Barron's Magazine's Top Advisory Teams Summit_July 17, 2013

ZAPPOS.COMDELIVERING HAPPINESSDOWNTOWN PROJECT

Downtown Project

CollisionsCommunityCo-Learning

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A Little About Me (Tony)

• 1994-1995: Pizza business in college

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A Little About Me (Tony)

• 1994-1995: Pizza business in college

• 1996-1998: LinkExchange (online advertising)Sold to Microsoft for $265 million

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A Little About Me (Tony)

• 1994-1995: Pizza business in college

• 1996-1998: LinkExchange (online advertising)Sold to Microsoft for $265 million

• 1999: Venture Frogs (investment fund) - Invested in Zappos.com, Inc.

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A Little About Me (Tony)

• 1994-1995: Pizza business in college

• 1996-1998: LinkExchange (online advertising)Sold to Microsoft for $265 million

• 1999: Venture Frogs (investment fund) - Invested in Zappos.com, Inc.

• 1999-Today: Zappos.com, Inc.

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A Little About Me (Tony)

• 1994-1995: Pizza business in college

• 1996-1998: LinkExchange (online advertising)Sold to Microsoft for $265 million

• 1999: Venture Frogs (investment fund) - Invested in Zappos.com, Inc.

• 1999-Today: Zappos.com, Inc.

• 2009: Amazon acquires Zappos for $1.2 billion

• 2010: NYT bestseller Delivering Happiness published

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The Power of WOW

‘01 ‘02 ‘06‘03 ‘04 ‘05 ‘07‘00 ‘08

Gro

ss S

ale

s $M

M

$1,000

800

600

400

200

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Customer Experience What do customers expect?

What do customers actually experience?

What emotions do customers feel?

What stories do they tell their friends?

How can culture create more stories and memories?

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the #1 priority

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the #1 priorityCULTURE

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the #1 priorityCULTURE

4 weeks of training

Culture book

$4000 offer

Hiring for culture

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Clothing, Customer Service, Culture

Customer Service

Clothing

Culture

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Clothing

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Customer Service

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Culture

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Clothing, Customer Service, Culture

Customer Service

Clothing

Culture

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Delivering Happiness(customers and employees)

“People will forget what you said.People will forget what you did.

But people will never forget how you made them feel.”

-Maya Angelou

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Building Great

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Ingredient #1

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CULTURE“Committable Core Values”

Don’t make your core values just a meaningless plaque on the wall…

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Example: Core Values

1. Deliver WOW Through Service2. Embrace and Drive Change3. Create Fun and a Little Weirdness4. Be Adventurous, Creative, and Open-Minded5. Pursue Growth and Learning6. Build Open and Honest Relationships With Communication7. Build a Positive Team and Family Spirit8. Do More with Less9. Be Passionate and Determined10. Be Humble

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COMMIT TO TRANSPARENCY

“Be real and you have nothing to fear”

Your culture is your brand

Don’t try to be someone you are not

Parades at Zappos…

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“That’s great…

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“That’s great…but it would

never work at my company…”

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ALIGNMENTIt doesn’t matter what your

core values are…as long as you

commit to them.

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Ingredient #2

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VISION

“Whatever you’re thinking, think bigger.”

Does the vision have meaning?

Chase the vision, not the money…

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VISION

“Don’t chase the paper, chase the dream.”

Sean Combs aka “Puff Daddy” to rapperBiggie Smalls aka “Notorious B.I.G.”

in Notorious

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ENTREPRENEURS:

“What would you be passionate about doing for 10 years even if you never made a dime?”

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EMPLOYEES:

What’s the larger vision and greater purpose in

their work beyond money or profits?

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MOTIVATION

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MOTIVATIONvs.

INSPIRATION

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Vision & Cultureinspire

Passion & Purpose

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Evolving vision and brand at Zappos.com

1999 Selection

2003 Customer Service

2005 Culture and core values as our platform

2007 Personal Emotional Connection

2009 Delivering Happiness

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Questions Where does the story begin?

Where does the story end?

How do you reinforce the good memories?

What were the emotions, positive and negative?

How can you create more stories and memories?

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What’s your business? You’re not in the _______ business.

Cirque du Soleil is not in the circus business.

You’re in the experience and emotions business.

You’re in the stories and memories business.

