This is one of the positively “Tony Hsieh” lines that is most memorable in the out-of-the-blue news that hit today that Amazon acquired Zappos. In his email to employees, Tony said:
“Over the next few days, you will probably read headlines that say “Amazon acquires Zappos” or “Zappos sells to Amazon”. While those headlines are technically correct, they don’t really properly convey the spirit of the transaction. (I personally would prefer the headline “Zappos and Amazon sitting in a tree–”)”
As Tony explained to employees, this is a stock transfer deal. But what’s most important is the deal behind the deal; which is that Zappos remains who they are. They become better at the blocking and tackling and operational aspects of high volume pick, pack, ship operations, especially as they expand into product lines well beyond shoes. But the core values and the zaniness of Zappos will remain.
Glad to hear it. On this point I stick my neck out to say that I believe in both of these companies’ commitment. Here’s why:
- They both began with a passionate focus on customers.
- They both still have leaders on board who think, drink, eat customer happiness.
- Bezos knows that messing with what Zappos has achieved in terms of emotional bonds with customers and employees is what they are buying. This is the currency of the brand. He knows not to mess with that. (check out the Bezos’ video)
- Amazon saw a kindred spirit and asked it to bond with them. Tony characterizes it closer to a marriage/romance with his line above.
- Congruence of values will be an important compass in steering decisions.
Thinking of the names Amazon and Zappos sitting in a tree to make each one better sounds okay to me. The potential is great.
Is my antennae up a little bit that Zappos will change? You bet. But do I see this as more positive than negative..a “glass half full” prospect? Yes. Right now, based on just who these companies are and how they’ve conducted themselves, I’d say at least three-quarters full.
What do all of you think? How did you feel when you read the news? I bet you had an emotional initial reaction…what was it and why?
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Seems like there are some powerful synergies. Tony’s note said, “We realized that Amazon’s resources, technology, and operational experience had the potential to greatly accelerate our growth so that we could grow the Zappos brand and culture even faster.” The trick, I believe, will be staying a subsidiary to maintain Zappos unique culture.
Paul,
I couldn’t agree more. Zappos is growing rapidly and will benefit from the scalability machine and “know how” that Amazon has mastered.
Because of the intense emotional bond and connection that customers have with Zappos, they are going to feel very protective of how they interact with Zappos. Changes in the tenor or tone of the relationship will be quickly noted by customers who love “their” Zappos. I think this is the equity that Zappos knows they have to protect the most.
Zappos will definitely benefit from the operational efficiencies that Amazon can bring to the table. That said, I’d be hard pressed to say Zappos has stumbled to this point. They may have been able to do it on their own.
As for corporate culture, well, that will likely be a different story. The empowerment that Zappos allows their employees becomes increasingly more difficult as the size of the company grows. At some point, they likely would have had to institute some tighter restraints on who could take what actions. I’ll try to remain optimistic, but infusing a publicly traded company into the mix, and all the the challenges that come with having shareholders, may only speed those inevitable restraints.
Still, in the end, if you asked me to pick a company to buy Zappos, Amazon would have been at the top of the list.
Shawn,
Glad you brought up the point about Zappos now being part of a publicly traded company.
You are right, there will be some new “rules of the road” and constraints that must be followed. The transparency that Tony and the Zappos gang has fostered however, can be retained. They may have to crusade for it, but my sense is that they will. Time of course is the biggest wild card in terms of sustaining Zappos’ unique culture for the long term.
We went through this when Lands’ End went public with the financial community. There were quite a few decisions and actions that we made that didn’t quite make sense to them on the balance sheet. Our meetings with them, especially early on, included a great deal of involving and having them experience the “Lands’ End Way.” What I know of my time with Tony and team is that I suspect they are considering these new dimensions that must be part of justifying actions. What they do is not intuitive; that’s what makes them have the value they do. It will be interesting to watch how they Zappos builds relationships with this new stakeholder, the financial community, “Zappos style.”
Mama needs a new pair of shoes.
Hi Jeanne!
Thanks for the great writeup! We’re really excited about what Zappos and Amazon will be able to accomplish together, and as mentioned in the letter, we plan to continue to build the Zappos brand, culture, and business the way we always have — we’ll just have access to more resources now!
Tony,
Thanks for responding on such a busy day!
Legions of Zappos fans want you to stay just the way you are! Great to hear that’s your plan. People really want to have confidence that you’ll be able to keep that unique Zappos culture hopping!
Hi Jeanne!
Thanks for such a great writeup. Tony already said it. We are very excited about the future and will continue to build the Zappos brand, culture, and business with more resources.
Looking forward to your new book.
Hi Jeanne!
Thanks for such a great writeup. Tony already said it. We are very excited about the future and will continue to build the Zappos brand, culture, and business with more resources.
Looking forward to your new book.
Alfred,
It’s great that you also chimed in, being the “money guy.” As you know, everybody wants you to stay just the way you are!
Thanks for the shout-out on the new book! It’s called “I Love You More than My Dog: Five Decisions that Drive Extreme Customer Loyalty In Good Times and Bad.” Turns out, there are five common decisions made by beloved companies that earn outlandish raves and love from their customers! http://www.amazon.com/Love-You-More-Than-Dog/dp/1591842956
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