Wonder Boy: Tony Hsieh, Zappos, and the Myth of Happiness in Silicon Valley

These were my takeaways from an in-depth look into his life. I remember I used to idolize him when I was younger. He seemed like he was the pinnacle of success. Definitely a sobering look at what happens you go into psychosis.

These were the passages that stood out to me.

That excitement was evident to his classmates, who saw through his introversion to a young man who was full of adventure and curiosity and was destined for greater things, even among a class of Harvard graduates. They agreed that it would be Tony who bound them together in the years ahead. “At the time, we were surrounded by all these people who we expected to go on and do great things,” Jill, who would go on to work in government in Washington, D.C., later told friends. “We were so worried that we would lose each other as life went on.”

“So they made a bet: If Tony became a millionaire within ten years of graduation, they would all go on a cruise and Tony would pay for everyone’s trip. If a decade passed and Tony still hadn’t become a millionaire, they would still go on a cruise, but everyone else would pool money to pay for it. Tony had already done the calculations. “To me, it seemed like a win-win situation,” he wrote later. “Either I would be a millionaire or I would get a free cruise. Either way, I would be happy.”

year-olds listened as Lenny, sipping a Kahlúa cocktail, made his offer: $1 million in cash to acquire LinkExchange and add it to Bigfoot’s portfolio. Tony, with his mop of hair, and Sanjay, with his dark bushy eyebrows, tried not to flinch. It was a life-changing amount of money. They told Lenny they needed a few days to think about it. Within twenty-four hours, Tony and Sanjay replied with a counteroffer of $2 million, so they could each walk away with $1 million. “I have read somewhere that you’re in your best negotiating position if you don’t care what the outcome is and you’re not afraid to walk away,” Tony said. “I’ve made a lot of money in my lifetime,” Lenny responded, declining to meet their price. “But I’ve also lost a lot of money when I decided to bet the farm instead of taking money off the table. I wish you the best of luck.”

Four months after Barshack’s offer, Ariel introduced Tony, Sanjay, and Ali to Jerry Yang, the co-founder of Yahoo. Jerry’s company had become the embodiment of the dot-com boom, its logo emblazoned on the homepage of millions of internet surfers, pre-Google. Yang had just led Yahoo through an initial public offering in April 1996, at a whopping $1 billion valuation—an extraordinary size at the time. Yang also had more in common with Hsieh than most other Silicon Valley founders at the time: they were both Taiwanese and at the helm of tech companies in an industry where the majority of C-suite-level executives were white.

“But Yang didn’t want to negotiate a contract; he wanted to buy LinkExchange, for $20 million (the figure Tony cited in his memoir; according to Ali, it was actually $25 million). For the second time, Tony was doing everything he could not to flinch. The three founders informed their employees, still a tight-knit group of friends, of the offer, and for several nerve-racking days they considered their options. Tony understood that if they said yes to the deal, he would never have to work another day of his life. He then made a list of all the things he would buy with the money: a condo in San Francisco, a big-screen TV, a computer. Maybe some long weekends in Miami or Las Vegas. But ultimately, he realized, he would likely use the money to start another company because he loved the process of building and growing a venture. Why sell a company he was already excited about, only to start another company to be excited about?”

“In the end, he and the other founders turned down Yahoo’s offer. It was a seminal decision he would cite over and over again to underpin his assertion that chasing profits had never been his game, that it was always about passion and purpose. “There will never be another 1997,” Tony said during a company meeting, announcing that the Yahoo deal was not happening. His voice trembled as he looked around at the familiar faces of his homegrown company and realized he saw relief. This was not a moment of failure. It was time to continue building.”

“Public speaking and building out the story around himself and the company was a skill that he wanted to improve, Skye recalled. “After we met with a journalist, he would always ask me, ‘How did I do? Was it a good meeting?’ He really wanted to parse it out afterwards, and he was very open to any advice and guidance that I had for him.” So while there was no official CEO, to Sequoia and the rest of the board, “Tony was their darling,” Susan Cooney said.”

