In my previous post I wrote about the first section of Tony Hsieh’s book where Tony discusses discovering his true happiness and passions. I began the second section today, and while I haven’t finished it yet, I had to write about the period during which Zappos was struggling to make any profit. They had sales, they had employees, offices, a warehouse, and a real growing business model, but they still weren’t making any profit.
Tony was only working for $25/year full time at Zappos. He had invested millions from the investment fund, Venture Frogs, that he’d started, to the point that there was no money left. He then began to invest money from his own personal funds but that began to run out. They had to layoff some employees and significantly cut the salaries of the others, but in order to make that work and still keep the employees, Tony put them up in his own loft without charging rent. He also began selling off the property he had purchased as an investment in order to put that money into Zappos and keep it going. He even listed his favorite loft at less than market value, and then dropped it by 40% in order to quickly turn it around, get the cash and keep Zappos going.
VC’s said it was a bad investment; naysayers said people won’t buy shoes online. The business plan, should someone have ever bothered to put one together, would not have indicated any of this was a good decision. But Tony believed in the idea, he believed in the team, and he believed in himself and he was willing to risk everything for his passion of building something. In the end, he decided to liquidate everything he had and have a “fire sale” in order to raise the final round of money to keep hope alive.
We all know how it worked out in the end, though I can’t wait to read more and learn how. This book will teach you lessons in commitment and following your dreams, as well as motivate you, so I highly recommend it…again. And don’t forget, leave a comment on this post or the last one, or the next one, for an opportunity to win your own copy.