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		<title>Fashion &amp; beauty startup Zalora scores $100M investment to grow in Southeast Asia</title>
		<link>http://venturebeat.com/2013/05/22/fashion-beauty-startup-zalora-scores-100m-investment-to-grow-in-south-east-asia/</link>
		<comments>http://venturebeat.com/2013/05/22/fashion-beauty-startup-zalora-scores-100m-investment-to-grow-in-south-east-asia/#comments</comments>
		<pubDate>Wed, 22 May 2013 15:58:49 +0000</pubDate>
		<dc:creator>John Koetsier</dc:creator>
				<category><![CDATA[Business]]></category>
		<category><![CDATA[Deals]]></category>
		<category><![CDATA[Entrepreneur]]></category>
		<category><![CDATA[Lifestyle]]></category>
		<category><![CDATA[Mobile]]></category>
		<category><![CDATA[Asia]]></category>
		<category><![CDATA[beauty]]></category>
		<category><![CDATA[Brunei]]></category>
		<category><![CDATA[fashion]]></category>
		<category><![CDATA[featured]]></category>
		<category><![CDATA[Hong Kong]]></category>
		<category><![CDATA[Indonesia]]></category>
		<category><![CDATA[m-commerce]]></category>
		<category><![CDATA[malaysia]]></category>
		<category><![CDATA[mobile commerce]]></category>
		<category><![CDATA[Samwer brothers]]></category>
		<category><![CDATA[Singapore]]></category>
		<category><![CDATA[South-East Asia]]></category>
		<category><![CDATA[Taiwan]]></category>
		<category><![CDATA[Thailand]]></category>
		<category><![CDATA[the Philippines]]></category>
		<category><![CDATA[Vietnam]]></category>
		<category><![CDATA[Zalora]]></category>
		<category><![CDATA[zappos]]></category>

		<guid isPermaLink="false">http://venturebeat.com/?p=742612</guid>
		<description><![CDATA[<p>It is indeed an honor when a year-old startup with two or three million dollars in annualized revenue scores a $100 million investment. An unusual honor, as well. But there's method behind the&#160;madness.</p>
<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=venturebeat.com&#038;blog=342986&#038;post=742612&#038;subd=venturebeat&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
				<content:encoded><![CDATA[<p><a href="http://venturebeat.files.wordpress.com/2013/05/fashion-beauty.jpg" target="_blank"><img class="aligncenter size-full wp-image-742642" alt="fashion-beauty" src="http://venturebeat.files.wordpress.com/2013/05/fashion-beauty.jpg?w=655&#038;h=509" width="655" height="509" /></a><a href="http://www.zalora.com" target="_blank">Zalora</a>, the Zappos-like fashion and beauty store for Southeast Asia, announced this morning that it has closed a $100 million financing round.</p>
<p>That&#8217;s a lot of lipstick and high heels.</p>
<p>Zalora focuses on 10 countries in Asia: Singapore, Indonesia, Malaysia, Brunei, the Philippines, Thailand, Vietnam, Taiwan, and Hong Kong. The year-old startup says it has already achieved &#8220;annualized double-digit million USD revenues.&#8221;</p>
<p>“Our company is one of the fastest growing e-commerce companies in Southeast Asia and has bright prospects,&#8221; said managing director Michele Ferrario. &#8220;It is an honor for us that investors of such great repute have invested into an e-commerce company as young as Zalora&#8221;</p>
<p><a href="http://venturebeat.files.wordpress.com/2013/05/image001-1.jpg" target="_blank"><img class="aligncenter size-full wp-image-742641" alt="zalora" src="http://venturebeat.files.wordpress.com/2013/05/image001-1.jpg?w=556&#038;h=398" width="556" height="398" /></a></p>
<p>It is indeed an honor when a year-old startup with two or three million dollars in annualized revenue scores a $100 million investment. And it&#8217;s an unusual honor as well. But there&#8217;s method behind the madness.</p>
<p>The investment was secured by the German holding company that owns Zalora, Rocket Internet, which claims to be &#8220;the largest, fastest and most successful international online venture builder.&#8221; Founded by the infamous Samwer brothers &#8212; who Jason Calacanis has called &#8220;despicable thieves&#8221; &#8212;  its modus operandi has been to take successful models from American startups and apply them globally.</p>
<p>Genius, perhaps, if not very original. And very, very successful.</p>