“To those who saw and worked with Tony during this time, he seemed like a natural leader who was still learning but had all the potential to be great. To former Harvard classmates whom Tony had hired to help out at LinkExchange, he remained the mischievous and curious friend with wild ideas. In the summer of 1998, Tony organized an impromptu trip to Yosemite, and went to the camping store near the LinkExchange office to buy everyone tents. In addition to Sanjay and Alex Hsu, other college friends including Jill Wheeler and Kami Hayashi joined them. Packed into Tony’s mother’s minivan, they left after work and arrived at Yosemite after dark, complicating the process of setting up the tents. No one remembered to bring flashlights, but of course Tony kept night-vision goggles in his mother’s minivan. Once they finished setting up one of the newly purchased tents, they realized yet another mistake: they would not be able to fit inside because Tony had bought ones meant for kids. The party ended up sleeping in the van.”

“Shortly after, Tony found himself making a list similar to the one he’d made when they got the first offer from Jerry Yang. This time, however, the list was not about all the things he would buy with his newfound wealth. It was a list of the happiest periods in his life. He realized that none of those moments involved money. All of them included building businesses and experiences. “Being creative and inventive made me happy,” he said. “Connecting with a friend and talking through the entire night until the sun rose made me happy. Trick-or-treating in middle school with a group of my closest friends made me happy.”

“Such questions guide the lives of many, only now Tony had more money than most would ever see in a lifetime. “If you hate someone, give them a winning lottery ticket and announce it to the world,” his childhood friend Alex Hsu later said. “Having so much financial success in your twenties and early thirties comes with a different set of challenges that most people will never have to face.”

“Tony tried MDMA for the first time in 1999, the same year he went to his first warehouse rave, and not long after he became a millionaire at twenty-five years of age. “The drug was transformative for us to a certain degree,” said a close friend of Tony’s who had known him for years and was present when Tony first tried the drug. “It kind of consumed our lives for a little bit.” The experience of taking MDMA can be cathartic, and by coupling that with raving, Tony was connecting to a side of himself he hadn’t tapped into previously. The most common effects of the substance are to give users a heightened sense of awareness, well-being, empathy, and transcendence.”

“More than a decade before Adam Neumann, the Israeli entrepreneur and marketing spin doctor who blurred the lines between work, play, and other parts of life with the ethos of the co-working venture WeWork and its residential arm WeLive, Tony fused those elements together at 1000 Van Ness, just as he had done at Harvard. Once they moved into the building, Tony and his friends owned 20 percent of its apartments—technically registered to a separate address, 151 Alice B. Toklas Place, because the complex was so large—and had 40 percent of the seats on the board of the building’s homeowners’ association. “We could create our own adult version of a college dorm and build our own community,” he wrote later. “It was an opportunity for us to create our own world. It was perfect.”

“Isn’t this amazing? You created all of this,” Tony later recalled the woman saying in his memoir. I looked over to see who it was, but it was someone I didn’t recognize. She had blonde hair and blue eyes, and was also leaning out the window to marvel at the flashing lights of the fire trucks below. “Yeah, they were pretty nice about it. I was worried that they would be mad at me, especially since it’s New Year’s,” I said. “That’s not what I meant. I mean all of this,” she said. She turned and gestured toward the rest of the people that were still at the party. “You could have done anything you wanted and you chose to create an experience that people will remember forever.” She gazed into my eyes. I could still hear the music in the background, but the rest of the world seemed to disappear. I had no idea who this girl was, but somehow the universe had brought us together for a single moment in time that I would remember forever. “Envision, create, and believe in your own universe and the universe will form around you,” she said softly. “Just like what you did tonight.”

the price to 40 percent below what he had paid for the condo. Shortly after, he found a buyer. “As your friend and financial adviser, I’m advising you not to do it,” said Alfred. He had since left Tony’s immediate orbit and started working for Tellme Networks, a telephone tech company that Venture Frogs had invested in, as vice president of business development. But Alfred still looked out for Tony’s blind spots. “It may pay off in the long run, but it’s not worth the risk.” Tony and Alfred were two very different people, however. Alfred had always been more careful and deliberate. Tony, meanwhile, had always been willing to risk it all for an idea. He accepted the offer on the apartment.

