Only Tony Hsieh could put together a day like this.
It was 2009, and the Zappos CEO and his longtime partner-in-crime Fred Mossler were holding a top-secret meeting with Jeff Bezos in Las Vegas, a few months before the Amazon/Zappos marriage was announced. In true Tony fashion, he opted out of fine dining and instead “invited Jeff to his house and grilled hot dogs,” Mossler recalled. Hsieh also decided the pair should serve up another surprise. They brought in two pizzas to host the business mogul who had famously coined the “Two Pizza Rule.”
But the Bezos pow-wow was only one of the memorable moments that day. As Mossler tells it: “At 8 a.m., we met the guy who drew on the whiteboard in the famous UPS commercials. We had lunch with [author and motivational speaker] Tony Robbins. We had dinner with Jeff Bezos. And closed the day with Snoop Dogg. Snoop was performing a concert in Las Vegas and wanted to see Tony in the Studio at the Palms after the show. Tony said OK and asked if I wanted to go with him. We went to meet Snoop Dogg at midnight and talked to him until 3 a.m. He was a total pro,” recalled Mossler, the day before what would have been Hsieh’s 47th birthday, on Dec. 12.
This was just one of the many incredible stories told when FN sat in on an intimate Zoom Video call between Mossler, his wife, Meghan, and two close friends, Eileen Tetreault and Richard Zech. (All four were longtime Zappos senior executives, but have since moved on to other endeavors; the Mosslers own shoe brand Ross & Snow.)
Through laughter and tears, the group opened up about the company’s earliest days, when the team toiled out of Hsieh’s San Francisco apartment. They reflected on Tony’s most groundbreaking ideas — some of them conceived in three hours, others over a period of many months. And they reminisced about those infamous Vendor Appreciation parties (Tony curated them all), the moment Zappos landed Nike, Hsieh’s soup-making obsession, his love of puns — and so much more.
One extraordinary man. Two decades of incredible friendship. Thousands of indelible memories. Here, untold stories about Tony Hsieh, from some of the people who knew him best.
When Fred Met Tony
FRED MOSSLER: Tony and I met at Mel’s diner in San Francisco in 1999. I was first introduced to him through [Zappos founder] Nick [Swinmurn]. Tony was running a fund called Venture Frogs. Nick reached out and pitched the idea of selling shoes on the internet. Tony knew that the internet would one day exceed the size of the catalog market. He thought it was probably an investment worth considering. But he told Nick, “You need a shoe person. Call Nordstrom or Macy’s in San Francisco and see if you can get a buyer.” Nick randomly called me. I was with Nordstrom at San Francisco Centre. Things were going well, but it was San Francisco in 1999, and the center of the universe for this new thing called the internet.
MEGHAN MOSSLER: I remember you telling me you wore your suit. You expected you were going to meet a very polished person. Nick was a young guy in his early 20s wearing board shorts and a T-shirt. I read that Nick had just stopped wearing suits to meetings with venture capitalists. When he met with Tony, it was his first and only time he wasn’t wearing one. He just came as himself and I think that’s so important. Because Tony would have probably been uncomfortable if Nick had been wearing a suit. The whole thing might have never even happened. Tony famously shared one suit with his brother.
Just a Few Months In, Tony Saves the Day
FRED: Tony hadn’t really been involved at the
beginning. I think he and [former Zappos COO] Alfred [Lin] came over and visited once after they had originally invested that summer. We had a proper office, but Tony was building an incubator and it was still under construction, so his office was in his apartment. By the end of December 1999, we had run out of money. We were scrambling around and trying to meet with different investors in Silicon Valley. Nobody was interested. We got down to the final day. We all went to this Mexican restaurant in our parking lot and had lunch and margaritas and said, “Good try, good effort.” There was no more money for payroll. We went back to our office to clean out our desks and Tony calls. He said, “I’ve decided that we’ll invest another round, but under some conditions.” One of them was he would get involved in the company, and he had some other people he wanted to bring in to help us out. The other condition was that we had to move into his apartment. There were probably a dozen of us. We had our desks in Tony’s living room. That was our office for six months to a year.
Inside That San Francisco Apartment, an Early Blunder
FRED: We had a drop-ship partner at the time, a sporting-goods retailer in the Bay Area. We would get a feed from them and it would go up on our site. We didn’t really monitor it. At Zappos at the time, if you registered, you got $10 off. They put up this soccer cleat for $9.95 in this feed and we didn’t know. It went on our site at $9.95, but if you registered, you got a soccer cleat and a nickel back. We came in the next morning, and the whole apartment was flooded with 5,000 orders for these soccer cleats that were free. Alfred walked in and said, “This business is never going to work.”