<p>Rocket Internet <a href="http://venturebeat.com/2010/05/16/groupon-citydeal/">sold Groupon clone CityDeal to Groupon</a> for $126 million in 2010 and <a href="http://venturebeat.com/2013/04/25/rare-interview-oliver-samwer-explains-how-rocket-has-soared-above-its-copycat-rep/">eBay clone Alando to eBay</a> for $50 million, among many other lucrative deals. That history is undoubtedly part of what led the investment group, led by Summit Partners, Investment AB Kinnevik, and the Verlinvest and Tengelmann Group, to participate in this $100 million round.</p>
<div id="attachment_742650" class="wp-caption aligncenter" style="width: 568px"><a href="http://venturebeat.files.wordpress.com/2013/05/screen-shot-2013-05-22-at-8-59-14-am.png" target="_blank"><img class="size-large wp-image-742650" alt="Rocket Internet's impressive portfolio of companies" src="http://venturebeat.files.wordpress.com/2013/05/screen-shot-2013-05-22-at-8-59-14-am.png?w=558&#038;h=268" width="558" height="268" /></a><div class="vb_image_source"><span>Source:</span> Rocket Internet</div><p class="wp-caption-text">Rocket Internet&#8217;s impressive portfolio of companies</p></div>
<p>A big chunk, 25 percent, of Zalora&#8217;s revenue comes from mobile commerce, and the company says its app is the top lifestyle app in all the countries it serves, and the top app overall for Singapore, Malaysia and Vietnam.</p>
<p>In other words, Rocket Ventures saw an opportunity to take a big slice of an emerging market, and is moving rapidly &#8212; and with massive investment &#8212; to own the space.</p>
<p>The capital will be used, Zalora said, to scale up operations and grow the number of local and international brands it carries.</p>
<p>The company has just delivered its millionth order.</p>
<p><em>photo credit: <a href="http://www.flickr.com/photos/aehohikaruki/422892014/" target="_blank">AehoHikaruki</a> via <a href="http://photopin.com" target="_blank">photopin</a> <a href="http://creativecommons.org/licenses/by-sa/2.0/" target="_blank">cc</a></em></p>
<br />Filed under: <a href='http://venturebeat.com/category/business/'>Business</a>, <a href='http://venturebeat.com/category/deals/'>Deals</a>, <a href='http://venturebeat.com/category/entrepreneur/'>Entrepreneur</a>, <a href='http://venturebeat.com/category/lifestyle/'>Lifestyle</a>, <a href='http://venturebeat.com/category/mobile/'>Mobile</a>  <img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=venturebeat.com&#038;blog=342986&#038;post=742612&#038;subd=venturebeat&#038;ref=&#038;feed=1" width="1" height="1" />]]></content:encoded>
			<wfw:commentRss>http://venturebeat.com/2013/05/22/fashion-beauty-startup-zalora-scores-100m-investment-to-grow-in-south-east-asia/feed/</wfw:commentRss>
		<slash:comments>0</slash:comments>
	<enclosure url="http://venturebeat.files.wordpress.com/2013/05/image001-1.jpg?w=160" /><source url="http://venturebeat.com/2013/05/22/fashion-beauty-startup-zalora-scores-100m-investment-to-grow-in-south-east-asia/">Fashion &amp; beauty startup Zalora scores $100M investment to grow in Southeast Asia</source>
		<media:content url="http://0.gravatar.com/avatar/6d4d24b12c84be6eecddf121bc3fee48?s=96&#38;d=http%3A%2F%2F0.gravatar.com%2Favatar%2Fad516503a11cd5ca435acc9bb6523536%3Fs%3D96&#38;r=G" medium="image">
			<media:title type="html">johnkoetsier</media:title>
		</media:content>

		<media:content url="http://venturebeat.files.wordpress.com/2013/05/fashion-beauty.jpg" medium="image">
			<media:title type="html">fashion-beauty</media:title>
		</media:content>

		<media:content url="http://venturebeat.files.wordpress.com/2013/05/image001-1.jpg" medium="image">
			<media:title type="html">zalora</media:title>
		</media:content>

		<media:content url="http://venturebeat.files.wordpress.com/2013/05/screen-shot-2013-05-22-at-8-59-14-am.png?w=558" medium="image">
			<media:title type="html">Rocket Internet&#039;s impressive portfolio of companies</media:title>
		</media:content>
	</item>
		<item>
		<title>Zappos&#8217; culture coach: how &#8216;squishy&#8217; stuff like culture took us to a billion dollars in revenue</title>
		<link>http://venturebeat.com/2013/02/17/zappos-culture-coach-how-squishy-stuff-like-culture-took-us-to-a-billion-dollars-in-revenue/</link>
		<comments>http://venturebeat.com/2013/02/17/zappos-culture-coach-how-squishy-stuff-like-culture-took-us-to-a-billion-dollars-in-revenue/#comments</comments>
		<pubDate>Sun, 17 Feb 2013 16:46:11 +0000</pubDate>
