Hsieh: We Won Online By Investing In Our Culture

In an opinion piece about the sale of his company in Inc magazine, Zappos founder Tony Hsieh explains that the reason he did so well in the cut thrust world of online retail was that he created a culture internally which then created better service and therefore more sales:

Zappos sells shoes and apparel online, but what distinguished us from our competitors was that we’d put our company culture above all else. We’d bet that by being good to our employees — for instance, by paying for 100 percent of health care premiums, spending heavily on personal development, and giving customer service reps more freedom than at a typical call center — we would be able to offer better service than our competitors. Better service would translate into lots of repeat customers, which would mean low marketing expenses, long-term profits, and fast growth. Amazingly, it all seemed to be working… We saw Zappos as a global brand like Virgin — except whereas Virgin was about being hip and cool, Zappos would be about offering the best service. The plan was to grow sales to $1 billion by 2010 and eventually go public.

Inc: Why I Sold Zappos