This is one of the best autobiographies I’ve read in a while. Tony Hsieh’s personal quest in life was to find the perfect mix of passion, purpose, and profits. His combination of the “3 P’s” really struck a chord with me, and is something I believe everyone should think about as they figure out how they want to spend their time.
Tony Hsieh was a legendary business builder and was the co-founder of LinkExchange (sold for $265M to Microsoft) and the CEO of Zappos (sold to Amazon for $1.2B).
To understand his mentality around the 3 P’s, here’s what he said following the Zappos acquisition: “It wasn’t just about money. Together, we had built a business that combined profits, passion, and purpose. And we know it wasn’t just about building a business. It was about building a lifestyle that was about delivering happiness to everyone, including ourselves.”
As the son of Taiwanese immigrants, Tony had a pretty regular upbringing. From a young age, he was obsessed with building businesses and started multiple small ventures in school. At Harvard, he continued scheming his way through class, in favor of pursuing business ideas. He ran a successful pizza business within his dorm.
After graduating, he got a cushy job at Oracle. But he found the work and lifestyle uninspiring, so after 5 months, he left to start a business with his college (and current) roommate. They were going to design websites for local businesses. After a week of working on the new venture, they realized it wasn’t for them. So they pivoted and started LinkExchange – an internet advertising cooperative.
The business did well and after 5 months, they received a $1M acquisition offer. They turned it down and 5 months later, they received a $20M acquisition offer from Yahoo. They turned this down too and later ended up selling the business to Microsoft for $265M. Tony intended to continue on but soon realized that he had lost his enthusiasm and passion for the business. He realized that money and conventional success didn’t make him happy. He decided to stop chasing money, and chase passion instead.
After leaving, he started a venture fund with his college friend Alfred, who he had also recruited as the LinkExchange CFO. Through this fund, they met a guy named Nick, who was building the “Amazon of Shoes”. They decided to invest in what would grow to become Zappos.
Around this time, Tony developed a passion for poker. He learned that there were a lot of similarities between poker and business. His biggest learning from poker was that success was contingent on choosing the right table to sit at. In business, this is akin to choosing the right market.
Simultaneously, Tony fell in love with raves. Years later, he came across research on the science of happiness that said the combination of physical synchrony with other human beings and being part of something bigger than oneself leads to a greater sense of happiness. Another piece of advice he offers that is linked to this – stop trying to network in the traditional business sense, and instead just try to build up the number and depth of your friendships, where the friendship itself is the reward.
Back to Zappos – Tony and Alfred continued to fund Zappos when they ran out of cash and couldn’t raise funding. Eventually, Tony decided to join the company. Zappos was continuously on the brink of death, struggling through a recession, the dot com bubble, and 9/11. On many occasions, Tony was forced to invest his own money into the company.
Eventually, they decided Zappos had to change its business model. They decided to move from being a pure dropshipper to holding their own inventory. To get the funds to execute this, Tony liquidated all his assets. Their decision was inspired by the desire to become the company offering the best customer service in e-commerce.
In prioritizing customer service, the Zappos team started placing more focus on their internal culture. As Tony said, “brand is just a lagging indicator of a company's culture”.
So they did a few really interesting things:
All this culminated in what was described as a truly fantastic culture: “Let your employees bring all of themselves to their job. I think when people say they dread going into work on Monday morning, it’s because they know they are leaving a piece of themselves at home.”
There’s a lot more to the Zappos story, but I think the most valuable part of this book is the last chapter, dedicated to the Science of Happiness.
Tony asks readers: “What is your goal in life?”
For most, if you distill the responses down enough, the answer is happiness. Interestingly, most people live thinking “When I get ______, I will be happy” or “When I achieve ______, I will be happy.” Research shows that the happiness they thought they would achieve fades fairly quickly. For me, this was the most valuable takeaway from the book. If we’re all just searching for happiness, why do most of us not put any effort into learning about it? I plan to spend some time reading about the Science of Happiness.
Tony Hsieh tragically passed away in November 2020 at the age of 46.
“Thousands of candles can be lit from a single candle, and the life of the candle will not be shortened. Happiness never decreases by being shared.” – Buddha