What Every Tech Startup Founder Can Learn from Tony Hsieh, Zappos

By: Felicia Savage


Every once in a while, an entrepreneur will come along and do something that really shakes things up in the startup world. For good or bad, those are people we can learn from, and to some extent, emulate. Right now, that person is Tony Hsieh, the CEO of Zappos, the online shoe store. This is the guy who whipped Zappos from a $1.6 million company in 2000 to one worth $1 billion in 2009. Tony is often quoted as saying that the top priority for Zappos isn’t selling shoes; rather, it is developing a company culture. And did he ever shake things up recently.


Flat as a Pancake

In case you missed all of the headlines, Hsieh recently announced that he was taking Zappos holacratic. That is, he was getting rid of the business hierarchy, making Zappos’ company structure flat. Completely getting rid of managers. Everyone is still responsible for their respective jobs, but now they’re all on one level. Essentially, everyone is empowered to move the business forward, whether they’re in charge of buying product to resell or just cleaning the toilets. Hseih’s move emphasizes the importance of every role in the business.


Take Away

When many tech startups get rolling, they spend a lot of time and effort making themselves look like businesses: who’s this, who’s that, what’s this person’s role. But what Hseih is really saying with his move is that it’s not the roles within a business that define it, but the responsibilities each person has.


Let’s say you and I start a retail business together. There are hundreds of responsibilities that need to be covered. Instead of focusing time on divvying up roles (“I’ll be the CEO, and you can be the COO, and I’ll be the accountant, and you can be Senior Sales Manager”), you should be divvying up responsibilities (“I’ll take care of finances if you’ll focus on marketing”). Once you get large enough to hire someone to cover a responsibility, it’s on you to cover all of the responsibilities.


Often, roles in a business like this become more about pride than responsibility. You can proudly strut around declaring yourself the CEO, but unless you’re making the decisions that are taking the company forward, you aren’t doing yourself—or the company—any favors. The way Hseih is covering responsibility instead of hierarchy is a great way to speed up the process behind a startup. By hiring in roles, you can find yourself hiring more quickly than you need to, which also runs you through funds faster. In a flat environment, you simply get the job done.