Think bigger.

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Delivering Happiness - What’s Next?

Clothing

Customer Service

Company Culture

“a great brand is… ______”

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Zappos.com

http://media.glassdoor.com/m/7b/2c/00/f6/entrance-to-the-zappos-com-headquarter-office-in-henderson-nv-photo-by.jpg

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Las Vegas City Hall

http://brandonwiegand.com/wp-content/uploads/2010/11/Zappos-City-Hall.jpg

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Nike

http://standardatl.com/home/wp-content/uploads/2010/07/Nike_Campus_Tour_01.jpg

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Google

http://static.panoramio.com/photos/original/400729.jpg

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Apple

http://www.techzek.com/wp-content/uploads/2011/09/apple_campus-1.jpg

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Doggy Day Care

http://www.adogsdayout.com/Pix_Overhead_View_ADDO_7-31-08.JPG

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NYU Campus

http://www.adogsdayout.com/Pix_Overhead_View_ADDO_7-31-08.JPG

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Downtown Vegas - Fremont East

http://www.eatinglv.com/wordpress/wp-content/gallery/odettedowntown/chinatown-038-large.jpg

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Downtown Vegas - Fremont East

http://www.lucyvegas.com/sites/default/files/griffin5.jpg

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Downtown Vegas - Fremont East

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Downtown Vegas - Fremont East

http://roadjournals.viamagazine.com/wp-content/uploads/2011/05/The-Beat-Coffeehouse.jpg

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DOWNTOWN PROJECT - $350M

$ 50M – Small businesses

$ 50M – Tech Startups

$ 50M – Education, Arts, Culture

$200M – Real Estate

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DOWNTOWN PROJECT GOALS

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DOWNTOWN PROJECT GOALS

Live/Work/Play – Walking Distance

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DOWNTOWN PROJECT GOALS

Live/Work/Play – Walking Distance

The Most Community-Focused Large City in the World

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DOWNTOWN PROJECT GOALS

Live/Work/Play – Walking Distance

The Most Community-Focused Large City in the World

The Co-Learning and Co-working Capital of the World

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ROI vs. ROC

Instead of maximizing short-term ROI (Return On Investment)…

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ROI vs. ROC

Instead of maximizing short-term ROI (Return On Investment)…

We focus on maximizing long-term ROC

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ROI vs. ROC

Instead of maximizing short-term ROI (Return On Investment)…

We focus on maximizing long-term ROC (Return On Community)

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ROI vs. ROC and ROL

Instead of maximizing short-term ROI (Return On Investment)…

We focus on maximizing long-term ROC (Return On Community)and institutionalizing ROL

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ROI vs. ROC and ROL

Instead of maximizing short-term ROI (Return On Investment)…

We focus on maximizing long-term ROC (Return On Community)and institutionalizing ROL(Return On Luck) – Accelerating Serendipity

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THE BIG BET

Accelerating Collisions, Community, and Co-Learning

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THE BIG BET

Accelerating Collisions, Community, and Co-Learning

…will lead to…

Happiness, Luckiness,Innovation, and Productivity

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DOWNTOWN PROJECT - $350M

$ 50M – Small businesses

$ 50M – Tech Startups

$ 50M – Education, Arts, Culture

$200M – Real Estate

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$50M – Small Businesses

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$50M – Small Businesses

Criteria

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$50M – Small Businesses

Criteria Owner Operated - Passionate

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$50M – Small Businesses

Criteria Owner Operated - Passionate Helps Build Community

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$50M – Small Businesses

Criteria Owner Operated - Passionate Helps Build Community Execution Ability

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$50M – Small Businesses

Criteria Owner Operated - Passionate Helps Build Community Execution Ability Sustainable

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$50M – Small Businesses

Criteria Owner Operated - Passionate Helps Build Community Execution Ability Sustainable Unique or First or Best at

Something

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$50M – Small Businesses

Criteria Owner Operated - Passionate Helps Build Community Execution Ability Sustainable Unique or First or Best at

Something Story-worthy

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Natalie

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Natalie

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Natalie

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Natalie

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Natalie

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Natalie

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Check Cashing

http://www.vegaschatter.com/files/100501/checks_cashed..jpg

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Check Cashing

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Sarah

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Sarah

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Sarah

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Shipping Containers

http://images03.olx.com/ui/8/84/18/1280992807_108377618_4-cargo-containers-40ft-20-ft-For-Sale.jpg