It hadn’t been done before, Mark said, but he couldn’t see why not. When the group stood up to leave, Tony suggested Mark join them back at the Zappos office for a tour. At the front entrance, Fred opened the glass door for Mark, and Tony walked in alongside him. Looking up at Mark, Tony said, “Would you come work for Zappos?” Beyond being a tech company, Mark had little idea what Zappos did, nor what roles the three men in front of him held. But after spending an hour at lunch with these guys, he felt a synergy between them that he’d never encountered, and whatever they had in mind, he was sure it would be worth the risk. “I’d love to join,” Mark replied.

“Multiple times a day, Tony would spin around in his chair and toss out an idea that Mark would frantically scribble down and then try to figure out how to execute. One day, Tony told Mark he wanted a Zappos University. When Mark asked what that was, Tony replied, “We don’t know; we’d like for you to tell us.” Building on the orientation program, and the company’s existing curriculum around customer service, culture, and warehouse operations, Mark launched Zappos University by expanding it to an in-house professional development program that could teach employees new skills—regardless of whether they applied that skill to their job—from yoga classes to playing golf. It also involved other initiatives that would pay employees to do community service, or volunteer at a local soup kitchen during work hours. Another pillar of Zappos University was Zappos Insights, which provided consultations to other companies on how to improve their corporate culture. Over three-day “camps,” executives from other companies would learn how Zappos managed HR, how to give their employees more impetus to focus on customer service, and how to achieve a “wow” factor. On the final day, attendees went to Zappos’s legendary quarterly all-hands meetings, led by musicians and rousing speeches—years before concert-style corporate gatherings were made famous by WeWork and its enigmatic CEO, Adam Neumann.”

“To double down on the customer service emphasis, Tony became obsessed with the happiness of his own employees, which he believed would translate to happy customers. So he vowed to make Zappos among the best places to work in the world. It paid 100 percent of its employees’ health insurance premiums and invested in professional development courses. Individuality was treasured and encouraged: employees brought their home and personal lives with them to the office, filling every inch of their cubicle walls with personal photos, notes, cards, Silly String, or whatever else most represented them. Beyond monkey row, plants hung from the ceiling throughout the office like a greenhouse, a style of which Tony was the architect.”

“He drew on concepts like Maslow’s hierarchy of needs, which determines that once the requirements of survival—things like water and food—are met, humans can achieve happiness by first pursuing security and safety, then family and a sense of belonging, a sense of self-esteem and respect within a community, until self-actualization is reached, meaning the display of creativity, acceptance of facts, self-sufficiency, and morality. A more distilled version of happiness could be attributed to three experiences: pleasure, a sense experienced for short periods of time; passion, when peak performance meets peak engagement, and sense of time is lost; and finally, a higher purpose, or the sense of being a part of something bigger than oneself. Taking it a step further Tony realized that there were parallels between happiness achieved by oneself—pleasure, passion, and purpose—that could be applied to Zappos, and every company in the world: profits, passion, and purpose. Tony ultimately concluded that happiness was about four things: perceived control, perceived progress, connectedness to others, and being part of something bigger than yourself.

“Through Fred’s story, Sanborn teaches readers four principles that will bring creativity and inspiration to life and work: make a difference every day, no matter how small; build strong relationships for more success; create value for others without spending money; and constantly reinvent the self.”

Mark had by now become accustomed to Tony’s ability to surprise. One time during a presentation to Zappos employees, Mark had told a joke and then laughed as he delivered the punchline. At the end of the presentation, Tony approached him and, looking directly at him without expression, said, “Next time when you tell the joke, it would be funnier if you didn’t laugh,” and then walked off without saying a word. Mark burst out laughing. He later learned that Tony had been studying the art of comedy to work on his own public speaking.”

“The treatise would conclude with the most important lesson he’d learned during his thirty-six years: that “by concentrating on the happiness of those around you, you can dramatically increase your own.”

“Glaeser’s theory posits that when cities increase in size, the productivity and innovation of each resident increase. But when companies increase in size, the opposite happens—with more bureaucracy and red tape, each employee actually becomes less productive and creative.”

“Tony instilled in me that night what ‘wow’ really means,” Tyler later remarked. “It’s about making someone feel really special.”

