Zappos Retains Corporate Culture After Amazon Acquisition

Published on June 17, 2010

Tony Hsieh is known for taking an unconventional approach to management.  Nothing proves this point more clearly than his standing offer to pay new hires at Zappos $2,000 on their first day of work if they agree to quit.  The logic is that he would rather not have employees working at Zappos who are inclined to accept such a short sighted offer.  When Mr. Hsieh sold Zappos to for $1.2 billion last year, he insisted on unconventional terms as well.

The dream of many entrepreneurs is to start a company that promises a large payoff in a relatively short timeframe by either going public or being acquired by a larger player in the industry.  Normally, an acquisition is a time for the founders to cash out and often the company is simply absorbed into the larger entity to capture “synergies” and other supposed efficiencies.

Mr. Hsieh appears to have bucked the trend in his deal with  In the interview below, he discusses how Zappos has retained its corporate culture and continues to operate independently from Amazon.  Apparently CEO Jeff Bezos has yet to visit Zappos headquarters.

This acquisition approach may sound familiar to readers of The Rational Walk.  It is the model that Berkshire Hathaway typically takes when acquiring companies.  Warren Buffett always says that his task when buying businesses is to keep the founders, who are almost always independently wealthy, interested in running the business.  There is probably no way to keep someone like Mr. Hsieh interested in running a company unless he is able to continue operating it without micromanagement.

In the video shown below, Tony Hsieh briefly comments on the acquisition.  Mr. Hsieh has also written a book, Delivering Happiness:  A Path to Profits, Passion, and Purpose, which we plan to review in the near future.

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Zappos Retains Corporate Culture After Amazon Acquisition
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