Zappos CEO Tony Hsieh
By Zack Guzman/ CNBC
Many business leaders have speculated about the perfect recipe for successful entrepreneurship, but for Zappos CEO Tony Hsieh it’s more about creative freedom.
It’s something he learned at an early age when he tried opening a worm farm at 8 years old, and has since relearned over the years, navigating the sale of his shoe company Zappos to Amazon for $1.2 billion in 2009.
“What I love about being an entrepreneur is that it’s really about creativity,” Hsieh told CNBC. “I think people that love being creative, love being handed a bunch of different constraints and then try to figure out what to do with it — those are the are people that [should] want to be entrepreneurs.”
And it’s this creativity that differentiates entrepreneurial thinking from the more traditional reasoning that might be expected from an MBA, Hsieh said, highlighting a metaphor originally laid out by University of Virginia professor Saras Sarasvathy.
“If you look at typical MBAs versus entrepreneurs and asked them to go make some sort of dish … what a typical MBA might do is decide what they want to make, Google it, go find the recipe and then go buy those ingredients and then follow that recipe and make that great dish,” he said.
“What an entrepreneur would do is open up the refrigerator and the cupboards and see what ingredients there are and then cobble together something that’s never been made before. They’re both different approaches to business and there’s value in both, but for me I prefer the second approach because it allows for a lot more creativity.”
Hsieh has no doubt tried to instill this emphasis on creativity into the core of his shoe business at Zappos, where a tenet of company culture is to “create fun and a little weirdness.” Recently, in an attempt to ensure Zappos employees have the same incentive for creativity as entrepreneurs, Hsieh rid his company of direct manager roles and opted to install a self-management system known as Holacracy.
“The idea is every employee is really his or her own mini entrepreneur,” he said. Part of that process is making sure that the company emphasizes the characteristics that Hsieh thinks uniquely set entrepreneurs up for success. Citing one study, which looked at personality attributes that entrepreneurs tend to display more often than average, Hsieh revealed three traits successful entrepreneurs have.
“What they found was that [entrepreneurs] highly over-index for three things:
- “One is being comfortable with ambiguity.
- “Second is a strong sense of curiosity.
- “And third — not as strong as the first two but still over-indexing compared to the general population — is emotional intelligence,” he said.
“Those are things that we now are emphasizing even more as we move toward self-organization and self-management at Zappos,” said Hsieh.