When the festival was announced in November 2012, the Las Vegas Review-Journal ran a front-page story quoting Rehan, and from then on he became the face of the festival. He was talking to reporters from Entrepreneur and NBC. Ryan and Justin put him on the front cover of Vegas Seven. “I had the mayor on speed dial. I could get permits approved, deals done with 48 hours’ notice,” he said. “I was invited to every major charity gala, every major event … There’s a lot of social clout that came with it.”

“The Life Is Beautiful festival would also help to reinforce another message about Tony’s social experiment: it was a constant party. Part of what bonded the neighborhood together was the seemingly never-ending cycle of social events and the blurred lines between work and the rest of life. The common denominator was the presence of alcohol, and as the man at the center of the village, Tony’s alcohol intake rose alongside his increasing fame.”

“Much as new business partners like Rehan felt like they were on cloud nine once they’d entered Tony’s inner orbit, the experience for the women in his life was similarly intoxicating. But Michelle D’Attilio was going to learn that loving Tony came with a big caveat.”

“As they sat in first class—Tony had since abandoned his habit of flying budget airline Southwest—they shared headphones connected to an iPod and danced in their seats for most of the six-hour flight. She remembered how she could not stop laughing. “This silly, magical, fun side of Tony was the reason that people fell in love with him,” she said. “Not necessarily romantic love. I mean the human who could create fun out of any little thing.”

“There was one element of Tony’s polyamory that suited her: radical honesty and transparency. For example, if Tony was spending time with another woman, he would never hide it.”

“Andy’s departure, meanwhile, was less straightforward, with conflicting accounts about why he left Zappos. In the recollection of one Zapponian who worked on the same team as Andy, it was a mutual decision that boiled down to Andy being a poor cultural fit. “We had different ideals of what Zappos was and different ideals of work ethic and leadership,” the person said. In short, Andy did not seem as hardworking as his older brother, and he used his familial status to skate by.”

“Calacanis said Jody’s death forced him to think about two other entrepreneurs who had died by suicide recently: Aaron Swartz, the twenty-six-year-old co-founder of Reddit, and twenty-two-year-old Ilya Zhitomirskiy, who had founded the social networking site Diaspora. “Perhaps we owe it to these three amazing humans to examine if the pressures of being a founder, the pressure of our community’s relentless pursuit of greatness, in some way contributed to their deaths?” Calacanis wrote. “I’m not an expert on suicide, but I am an expert on being a founder. Many of the founders I know have been desperate, depressed and overwhelmed in their careers. For everyone that shared this with me, I’m certain 10 more didn’t … Is it worth exploring why this happens and if it is, in fact, a trend?”

“Over the years such a phenomenon had been explored, but many questions remained. In his 2005 book The Hypomanic Edge: The Link Between (a Little) Craziness and (a Lot of) Success in America, John Gartner had explored whether American entrepreneurs share a common condition: hypomania, “a mild form of mania, often found in the relatives of manic depressives. Hypomanics are brimming with infectious energy, irrational confidence, and really big ideas. They think, talk, move, and make decisions quickly. Anyone who slows them down with questions ‘just doesn’t get it.’ Hypomanics are not crazy, but ‘normal’ is not the first word that comes to mind when describing them. Hypomanics live on the edge, between normal and abnormal.” Gartner, a clinical psychologist who taught at Johns Hopkins University Medical School, zeroed in on the tech industry, which had just gone through a boom-and-bust cycle. In a survey of ten internet CEOs, Gartner found that each of them identified with most traits of hypomania: feelings that they were “brilliant, special, chosen, perhaps even destined to change the world”; “channels his energy into the achievement of wildly grand ambitions”; “often works on little sleep”; and “sometimes acts impulsively, with poor judgment, in ways that can have painful consequences.” Part of being hypomanic, Gartner stated, was that in addition to euphoric highs and feelings of grandeur came susceptibility to a depressive down cycle that can be magnified under the stresses of leading a company.”

“While rates of suicide among entrepreneurs have never been adequately measured, there has been growing momentum among some tech leaders to increase dialogue around identifying warning signs. Brad Feld, another venture capitalist, became a shining light for entrepreneurs seeking help after he began speaking openly about his struggle with depression over the years, and highlighted the unique challenges facing those whose identities are often tied to their success. “The intensity of being an entrepreneur, especially when your company is failing, or you are failing at your role, can be overwhelming,” he wrote on his blog. “It’s ok to fail. It’s ok to lose. It’s ok to be depressed.”

