Delivering Happiness

The Crimson, our school newspaper, wrote a story about the whole virtual
study group experiment, and I ended up doing fine on the final exam.
I had discovered the power of crowdsourcing.
I
was exposed to a lot of different things for the first time in college.
I joined the movie society, which made money by renting films to be
shown in one of the school auditoriums, and then sold tickets to the
students. I visited a friend’s farm, where I learned how to milk cows during
the day, and wound up getting stitches at night after I fell flat on my chin
while attempting to learn how to ice skate. I’m not sure whether the cow-
milking or the emergency-room stitching was more traumatic.
I won tickets on the local radio station to my first concert and got to see
U2 perform during their Zoo TV tour. I held various jobs during school,
including catering at weddings and bartending, after having completed a
four-hour session at the Harvard Bartending School and earning a certificate
in Mixology. I also held various computer programming jobs, including
working for Harvard Student Agencies, Spinnaker Software, and a summer
internship at Microsoft.
One of the companies I worked for was BBN, which developed the
technology that eventually became the backbone of the Internet. BBN
contracted with different government agencies, so I was required to get a
background check in order for me to obtain Secret status, which was one

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level below Top Secret status. Apparently there were levels of government
secrecy that were so high that even the name of the status was classified.
For most of my work at BBN, I had to go into a large, isolated room
with multiple levels of security, including electronic badges and secret
access codes through different doors. I wasn’t allowed to bring anything
into or out of the room, especially electronic devices or any type of
electronic media or storage.
One summer, I decided to head across the river from Cambridge to
Boston to explore the city. I somehow wandered past the headquarters of
the Boston chapter of the Guardian Angels, a street gang whose mission
was to prevent and fight crime. I ended up becoming a member for a few
months and helped patrol the subway system and back alleys of Boston.
I was given the gang name of “Secret.” At first, I thought it was because
I had mentioned my Secret status with the government, but I learned later
that one of the other gang members had originally wanted to name me
“Ancient Chinese Secret.”
During my junior and senior years in college, I realized that I missed
running my own business, so I took over the Quincy House Grille, which
was an eating area on the ground floor of the Quincy House dorm. Our
dorm housed about three hundred students, and the Quincy House Grille
was a late-night gathering spot for students to play foosball and pinball, and
satisfy their late-night cravings.
One of my roommates, Sanjay, ran the grill with me. We were
responsible for setting the menu and prices, ordering from suppliers, hiring
employees, and occasionally making the food ourselves.
At the time, a city ordinance prevented fast-food establishments from
opening up anywhere near campus, so I decided to take the subway to the
next stop to the nearest McDonald’s. I talked to the manager there and he
sold me a hundred frozen McDonald’s hamburger patties and buns, which I
then loaded into a taxicab and brought back to our dorm. For a couple of
months, this was part of my daily routine. Because there was no other place
on campus to get McDonald’s burgers, I was able to charge $3 for burgers
that cost me $1 to buy.
I eventually got tired of making the daily runs to McDonald’s, so I
decided to see what it would take to turn the grill into a pizza business
instead. I learned that pizzas were very high-margin. A large pizza cost less

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than $2 to make but could be sold for $10 (or more with additional
toppings). And even more money could be made by selling pizzas by the
slice. After some research, I discovered it would cost about $2,000 to invest
in pizza ovens. It seemed like it was worth the risk, so I took a deep breath
and wrote a check for $2,000.
I also wanted to make the grill more of a place where people wanted to
hang out, so I spent many nights recording music videos from MTV onto
videotape, pausing the recording anytime a commercial came on, because
this was the pre-TiVo era. The videos playing in the background turned out
to be a big hit, and combined with the new pizza offering, we ended up
tripling sales at the grill compared with the previous year. The $2,000
investment was recouped within a couple of months.
It was through the pizza business that I met Alfred, who eventually
would join Zappos as our CFO and COO. Alfred was actually my number
one customer, and he stopped by every night to order a large pepperoni
pizza from me.
We had two nicknames for Alfred while in college: “Human Trash
Compactor” and “Monster.” He earned these nicknames because every time
a group of us would go out to a restaurant (usually it was a group of ten of
us at a late-night greasy Chinese place called The Kong), he would literally
finish everyone’s leftovers from their plates. I was just thankful that I
wasn’t one of the roommates he shared his bathroom with.
So to me, it really wasn’t that weird that Alfred would stop by every
night to order an entire pepperoni pizza from me. But sometimes he would
stop by a few hours later and order another large pepperoni pizza. At the
time, I remember thinking to myself, Wow, this boy can eat.
I found out several years later that Alfred was taking the pizzas upstairs
to his roommates, and then selling them off by the slice. So I guess that’s
why we ended up hiring him as our CFO and COO at Zappos.
We ended up doing the math a few years ago and figured out that, while
I made more money from the pizza business than Alfred, he made about ten
times more money per hour than me by arbitraging pizza. (There was also a
lot less risk on his part. The grill was the victim of a burglary one night
where $2,000 was stolen. At the end of the year, I figured I had effectively
made about $2 an hour.)

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I didn’t know it at the time, but our pizza relationship was the seed that
would lead to many million-dollar business opportunities together down the
road.
A
s the end of my senior year in college approached, Sanjay introduced me
to this thing called the World Wide Web. I thought it was a pretty
interesting and fun thing to explore at the time, but I didn’t pay too much
attention to it.
The focus for most seniors, including myself, was trying to get a job
lined up before graduation. A lot of companies from all over the country
and from different industries sent recruiters to the Harvard campus so that
we didn’t need to travel to interview for our future jobs.
Many of our other roommates applied for banking or management
consulting jobs, both of which were considered the “hot” jobs to get. To me,
they both seemed incredibly boring, and I also heard that the workdays
were sixteen hours long.
So Sanjay and I decided to interview mostly with technology companies.
My goal was to find a high-paying job. I didn’t really care what my specific
job function was, what company I worked for, what the culture of the
company was like, or where I ended up living.
I just wanted a job that paid well and didn’t seem like too much work.

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