package that why he launched link Exchange in early 1995.

In 1998 Hsieh co-founded an investment firm called Venture Frogs. They invested in a
variety of Internet startups, including Ask Jeeves, OpenTable Tellme network and
Zappos.com.

Middle age
As an investor of venture frog he looks seriously at the long term potential of
zapoos.com. Hsieh and Lin decided to invested in zapoos.com and become CEO in
2000.He saw footwear Industry in the US is a $40 billion market, and 5% of that was
already being sold by paper mail order catalogs. as the CEO, starting with $1.6 million in
2000. By 2009, revenues reached $1 billion.

By 2008, the company hit its goal of $1bn in gross sales and in 2009 Fortune magazine
ranked Zappos 23rd on its list of the best companies to work for. Zappos expanded into
clothes and other categories where customer service could be a differentiator that the
opportunities he avail.

At last phase
In June 2010, Hsieh released Delivering Happiness, a book about his entrepreneurial
endeavors.

5. Business Skills
Transparency in dealing with employees, suppliers, investors and customers was a central
tenet. In late 2008, Zappos shed 8 per cent of its workforce. Rather than spinning it as
strategic, Mr Hsieh sent a detailed e-mail to staff on what was happening and why. He
also put the e-mail on his blog so even outsiders had access to the details at the same
time.

Mr Hsieh viewed culture- building as an investment. The values, benefits and freedom
that went with it had resulted in a high-energy workplace. Customer service calls could
take an hour, but that was considered as a marketing expense because customers who had
a good experience would tell friends.

6. Start up and opportunities

Tony Hsieh, CEO of billion-dollar selling online retailer Zappos.com, Inc., has changed
all that - having found a way to return to the basics of keeping the customer happy. And
he does it by focusing on his 2000 employees. “A tight-knit company culture and quality

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customer service are synonymous,” says Hsieh, describing the company he’s spent the
better part of a decade building. It hasn’t always been easy. Many of today’s retail clerks
have minimal product knowledge and even less interest in the success of the companies
that employ them. With the rise of online shopping and the increased number of overseas
call centers, the challenge of creating a positive experience for the consumer only
increases. But Zappos refuses to settle.

7. Handling Of Business
Tony Hsieh, the chief executive, became a multimillionaire at 24 when he sold a start-up
he had co-founded to Microsoft for $265m. After joining Zappos as an adviser and
investor, he eventually became chief executive. When Mr Hsieh got involved in 1999,
annual gross sales were $1.6m. He had two goals for the first 10 years: reach $1bn in
annual sales and get on the list of best companies

8. Limitations
Then Zappos was sold to Amazon in late 2009 for $1.2bn. Mr Hsieh reassured employees
and others that it would be business as usual. Today, Zappos still operates as an
independent entity with its brand and culture intact.

9. Secret Of Success
Hsieh hopes that, down the road, people won’t even realize that Zappos started by selling
shoes. They want to be known and remembered as the best customer service and
customer experience company. Hsieh envisions Zappos being something like Virgin
(dozens of companies), but instead of being “hip and cool [like Virgin]… we just want to
be about the very best customer service.” that why 75% of Zappos orders are from repeat
customers. One another success was customer service. Customer service was a core
element of the culture. Its free-call number, free shipping and returns, 365-day return
policy and 24/7 availability also set it apart. Zappos employees had no scripts or call-time
metrics, and were empowered to take action to make customers happy.

10. Crisis Management

In 2009 Amazon acquired Zappos for around $1 billion. The acquisition by Amazon
wasn’t your typical transaction where the founder and team got rich, retired, and you
never heard from the company again. Today, nearly four years after the acquisition,
Zappos still operates independently from Amazon. In fact, if you take a quick look at the
Zappos website, you might think it’s a competitor of Amazon.

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 11. Membership of organization and association
Not explain in this case study.

12. Use of local and foreign contacts/

relationships/connections
Zapoos.com is online retail store that why it is connected all over the world and strong
connections and relationships with customer from rest off the world. The nature of
business is both services in shape of online retailer and product in shape of shoes, Cloths,
bags.

13. Success Factors

Customer service was a core element of the culture. Its free-call number, free shipping
and returns, 365-day return policy and 24/7 availability also set it apart. Zappos
employees had no scripts or call-time metrics, and were empowered to take action to
make customers happy.

Initially, Zappos relied on a “drop-ship” model, whereby the supplier sent the shoes to the
customer directly on receipt of information from Zappos, but orders were too often
delayed or lost. So Mr Hsieh switched to an inventory model and invested in a
distribution facility, which greatly helped Zappos deliver on its brand promise.

Another success factor was its relationships with vendors. Zappos built collaborative
partnerships and shared information with vendors in an open and transparent way. They
were able to see inventory levels, sales and profitability, and they helped Zappos plan its
business and made sure they had the right product at the right time.

14. Major Contributions

Toward Society
Community Involvement

The Zappos Family believes that helping and caring isn't limited to a 9-5 schedule. Our
employees are wonderfully involved in our communities. Our support also reaches
beyond our Nevada and Kentucky locations. The Zappos Family Powered by Love. he
Zappos Family believes that helping and caring isn't limited to a 9-5 schedule. Our
employees are wonderfully involved in our communities. Our support also reaches
beyond our Nevada and Kentucky locations. The Zappos Family - Powered by Love.

Toward Business

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Living Our Core Values

In one way or another, the concepts of integrity, honesty and commitment contained in
this Code of Business Conduct and Ethics (the “Code of Conduct”) are already touched
on in our Core Values and currently exist in our company culture. Our ten core values
are:

Deliver WOW through Service

Embrace and Drive Change

Create Fun and A Little Weirdness

Be Adventurous, Creative, and Open-Minded

Pursue Growth and Learning

Build Open and Honest Relationships with Communication

Build a Positive Team and Family Spirit

Do More With Less

Be Passionate and Determined

Be Humble

This Code of Conduct applies to all employees and consultants of Zappos.com, Inc. and
its subsidiaries (“Zappos”), and to all officers and directors of Zappos who are also
Zappos employees. Officers and directors who are employees of our parent,
Amazon.com, Inc., must comply with the Amazon.com, Inc. Code of Business Conduct
and Ethics.

Toward Rest of the world

Tony Hsieh couldn't be more different from the murderous mobsters and bombastic
billionaires who built Las Vegas.

While those men were quick to boast, make threats or sometimes even slit an opponent's
throat in order to build their empires, Hsieh, 38, takes a dreamier approach, literally.

Sarah Nisperos, a fashion designer and friend of Hsieh, recently described how the CEO
of online shoe and clothing retailer Zappos made the life-altering decision to move his
company's headquarters to downtown Las Vegas and invest hundreds of millions of
dollars of his own money to revive the once-troubled area.

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He said he had a dream about building another Town Square," Nisperos said, referencing
the swanky retail and office center not far from Zappos' current headquarters in
Henderson. "But he wanted all these things based on happiness and merit and how nice
you are. I said you shouldn't build a strip mall, you should be downtown."

15.References:
http://www.reviewjournal.com/news/las-vegas/zappos-ceo-dreams-fixing-world-fixing-
cities

http://about.zappos.com/our-unique-culture/zappos-community-involvement

http://blogs.zappos.com/blogs/ceo-and-coo-blog/2009/01/03/your-culture-is-your-brand

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