Introducing Zappos to a Reluctant Shoe Industry
FRED: The first trade show I went to in 1999, I met with 80 vendors. They still thought I was at Nordstrom. Everyone loves the Nordstrom buyer. I said, “I’m with Zappos. We sell shoes online.” And they said: “What? You’ll never sell shoes on the internet!” I think I got four brands. One of them was Rochester Shoe Tree Co.
The Team Expands, Tony Pulls All-Nighters Coding the Site
EILEEN TETREAULT: Fred endured the scary stuff and had gone through a lot of the growing pains. We started getting a lot of traction by the time I got there. I came at the beginning of 2002. I was working at Nordstrom San Francisco and one of my friends [told me to go talk to Fred]. The Zappos office was walking distance from Nordstrom, so I walked over and met with Fred and a few other people. They said I should meet Tony. So I met all these people, and I finally said, “Am I going to meet Tony?” And Fred said, “That was Tony.” He had on a Zappos T-shirt. I was the oldest person at Zappos when I started. So all the “kids” were about 10 years younger. I saw Tony as my younger brother.
FRED: Tony would come in late in those days because he was doing a lot of coding for the site. He was a developer, so the best time for him to work was in the wee hours of the morning. He would be up at 4 a.m. while it was nice and quiet — working on coding — and then he would sleep in in the morning.
Pivotal Turning Points
FRED: Success in e-commerce is about conversion rate. Traffic is expensive to drive. If you convert that traffic, it’s how you succeed. It was about us acquiring brands. We had a search box on the homepage. Many of the brands [people searched for] we didn’t have. Our burn rate was very high. We had to get these brands. Tony took the brand search terms and he assigned points to each one for us. He calculated that if we could get 300 points, we would make it. He handed that to us and said, “You guys have until X date.” That was it. It was cool how he thought about that. He gamified it and made it competitive for us.
EILEEN: I remember we came back from WSA, and he said, “You guys got more brands than we thought. Now we have to get going on the money.” We didn’t have any budget because we didn’t know who we were going to get. We were just out there writing orders.
FRED: In 2002-03, we just had a handful of buyers, no assistants or anything, just bare bones. There was no way we could manage a business with, like, six of us. We needed help from the vendors. To do that, they would have to have access to our system, see the inventory and write reorders. I remember one afternoon, I spun around and told Tony — we sat back-to-back — that we were overwhelmed and that the only way this business could be scalable is if vendors could log in. Tony didn’t say a single word. He just kind of looked at me like I was annoying him. Three hours later he spun back around and said, “Like this?” He’d created our first extranet. That was a huge driver for our business.
MEGHAN: It changed the industry. Now brands work with retailers the same way.
FRED: [Another big turning point] was when we moved our fulfillment center from California to Kentucky. When we got out there, we had to have a better way of managing inventory. We were doing it the old way. where you’re shifting shoes around and organizing by style and color and size. We got up to about 30,000 units, and that was just not making any sense. Tony went out to Kentucky and spent three or four months building a warehouse management system using license plate numbers that manage every single unit on its own. That way you didn’t have to worry if brands were housed together or by size or color. Tony built that system in three months from scratch, and worked 20 hours a day doing it.
Moving to Las Vegas & Expanding the Zappos Family
FRED: In 2004, we had 90 people, and 70 moved to Las Vegas. We didn’t know anyone else in town. That created a great bond between everyone — we spent time together after work, and on weekends we barbecued. Our relationships grew a lot stronger and it went to another level.
RICHARD ZECH: Fred and I reconnected in 2005. I was down in Las Vegas at one of the trade shows and met Fred for drinks. We were sitting there talking and all of a sudden these two guys sit down and one of them, [Alfred], just started asking me questions about my current business. At that time, I had just sold [a home ambiance company] and he started asking me, “What are your internal gross margins? What was your EBITA? How many employees did you have? Where did you manufacture?” I kept looking at Fred, and Fred didn’t say anything. The other person at the table sat very quietly and didn’t saying anything [until he said], “Let’s go.” They both stood up and walked away. Fred said, “That was Alfred and Tony — and that was your interview. And you’re hired.” Tony never said a thing.
MEGHAN: I started at Zappos in 2005, I moved to Vegas a year earlier. I was trying to think of the first time I really remember interacting with Tony. He was so quiet for so long. But he was so approachable. All of a sudden, you were just friends with him. When the company was small, Tony would have everyone over to his house for New Year’s Eve for a pajama party. And he would have everyone over for Fourth of July.
The Zappos Culture Crystalizes
FRED: We were growing really quickly in Vegas, and Tony, Alfred or I would always do the last interview. When we got [to a certain number of people], it wasn’t possible anymore. Tony
realized he needed to document what the culture was so everyone would know what those core values are. He asked everyone in the company, over the course of a year, what the culture meant to them, and he distilled that into the 10 Core Values. He knew it had to be written down and defined.
