<p><p>A candid conversation with the visionary CEO of Zappos about reinventing online shopping, turning Las Vegas into a utopia and why he hates shoes.</p><br></p>
Markets rise and fall, but one thing is certain: Tony Hsieh is having way more fun at work than the rest of us. His résumé says “CEO of Zappos.com,” the online retailer, but Hsieh (pronounced “Shay”) could easily dub himself High Priest of Happiness or even Partier in Chief. No meeting is too serious for Tony (first names only, please, among Zapponians) to break out shots of Grey Goose or to introduce, say, a guy in a hot-dog suit who comes in doing backflips (this actually happened).
Wackiness aside, business is booming. The shoe and clothing website was topping $1 billion in annual merchandising sales when Amazon acquired Zappos in 2009. Now the customer-service-focused company is reportedly more than twice as rich, though it no longer discloses revenue. At the same time, Hsieh, 40, is investing $350 million of personal pocket change to revitalize the bleak downtown Las Vegas neighborhood surrounding Zappos headquarters. Real estate, restaurants, tech start-ups, a school, a health center, arts, music, even a 40-foot metal praying mantis that breathes fire during a nightly drum circle—it’s all part of Hsieh’s new urban utopia.
Anthony Chia-Hua Hsieh was born December 12, 1973 in Urbana, Illinois to hardworking Taiwanese immigrants who later moved to California’s Bay Area to work even harder. Tony’s dad was a chemical engineer and his mom a social worker; they demanded excellence from Tony and his younger brothers, Andy and David. A prestigious Marin County private school paved the way to Harvard, where Hsieh studied computer science but barely went to class. Fortune found him anyway. Campus jobs led to computing jobs and a tech start-up of his own, a banner-ad aggregator called LinkExchange, which Microsoft bought for $265 million when Hsieh was 24. In 1999 he nearly deleted a voice-mail message from a guy looking for investors in an online store called ShoeSite.com, which eventually became the Zappos of internet success stories. Today the company makes nearly every list of best places to work, though Hsieh remains just another guy in a Zappos T-shirt one cubicle over. He even answers phones sometimes in the company’s 24/7 call center.
Contributing Editor David Hochman, who last interviewed comic-book icon Stan Lee, hung out with Hsieh in downtown Vegas for several days at Zappos headquarters and at the Ogden, where Hsieh lives alone in a sprawling condo almost always open to employees and friends. The man Hochman encountered surprised him. “You go in expecting Tony Robbins or even Ronald McDonald because of the rah-rah corporate culture,” Hochman says. “But Tony is shy to the point of being awkward and much more an observer than a showboat. Then again, there’s enough mirth-making around Zappos—the name is short for zapatos, the Spanish word for shoes—to make work a fiesta, even if Hsieh doesn’t say a thing.”
PLAYBOY: Tutu Tuesdays, Kilt Fridays, Godzilla-size bottles of vodka everywhere. How does anyone get anything done around here?
HSIEH: You get used to it. When there’s an employee parade coming through the office or someone from finance brings a horse up to the 10th floor for Chinese New Year, it’s just another day at Zappos. You learn to adapt. It’s all about framing, really. When you need to party, you party. When you need to produce, you produce. And by the way, it’s the Year of the Horse.
PLAYBOY: Whatever happened to nose to the grindstone?
HSIEH: Work isn’t about being chained to your desk, staring at a screen. What we’re focused on is employee engagement. Plenty of studies show that the more engaged employees are, the happier and more productive they are. And the best predictors of engagement are things like whether you have a best friend at work and how much freedom you have on the job. It’s a powerful thing to know you can turn your work space into a tiki lounge and invite everybody to happy hour at five o’clock.
PLAYBOY: What’s to prevent employees from being wasted all the time?
HSIEH: We trust our employees to use good judgment, which 99.9 percent of them do. We’d rather not create policies to address the 0.1 percent at the cost of fun for the other 99.9.
At our quarterly merchandising-awards ceremony this year, people showed up early to grab a beer or wine. Then we spent an hour recognizing the people who met their sales numbers. We watched a few SNL-type skits some employees put together, and then we had happy hour afterward a block away.
PLAYBOY: Work hard, play hard?