		<dc:creator>John Koetsier</dc:creator>
				<category><![CDATA[Business]]></category>
		<category><![CDATA[Entrepreneur]]></category>
		<category><![CDATA[company]]></category>
		<category><![CDATA[culture]]></category>
		<category><![CDATA[David Vik]]></category>
		<category><![CDATA[featured]]></category>
		<category><![CDATA[zappos]]></category>

		<guid isPermaLink="false">http://venturebeat.com/?p=623628</guid>
		<description><![CDATA[<p>A great company culture doesn't have to cost a lot of money -- it's not about masseuses and prime&#160;rib.</p>
<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=venturebeat.com&#038;blog=342986&#038;post=623628&#038;subd=venturebeat&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
				<content:encoded><![CDATA[<p><a href="http://venturebeat.com/2013/02/17/zappos-culture-coach-how-squishy-stuff-like-culture-took-us-to-a-billion-dollars-in-revenue/from-trey-ratcliff-at-www-stuckincustoms-com/" rel="attachment wp-att-623633"><img class="aligncenter size-full wp-image-623633" alt="from Trey Ratcliff at www.stuckincustoms.com" src="http://venturebeat.files.wordpress.com/2013/02/large_5742126404.jpg?w=1024&#038;h=677" width="1024" height="677" /></a>Not every company achieves a billion dollars in sales, pays new hires $2,000 to quit, or makes the Fortune Magazine lists of &#8220;best places in America&#8221; to work. And not every company has a 500-page &#8220;culture book&#8221; that defines who and what it is.</p>
<p>Zappos, the online shoe-and-almost-everything-else retailer, is known for having an amazing corporate culture. The company&#8217;s corporate goal, which started out as &#8220;delivering wow,&#8221; is now &#8220;delivering happiness.&#8221; But it also delivers a lot of revenue.</p>
<p>How?</p>
<p>I talked to David Vik, the &#8220;coach&#8221; of Zappos who joined the company as the 119th employee. He focused on building people and building a positive corporate culture, and scrawled the graphic that would eventually become its iconic shoe-as-exclamation-mark logo. He not only helped Zappos build its globally-famous culture, he also transformed his most recent company, recruiting firm <a href="http://rivierapartners.com" target="_blank">Riviera Partners</a>, from &#8220;12 angry people&#8221; to one of Inc. Magazines&#8217; fastest-growing companies.</p>
<p>Vik recently published &#8220;<a href="http://www.amazon.com/Culture-Secret-Empower-People-Companies/dp/1608324028/ref=la_B00ANUN3VK_1_1?ie=UTF8&amp;qid=1361117468&amp;sr=1-1" target="_blank">The Culture Secret</a>,&#8221; a book about empowering people &#8212; and companies &#8212; through vision, purpose, and pure wow.</p>
<p><strong>VentureBeat: What was your role at Zappos?</strong></p>
<p><strong>Vik:</strong> I was just &#8220;Coach&#8221; of Zappos … kind of like being a coach of a sports team. My focus was to empower employees to reach their potential, and to drive the culture.</p>
<p><strong>VentureBeat: You were a chiropractor before that, right? How&#8217;d that transition happen?</strong></p>
<p><strong>Vik:</strong> Nick Swinmurn, the founder of Zappos, was a patient of mine, and I invested in the company. In fact, I sketched out the logo with a shoe in it.</p>
<p>I had retired after 22 years as a chiropractor, building one of most successful clinics in the States, but after I retired there was nothing to do. So I went to the company&#8217;s startup day for new hires when there were 118 people in the company.</p>
<p>At the end of the day, Tony (CEO Tony Hsieh) had them vote on me … and they wanted to me to join the company!</p>
<p><strong>VentureBeat: A ton has been written about Zappos&#8217; culture. What&#8217;s unique about Zappos?</strong></p>
<p><strong>Vik:</strong> Their vision, which originally was to deliver wow, and now is to deliver happiness.</p>
<p>Selling shoes is a commodity … so you have to do it different than anyone else. We built a huge selection and had the idea that you could buy whatever you wanted and return what you didn&#8217;t want for free. The focus of every department was on delivering wow.</p>
<p>What I did was deliver wow to our employees &#8230; I had a throne in my office and had thousands of visitors, all of who sat in my throne. You&#8217;re a king in your life, you were built and born to reach your potential, and I wanted them to feel that.</p>
