Alfred Lin from Zappos is with us for this interview. Alfred is the chairman of Zappos and the chief operating officer is Tony Sy, the right hand of the CEO when it comes to managing finances and operations for Zappos. Earlier we published an interview with Tony.
I wanted to interview Alfred to understand his role as a key guy working with Tony. I wanted to understand how they met and how they build Zappos. Most successful technology companies were created by two guys working together (Google, HP, Microsoft, etc.), and I thought it would be a good opportunity to better understand such relationships.
I did not expect Alfred to focus so consistently on the importance of a strong team, and not just on Tony / Alfred’s relationship. In his opinion, they are successful because of the whole team, and not just the two guys in the spotlight.
On the other hand, Alfred talks about how he and Tony Sy, the CEO of Zappos, began working together. Tony sold the pizza with the whole pie. Alfred sold the pizza on a slice. Who do you think was the most profitable?
Adrian: I talk to Alfred Lin, who is the main operator of Zappos. Alfred thanks us for joining us. Do you want to tell us a little about who you are, about your background and where you came from?
Alfred: Of course. As you mentioned, I am currently the main operator of Zappos.com. We are one of the largest, if not the largest, sellers of shoes, bags and clothing on the Internet. We really think of ourselves primarily as a service company, and then about a service company that just sells these products.
I was born in Taiwan and lived there for six or seven years. I was old enough to remember that I was not born in this country, but not old enough to really understand where I lived. I was raised mainly in New York, went to college in the Boston area, and then went to the Bay Area for graduate school. Over time, I was dragged into a bunch of Internet companies.
I first met our CEO Tony Xie in college. In our hostel, he was engaged in a pizzeria. I used to go down to his pizzeria and buy a lot of cakes, pick them up and sell them on a slice. He earned 2 or 3 dollars per hour, and I earned 2 or 3 dollars per minute, but he spent more time on it, so in the end he made more money than he did.
After we left college, Tony went to the Bay Area and launched the company Link Exchange. I joined about a year later when he needed someone to take care of books and create financial models. I was a master of applied mathematics in college and in the process of getting my Ph.D. thesis at that time. I agreed to work part-time as a vice-president for finance and administration, going to part-time courses. Gradually, I got involved and believed in the Link Exchange business. As a result, I began to engage in less school and more complete work.
A year and a half after I joined, we sold Microsoft to 265 million dollars. Through Link Exchange, Tony and I discovered that we work well together. After Microsoft bought the company, we started Venture Frogs, where we gathered a small fund of friends and families of the Link Exchange; we used it to start investing in a bunch of internet startups.
Zappos is one of our investments. Over time, Tony and I finished thinking that he had the most opportunities, and that was also the most interesting part of the job. Now we are both in Zappos.
Adrian: Many successful stories in Silicon Valley and elsewhere were started by two guys. Hewlett Packard. An Apple. Microsoft. Oracle. Google. There's just a balance between the two guys, and now you are the key guy with Tony. I find it absolutely fascinating. How did he turn into where you are now?
Alfred: If we go back to some of the things that are really interesting to us, in terms of creating a culture, one of the books that we recently read, Tribal leadership , suggests that three people work together much better. It’s a triad, and in fact we don’t, because we have Tony, Fred Mosler, and I, who are basically three guys who balance each other in Zappos.
I think there are people in the background who never get a full loan, although they are an important part of it. Therefore, you need a much deeper study of how organizations are formed and their level of success.
In Zappos, all ideas don't come from me, Tony, or Fred. They come from everyone in the company. The mark of a successful company is a group of people who have decided that they are going to proceed with it, and perhaps this is indeed the key to its success, unlike the two guys who come up with all the ideas
Adrian: What are some of the ways you could use this way through the company?
Alfred: When we talk to our employees about a new rental orientation, we tell them that Tony, Fred and I are three guys who seem to be on top of the organization. This company does not implement only our ideas. If our ideas are being introduced and only our ideas, then these are three good ideas in a day, month or year or in any other time period that you think have come up with good ideas. If we rent out all 1600 employees, then we will get 1600 useful ideas with which we can work.
We tell everyone that if they are passionate about something, they should just take responsibility for it and run with it. This allows people to be responsible for the things they are passionate about. We also tell them that if you are passionate about 1600 employees, I’m sure you will find 20 or 30 people who are also passionate about it.
Adrian: Let me say that some guy who has been in the company for a month has great ideas that he really cares about. How does he work with these ideas?
Alfred: It’s like, “I’m passionate about it, so let me do something. Let me talk to other people about it. ” People want to be part of a winning team, so if it’s a good idea, it chooses. People will want to be a part of it, and naturally, he just relies on himself. We have a lot of things that started with crazy ideas that over time earned and became more significant for Zappos. Culture is very important to us, and every day we have small tricks that are created on top of each other.
For example, we started these parades. The first time someone wanted to create a parade and just go through the parade, it was weird. It wasn’t quite good, but it took several people to say goodbye to people, throw candy at people and bring people mood. We thought it was cool, but at the same time strange. These parades were simply built on themselves, and now people take them very seriously. There are themes at every parade, and they really cheer people up.
