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cover "Happy at any cost"

“The Revolutionary Vision and Fatal Quest of Zappos CEO Tony Hsiesh,” is the subtitle.

This book, however, is a tragedy.

Happy at Any Cost is the story of on undoubted visionary leader; their quest for not just their own happiness, but also for the happiness of others. This in turn leads to a lot of good, a lot of success, but ultimately exploitation, substance abuse, and the death of a beloved figure in the world of business and Las Vegas.

Unlike Aimee Groth’s 2017 book “The Kingdom of Happiness” which I reviewed here, and is an inside look at the Las Vegas “Downtown Project” and by extension Zappos, this is the telling of the story of Tony’s last two years as he struggled with mental illness and substance abuse issues put in the wider context of the rest of his life. This is also a cautionary tale for entrepreneurs and for those who can be swept up in vision without dealing with, or caring to deal with, the nuts-and-bolts details that make visions work.

Employing an interesting dual timeline structure, Ms. Grind and Ms. Sayre present an exhaustively researched, and deeply unnerving, tale of Tony Hsieh’s rise and fall. His rise as a tech entrepreneur at Link Exchange, then becoming CEO of what turned into Zappos, his evangelism for company culture with his book Delivering Happiness, and becoming a leading Las Vegas civic figure with the Downtown Project. His fall with the problems with the Downtown Project, issues with Zappos’s adoption of a new company structure called Holocracy, his move to Park City, Utah, his “retirement” from Zappos, and his struggles with alcohol, drugs, and mental illness. It also tells the story of Tony’s last days up to and including his death after a house fire in Connecticut.

Happy at Any Cost very much frames Tony’s life story as a coping mechanism for mental health issues and has the worthy goal of pointing out that if there was not the social stigma long associated with mental health issues perhaps it would have been easier for those around him to help. It is interesting to note, that a reading of Tony’s book Delivering Happiness, particularly in retrospect, leaves the reader with the feeling that the focus on fun and party atmosphere that permeates the book could easily be a coping mechanism for other issues. Where it perhaps most accurately hits the mark is in its exploration that having happiness as a goal in itself as ultimately self-defeating and that happiness should be a by-product of whatever drives you.

I find Tony a fascinating figure to discuss. Someone with gargantuan visions which he often left others to implement. Sometimes that worked and other times it failed. By definition, someone’s legacy is based on what marks they leave behind. Tony was someone who talked about culture and put culture at the front of their business model when nobody, literally nobody, was talking about company culture. For all its flaws, Tony helped rejuvenate Downtown Las Vegas and make it a vibrant hub of new business. However, Tony unbelievably left no will making the unraveling of his estate a legal nightmare for his family and associates. Given his investments in Las Vegas real estate, and businesses, this is likely to be a story with many subsequent chapters and potential consequences.

“A failure of leadership due to a lack of management” was my conclusion to the story told in “The Kingdom of Happiness.” It is hard not to look at “Happy at Any Cost” and come to the same conclusion.

Tony was someone who was in serious trouble near the end of his life. Many of those around him tried to help, some undoubtedly exacerbated the situation, and some just bought into that this was the vision. This book, in some ways, is a celebration of what Tony was able to achieve, which makes the ultimate tragedy even more real and poignant.

It is a haunting tale of what happens someone creates their own world where they no longer hear the world “no.”  

badblood

Ever get the feeling that the Silicon Valley Startup culture is more con than the pinnacle of new business development? If the answer is yes, or if you are afraid the answer may be yes, then Bad Blood is a book you should read.

Written by the reporter who blew the lid on the Theranos scandal in the Wall Street Journal, when they were still considered the darlings of the healthcare startup world, it is a remarkable story. If it was fiction, the story would have been laughed out of the editor’s office or thrown in the trash. It is a story of just how far networking and connections can get a company when they have a product that has really never worked. Of how the best, and the brightest, can be so intent on finding the next great thing, and of not missing out, that they will overlook almost anything.

But at its heart, Bad Blood is a story about rules and ethics. About how some people break rules and other refuse to. How some discover their own ethical lines, and how others see those same lines and cross them anyway without a second thought.
For those who do not know, Theranos claimed to have developed a spectacular new blood testing technology that only required a tiny finger prick of blood to be able to run hundreds of lab tests. They raised millions in investments but we never really able to get their technology to work properly; if at all. It is claimed that Theranos repeated lied to investors, business partners, and employees. They are, and continue to be, at the center of a number of private lawsuits and criminal prosecutions.

