Delivering Happiness

Embrace and Drive Change
Part of being in a growing company is that change is constant. For
some people, especially those who come from bigger companies, the
constant change can be somewhat unsettling at first. If you are not
prepared to deal with constant change, then you probably are not a
good fit for the company.
We must all learn not only to not fear change, but to embrace it
enthusiastically and, perhaps even more important, encourage and
drive it. We must always plan for and be prepared for constant
change.
Although change can and will come from all directions, it’s
important that most of the changes in the company are driven from
the bottom up—from the people who are on the front lines, closer to
the customers and/or issues.
Never accept or be too comfortable with the status quo, because
the companies that get into trouble are historically the ones that
aren’t able to adapt to change and respond quickly enough.
We are ever evolving. If we want to continue to stay ahead of our
competition, we must continually change and keep them guessing.
Others can copy our images, our shipping, and the overall look of our
Web site, but they cannot copy our people, our culture, or our
service. And they will not be able to evolve as fast as we can as long
as embracing constant change is part of our culture.
Ask yourself: How do you plan and prepare for change? Do you
view new challenges optimistically? Do you encourage and drive
change? How do you encourage more change to be driven from the
bottom up?
Are you empowering your direct reports to drive change?
The Power of 1%
Blog post by Alfred L, CFO/COO, January 2009
It was the best of times and it was the worst of times.

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—A Tale of Two Cities, by Charles Dickens
On CNBC Reports 2008, Maria Bartiromo quoted Charles Dickens,
noting that, while Dickens was referring to the French Revolution, he
could have easily been talking about 2008.
No doubt, 2008 was a very challenging year, starting out with a
weak economic and retail environment that degraded slowly in the
first half of the year and then fell off a cliff in the second half of the
year. Depending on what reports you read, online e-commerce was
down 3–5% this holiday season, marking the first time e-commerce
didn’t grow. Reading about these not-so-positive reports just goes to
show how very lucky we are at Zappos, because we were able to ride
through these rocky times and produce pretty incredible results.
No, things weren’t perfect, but 2008 was still a great year for us!
Official results have to wait until our finance team closes the books
and releases the audited financials in early March, but we managed
to grow our business over last year and during the holiday season
(when e-commerce was down), exceeded $1B in gross merchandise
sales. And by Doing More With Less, we kept ourselves profitable
and cash-positive, all the while having a lot of fun serving our
customers!
We can reminisce about 2008, but now that 2009 is here and
we’re back from some much-needed downtime, it’s time to get our
A-game back on. We’ll be going over our goals and “official” plans
as soon as our board approves them, but even before that “officially”
happens, we already know what we need to do.
One thing I encourage you to do is to refer back to our core
values document and make at least one improvement every week that
makes Zappos better. Ideally, we would do this every single day. It
sounds daunting, but remember improvements don’t have to be
dramatic. Think about what it means to improve just 1% per day and
build upon that every single day. Doing so has a dramatic effect and
will make us 37x better, not 365% (3.65x) better, at the end of the
year.
Wake up every day and ask yourself not only what is the 1%
improvement I can change to make Zappos better, but also what is

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the 1% improvement I can change to make myself better personally
and professionally. In the end we, as Zappos, can’t grow unless we,
as individuals, grow too.
Imagine yourself making 1% changes every day that compound
and consequently make you and Zappos 37x better by the end of the
year. Imagine if every employee at Zappos was to do the same.
Imagine how much better you, Zappos, and the world will be next
year.
It won’t be easy and 2009 will no doubt present its own set of
challenges, but we positively will get through it. Have a great and
happy 2009!
PS: This is for the math geeks. If you start out with $100 at the
beginning of the year and you were able to increase what you have
by 1% every single day, at the end of the year, you would have
$3,778.34 = $100 * (1 + 1%) ^ 365. That is 37.78x what you had at
the beginning of the year. Get that 1% every single day!
PPS: Yes, I am a math geek. No, I wasn’t cool enough to join the
football team, so I joined the math team. Thanks for putting up with
me.