We also decided that we were going to take some money to improve housing when we began to move into this space. Instead of receiving it from the owner and providing it to the architect or contractors to clear the space and have a very sterile working environment, we asked if we could take the money and transfer it to some of our teams. We told each individual team: “Go, create a conference room the way you would like it to be created.” It didn't cost us any money. The team loved doing it because they held a lot of pride and possession in creating their own working space. At the same time, it was a teamwork experience for all these teams. Now every time we move to a new space, standards are raised, and we give people a small budget of $ 500 to design each room.
Here are some of the ideas with which we want people to work together and integrate into larger things and larger events.
Adrian: Some people may look at this and say: “They may be a bunch of crazy kids who are running, but someone may get a lawsuit at some point. The corporation simply cannot work that way. ” answer to that?
Alfred: This is a very old school, a very risky and conservative perspective. On this day and every day everyone will have a blog. Everyone will express themselves in their own way, and people are actually less inclined to sue you if you allow them to express themselves differently and are more likely to sue you if you try to limit them.
We have become a much more transparent society, especially the younger generation. There are things that we, those who are not old, but in our 30s and 40s, think they are crazy, but the younger generation has no problem telling people what they are doing this weekend on Facebook or Twitter and just let the world know who they are and what they are. You can't stop it. The level of transparency that a company can provide and allows employees to express themselves is a key way for a company to have far more lawyers for a company than themselves.
Adrian: When your layoffs occurred, it was immediately reported in real time on Twitter. This is about as transparent as you can get; which is almost uncomfortable.
Alfred: Yes, we truly believe in transparency and try to make sure that everyone knows what is happening inside the company. Obviously, no one likes to talk about layoffs and layoffs, but first we told the injured staff. Then after that they launched Twittering. Immediately after those affected were told that Tony sent an email to the entire company about our decision, why we did it and why we are doing it in a proactive manner. He then posted it on the company's blog and posted it on Twitter.
The overwhelming response from affected employees, existing employees, and the people who followed Zappos was extremely positive compared to what most layoffs give. Part of this is that we are transparent. We truly believe in the desire to take care of people and stun our employees, customers, partners and investors. We want to give them full transparency.
Adrian: Obviously, the concept of deception of all these different partners, employees and companies is good and good. At some level, you need to be aware that you need to negotiate with different people. You will have a lot of people coming to you for different things all the time. You cannot do everything for everyone, and you cannot be everything for everyone. Sometimes you need to leave and say no. How do you balance it and still feel how you give people a terrific experience?
Alfred: Wow, people never just spend more on them. Much has to do with showing people you care. For example, even in areas that seem super efficient, you can hire a few well-trained people or train them less to serve customers.
One example centers around scripts. It may be easier to teach someone to read the script than to teach someone to sound like he cares, but think about the consequences of whether you feel that the representative really cares about you or not. You may have policies and procedures read to you, and then another person who puts them in his words and jokes with you on the phone. I am sure that you will be amazed by the person who really cares, provides you with their inseparable attention and tries to contact you compared to those who read the script. It really is not so much. This is simply the level of expectation that we are real and transparent.
Adrian: What do your investors think about the Zappos culture?
Alfred: Mike Moritz of Sequoia Capital is on our board. They invested in some companies that were very successful; some of them with very scared cultures such as Google, PayPal and Yahoo! They certainly believe that culture is important, but they also care about financial and driving results. As long as we do both, that's great. This is not only culture. You must also do your job, and we also support our employees.
Adrian: You obviously did well, and this is not an accident or coincidence. How would you suggest that someone start today if they did not have the reputation or resources that you had, as well as the opportunity to immediately see several companies and go with the winner? How would you suggest they build a company like Zappos?
Alfred: First of all, find out what worries you most. Tony talks about pursuing a vision, not about money. It doesn't matter how “successful” you are, or people think that you are successful, business is hard, and you will have hard times and hard times.
We are entering an economy where it will be difficult for everyone. But if you do not like what you are doing, getting up in the morning is very difficult, getting up and trying to solve problems every day. You really need to think about what things you really love to do, and be fine without making money right away. You must find what you like and want to do for the next 10 years, without making $ 1.
This is a rather harsh way to look at it, but think about it in terms of the fact that if you start a company, you can have a lot of success at any given time, and business cycles - in 10-year increments. If he survives after 10 years and after that, it will be a true test of whether the company will survive, and not in the first year or the second year. Despite the fact that many enterprises fail in the first or second year, the time-tested battle must go through a business cycle. If you cannot get through this timeframe of what you love, and you only pursue money, then you risk that it will not work for you, and you would have hated your life for the past 10 years. Who wants this?
Also, be honest when reading a lot of articles or books about business. You can be open-minded by talking to a large number of entrepreneurs and learning about what made them successful. Try to incorporate this into your business. The joke I make fun of in Zappos, we really have no original or interesting ideas. We just included a whole bunch of ideas from all the people we met. We do not copy things, because copying them to your company does not work. You have to change them. You accept people's ideas, change them, improve them and make them suitable for your company.