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Shipping Containers

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Shipping Container Park

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Shipping Container Park

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Shipping Container Park

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Shipping Container Park

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Bike Sharing

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$50M – Tech Startups

http://img-s.foursquare.com/pix/EN1ZIL0JC5HTCZYD0PW41SWQYJHURTD204ZFZYBFGPM3F5JS.jpg

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$50M – Tech Startups

http://timenerdworld.files.wordpress.com/2011/12/romotivefinal.jpg?w=576

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The City as a Startup

http://bostinno.com/wp-content/uploads/2011/10/startup-sign.png

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$50M – Startups

http://www.shebytes.com/wp-content/uploads/2011/12/venture-for-america-12-12-11.jpg

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$50M – Education, Arts, Culture

http://blogs.middlebury.edu/internship/files/2011/01/teach4America1.jpg

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$50M – Education, Arts, Culture

http://blogs.middlebury.edu/internship/files/2011/01/teach4America1.jpg

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$50M – Education, Arts, Culture

http://blogs.middlebury.edu/internship/files/2011/01/teach4America1.jpg

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$50M – Education, Arts, Culture

http://blogs.middlebury.edu/internship/files/2011/01/teach4America1.jpg

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$50M – Education, Arts, Culture

http://www.vegasnews.com/wp-content/uploads/3_2_12_burn_vegas_kabik-131-9-588.jpg

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$50M – Education, Arts, Culture

http://mikerossart.net/images/mikeross_enter.jpg

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$50M – Education, Arts, Culture

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$200M – Real Estate

http://ecx.images-amazon.com/images/I/510Ph%2BqMw-L.jpg

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WHEN CITIES DOUBLE IN SIZE…

Productivity and innovation per resident increases by 15%

(But not true for companies)

Accelerate serendipity -> Accelerate learning -> Accelerate productivity and innovation

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3 INGREDIENTS FOR SERENDIPITY

1. Residential density of 100 residents/acre

2. Street-level activity for residents to collide

3. Culture of openness, collaboration, creativity, and optimism

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HOW TO ACCELERATE LEARNING & INNOVATION

Maximize serendipitous interactions

Density in the office

Density in the city

Collisions vs. convenience

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Las Vegas City Hall

http://brandonwiegand.com/wp-content/uploads/2010/11/Zappos-City-Hall.jpg

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DIFFERENT GROUPS COLLIDING

1. 2000 Zappos employees2. 1000 Teach For America corp members

and alumni3. Tech Startup Community4. Small Business Community5. Art and Music Communities6. Other Passion Communities7. Local Residents

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LEARNING FROM ZAPPOS & COWORKING…

Culture is to a Company

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LEARNING FROM ZAPPOS & COWORKING…

Culture is to a Companyas

Community is to a City

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LEARNING FROM ZAPPOS & COWORKING…

Culture is to a Companyas

Community is to a CityValues

InnovationSerendipity

ParticipationUpward Mobility

Attracting Startups and the Creative Class

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Our Secret Weapon

http://static3.vipasuite.com/resources/dyn/images/459355w783h429s185b/_fn/ogden-3.jpg

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LEARNING FROM TED, SUMMIT SERIES, SXSW, BIF…

Curated ContentSerendipity

LearningConnectionsCommunity

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Downtown Vegas Every Day

Curated ContentSerendipity

LearningConnectionsCommunity

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Fremont St. & Las Vegas Blvd.

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Fremont St. & Las Vegas Blvd.

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Fremont St. & Las Vegas Blvd.

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Fremont St. & Las Vegas Blvd.

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Fremont St. & Las Vegas Blvd.

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Fremont St. & Las Vegas Blvd.

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Fremont St. & Las Vegas Blvd.

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Fremont St. & Las Vegas Blvd.

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Fremont St. & Las Vegas Blvd.

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Fremont St. & Las Vegas Blvd.

