Unorthodox But Excellent Business Advice

Two recent posts — “Up, Up And Away!” and “Having A Theme Is Fun And Re-Enforces Your Goals” discussed re-working my business. Therefore, when a friend game me “Rework”, I put it right on top of my pile of books to read.

It is written by Jason Fried and David Heinemeier Hansson.  Fried and Hansson’s company, 37Signals, develops software such as Basecamp, Highrise and Campfire.  These products are extremely profitable having generated millions and millions of dollars.

By page 9, I was hooked.  These guys espouse some truly un-orthodox business philosophies that all make sense.  For instance, it is almost a cliché that you learn from your mistakes.  However, in one section entitled “Learning From Your Mistakes Is Overrated”, Fried and Hansson ask “What do you really learn from mistakes?”  They convincingly suggest that you only learn what not to do but that a mistake doesn’t help you figure out what to do next.

In contrast, they argue that success is a much better learning mechanism.  Success allows you to know what works, gives you confidence to continue on your path and gives you experience to build upon it.

Another section entitled “Planning Is Guessing” debunks the importance of business plans and long-term planning.  They argue that such efforts are actually just guesses and virtually impossible to execute without making adjustments.  Further, they warn that rigidly sticking to your “guess”
discourages you from adapting to a better course of action, or taking advantage of opportunities which you didn’t original foresee.  They add that long-range planning is done early on when you do not have all pertinent information.  Over the course of a project, new and important information is
learned and being flexible allows you to better incorporate this information.  They don’t argue that business owners shouldn’t plan but rather that they shouldn’t obsess over it or write more than a few pages.

Another one of my favorites is entitled “Why Grow?”.  Here the authors discuss how many companies are infatuated with growth.  They counter, however, that growth is over-rated, is often done to boost egos and that being small is a great destination.  They point out that small companies are more agile, and can grow quickly if needed.  In contrast, large companies can’t adapt as quickly and face problems if they have to downsize.  They urge you not to make assumption about how big you should be.  Grow slow and see what feels right.  Indeed, Fried and Hansson practice what they preach
keeping 37Signals to around 16 employees.

These are just a few of the pearls of wisdom in Rework.  Having read scores of business books which contain many of the same concepts, I can tell you that this one is well worth the time.

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“Delivering Happiness” Delivers Happiness

Steve Jobs is often cited as the best business leaders in the world, but I place Tony Hsieh, CEO of Zappos.com, right up there with him.

A business leader who creates just one noteworthy innovation stands out in the crowd. But Tony has developed multiple cutting edge innovations which, in my opinion, separate him from most CEOs.

These innovations include:

• Paying trainees $2,000 to quit (if they take the money, then they weren’t the right fit)
• Requiring all of his employees to use Twitter
• Surprise upgraded shipping for customers
• Empowering customer service representatives to solve the customer’s problem (even if unrelated to their Zappos order)
• Hiring and promoting not just based on performance but also fit within the Zappos culture
• Encouraging employees, vendors and customers to contribute to an annual and un-censorsed culture book
• Requiring customer service representatives to locate out-of-stock products for customers at other websites and then sharing this information with them.

It is therefore with great excitement for me to receive two advanced copies of Tony’s debut book Delivering Happiness, and give my honest and objective opinion of the book.

The book is written in a colloquial style which makes it easy to read and genuine. For a man who prides himself on being transparent, it works perfectly. Another unique feature of Delivering Happiness is Tony’s sprinkling of third party emails and accounts to realistically convey portions of his story. For instance, Tony shares his October 19, 2000 state-of-the-company email (and not a pretty state, by the way) which he sent to all of his Zapponians, and two actual response emails to his emails following drastic lay-offs at the company. The use of these supporting, back-up documents adds to the credibility of the story and makes it more compelling.

Tony shares stories of his childhood (including his first failed entrepreneurial venture of worm farming), college years at Harvard, first job a Oracle, and ultimately the stories behind LinkExchange (his first true success), and of course his roller coast ride taking Zappos.com from near extinction to a billion dollar success.

Tony ended up selling LinkExchange to Microsoft for $265 million showing tremendous courage along the way by rejecting earlier offers from other suitors of $1 million and $20 million. Even after he sold the company, he intentionally forfeited $8 million of his $40 million share of the sales price because of his unwillingness to remain with LinkExchange for the agreed time period due to his incompatibility with the company’s then-culture.

The early years and rise of Zappos.com is just as fascinating, which Tony sold to Amazon.com for $1.2 billion. Highlights include Tony’s use of most of his savings to keep it afloat, the story behind his decision to change from a drop-shipping business to a warehouse, in-house shipping business model, and (most importantly) his decision to make spreading happiness his company’s raison d’être.

In the age of self-aggrandizing autobiographies, it is refreshing to read a down-to-earth (and at times self-deprecating) memoir.  I’d say this book definitely delivers happiness, and provides fresh ideas on how a world-class company should be run.

By the way, when I shared the stage with Tony at an Entrepreneurs’ Organization event last year, he couldn’t have been more gracious. He flew in on short notice to replace a canceling speaker, and joined us for after-hours well into the wee hours of the night.

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• Zappos’ Shoe Guru Writes About Delivering Happiness! (bloggingwithbeth.com)
• Hsieh details behind-the-scenes tension in Amazon-Zappos deal (techflash.com)
• Tony Hsieh Explains Why He Sold Zappos To Amazon Under Pressure From Sequoia (techcrunch.com)

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