HSIEH: Why not? We also encourage managers to spend 10 to 20 percent of their time outside the office with their team and the people they work with. When new managers hear this, they go, “What? How? Why? Where?” It’s one of those bad habits we have to untrain out of our employees. And productivity and efficiency go up anywhere from 20 to 100 percent. It’s because communication within departments is better and people are willing to do favors for each other, not just as co-workers but as friends.
PLAYBOY: Your employees must be hooking up like crazy. Do you have to police the office nap rooms?
HSIEH: We’ve had quite a few Zappos marriages, but again, we trust our employees. Our nap rooms are for resting.
Listen, if you’re not enjoying work, what’s the point? Prior to Zappos, I cofounded a company called LinkExchange back in 1996 and grew it to about 100 employees before selling it to Microsoft two and a half years later. A lot of people don’t know the real reason we sold the company: It ended up not being a fun place to work anymore. When we were smaller, in the early days, it was super exciting and fun. We were hiring friends and friends of friends. Then at some point we ran out of friends and had to hire people based on interviews and résumés, which we had never done before. We were fresh out of school, and work suddenly became a job. I dreaded getting out of bed in the morning, even though it was my company. That’s a terrible situation, and it’s why we got out.
PLAYBOY: You left $8 million on the table by not sticking around with Microsoft that first year as your contract stipulated. That had to hurt.
HSIEH: It would have hurt a lot more to waste my life waiting for the money. Trust me, I still walked away with more money than I’ll ever need for the rest of my life. [Editor’s note: Hsieh received $32 million.] But it was a philosophical shift too. We’d been offered millions before and always held out for more. But while hanging around after the sale, I thought about all the things I wanted to be creating and experiencing. That’s when I decided to stop chasing the money and start chasing the passion.
PLAYBOY: Following your passion is easy when you’re sitting on millions. What if someone’s out of work? They need to chase the cash.
HSIEH: I think it’s hard to give universal advice, because it depends on your expenses, how much savings you have, your work experience. But when you’re out of work, it’s essential to focus on your interests and passions.
Sometimes when I speak at a conference, people ask me what’s a good market to get into where they can make a lot of money. My advice to them is, rather than having money be your primary motivator, think about what you’d be happy doing for 10 years even if you didn’t make a cent. That’s what you should be doing. I think if you do that, ironically, it’ll greatly increase your chances of making more money, because your enthusiasm will rub off on employees and customers and have this ripple effect on your whole business.
PLAYBOY: You must be really passionate about shoes.
HSIEH: I have zero interest in shoes. If anything, I have negative interest in shoes. And fashion. My outfit is the same every day: a Zappos T-shirt, jeans and sneakers. What happened was I formed an investment company with my happy little core group of friends. We invested in about 20 different companies, and things went great for a minute, but pretty quickly I got bored again. I felt I was sitting on the sidelines. I missed building something. Of all the investments we had, Zappos was both the most promising and, more important, the company with the people I liked the best. I joined full-time within that first year and have been here ever since.
PLAYBOY: Is there any advantage in not being in Silicon Valley or some other tech center?
HSIEH: Zappos started in San Francisco, and in 2004 we decided to relocate to the Las Vegas area. Seventy people moved with us. We’re a customer-service company, and it was really hard finding people in San Francisco who wanted to do customer service as a career. Vegas is service-focused 24/7, so we knew it would fit with our core values.
PLAYBOY: Core values?
HSIEH: We have 10 core values that serve as a formalized definition of our company culture, and everything is driven by those ideals. They bond us like a family; they guide us through good times and bad. Some of our core values: Embrace and drive change. Build open and honest relationships with communication. Be passionate and determined. Be adventurous. Be open-minded. Embrace growth and learning. Have fun. Be humble.
PLAYBOY: Value number one is to deliver “wow.” What does that mean exactly?
HSIEH: When you think about getting a “wow” reaction from someone, it shifts your attitude. You can’t just do things the expected way to get a wow. You have to go above and beyond. You’re going for spine tingling, earthshaking. You’re shooting for emotional impact. It’s why we have this thing in our call centers called PEC, or personal emotional connection. You don’t want to think of your customer as a dollar sign. You want to truly and authentically connect to their humanity. That’s why our reps have the freedom to send flowers or handwritten notes or cookies just as a friendly thank-you or follow-up. It’s why one employee spent 10 hours on the phone with a customer in 2012.
PLAYBOY: Ten hours?