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Downtown Vegas Monthly Cadence

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Downtown Vegas Monthly Cadence

Week 1 – First Friday Week

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Downtown Vegas Monthly Cadence

Week 1 – First Friday WeekWeek 2 – Tech Week

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Downtown Vegas Monthly Cadence

Week 1 – First Friday WeekWeek 2 – Tech Week

Week 3 – Fashion Week

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Downtown Vegas Monthly Cadence

Week 1 – First Friday WeekWeek 2 – Tech Week

Week 3 – Fashion WeekWeek 4 – Catalyst Week

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Fashion Incubator – Stitch Factory

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Fashion Incubator – Stitch Factory

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Return On Collisions (ROC)

What is the value of a resident that is out and about in the community?

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Return On Collisions (ROC)

What is the value of a resident that is out and about in the community?

3-4 hours/day

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Return On Collisions (ROC)

What is the value of a resident that is out and about in the community?

3-4 hours/dayx 7 days/week

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Return On Collisions (ROC)

What is the value of a resident that is out and about in the community?

3-4 hours/dayx 7 days/week

x 40 weeks/year

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Return On Collisions (ROC)

What is the value of a resident that is out and about in the community?

3-4 hours/dayx 7 days/week

x 40 weeks/year= 1000 “collisionable” hours/year

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Jake – Flint and Tinder

http://images.fastcompany.com/upload/inline-Made-In-The-USA-Flint-And-Tinder-Undies-And-You-Will-Love-It-b.jpg

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Jake – Flint and Tinder

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Return On Collisions (ROC)

What is the value of a purposeful visitor that contributes to community?

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Return On Collisions (ROC)

What is the value of a purposeful visitor that contributes to community?

12 hours/day

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Return On Collisions (ROC)

What is the value of a purposeful visitor that contributes to community?

12 hours/dayx 7 days/week

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Return On Collisions (ROC)

What is the value of a purposeful visitor that contributes to community?

12 hours/dayx 7 days/week

x 12 weeks/year

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Return On Collisions (ROC)

What is the value of a purposeful visitor that contributes to community?

12 hours/dayx 7 days/week

x 12 weeks/year= 1000 “collisionable” hours/year

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Return On Collisions (ROC)

“Subscribe” toDowntown Vegas

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Return On Collisions (ROC)

1. 100 residents per acre

2. Street-level activity for residents to collide

3. Culture of openness, collaboration, creativity, and optimism

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Return On Collisions (ROC)

1. 100 residents per acre

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Return On Collisions (ROC)

1. 100,000

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Return On Collisions (ROC)

1. 100,000 “collisionable”

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Return On Collisions (ROC)

1. 100,000 “collisionable” community

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Return On Collisions (ROC)

1. 100,000 “collisionable” community hours

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Return On Collisions (ROC)

1. 100,000 “collisionable” community hours per

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Return On Collisions (ROC)

1. 100,000 “collisionable” community hours per acre

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Return On Collisions (ROC)

1. 100,000 “collisionable” community hours per acre per

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Return On Collisions (ROC)

1. 100,000 “collisionable” community hours per acre per year

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Return On Collisions (ROC)

1. 100,000 “collisionable” community hours per acre per year

2.3 collisionable hours per square foot

per year

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OUR BIG BET… 3 Guiding Principles

Accelerate:1.Collisions2.Community3.Co-Learning

And everything else will fall into place…(productivity, innovation, growth, happiness)

What will people say about downtown?

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ZAPPOS, DELIVERING HAPPINESS, DOWNTOWN PROJECT

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50% of Humans Live in Cities

http://ecx.images-amazon.com/images/I/510Ph%2BqMw-L.jpg

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75% Will Live In Cities in Our Lifetime

http://ecx.images-amazon.com/images/I/510Ph%2BqMw-L.jpg

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The 4-Minute Mile

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The 4-Minute Mile

http://en.wikipedia.org/wiki/File:Iffley_Road_Track,_Oxford_-_blue_plaque.JPG

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www.DowntownProject.comtony@zappos.com

http://langintro.com/lv_dec_2010/pics/0950_emergency_arts_window.jpg

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A great

brand

is a story that never stops unfolding.

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A great

brandcompany

is a story that never stops unfolding.

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A great

brandcompanycity

is a story that never stops unfolding.

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A great

brandcompanycitycommunity

is a story that never stops unfolding.

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Thank you!

For a copy of this presentation:

tony@zappos.com

For more information:

www.DowntownProject.com

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http://www.youtube.com/watch?v=AF4f3l4a4_A