Coincidentally enough, I had decided that I wanted to write a letter to my mentor Tony this weekend, thanking him for the huge impact he’s had on my life. But I suppose that has now morphed into a more public letter.
Being in a zombie, half blurry-eyed state, it’s a little tough to articulate well what Tony has meant to me. We go through life, and a lot of people have an impact on us, and it’s often hard to say that a particular person caused you to take a particular path. But, Tony is one of the few people whom I can definitely say my life would not at all be what it is without him.
I first met him many years ago in Dec 1996 when I was just starting high school. My best friend Jennifer asked me what I was doing for winter break and if I wanted to help out her cousin Tony with his new internet startup. I had no idea what an internet startup was, but I had nothing going on, so I agreed to go.
On the first day of our holiday break, Jennifer and I hopped on the Caltrain from the peninsula (Silicon Valley) to head to his office in SOMA (San Francisco). It was exciting! We couldn’t drive, but we could go to a startup office all by ourselves! I followed Jennifer to the address. I think their office was actually someone’s apartment. And when we got there, there seemingly was no one there. We hung around for a while, and maybe about 10am or so some people started to trickle in – this was my introduction to startup life.
Tony had more or less just graduated from Harvard, as he had spent a few short months at Oracle after graduation, and then decided to quit to build his own company LinkExchange. Leaving a big employer so quickly was highly unusual back then, and he would go on to do many non-conforming things that he was right about.
LinkExchange was an ad network. If you had a website and hosted LinkExchange ad banners, for every 2 impressions you generated, you received 1 free impression of your banner. Back then because the internet was still new, people paid attention to banners and clicked on them like crazy, so this was incredibly effective in helping generate traffic for people. LinkExchange would then sell the remaining ad impressions. They had launched the service earlier that year, and by that December, they were already growing like crazy.
I definitely was *not helpful*. We put together some tables and chairs. And made ethernet cables from scratch. Yes, from scratch. We had to cut cables, splice the individual wires, and insert them into plastic tips and crimp them. I was terrible at this, and Jennifer largely fixed all of my mistakes (as always). Since I was so bad at the ethernet cable making process, they asked me to help them put together an internal webpage to keep all their meetings / schedule together. Great! I could put my basic HTML skills to use. I don’t think they liked the amateurish turquoise background that I chose, so someone at LinkExchange quickly fixed it.
I was more of a nuisance than help, but what I saw that day was super inspiring. Here were a bunch of friends who were getting together to build things. They could wear whatever they wanted, saunter in whenever they wanted, and eat all the pizza they wanted. And they all had varied tasks and were taking business meetings in what looked like a kitchen? There was never a dull moment. It was the dream. Neither of my parents worked in tech and certainly not startups, so this was incredibly eye-opening, and immediately, I knew that this was what I was going to do when I grew up – become an entrepreneur and start companies. Without this exposure to startups in 1996, I don’t think I would have made this realization (if at all) for many years.
Fast forward a few years later. Microsoft bought LinkExchange just 2 years later for a reported $265m. Tony and his college friend Alfred (who also was at LinkExchange) decided to start a startup incubator with their own money. (As a side note, the food at their restaurant in this incubator was fantastic!) This was bold and unique, because Idealab was really the only one doing something somewhat similar at the time. The concept of accelerators or incubators would not come in a big way until years later.
I don’t think Tony knew this, but while in high school, I cold-emailed almost every single one of his portfolio companies to ask them for an internship. I was determined to work at a startup as soon as possible in high school and start my startup career. I ended up working at one of his portfolio companies (probably unbeknownst to him) in the summer of 2000 which really help set me on my path to a career in startups. Often that first opportunity is the hardest to land, and each subsequent opportunity opens more and more doors.
By late 2000, the stock market had crashed and everyone was fleeing startups. Newspapers ran headlines saying that tech was dead and that all programming jobs would be outsourced. They couldn’t have been more wrong, but most people panicked and stopped investing in startups. Tony, was always a first-principles thinker, and he leaned into this and ended up co-leading one of his portfolio companies Zappos. As an e-commerce company that provided free shipping and free returns, Zappos’ margins were razor thin. This scared most VCs. (This would certainly scare me.) But, he believed that it could work if customers had a great experience and would become repeat customers. So, he poured a lot of his own capital into the business when no VC at the time would touch this company. While many VCs pontificate about high level things, he looked at problems from a bottom’s up approach which made his thinking often unique from others.
In order to make the Zappos model work, he needed customer service to be top notch, reliable, and have a lower cost. It was clear to him that this model wouldn’t work in pricey San Francisco. So, he made another bold decision to move the company to Henderson, NV, which could provide all of those things. This was at a time when certainly most people believed you can only build an internet business in the San Francisco Bay Area. In hindsight, when they ended up needing to hire tons of people, being the BEST internet company in the Las Vegas area allowed them to swoop up talent that would have been a huge war to win in San Francisco. The other thing that was apparent to me, is that the Zappos family was incredibly diverse — and free to be themselves. Tony’s attention to culture and cultivating an open and welcoming work family left a lasting impact on me, and he started doing this well before it became a trend. Like so many of you, his book Delivering Happiness has affected my own thinking.
Fast forward many years, Jennifer and I were working on our own startup, and we were grappling with a particular challenge. We decided to consult Tony and get his advice. In a very Tony-like way, he basically told us to do what we thought was best. I remember feeling frustrated at the time, because…I didn’t know what was best! I had wanted him to tell me what he thought was best! But a good mentor helps you find your own answer – he/she doesn’t tell you the answer.
In that meeting, he also pulled out a book and told me to read it. The book was Start with Why by Simon Sinek. So I read it. The gist of the book is that to build a great company, you need to go back to first principles. Most people start building a company by trying to sell their product details. “Buy my shoes! They are grey with stripes.” But customers, employees, and everyone want to rally around something much bigger — something inspirational that the company stands for. It actually took me many years to process this and actually figure out how to implement this — I didn’t get this right for LaunchBit, but after marinating on this advice for years, this is what we’ve been striving to do at Hustle Fund. We aren’t just capital deployers. We are trying to create a movement and a philosophy. That particular meeting with Tony is one that I play in my head over and over – I feel like I finally understand what he was getting at and that is what I most wanted to tell him this weekend.
If cynics believe that it’s impossible to get ahead in life without being an asshole, Tony Hsieh is a good example of someone who defies the norm. He was never flashy and always kind and generous to all. I could go on and on in writing this, but thank you, Tony, for helping me in so many ways that you may not have been aware. For your kindness, generosity, and inspiration.
Sending big hugs to the entire Hsieh family whom I consider to be my second family and who took me in during my formative years and had a huge impact on who I am today.