HSIEH: A little longer than 10, actually. I have no idea what they talked about for all that time, but I don’t need to know. What matters is that our people go the extra mile. I’ll call Zappos sometimes if I need an answer for something. If I’m with a bunch of friends at a bar and there’s a question we can’t answer, we’ll call Zappos and ask. I shouldn’t tell people that, but it’s true. If you’re looking for a great pizza place near you or want to know how many seats are in the theater you happen to be walking past, maybe give Zappos a call. You’ll be amazed when the person answering actually makes an effort. Our reps don’t have quotas. They don’t have scripts. They never up-sell.
PLAYBOY: Remind us again why you don’t go bankrupt doing things this way.
HSIEH: Interestingly enough, most phone calls that come in don’t result in an immediate order. Somebody might want to see if they can get something delivered by tomorrow or if we have a shoe in a certain color. They’re not calling to buy something. What matters is using each interaction with a customer to build a customer-service brand, to let our reps shine in each interaction. That way, we’re creating a moment, a memorable and favorable experience, and yes, that does bring customers back for more.
PLAYBOY: The promise of the internet was that we’d all be working remotely from hammocks somewhere and ordering pizza with a click of a mouse. But your company culture demands that employees show up and stick around.
HSIEH: We’ve always taken the view that we have to physically be together from an employee perspective. People don’t work as well remotely. The author Steven Johnson writes about something called the “adjacent possible”—this notion that great ideas bubble up from unexpected places and random interactions over time. We want employees all in the same physical space to have more collisions. In fact, we’ve done weird things to prioritize collisions over convenience.
PLAYBOY: I assume you’re not talking about car crashes.
HSIEH: Here’s the idea. Maybe 15 or so years ago I used to throw a lot of parties. I noticed that when you have multiple bars, it always works best if you shut down the first bar during the first hour. Trust me, people will always find the alcohol. Then an hour later, open that first bar again, and it promotes circulation. It’s a simple strategy, but people don’t do it. It led me at Zappos to think about how to get employees to circulate and run into each other.
PLAYBOY: And you call yourself an introvert?
HSIEH: Yes, but I like to surround myself with extroverts. I can’t explain why. It’s definitely harder for me to make small talk and interact the way some people do, so I guess I had to build it into the program. For instance, in our new building everyone enters through a central courtyard plaza, which becomes a daily congestion point. You see almost everybody in the company at some point every day. Also, there used to be a sky bridge from a parking garage leading to the former city hall where our office is now. The city employees all used to park and walk across the bridge and into the building. When we moved in, we shut down that bridge, which forces all the employees out into the streets. That builds connection not just within the company but between Zappos and the surrounding neighborhood and city.
PLAYBOY: You recently declared Zappos a holacracy. First, congratulations! Second, what’s a holacracy?
HSIEH: Holacracy is a different way of organizing a company. Most companies are organized from high to low, where a boss commands people and so on, whereas a holacracy operates more like an urban environment and less like a bureaucratic institution. Everyone is together, and yet they don’t order each other around. In a pure holacracy, you do away with all job titles, managers and levels. We’re still experimenting with the form, and it will have a unique Zappos flavor, but the key is to enable employees to act more like entrepreneurs. Instead of being told what to do by managers, we trust that employees will know what needs to be accomplished and then figure out the best way to make that happen.
It’s always a concern as a company grows—and we’re approaching 2,000 employees—that you remain innovative. When companies get bigger, productivity and innovation per employee generally go down. From the Zappos perspective, we’re trying to avoid that fate. So the model we’re using isn’t a corporate one. Rather, it’s the city. Every time the size of a city doubles, innovation and productivity increase by 15 percent.
PLAYBOY: Speaking of cities, you’ve invested $350 million of your own money to revitalize a forlorn area of downtown Las Vegas. That’s a huge bet.
HSIEH: People hear the $350 million number and think it’s a phenomenal risk. But Downtown Project is about 300 different projects going on simultaneously. Roughly $50 million goes to small businesses to help build a sense of neighborhood and community; $50 million goes to tech start-ups; $50 million goes into arts, education, music and health care, and then $200 million goes to real estate.
PLAYBOY: But you don’t have any experience in urban planning.
HSIEH: That’s right. None. Up until three years ago nothing related to urban planning was even on my radar. I had about as much interest in it as I did in shoes, but I’ve always loved thinking about how people interact.
