Bulldozer00's Blog

This morning, I stumbled upon a New York Times article announcing that purchase of Zappos.com by the behemoth that is Amazon.com (I’ve owned shares in Amazon.com for over 10 years). From the article:

• “Amazon initially sought to pay cash, but Zappos asked for an all-stock deal, this person said.The extra cash and restricted stock for employees is meant to keep them on board and preserve the company’s culture, the person said. The deal is expected to close in the fall.”
• “Zappos appears to engender friendly feelings even among some of its smaller competitors. Korey Buzzell, who runs the independent site Shoe-Store.net, said Zappos had been an amicable competitor in the past, sending customers to his site when it could not fulfill their orders.”

Since (because of its totally unique and far out culture) Zappos is currently my favorite company to externally watch and follow, I was initially bummed. However after reading Zappos CEO Tony Hsieh’s down-to-earth, understandable, and jargon-less letter to employees, I’m actually excited about the future potential of Amazappos.com.

Here are some snippets from Hsieh’s letter that rang my bell and changed my feelings toward the deal. Notice how many times the word “culture” is used.

• “For Zappos, our vision remains the same: delivering happiness to customers, employees, and vendors. We just want to get there faster.”
• “Amazon supports us in continuing to grow our vision as an independent entity, under the Zappos brand and with our unique culture.“
• “Our culture at Zappos is unique and always evolving and changing, because one of our core values is to Embrace and Drive Change. What happens to our culture is up to us, which has always been true. Just like before, we are in control of our destiny and how our culture evolves.“
• “They are not looking to have their folks come in and run Zappos unless we ask them to. That being said, they have a lot of experience and expertise in a lot of areas, so we’re very excited about the opportunities to tap into their knowledge, expertise, and resources, especially on the technology side.“
• “We learned that they truly wanted us to continue to build the Zappos brand and continue to build the Zappos culture in our own unique way. I think “unique” was their way of saying “fun and a little weird.” 🙂 “
• “Amazon focuses on low prices, vast selection and convenience to make their customers happy, while Zappos does it through developing relationships, creating personal emotional connections, and delivering high touch (“WOW”) customer service.“
• “Jeff Bezos (CEO of Amazon) made it clear that he had a great deal of respect for our culture and that Amazon would look to protect it.“
• “Our mission remains the same: delivering happiness to all of our stakeholders, including our employees, our customers, and our vendors.“
• “We do not have any plans to move any departments, nor does Amazon want us to because they recognize that our culture is what makes the Zappos brand special.”
  
• “This is not a cash transaction. This is a stock exchange. Our shareholders and option holders will be issued approximately 10 million Amazon shares on a fully converted basis.“
  

I was also stunned by the disclosure that Zappos.com, which grew into a $1B company over 10 years selling a commodity product – shoes, only has (had?) 100 shareholders. I wish I was one, but now I am!

BTW, Hsieh’s e-letter has a really great video of Amazon CEO Jeff Bezos’ intro to Zappos employees embedded within it. He describes his values, and more interestingly, how Amazon got started. He also unembarassingly and openly shares some of the stupid mistakes that he made in piloting Amazon to where it is today.