As with any book about a still emerging scandal, it does suffer from being a little out of date. Since the book’s publication, the two central characters; Founder and CEO of Theranos Elizabeth Homles, and President Sunny Balwani were both prosecuted by the SEC. The charges were resolved by a complicated agreement with regards to company ownership and a fine; however, in June of 2018 they were both indicted on wire fraud and conspiracy charges by the Northern District of California.

It is obvious from the writing that there is no love lost between Mr. Carreyrou and his subjects; Ms. Holmes and Mr. Balwani. But this is a minor quibble and, to be honest, quite understandable given the levels to which they pushed back against his reporting.
It is an extraordinary tale for any one in business that raises an interesting question. How does a competitor prepare for, and compete, with a disruptive new technology that does not actually exist? The real victims of the Theranos scandal may not be the investors and employees, but competitors who undoubtedly spent millions, and hundreds of R&D hours, chasing a technology that so far has not worked. Not to mention the consumers waiting for better blood tests while the industry chased its tail searching for Theranos’ secret.

Of course, Bad Blood is also a cautionary tale about the cult of personality that surrounds many entrepreneurs today. It is a book filled with larger than life personalities, chasing larger than life dreams, that leads to larger than life crimes.

Here is a Silicon Valley worthy investment tip: the movie rights should be worth millions.

(Clicking on the image above will take you to Amazon where a tiny percentage goes to help my movie and book buying habit.)

 

 Zappos, Tony Hsieh, and the Downtown Project are controversial subjects in some quarters of Las Vegas – although I have always been a supporter. In my opinion, it is hard to not give credit to Mr. Hsieh for having the courage, faith, and energy, to move his company and sink millions into the depressed center of Las Vegas, a city I love living in and call home.

That makes Aimee Groth’s tell all book about living inside, or at least partially inside, the bubble of Tony Hsieh’s circle throughout the first five years of the Downtown Project all the more difficult, and fascinating to read. With Ms. Groth becoming part, if not the driving force, of the narrative this is very much a piece of Gonzo journalism which gives some first person perspective to the stresses and confusion that many in the story recall.

To give some background, Tony Hsieh is the CEO of Zappos, an online shoe retailer which is owned by Amazon. In 2013, Zappos moved its headquarters into the former city hall building of Downtown Las Vegas. Downtown Las Vegas, and in particular the area east of Las Vegas Boulevard, had been a rundown collection of tattoo parlors, pawn shops, seedy bars, and ultra-cheap motels. With the result, it had all the problems of a depressed city center, with homelessness, prostitution, and drug dealing on most street corners. With Zappos’s move to Downtown, Mr. Hsieh created the “Downtown Project” with $350 million of his own money. Almost half the money was earmarked for the purchasing of real-estate with the rest to be invested in businesses and startups centered in Downtown Las Vegas. The stated goals of the Downtown Project was not only the creation of a new business and a technology startup environment, but to make Downtown a place with a thriving innovation culture.

The story follows Ms. Groth’s intial conversations with Mr. Hsieh and other invited guests to the Downtown Project, through partying and becoming part of Mr. Hsiehs entourage, the first cracks appearing in the startup culture, to the major reorganization of the Downtown Project, and the internal strife at Zappos due to the move downtown and Holacracy. Holacracy is a new management system and communication tool that was adopted by Zappos. I reviewed Brian J. Robertson’s book on Holacracy here.

However, the main thrust of “The Kingdom of Happiness” is on Mr. Hsieh’s, and those around him’s, response to these events and to their motives in the first place. As the story is told there is almost a willful lack of support, and management, given to the early entrepreneurs, lured to Las Vegas with promises of financing to follow their dreams and the expectation of mentoring. With the result that many were essentially setup to fail, or at the very least felt that way.

“…the young entrepreneurs who didn’t naturally seek out assistance or know how to navigate an ecosystem like this were left to fend for themselves.” – From The Kingdom of Happiness.

There is also a darker undercurrent that flows through the book, and that is the potential conflict of interest in the due roles of the Downtown Project as both landlord and investor to various new and startup businesses. At one point in the book an entrepreneur wonders at the oddness of trying to avoid their investor and business partner, because they are also their landlord. There are numerous mentions throughout the book by those in the Downtown Project, that a source of profits for the Downtown Project is the real estate rather than in the businesses they have investments in. An uncharitable reading might question the ethics, or morality, of this arrangement.