We focus on what we refer to as the three Cs: collisions, as I’ve described, plus co-learning and connectedness. A lot of urban revitalization projects depend on having an expensive sports team or stadium or a Harvard or Stanford, but not every community can have that. We’re thinking about relatively simple concepts, such as how to get more people colliding with each other or how to help people learn together in interesting ways. We initiated something called Learning Village. Anyone can go in and take part in whatever theme we have on a particular week. Because our population is creative and entrepreneurial, we might offer something fashion-focused where we hear from emerging designers, or we’ll have a week devoted to tech. It’s like we’re throwing a mini conference every single week.
PLAYBOY: A city is not a conference, though. One criticism of Downtown Project is that it doesn’t address real urban issues such as homelessness, public transportation and affordable housing. Yes, you have a retail village made of supercool shipping containers, but what about a decent neighborhood supermarket?
HSIEH: Yeah. I guess the simplest answer is we’re not the government and we’re not trying to solve every problem. I will say it’s challenging at times. I come from a tech background; I’m used to being able to go from an idea to launch in 24 hours. Here, everything’s much slower. Building buildings takes time. Everything is a process, so you stick to your goals. Our goal with Downtown Project is to help make downtown Vegas a place of inspiration, creativity, entrepreneurship, innovation, discovery and upward mobility. Over time I hope we can expand our scope, but right now we’re focused on helping accelerate the number of people from the creative class and entrepreneurs on both the small-business side and technology side to this area. What we’re trying to do is the TED conference meets SXSW meets Burning Man.
PLAYBOY: Downtown Project took over the old Gold Spike casino but replaced all the gaming tables and slot machines with pool tables and games like cornhole. Are you not a gambler?
PLAYBOY: Weren’t you once a serious poker player?
HSIEH: I don’t consider playing poker to be gambling. It’s not a game where the house wins. I did play in the World Series of Poker once, but that was way before it was famous.
PLAYBOY: Give us some pointers on winning.
HSIEH: Well, you need to define what you mean by winning. Is your goal to make money? Is your goal to have a good time? Is your goal to build relationships? Is your goal to build a certain brand or persona? If you walk into a random casino, it’s probably to make money, so you can break it down from there. Let’s say you do make money; you can break down how long you spent playing and how enjoyable it was. Or did you feel you were just grinding it out? If I play poker at a tech conference, depending on who else is playing, it’s a good way to get casual face time with someone and build a relationship. Even if I lose money, I’m still winning.
PLAYBOY: What if your goal is simply not to lose your shirt?
HSIEH: Then don’t play. But if you can’t help yourself, realize that poker is very similar to business. Don’t play if you don’t understand it. If you’re not winning at your table, you have to think about switching to another table. If there are too many competitors, even if you’re good, success is going to be harder. Don’t cheat. Be patient. Be humble. Be nice. Be prepared for the worst. And the guy who wins the most hands isn’t the guy who makes the most money in the end. Also, have fun. You don’t want to be up all night worrying.
PLAYBOY: Speaking of that, you’re running a billion-dollar company in addition to overseeing a huge urban renewal program. When do you sleep?
HSIEH: I basically don’t sleep. I have meetings from eight A.M. to 10 P.M. almost every day. I split my time pretty much 50-50 between Zappos and Downtown Project, which works out to around 60 hours a week on each.
PLAYBOY: What does that equal in Red Bull ounces?
HSIEH: I’ve actually switched from Red Bull to coffee almost completely, though I do like fernet on occasion.
HSIEH: It’s an Italian liqueur I’ve introduced to a lot of people. Definitely an acquired taste. I didn’t like it when I first tried it, but my pitch to friends is that it’s a “healthy” alcohol. It’s flavored with herbs including ginseng, myrrh and chamomile. It tastes and smells like Chinese medicine, but it’s a digestif, so 60 seconds after you drink it, it coats your stomach and helps get rid of any nausea. I like to experiment with my liquor.
PLAYBOY: Is it true that when you were writing your number-one best-selling business book, Delivering Happiness, you ate coffee beans drenched in vodka to write faster?
HSIEH: Yes. I found it was easy to write once I was in the mood, but it was hard to get in the mood. So I tried various things based on feedback from writer friends. Vodka first, then coffee and then, yes, I actually soaked coffee beans in the vodka. But I found the most effective technique was taking Excedrin when I didn’t have a headache because there’s actually a lot of caffeine in Excedrin. I ended up writing the whole book in about two weeks’ time.
PLAYBOY: Were you always so driven?
