Amazon purchased online shoe retailer Zappos for $1.2 billion in 2009, which helped current Zappos CEO Tony Hsieh earn an estimated net worth of around $840 million.
But that’s only half the story of Zappos’ success.
To understand how this shoe website became one of the most talked-about, fastest-growing businesses in America at the time, you need to know the story of Nick Swinmurn, Zappos’ “silent founder.”
Nick founded Zappos in 1999 after a frustrating outing to his local mall. He quit his day job to focus full-time on creating the ultimate shoe shopping experience – and the decision paid off big time. Zappos’ vast array of colors, sizes, brands, and styles was the initial draw for customers, but excellent customer service (such as free shipping and returns and easy access to friendly representatives) is what kept them coming back. This focus on the customer was one of the early tenets that led to Zappos’ success – and those of you who’ve taken my course or read my book know that caring for clients is always my first priority.
Once Nick began to experience too many demands from running a fast-growing startup, he reached out to fellow entrepreneur and Venture Capital investor Tony Hsieh to come on board in 2000. By 2005, gross sales reached $370 million and the company had made the Inc. 500 list. Most importantly, Zappos was very close to breaking even. That’s when Nick and Tony received their first offer from Jeff Bezos, which they turned down.
Both knew that the brand was capable of being much more than just a big shoe website, and they wanted to see it reach that full potential before they put a price tag on it.
Nick continued to lead the brand alongside Hsieh until 2006, when he exited Zappos for good (with a sizeable portion of shares, of course). At that point, Tony was handling the day-to-day financial decisions, and Nick realized he didn’t need to stay on board solely for his ego. He had faith that Tony would maintain his original ideals of great customer service, a positive work culture, and sourcing the right people with the best energy for the job.
Just three years later, Hsieh accepted a new offer from Amazon – an all-stock deal worth $1.2 billion – solidifying Zappos as a true financial success story.
