Delivering Happiness

After carefully considering the choices, I have decided not to switch
to any of the alternate packages offered. However, I recognize that
Zappos wants (needs?) to trim back on spending, so I have a counter
offer. The main thing I am interested in right now is expanding my
personal time. I’d be willing to take a 20% pay cut in exchange for
one extra day per week off.
As things started to look more and more bleak, some people decided to
leave the company. Most employees didn’t have any savings, so taking a
big pay cut or working for free meant that they wouldn’t able to pay their
rent, so we racked our brains trying to come up with more creative
solutions.
The party loft I had was actually empty now that Zappos had moved into
the incubator offices, so I put five beds in 810 (formerly Club BIO) and
started housing employees there without charging them rent.

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I also owned three other lofts in the building and housed some incubator
and Zappos employees (including Nick) in there as well, and also let them
live there without charging rent. Of the people remaining, we lived by an
“all-for-one, one-for-all” credo and did everything we could to keep the
company afloat.
Everyone remaining stepped up and worked harder than before, and we
were pleasantly surprised to find that the layoffs actually didn’t hurt the
company’s productivity. We realized that we had laid off the
underperformers and the nonbelievers, but because everyone remaining was
so passionate about the company and believed in what we were doing, we
could still accomplish just as much work as we had before.
It was a big lesson in the power of instilling passion throughout the
entire company and working as a unified team. Everyone was making
sacrifices.
But it still wasn’t enough to get us to profitability.
I continued to put some of my own personal cash into the company
every few months, but I knew it wasn’t sustainable. The company was still
losing too much cash every month.
As the money in my personal bank account started dwindling away, I
began selling the real estate that I owned so that I could put the proceeds
from each sale back into Zappos. I eventually ended up selling every
property I had bought except for the one I lived in and the party loft. I had
wanted to sell the party loft, but the economy was so bad that there simply
were no interested buyers.
On top of that, the restaurant that my parents were running was not
meeting its sales projections, in part due to the economy and in part because
none of us had any restaurant experience.
The situation was dire. Everything I was involved in was running out of
money, including the restaurant, the incubator, Zappos, and myself
personally.
The only backup plan I had for myself personally was the thought that,
whenever the economy would eventually turn around, I would be able to
sell the party loft and convert that to cash. That would be my cushion and
safety net, although I had no idea when the economy would eventually turn
around or how long it would take to sell a loft like that.

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Nick, Fred, and I looked at other areas in the business where we could
try to cut expenses. Even though it would hurt our growth, we decided to
cut most of our marketing expenses, and refocused our efforts on trying to
get the customers who had already bought from us to purchase again and
more frequently. Little did we know that this was actually a blessing in
disguise, as it forced us to focus more on delivering better customer service.
In 2003, we would decide to make customer service the focus of the
company.
Even so, at the time, our number one priority wasn’t customer service. It
was simply survival.
The need to survive and figure things out had an unanticipated
consequence. It brought all of us closer together because we all shared the
same goal of not going out of business. Even though we were going through
some tough times, we were going through everything together, and we were
all fiercely passionate about what we were doing. We had all made
sacrifices in our own way because we all believed in the potential and
future of the company.
Without realizing it, Zappos had become my new tribe.