Zappos Tony Hsieh: the first entrepreneurial story of selling shoes online

Zappos Tony Hsieh: The Entrepreneurial Story of Selling Shoes Online (1)

Domestic online shirt wars are in full swing. Although the dominant players can't wait to announce their market position, new competitors have joined in. Behind the fierce competition, B2C business is now favored again, focusing on vertical B2C in specific fields.

How far can vertical B2C go? Then there is the comparison version. In the United States, China entrepreneur Tony Hsieh has been devoted to the exploration of B2C for the past nine years. The difference is that he sells shoes online.

Prequel: let Microsoft pay the bill

Tony Hsieh, 33, was born in Illinois. His parents came to settle in the United States from Taiwan Province Province, China in their early years.

Tony Hsieh, the eldest of the three brothers, spent his childhood in San Francisco's North Bay. San Francisco has the largest Chinatown in the United States, and its history can be traced back to 120 years ago. The Chinese archway at the entrance reads "The world is public". On the other hand, at its southern end, it is Silicon Valley, the center of information industry.

The San Francisco Bay Area is a metropolitan area in northern California. There are several suburban centers in the Bay Area. The San Francisco Bay Area north of the Golden Gate Bridge is often called the North Bay, and the Golden Gate Bridge is the only way to San Francisco.

Father Xie Chuangang later told the media that Tony Hsieh had his own understanding and judgment since he was a child. The family only asks the children and their parents to speak Chinese, and the rest is up to them. Parents only help, not interfere.

This is a humble expression of a father's pride in his son. Zaohui not only achieved excellent results in middle schools in Tony Hsieh, but also was a computer genius and won numerous awards. Later, he was successfully admitted to Harvard University to major in computer science. In fact, he got a diploma at the age of 19, which made him a celebrity on campus.

His interest is not limited to computers. While studying at Harvard University, Tony Hsieh and his roommate, Sanjia Madan, opened a pizza shop that was about to close down. The customers were his dormitory classmates, and they sold the shop after graduation. This is not his first business. He made his own badge very early and sold it by mail order. When he was in middle school, he took on some coding work from time to time.

At the age of 2 1, like many IT entrepreneurial stories, he had the opportunity to further his studies, but he and Sanjay Madan decided to be programmers in Oracle Bone Inscriptions. Of course, this is against the tradition of China people who have settled in the United States.

1995, their boss Larry Ellision put forward the concept of network computer. Of course, we still use PC today, but every IT practitioner can feel that the Internet era has arrived.

Only five months later, at the beginning of 1996, they left Oracle Bone Inscriptions Company, and Tony Hsieh started a business with $20,000 as the start-up capital in a two-bedroom apartment. In addition to Sanjay Madan, more than a dozen colleagues gathered together. Of course, many of them didn't pay.

Their project is LinkExchange. In the early days of Internet development, the promotion of websites was a problem. Of course, large websites have enough advertising budgets, and what Tony Hsieh has to do is to "speak for the silent", which used to be a popular way of advertising communication. Small and medium-sized websites publish other people's advertisements on their own websites, and at the same time, their advertisements are displayed on other websites. Business came at the right time. Eight months later, they moved to an old-fashioned building in the media district near downtown San Francisco, where they have lived ever since.

In May, 1997, Sequoia Capital, which had benefited a lot from Yahoo before, realized the potential opportunities and injected $3 million into the project. Since then, LinkExchange has more than 800,000 member websites and 65.438 million employees.

1998165438+10 In October, Microsoft announced the acquisition of LinkExchange with shares worth 265 million US dollars. Microsoft said that this will enable Msn.com to enter the growing small commercial advertising market, and Microsoft can promote their products on hundreds of thousands of websites and use technology to unite these websites. After the acquisition, Microsoft renamed it MSNB Central. Of course, analysts will compare it with Hotmail acquired by Microsoft for $400 million.

Afterwards, in an interview with the media, Tony Hsieh said that he was "very excited", but when people praised him as "the second Yang Zhiyuan", he didn't make too many comments.

Zappo Dakang

Tony Hsieh, 24, became an angel investor after making huge profits from the deal with Microsoft.

He and another student from Harvard founded Venture Frogs, a venture capital company. "To be a successful venture capital company, you must be as energetic as a frog!" In addition to the $27 million "investment fund", it also provided "incubator" help. Tony Hsieh talked about his experience. "In the first year of my business, I had no idea what to do and made many mistakes."

1999, he met Nick Swam, an entrepreneur younger than himself, and Swam put forward the idea of selling shoes online. At first, Tony Hsieh didn't think so. Who will buy this kind of goods with obvious store sales characteristics online?

This is also the understanding of others. Swaim only raised $654.38+$500,000. Of course, in addition to the business model, experience is another reason why people have reservations. Later, Swam recalled in an interview with the Financial Times, "I have no experience in running a store. In fact, I don't have any business experience. "

Sometimes it is. If you work harder, what you can't do will turn around. Swaim sent a voice mail to Tony Hsieh, expounding his ideas once again: the market size of the entire American footwear retail industry is as high as 40 billion US dollars, of which 5% is achieved through mail-order catalogs, which is equivalent to 2 billion US dollars. The implication is that at least online sales can get a share from some catalog sales.

Tony Hsieh was so moved that he invested 500,000 dollars in ShoeSite, an online store in Swaim. However, ShoeSite is too straightforward, so it was renamed Zapatos, which is based on the Spanish word "shoe". Six months later, Tony Hsieh began to manage the company with Swam.

Soon after, Tony Hsieh invested an additional $654.38 million in Zappos. His interest in this website grew rapidly, and in 2000, Tony Hsieh became the CEO of Zappos.

At this time, selling shoes online has become the Red Sea, and shoes has also been established 1999. Amazon, an online retail giant, has also set foot in and set up Endless, and Nordstrom, a traditional department store, has also tested the water with Benchmark Capital. Zappos is not forward-looking, it is just one of the participants in this craze.

Since then, the Internet bubble burst rapidly, and B2C business made investors stay away overnight.

What is colder than the capital market is the practice of business model. Swaim's original idea was that online stores similar to the Yi Bei model would forward orders to footwear manufacturers after receiving them. Does not involve inventory, easy to get rich profits.

Fred Moseler, the manager in charge of Nordstrom's footwear procurement, recalled afterwards: People didn't want to leave this brand to a start-up website. Of the more than 65,438,000 companies he first contacted, only three seemed interested. After efforts, this number has increased, but it is far from the diversified choices that conform to the characteristics of the Internet.

At first, we could hardly sell anything. To make matters worse, one out of every 65,438+00 orders can't be completed, mainly because the goods are out of stock. Behind the out-of-stock, suppliers only sell some end-of-season goods through the website, and the choices faced by customers are not sufficient.

The shoes corresponding to 1999 were not sold much, and only1600,000 USD was sold in 2000. "At that time, we thought about bankruptcy every day." At this time, Tony Hsieh showed his entrepreneurial spirit. Although he had been in prosperity before, now he will go through adversity, and then he got a loan of up to $6 million from Wells Fargo.

In order to expand the variety of goods, Zappos began to own its own inventory. Unexpectedly, however, the inventory made the customer's orders respond in time, and the positive feedback from the customers inspired the two entrepreneurs. "Customers are telling us how to build a business. “

Tony Hsieh is aware of the need to participate more deeply in the industrial chain and undertake more value-added obligations. At that time, three-quarters of the orders were completed through the company, and Zappos finally gave up another quarter of the sales.

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