EILEEN: Vendors always wondered how we got any work done. They would see us talking and visiting. I said that’s how the magic happened. People would say they wanted to work at Zappos. I would say, “You would never make it.” And they would all meet Tony. He would be sitting at his desk. They all had a very similar response: This guy’s wearing a T-shirt, he’s got khakis on and is very quiet — what’s going on? That’s how the famous Zappos Tours came about.
Finally Landing Nike
FRED: We tried to get Nike for eight years, and we were finally able to convince them. It was April 2007. I got a call from Nike that they approved our account. It was about 2:30 in the afternoon and Tony and Alfred were sitting behind me. I tried to play it cool and not be too excited. I got off the phone and Tony said, “Email the company. Tell them we got Nike.” My hands were shaking so bad I couldn’t do it. Alfred had to finish it. An email went out and the whole building erupted in cheers. We closed the entire office and we all went down to this bar/restaurant and celebrated and set the all-time bar record. It was a cool day.
MEGHAN: Remembering how the news swept through the merch floor still gives me goosebumps. Everyone started screaming and hugging each other and running up and down the aisles.
Eileen: All I heard at first was, “We got.” That was the most important thing for anyone who worked at the company, whether you worked in legal or finance or marketing or anything.
Love Thy Vendors
FRED: Around the time we got Nike, we started our Vendor Appreciation parties. Tony personally curated those vendor parties. At one of them we had penguins. Another party we had a variety show, so there were stilts wandering around. One of Tony’s philosophies was to surprise and delight because it was all about the experience. He wouldn’t even tell us, it was all a secret. We had one at the Callaway Golf Center, and there was a band playing. They were pretty good. I came to find years later that it was Imagine Dragons.
Eileen: People didn’t realize they should have eaten before they came to those parties. Everything had alcohol in it. People couldn’t figure out what happened. Once I was asking Donald Pliner’s team whether he wanted to do a tequila shot. They said, “No,” and he said, “Yes I want to do shot.” Then he did three, and he literally went down in the bushes. That was a lot of people though. Tony used to stand at the door to greet everyone. Some of the vendors thought it was so cool he was right there. They really got to experience Zappos in full.
MEGHAN: He stood at the door last year at the 20th anniversary party. For hours.
RICHARD: Tony would always tell us to get to the vendor party early. Otherwise, we were going to have to stand in line. He said, “You’re not going to cut in line in front of any vendors.”
FRED: Anything over the years that we came up with to help vendors, [he applauded]. We wouldn’t let a vendor walk into our building carrying their own bags. Tony was always so proud and humble. He believed in being in service to the people who were helping you. If Tony ever pulled me aside, it was because a vendor was pulling their own bags.
EILEEN: I remember getting chewed out when we didn’t get a vendor’s check at dinner. One time a vendor paid and Tony happened to be there. He pulled me aside — super serious — and said, “Can you tell me what happened?”
FRED: That is literally the only time we would get in trouble. He took it very seriously.
Tony Writes a Bestseller
RICHARD: [My daughter] Ava and I went to Lake Tahoe the early part of the time [Tony was there writing]. We spent four or five days and the first day, Tony got a whole chicken and he had this chicken simmering. He said we were going to make soup for a week. He kept throwing in carrots, he’d throw in some potatoes, and it cooked for a week. It was good chicken soup.
MEGHAN: He continued his love of soup-making.
FRED: When the book came out, he got a bus and went around the country speaking and telling the Zappos story. The book was essentially how to be a better business — it was open source. We were always sharing what we knew, even with competitors like Shoebuy. Tony always said it was great that Zappos was doing wonderfully, but better if the world could learn from us. So the book was just his way of sharing the success of Zappos. Tony was always about sharing. Even back to the early days, when we moved to free shipping and no one was offering it, we asked what would happen if other companies start doing it. Tony said that would be great because that would just make for a better customer experience. It was never about what was best for Zappos. It was about what was best for the human condition.
MEGHAN: I remember being with Tony at the airport the first time he was recognized after “Delivering Happiness.” He was an understated guy in his T-shirt and very humble. Someone came running up and he was freaked out. They wanted a picture and he was so uncomfortable. The guy was chasing Tony through the airport.
RICHARD: I think it was the same trip we went into the bookstore at the airport and Tony opened up [the books] and wrote “Love, Tony.” And then he put them back. He said he thought it would be kind of cool if he did that.
MEGHAN: Tony became a great speaker. He worked really hard and studied public speaking. Everything he did was a science.
FRED: Nothing was an accident with Tony. He was a great speaker because he put the effort in. He studied comedy for a long time before the book tour. He wanted to have the right timing, the right effects. It was pretty much how Tony approached anything in life.