“the things that I’ve learned over the years is that different people grieve and cope in different ways—sometimes we need support, sometimes we need space, and sometimes we need time.”

“Like others before him, Rehan felt that Tony had shown him the world and the stars, only to have it all ripped from him in an instant. “It was strangely like a reality show where you could get voted off the island at any given point,” Rehan said later. “And in doing so you were very publicly voted off.”

“In another video segment for ABC News titled “Inside Zappos CEO’s Wild, Wonderful Life,” Tony gave the reporter a tour, even inviting the camera crew into his small trailer home. In one shot, Tony fed Marley the alpaca a carrot from his mouth. As Marley chomped, Tony’s eyes crinkled with laughter. Genuine glee spread across his face. After a year of turmoil in the Downtown Project, Tony was eager to put forth another image: a simple man of few needs and with a penchant for homemade soups, living among friends and farm animals.”

“But once the music started and events were in swing, his party boy spirit was complemented by his reputation as the go-to guy for recreational drugs. “A lot of us used to say Tony collected lost souls in a way,” said the frequent visitor. “He would bring them into his world, treat them really well, and then they would become fiercely loyal to him. Anthony was one of those people.”

“But once the music started and events were in swing, his party boy spirit was complemented by his reputation as the go-to guy for recreational drugs. “A lot of us used to say Tony collected lost souls in a way,” said the frequent visitor. “He would bring them into his world, treat them really well, and then they would become fiercely loyal to him. Anthony was one of those people.”

“But the Zappos definition of employee happiness—an open bar at the office with a philosophy of “work hard, play hard”—was at complete odds with the philosophy that Jewel was trying to introduce. “Happiness is different than excitement,” Jewel said. “Excitement and perk-driven culture becomes addictive in nature and creates entitlement.” By her definition, in fact, Zappos had it all wrong.”

“The results of a controlled clinical trial demonstrated a considerable increase in efficacy of the authors’ standard alcoholism treatment when supplemented by ketamine psychedelic therapy.” The researchers also found that ketamine-assisted psychedelic therapy induced “positive transformation of non-verbalized (mostly unconscious) self-concept and emotional attitudes, to various aspects of self and other people, positive changes in life values and purposes, important insights into the meaning of life and an increase in the level of spiritual development.”

“But it was in California-based tech circles that so-called ketamine clinics—facilities in which licensed doctors administer ketamine in a supervised setting—found an audience in the mid-2010s, around the same time it became clear that entrepreneurs were more susceptible to depression due to the stressors of their jobs.”

“Tyler was right alongside him. He was doing less than Tony—not unusual, given Tony’s higher tolerance for substances than most people—but Tyler had also gotten feedback from his wife: “I don’t like you on that drug. You’re not the same person for three days after you do it.”

“Tyler called Michelle just before midnight on August 4. “We have to get Tony healthy,” Tyler said to her. Michelle was exasperated. Not only had Tyler become persona non grata by this point, but there was now a narrative in Park City that Tyler had a savior complex. There were also other rumors—rumors that Tony believed—that Tyler was going to come onto the property and kidnap Tony in order to get him into rehab. Tony’s paranoia was also being fueled by whispers that his parents were preparing to set up a conservatorship, a court order that allows guardians to make decisions for individuals deemed incapacitated or incapable of managing their own affairs.”

“speaker Simon Sinek, a former advertising executive who had sold books on how to influence human behavior, among other things, and had a hugely successful run on the TED Talk circuit. Tony’s first memory was significant, Sinek told the audience, because every person’s worldview is a product of the experiences they had when they were young. Tony “sees everybody as a firefly,” Sinek said, sitting next to Tony on an oversized box, their legs dangling beneath them. “He sees the entire world as people with bright lights. He doesn’t distinguish who are the bright ones and who are the dim ones; everybody has a bright light and everybody is out there doing their thing. “If you put them in a container,” Sinek went on, “where all of their brightness comes together, you create a flashlight. You can actually light a path for somebody else. And I firmly believe that when you are at your best, that is what you are doing with Zappos.”