HSIEH: I always fantasized about making money because I knew it would give me the freedom to do whatever I wanted to do. I was always doing little businesses. I started a worm-farming business when I was nine, which went okay until all the worms escaped. I tried other things, but what took off was a button-making business I advertised in the back of a magazine. I was the Asian kid making around $200 a month in middle school from that.
PLAYBOY: Is there truth to the tiger-parent stereotype?
HSIEH: I think there’s some truth to it in my case, certainly. I grew up in Marin County, and we were one of the few Asian families among mostly white people. My parents emigrated from Taiwan. My dad’s an engineer. My parents definitely pushed me a little harder toward traditional success. For instance, in middle school, in addition to running my button business and having to get straight A’s, I had to play four musical instruments—violin, trumpet, French horn and piano—and I had to practice half an hour a day on weekdays and an hour a day on weekends on each instrument.
PLAYBOY: You write in your book that you sometimes faked your way out of practicing. Instead of playing the piano, you would play back an hour-long session you’d recorded earlier. Did you eventually get caught?
HSIEH: The funny thing is my parents didn’t know about that until they read the book. It was the part I was most nervous about them reading, even after all these years. I felt like I was back in middle school, afraid I was going to get in trouble. But then my mom said, “Oh, I know that didn’t really happen and you just wrote that to make it sound interesting.” I was saved!
PLAYBOY: You also said you almost never went to class as an undergrad at Harvard. How did that work?
HSIEH: Well, freshman year I skipped a lot of classes. I guess it depended on the class and if there were notes available afterward. You see, I invited my fellow students to participate in a study group and was able to compile a study guide for classes that I then distributed and sold for $20 each. I’d assign topics to students, and you could buy one only if you had contributed research to it. I never really had to open a book because I had these comprehensive guides that were completely aboveboard.
PLAYBOY: What life lessons came from running a student pizza grill at Harvard, aside from the fact that your best customer, Alfred Lin, later became your chief operating officer at Zappos?
HSIEH: Just like anything else, to get proficient at something, whether it’s playing piano, playing a sport or being an entrepreneur, you need to put in 10,000 hours of practice. Running the pizza business helped me get closer to that 10,000 hours faster.
PLAYBOY: New subject. Let’s say someone has $5,000 to invest. Any tips?
HSIEH: The first question to ask is, why are you investing? Even if the answer is “To make money,” ask yourself why. Maybe you’ll find out what you really want is to make money so you can travel around the world. If that’s your dream, take the money and spend it on a plane ticket. So many people have these “one day” conversations. One day I’m going to quit my job. One day I’m going to become a writer. One day I’m going to Paris. But then they’re so busy working, they never get there. I’d go so far as to say that if you have a great business idea, it might be worth spending the money you’d invest in college on starting the idea right now.
PLAYBOY: Again, that’s easy for a guy with a Harvard diploma to say.
HSIEH: I don’t think college needs to be the instant default. Maybe it’s more important to expose yourself to a lot of different things and people first and do stuff outside your comfort zone. So many people stay on the predictable, comfortable path. That’s boring. There’s a great quote by Jim Collins, who said when it comes to business, “good is the enemy of great.” When things are just good enough, you’re cutting yourself off from getting to that next level.
PLAYBOY: Amazon acquired Zappos in 2009 for $1.2 billion in stock. Brad Stone’s book on Amazon recounts the fierce tactics Amazon CEO Jeff Bezos used to negotiate, including lowball acquisition offers and pricing shoes lower on Amazon to pressure you into selling.
HSIEH: I haven’t read that book, but I think the acquisition went down the best possible path given the variables and circumstances. Ours was different from most of Amazon’s other acquisitions, where the plan is for the company being acquired to integrate with the parent company. Amazon buys you and you join the mother ship. We told them we’d consider doing the deal only if Zappos could remain independent, which we are. We needed to retain our own brand, our own culture, our own way of doing business, and all that’s separate from the rest of Amazon. They accepted that. It’s been almost five years now, and they remain true to their word. From our point of view it’s basically as if we swapped our previous board of directors with a new one. Then on top of that we get access to all this free technology from Amazon.
PLAYBOY: And now you get to hang out with Jeff Bezos too. What’s he like?
HSIEH: I don’t know him that well. I probably see him randomly, I would guess, once a year for less than five minutes. But I will say Amazon’s success has been amazing and the marriage has worked well for us.