<p>It started with the employees, and they delivered it to our clients.</p>
<p><strong>VentureBeat: Are there some core needed elements of a great culture in any company?</strong></p>
<p><strong>Vik: </strong>Well, yes, that&#8217;s the reason I wrote the book.</p>
<p>See, culture is squishy … people say &#8216;We&#8217;ll let dogs come in, and we&#8217;ll put beanbag chairs in the office, bring in foosball tables.&#8217; But that&#8217;s just window dressing. The culture is what you do and how you do it, it encompasses everything.</p>
<p>What I&#8217;ve found is you need five structures:</p>
<ul>
<li>vision: what you&#8217;re doing</li>
<li>purpose: why you do it</li>
<li>business model: what will fuel you as you&#8217;re doing it</li>
<li>wow and uniqueness factors: what sets you apart from others</li>
<li>values: what matters to you</li>
</ul>
<p>When everyone knows it, they can get behind it, and then they don&#8217;t have to be told what to do. For instance, at Apple, it&#8217;s tools for the mind, and employees have the autonomy to create and invent what tools of the mind they&#8217;re going to make.</p>
<p>A lot of companies have a long mission statement, and no one can remember it. You need something very short: this is what we do, and this is why we do it.</p>
<p><strong>VentureBeat: What kills a company&#8217;s culture &#8212; or at least a positive culture?</strong></p>
<p><strong>Vik: </strong>Companies just get off track.</p>
<p>First off, they don&#8217;t articulate what they are, and then it kind of becomes culture by default. Leadership can also destroy a culture by managing people (when you should only manage things, not people). Often it just kinda gets watered down. Companies start off with a great vision and purpose and then it kind of gets diluted.</p>
<p>Vision and purpose are not transaction based, but need to be experience based. For example, a car rental company isn&#8217;t about renting cars: They should say we&#8217;re connecting people.</p>
<p>In the past, companies were company-centric, but today they have to be customer-centric. They have to be in alignment with the wants, needs, and demands of the customer. If not, they&#8217;re going to die. Fifty years ago, the average lifetime of an S&amp;P company was 50 years, and now it&#8217;s only 25 years.</p>
<p>Some companies think they&#8217;re the only gal in an Alaska bar.</p>
<p><strong>VentureBeat: What about in tough times? How can a company work on culture when the house is burning down?</strong></p>
<p><strong>Vik:</strong> It&#8217;s simple. Customers vote with their pocketbooks whether they like you or not. So companies need to quit being company-centric and start being customer-centric.</p>
<p>It doesn&#8217;t have to cost a lot of money. It&#8217;s not about masseuses and prime rib. Those are cool things, but in many cases, it&#8217;s like a rich parent giving their kids a ton of money and toys, but not their time. If you want a great culture, you sit down, and talk: How are you doing, how&#8217;s your family, what can I do to help you out?</p>
<p>In the old days, the machines were the assets and the people were expendable. Now it&#8217;s the opposite.</p>
<p><strong>VentureBeat: What role did Tony play in Zappos&#8217; culture?</strong></p>
<p><strong>Vik: </strong>Huge. He had a real big role.</p>
<p>Tony had a company before Zappos and he sold it when it got to about 100 people. He said it wasn&#8217;t fun anymore &#8212;  it wasn&#8217;t a fun place to come to work. He wanted to change that, and I think that&#8217;s one of the reasons he hired me.</p>
<p><em>photo credit: <a href="http://www.flickr.com/photos/stuckincustoms/5742126404/" target="_blank">Stuck in Customs</a> via <a href="http://photopin.com" target="_blank">photopin</a> <a href="http://creativecommons.org/licenses/by-nc-sa/2.0/" target="_blank">cc</a></em></p>
<br />Filed under: <a href='http://venturebeat.com/category/business/'>Business</a>, <a href='http://venturebeat.com/category/entrepreneur/'>Entrepreneur</a>  <img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=venturebeat.com&#038;blog=342986&#038;post=623628&#038;subd=venturebeat&#038;ref=&#038;feed=1" width="1" height="1" />]]></content:encoded>
			<wfw:commentRss>http://venturebeat.com/2013/02/17/zappos-culture-coach-how-squishy-stuff-like-culture-took-us-to-a-billion-dollars-in-revenue/feed/</wfw:commentRss>