“Today we are saddened to share the news of Tony’s passing. We can only imagine what he would say if he were here to announce this to you all, but we envision his message would resonate that: Energy cannot be created or destroyed. Energy is the ability to bring about change. Tony has given energy to so many people. For those who knew him well, you knew of his childlike wonder; his love for experiences and relationships over material things. Let us all feel Tony’s energy and use it to deliver happiness.”

“The outpouring of grief was immediate. From President Bill Clinton to Ivanka Trump, thousands of people took to social media to share memories, photos, and videos of a man who was universally admired. Jeff Bezos was among the peers, employees, and complete strangers who came together in a mass of voices on Twitter, Instagram, and Facebook, each reciting stories of lives changed by Tony’s vision and generosity—cementing a legacy of humanity rarely left behind by business leaders.”

“standing with Ivanka and Tony on a casino floor, laughing while eating hot dogs. “Celebrating the life while mourning the loss of my dear friend Tony Hsieh,” she wrote. “Tony was a deeply original thinker always challenging me to reject conformity & follow my heart. Tony was driven by the mission of delivering happiness & brought joy to all who knew him. Rest In Peace Tony.”

“In Jeff Bezos’s tribute to Tony on social media, the Amazon founder wrote, “The world lost you way too soon. Your curiosity, vision, and relentless focus on customers leave an indelible mark. You will be missed by so many, Tony. Rest In Peace.”

“Many of the public figures who wrote tributes to Tony had little to no knowledge of what the last twelve months of his life had been like. One person who did was Jewel, who posted a twelve-minute video elegy to Tony in the days after his passing. “I sat here for a long time before I pushed Record, trying to figure out what to say,” she started slowly. “I’ve seen a lot of posts which are beautiful but I haven’t really been able to bring myself to post.” The singer paused and looked down at the guitar on her lap. “The brain can’t comprehend why you can’t just call that person anymore. The heart can’t understand why you can’t just hug that person anymore,” she said quietly, fighting back tears.”

“What became clear was that the community Tony had built from the ground up had failed to come together in his time of need. Despite the various efforts to get Tony help, they were not coordinated and were ultimately futile. It was partly Tony’s own doing—his paranoia had spread and bred feelings of mistrust among the entire group. Michelle admitted that, at Tony’s request, she had ignored Tyler’s calls for periods of time when she was in Park City, having bought into the idea that Tyler had gone too far. “It was like groupthink,” Michelle recalled, pointing to the psychological phenomenon common in cults that drives people to desire conformity within a group. “It was the only explanation.

“In the months after Tony’s death, the family largely kept quiet. Only one statement, from Richard, was released shortly after Tony’s passing: “We are so deeply grateful for the outpouring of love and respect shown in the wake of Tony’s passing. There is no human that did not fall in love with Tony’s humanity, which is why so many have been left heartbroken.”

“The family laid bare Tony’s struggles and demons well before 2020. “Despite his professional successes, Tony struggled with significant social anxiety,” the family wrote in the filing. “Tony’s mind moved at an incredible speed and Tony described using alcohol as a social lubricant to alleviate his social anxiety and to allow him to better communicate and make deeper connections to the people around him.” The family revealed that Tony had prescriptions for Adderall (to treat attention deficit hyperactivity disorder), Xanax (to treat anxiety and panic disorders), and Ambien (to treat insomnia). The Hsiehs also stated that Tony suffered from depression.”

“Tony considered himself a builder—of companies, experiences, and communities. With these building blocks, he thought, he could build his way to happiness—that this ephemeral state of mind was an end output that could be achieved with only a source code. In the end, he kept acquiring and building until eventually, he had everything in the world—and it still wasn’t enough. Herein lies the tragedy of this story. Because for all those whose lives he touched—from Canady Hall A in Harvard to those who followed him for two decades at Zappos, and all the strangers in between—they could agree on one thing: Tony Hsieh was more than enough.”

“Dedicated to a true visionary and champion of Downtown Las Vegas, Tony Hsieh. This corner of the Parlour Bar was a favorite meeting spot for Tony and his Zappos and Downtown Project teams for many years. The power outlet below was installed to help power their smart devices as big ideas were hatched and big deals were made.”

 

 

 

 

 

 

 

 

 

 

 

 

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