PLAYBOY: Is there a company whose success baffles you?
HSIEH: Snapchat. They turned down $3 billion from Facebook. I just wonder how they pay their bills and what their business model is. I’m not saying they don’t have one. I just can’t imagine what it is. I’m not behind the scenes, so I don’t know anything. It’s more just curiosity.
PLAYBOY: Is Google too powerful?
HSIEH: Google is interesting because it’s a monopoly, but ultimately it’s just a brand. I don’t think we’ll always live in a world run by Google. The amount of time it takes to build a brand and reach a lot of people keeps compressing. At some point, someone else will come along and be the new Google or Facebook or Twitter. We just don’t know what those things are yet. I can’t even keep up with all the new social media stuff, but I’m already hearing kids in high school comment that Twitter is for old people. We already know the next generation doesn’t care about e-mail. People forget how early on things are in terms of digital technology. Everyone thinks it’s been around forever, but it’s been only a couple of decades.
PLAYBOY: Where do you visualize it going?
HSIEH: Have you heard of the singularity? It’s this idea that technology is changing so quickly that at some point we’ll have technology that’s changed by technology. Right now, technology is still directed by humans, but there are predictions that within the next 40 to 60 years artificial intelligence could surpass human intelligence.
PLAYBOY: What would that look like?
HSIEH: It’s completely unfathomable. That’s the whole point. We can’t imagine it. But I believe we’re already in a pre-singularity phase. There’s all this buzz about 3-D printing right now. The prediction is that 3-D printing will have a bigger impact on society 20 years from now than the internet had in the past 20 years. It’s crazy to think about, but we’re almost at a point where a 3-D printer will be able to print out another 3-D printer. When that happens, it’s kind of game over. Just drop one off in Africa and it will spread itself through every village and city, and the whole world changes. It’s exciting and terrifying at the same time.
PLAYBOY: You spent a lot of time at raves when you were younger. What did you get out of those all-night dance parties?
HSIEH: A huge amount. In the beginning, it was this idea of peace, love, unity and respect—the guiding principles of the culture. You could talk to anyone, with no ulterior motive; it was about being open to people. But the most important understanding was about something called the hive switch. Psychologist Jonathan Haidt writes about it in The Righteous Mind. Basically, if you look at nature, you discover that certain animals, like chimpanzees and wolves, compete for food and mates, while others—bees are the best example—organize themselves for the greater good. They live together as a unified force because the DNA is the same. Bees are always working together for the benefit of the hive.
As humans, we go back and forth between both states. Serving our self-interest is kind of the default mode. But certain things trigger the hive switch and cause us to behave in a way that makes us care about the greater good. When you experience it, it is pure awe, like when you see something in nature that’s bigger than yourself. A synchronized movement does that as well, which is why when you join the military you spend the first six weeks just learning how to march in units.
For me, the hive switch got turned on by raves. It was a feeling of unity with the other people in the space, unity with the music and with one another. That’s why I go to Burning Man. The art, especially at night, just puts you in a state of awe. These things are hard to describe until you’ve experienced them, I guess.
PLAYBOY: You really have an open mind. The question has to be asked: How much weed do you smoke?
HSIEH: [Laughs and pauses] Let me answer this way: I think there’s a lot of interesting research that looks at the health effects of pot versus alcohol, and pot certainly doesn’t have a negative health impact. And since Washington and Colorado have legalized its use, it’s something to keep an eye on.
PLAYBOY: You’re avoiding the question. What about ecstasy? Nobody was going to raves in those days without it, right?
HSIEH: Okay, my hesitation in answering questions like these is that there’s a perception that you need to do drugs in order to have certain experiences. People have a visceral reaction to that idea, so I don’t like to state a preference one way or the other. People think with raves, for instance, that ecstasy is what that scene was all about. I mean, there were definitely people who went to raves in those years and were on ecstasy. I don’t have a judgment about that, but for me it was really the feeling of unity I described.
Did you ever see the movie Milk? I generally don’t get teary-eyed or cry out of sadness in movies. In that movie there’s the scene where gay rights activist Harvey Milk gets shot. That didn’t make me cry. What made me teary-eyed was the scene toward the end when thousands of people show up for a candlelight vigil. That was really uplifting. To me, it wasn’t about Milk; it wasn’t about his politics; it wasn’t about his death. It was about the response he triggered in all those people.
