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The reason LinkExhange sold to Microsoft was because of the company culture, according to Hsieh. After LinkExhange, Hsieh was an investor in Zappos, and two months after the founding of Zappos, Hsieh came in as the CEO. Zappos started in 1999 with no sales, and last year in 2008, had over $1 billion in gross sales. Hsieh mentioned that the biggest source of revenue for Zappos is word of mouth, as well as repeat sales.

Zappos is best known for their customer service. When Zappos started out, there was no company culture. In 2003, Zappos decided that they needed to differentiate themselves from all the other companies, and chose customer service. Zappos now follows the 3 C’s; Clothing, Customer Server and Culture.

Now, in 2009, Zappos is all about delivering happiness, both for employees and customers. What makes Zappos so great, among other things, is their policy on returns. If something doesn’t fit, or you want it returned, Zappos gives the customer 365 days to return the item. Decisions like these have powered Zappos to the top in company culture.

Hsieh talked about the Zappos hiring process — each time Zappos interviews a candidate, Zappos sends a shuttle to the airport to pick up the interviewee. The shuttle driver then will tell the recruiting team what happened in the shuttle so that Zappos can get a better understanding of the interviewee.

Zappos has 10 core vallues that each employee must meet in order to work at Zappos. All 10 of these core values are talked about during the interview process as well. Hsieh mentioned that if employees don’t have the right company culture, they won’t be welcomed in the Zappos culture, so they make sure they hire employees with the right company culture.

In July 2009, Amazon announced their intention to acquired Zappos, which is still waiting for government approval.