Designing an Organisational Culture: Tony Hsieh Wrapping Zappos' Organisational Culture?


Themes: Organizational Behaviour
Pub Date : 2009
Countries : Global
Industry : Not Applicable

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Case Code : OB0026
Case Length : 12 Pages
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Designing an Organisational Culture: Tony Hsieh
Wrapping Zappos' Organisational Culture?


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Designing an Organisational Culture: Tony Hsieh Wrapping Zappos'; Organisational Culture?


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At 23, Tony graduated in computer sciences from Harvard University. On completion of his graduation, he began working as a software engineer with Oracle in 1995.5 However, being a person who believes in having fun at work, Tony soon began hating the job, which was neither creative nor fun. He thought it was instead more fun to see a business develop right from scratch and watch it grow. As at that time, starting a new venture did not even seem risky to him, in 1996, he quit Oracle and decided to start an online advertising network called Link Exchange. Tony explains, “My job at Oracle didn't allow me to be entrepreneurial enough. I wanted to do something on my own, so my roommate and I started Link Exchange. Job satisfaction is much more important than money. I've always been, to some extent, entrepreneurial. I think because my parents were more conservative, I learned early on that it takes a lot more than just a good idea for a business to be successful and that there is always a lot to learn”6

Life at Link Exchange

Along with his fellow graduate from Harvard University, Sanjay Madan, Tony founded Link Exchange when he was 24 years old. A combination of websites, Link Exchange provided free advertising assistance to thousands of other member websites in its network. It offered free advertising services to all small websites, through a unique model. For every single ad promotion of Link Exchange on any of its member websites, the latter could display twice the number of ads on Link Exchange. Since, Link Exchange had a huge stock of fresh, unused ads; it made money by selling all those additional ads to other sites like and American Express.7 Link Exchange had become a huge hit, catching the attention of more than 200,000 member sites, by the end of 1997.8 Apart from offering websites and broad visibility, Link Exchange also provided information on the number of visits made and the number of click-throughs' received by any of the member websites.

By 1998, Link Exchange had grown from a small business in Tony's residence to a company worth million dollars. By the time Link Exchange reached its peak it was covering more than a half of internet-connected houses, every month. More than 10% of all the existing websites belonged to Link Exchange and it showed more than five million ads a day.9 According to Media Metrix research group, an internet statistics tracking company, its collective sites were seen by more number of web surfers than any other website, exceptions being Yahoo! and America Online. However, in spite of its success, by then Tony started hating going to the company.

Initially, when Link Exchange was established, Tony worked with five employees.10 They worked non-stop, round the clock, sleeping under the desks, not even knowing what day of the week it was. Tony recollected, “When we first started it was a lot of fun.”11 However, as the strength of the company grew to 100, people were hired more on skill set rather than cultural fit.12 Tony mentioned “The culture at Link Exchange definitely changed over time. I don't think anyone at Link Exchange ever thought that (company culture is extremely important) including me.”13

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5]Gracias Steve, “Button-making, internet advertiser, shoe entrepreneur, Zappos CEO, Tony Hsieh”, http://, December 30th 2008
6]"Interview conducted with Tony Hsieh by Sravanthi Vemulavada and Priti Krishnan”, op.cit.,
7] Freierman Shelley, “THE MEDIA BUSINESS: ADVERTISING; An Internet company with little freebies that could gains a place in the sun,” that-could.html?n=Top/News/Business/Companies/Microsoft%20Corporation, December 2nd 1998
8] “Button-making, internet advertiser, shoe entrepreneur, Zappos CEO, Tony Hsieh”, op.cit.
9] “LinkExchange: King of Niche and Reach”,
10] Kelley Braden, “BiF-4 Insights – Tony Hsieh –”,, October 27th 2008
11] “Tony Hsieh speaks at Yanik Silver's Underground Seminar 4”,
12] “BiF-4 Insights – Tony Hsieh –”, op.cit.
13] “Interview conducted with Tony Hsieh by Sravanthi Vemulavada and Priti Krishnan”, op.cit.