PLAYBOY: Incidentally, you’ve been rather ambiguous in discussing your sex life. Can you explain what you meant when you told The New York Times, “I hang out with a lot of people, guys and girls. I don’t really have this one person I am dating right now. I am hanging out with multiple people, and some people I hang out with more than others”?
HSIEH: Oh that. Because of the way it was worded, everyone started assuming I’m bisexual, which I’m not. I meant it as an analogy.
PLAYBOY: You’re 40 and single. Is monogamy overrated?
HSIEH: I think, biologically, from a Darwinian perspective, it is. From a purely evolutionary point of view, the guy who’s monogamous will have fewer copies of his genes in the next generation than a guy who’s not. I think it’s pretty hard to find one partner and call it a day. Using the analogy of friends, why not find just one friend and call it a day? The answer is because you get a different type of connection, different conversations, different experiences with different friends. I would say the same thing is true on the dating side.
PLAYBOY: You’ve mentioned before that you’re a fan of the literature of pickup artistry, including Neil Strauss’s The Game. Do those techniques work for you?
HSIEH: I think I have different goals. The Game is more focused on how to pick up girls, but I found it interesting in thinking about how to use similar concepts to build relationships in general. I’ve read a lot of stuff by people in that world, so I don’t remember who said what, but I remember hearing that if you’re going on a date with a girl, the best thing to do is change locations every half hour or hour and do something different. Basically, at the end, if you’ve gone to seven different locations, it will have the same effect on memory as going on seven dates in single locations. So it’s about time compression and memory and so on. The point is to seduce a girl faster, but that technique has other applications as well. It’s part of what I’m trying to do with Downtown Project. When people come visit us we basically hop from location to location to location, so even though they’ve been here only two or three nights, it will seem as though they’ve been here two weeks. It’ll have a big impact on their memory. Humans remember things in terms of geography and number of stories. I want a city where all this stuff is within walking distance so you can have a bunch of different experiences.
PLAYBOY: Just to confirm: You’re designing a city based on techniques used to get into women’s pants?
HSIEH: Well, we’re not using the techniques to pick up girls. But I did have someone here from that world who said what we’re trying to do is basically seduce people into moving to downtown Vegas.
PLAYBOY: And have a Tesla in every garage.
HSIEH: It’s true. We placed the largest order in the United States for Teslas. Project 100 is going to have car sharing and bike sharing, and we’ll also have a bunch of ultracompact electric vehicles called Twizys. But yeah, we bought 100 Teslas.
PLAYBOY: What’s your opinion of Tesla’s chief executive, Elon Musk?
HSIEH: He’s not doing enough, that slacker. He’s got to think bigger. That was sarcasm, if you couldn’t tell. I have huge respect for all he’s doing. It’s definitely a company I admire.
PLAYBOY: What other companies make the list?
HSIEH: I definitely like and appreciate the Virgin brand. I’ve always been interested in anything that’s a consumer-facing brand. Red Bull, Apple, In-N-Out Burger. Great service for the masses. Consistency. The employees seem happy; the customers seem happy.
PLAYBOY: By the way, did you really order the “100 by 100” off the secret menu at In-N-Out?
HSIEH: Absolutely. I like a challenge. It was Halloween; we were hungry. If you don’t know about it, the 100 by 100 is a massive burger. It’s 100 patties and 100 cheese slices, all within two buns. There were eight of us, and we ate the whole thing. The plan was to go out and party the rest of the night, but we just ended up lying on the apartment floor in a collective food coma. But we were happy.
PLAYBOY: You talk about happiness frequently, but is it realistic to think we should be happy all the time? As Louis C.K. has said, “No one has a full year of love and happiness. I mean, even rich, happily married, in-love people have diarrhea three times a year.”
HSIEH: I wouldn’t characterize myself as someone constantly seeking happiness, but I do think it’s worth striving for. In my book I talk about a framework from the research perspective that happiness is about four things: perceived control, perceived progress, connectedness—meaning the number and depth of your relationships—and being part of something bigger than yourself that gives you meaning or purpose. On a daily basis I’m conscious of which of those areas are present and which need work, whether it’s for myself or how we think about making employees happy or making customers happy.
PLAYBOY: Zappos has a 365-day return policy with free shipping both ways. That keeps customers happy, but people must abuse the hell out of it.