 What I feel is the main takeaway from the book, and makes it of particular interest to business people,  is the balance between Vision, Leadership, and Management, and how this seems to have gone awry at both Zappos and the Downtown Project. At one point Mr. Hsieh snaps at Ms. Groth that he is not a leader but a visionary and it is hard to argue with him. But if Mr. Hsieh is not leading then who is?

The move to Holacracy, a system that dispenses with traditional management structures, through the lens of Ms. Groth’s book, seems to be an imperfect answer to some difficult questions. There has been plenty of vision at Downtown Project and Zappos. There is also some merit in the argument that there has also been leadership at Zappos (you don’t undertake something like Holacracy without leadership pointing the way). But the cult of personality surrounding Mr. Tsieh, and Zappos’s focus on its non- traditional internal culture, maybe filling in for actual leadership.

What is clear, particularly at the Downtown Project, is that there has been a failure of leadership through a lack of management. In a drive to be different, focus on making things “happen,” and create a self-sustaining entrepreneurial culture, the basic structures and support networks have never been put in place that would seem to be a prerequisite for this type of project.

I, for one, am a supporter of the Downtown Project and Zappos – particularly for Zappos’s focus on internal culture. One only has to walk through downtown to see the enormous impact that Downtown Project and Zappos have had. However, there have been significant costs, and without examining the issues that The Kingdom of Happiness raises we are doomed to repeat them. In business, but particularly in the startup culture, there is a focus on leadership to the expense of everything else and an almost dismissal of management. What the story that Ms. Groth tells us is that visionaries abandon management at their peril and that leadership, while the key ingredient in all successful companies, cannot survive without good management.

 

(Clicking on the image above will take you to Amazon where a tiny percentage goes to help fund my book buying habit.)

 

If you live in Las Vegas…Check!

Have an interest in management and business issues… Check!

And know a number of people in the Downtown / Zappos / entrepreneur community… Check!

Then you can’t help but have heard of Holacracy.

Normally the tones of conversations about Holacracy, and in particular of Zappos’s ’embrace it or leave’ offer to their staff, mix wonder and an unbelieving shake of the head normally reserved for parents of teenagers. This new book by Brian J. Robertson aims to change all that.

The funny thing is that it actually does a pretty good job.

The first real hint that there is more here than just a new business book, is in that the author has been involved in Lean software development and it is almost a throwaway comment- which is unfortunate. Lean is becoming a highly respected way of changing how companies work (please see my review of Lean Hospitals for a better explanation) and there are some interesting commonalities that someone, better versed in both than myself, needs to explore.

At its core, Holacracy is the deconstruction of work into roles, accountabilities, domains, and polices and giving employees the freedom, and the structure, to make modifications when “tensions” arise without the formal structure of supervisors and management. Interestingly, a lot of the housekeeping of Holacracy is in preserving the integrity of the process rather than the comfort of the employees. “It is difficult to hide from empowerment when the organizational process around you continually shines a light on your hiding place.”

Of course, if you are looking for things to turn you off such as parody worthy jargon; “In Tactical Meetings circle members use a fast-paced forum to deal with their ongoing operations, synchronize team members, and triage any difficulties that are preventing progress.” then you will find it. However, it is worth embracing one of the key conceits of the author when describing the adoption or even understanding of a system such as Holacracy: The rules of any game fade into the background when everyone knows what they are doing and how they should do it. It is only when someone breaks the rules, or does not know them well enough, that the rules come into sharp relief.

For those of us who are constantly looking to upgrade our management tool box, there is a lot you will recognize from other areas and other ideas what are worth re-purposing if a complete adoption of Holacracy is never even on your mind. The structured checkins at the beginning of meetings, for example, I am already planning on adopting along with the book’s strategy definition.

Of course, a book of this length (it is a short 200 pages that I read in a morning) can be nothing more than a appetizer or introduction to the world of Holacracy. I would have liked to have seen a few more diagrams and a decent FAQ section: The idea that the CEO of a company unadopt Holacracy at any time but is not above the rules is great to know; but would have been nicer to hear on page 10 rather than page 152!

My main criticism of the book, however, is in the field of Human Resources. What does the disciplinary process look like in a Holacracy? What does termination look like? How does that jive with legal and privacy issues? There is mention of compensation models, but these are brief and experimental at best.

There is something really interesting going on here with Holacracy and it deserves a more positive press that it currently seems to be receiving; hopefully this book will help change that.

But it is not a panacea – at least not yet.

But is is worth your time to find out why!

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