HSIEH: There have been a few isolated cases. You hear about the occasional person taking a pair of hiking boots and going off into the mountains for three muddy weeks before trying to return them. We let them know we’re not a shoe-rental company. But we actually don’t mind when customers order 100 pairs of shoes and return 99. We’re trying to simulate the experience of going to a shoe store where the salesperson comes back and forth with box after box of shoes until you find the ones you like.
PLAYBOY: Why was Kanye West picking on Zappos last fall? He accused you of “selling shit product” on Bret Easton Ellis’s podcast.
HSIEH: When that story came out, we were shocked. It was totally from left field, but we used it as an opportunity to have fun. We created an actual shit product—a toilet plunger in a toilet bowl—and put it up for sale on Zappos.com for $100,000.
PLAYBOY: Did Kanye buy one?
HSIEH: Not yet. I haven’t heard a word from him since. But the reviews our customers wrote on the page are really funny. It’s weird. Celebrities usually love us. Garth Brooks came to Vegas and bought something like 400 pizzas for the entire staff.
PLAYBOY: You were a judge on The Celebrity Apprentice with Donald Trump. Do you ever see him around town?
HSIEH: I don’t know Donald very well. We interacted briefly during the filming, but his daughter Ivanka and I have become friends. She’s one of the smartest, most authentic, most genuine businesswomen I know, and I have a lot of respect for her. We had a great time when she and her husband came to check out everything going on in downtown Vegas and with Downtown Project, and somehow we all ended up eating deep-fried Twinkies at the end of the night. That’s probably the first and last time I’ll ever do that.
PLAYBOY: By the way, what is the secret to getting over e-mail glut?
HSIEH: You have to get up four hours earlier than you normally would. [laughs] Actually, there’s a technique I like called Yesterbox. I’m able to stay on top of things because every morning when I wake up, in my inbox or to-do list are yesterday’s e-mails. I know exactly how many e-mails I need to get through, and there’s a sense of progress. At some point there’s completion. Then, any e-mails that come in today become tomorrow’s mail. So some days, if I’ve gotten up early enough, I’m done with all my e-mail obligations by noon and can stop stressing about that part of life.
PLAYBOY: What other websites or apps do you like?
HSIEH: I think what Inside.com and the Inside app are doing is pretty interesting.
PLAYBOY: Inside is a news aggregator. Are you one of those rich guys looking to buy a newspaper?
HSIEH: [Laughs] No, I’d rather steal one.
PLAYBOY: What’s next for Zappos?
HSIEH: Today we sell a lot more than shoes. We’ve been making a big push into clothing. Looking ahead, we want to continue to build on having the very best customer service and customer experience out there, and that could translate into any realm. There could be a Zappos airline or a Zappos hotel or something else that stays in line with our core values.
PLAYBOY: Do you have any plans to deliver products by drone?
HSIEH: Not yet, but that would be pretty cool. We had a demo once at the Zappos plaza, and people were really excited.
PLAYBOY: The retail landscape is pretty dismal for many companies. If you were a struggling company like JCPenney or Barnes & Noble, what would you do to turn things around?
HSIEH: Listen to the customers. With brick-and-mortar retail in general there hasn’t been much innovation in a very long time. Buying from a store today is not that different from buying from a store 30 or 50 years ago. But if you look at the innovation at the Apple Store, let’s say, you see that success comes in figuring out how to take the customer experience to the next level. That’s true online and offline. That’s certainly where we found success.
PLAYBOY: Incidentally, how can someone get a job at Zappos?
HSIEH: We’re hiring. All our jobs are posted online.
PLAYBOY: What are you looking for?
HSIEH: People who are right for our culture. We do two sets of interviews. The hiring manager will interview for the standard stuff like fit within a team, relevant experience, technical ability and so on. Then our HR department does a separate set of interviews purely for culture fit, and those can get interesting. Applicants have to pass both assessments to be hired. We’ve said no to a lot of smart, talented people we knew could make an immediate impact on our top or bottom line. If they didn’t get the job, it could have been because they weren’t nice to the Zappos shuttle-bus driver on the way from the airport. And you have to like living in Vegas.
PLAYBOY: The history of famous people living in Vegas is kooky at best—Howard Hughes, Elvis, Liberace. Do you think you’ll stay for the long term?
HSIEH: I have no plans to leave. I think the world we’re creating here is very different from the one they lived in. It’s turning out to be a different world in general for all of us.