		<slash:comments>1</slash:comments>
	<enclosure url="http://venturebeat.files.wordpress.com/2013/02/large_5742126404.jpg?w=160" /><source url="http://venturebeat.com/2013/02/17/zappos-culture-coach-how-squishy-stuff-like-culture-took-us-to-a-billion-dollars-in-revenue/">Zappos&#8217; culture coach: how &#8216;squishy&#8217; stuff like culture took us to a billion dollars in revenue</source>
		<media:thumbnail url="http://venturebeat.files.wordpress.com/2013/02/large_5742126404.jpg?w=160" />
		<media:content url="http://venturebeat.files.wordpress.com/2013/02/large_5742126404.jpg?w=160" medium="image">
			<media:title type="html">from Trey Ratcliff at www.stuckincustoms.com</media:title>
		</media:content>

		<media:content url="http://0.gravatar.com/avatar/6d4d24b12c84be6eecddf121bc3fee48?s=96&#38;d=http%3A%2F%2F0.gravatar.com%2Favatar%2Fad516503a11cd5ca435acc9bb6523536%3Fs%3D96&#38;r=G" medium="image">
			<media:title type="html">johnkoetsier</media:title>
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		<media:content url="http://venturebeat.files.wordpress.com/2013/02/large_5742126404.jpg" medium="image">
			<media:title type="html">from Trey Ratcliff at www.stuckincustoms.com</media:title>
		</media:content>
	</item>
		<item>
		<title>Pinfluencer adds Zappos to client list, powers 250 million Pinterest impressions, and doubles revenue per pin</title>
		<link>http://venturebeat.com/2013/02/13/pinfluencer-adds-zappos-to-client-list-powers-250-million-pinterest-impressions-and-doubles-revenue-per-pin/</link>
		<comments>http://venturebeat.com/2013/02/13/pinfluencer-adds-zappos-to-client-list-powers-250-million-pinterest-impressions-and-doubles-revenue-per-pin/#comments</comments>
		<pubDate>Wed, 13 Feb 2013 17:13:55 +0000</pubDate>
		<dc:creator>John Koetsier</dc:creator>
				<category><![CDATA[Business]]></category>
		<category><![CDATA[Entrepreneur]]></category>
		<category><![CDATA[Social]]></category>
		<category><![CDATA[featured]]></category>
		<category><![CDATA[online marketing]]></category>
		<category><![CDATA[pin]]></category>
		<category><![CDATA[pinfluencer]]></category>
		<category><![CDATA[pinterest]]></category>
		<category><![CDATA[repin]]></category>
		<category><![CDATA[Social Media]]></category>
		<category><![CDATA[zappos]]></category>

		<guid isPermaLink="false">http://venturebeat.com/?p=621301</guid>
		<description><![CDATA[<p>According to Pinfluencer, the average campaign on its platform boosts brand website page visits per pin by 400 percent, doubles the pageviews per pin, and boosts revenue per pin by 50 percent, from $0.14 to&#160;$0.21.</p>
<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=venturebeat.com&#038;blog=342986&#038;post=621301&#038;subd=venturebeat&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
				<content:encoded><![CDATA[<p><a href="http://venturebeat.com/2013/02/13/pinfluencer-adds-zappos-to-client-list-powers-250-million-pinterest-impressions-and-doubles-revenue-per-pin/screen-shot-2013-02-13-at-9-08-18-am/" rel="attachment wp-att-621541"><img class="aligncenter size-full wp-image-621541" alt="Screen Shot 2013-02-13 at 9.08.18 AM" src="http://venturebeat.files.wordpress.com/2013/02/screen-shot-2013-02-13-at-9-08-18-am.png?w=961&#038;h=646" width="961" height="646" /></a><a href="http://www.pinfluencer.com" target="_blank">Pinfluencer</a> solidified its position as the premier marketing partner for brands that want to run Pinterest campaigns this morning as it announced that we-deliver-happiness online retailer Zappos is now using its services to sell more product via Pinterest.</p>
<p>&#8220;Zappos wants viral repins on Pinterest,&#8221; Pinfluencer chief executive Sharad Verma told me. &#8220;They&#8217;re also using our analytics product to understand which images are the most popular and generating the most engagement &#8230; and to know who their advocates or fan are.&#8221;</p>
<p>The year-old marketing and analytics company now boasts an impressive customer list that includes Etsy, Jetsetter, Martha Stewart, Sephora, and Orbitz, mostly because the hundred or so marketing campaigns that it has run have generated an astonishing 250 million product impressions.</p>
<p>Those per-campaign numbers are huge &#8211; 2.5 million impressions each &#8212; and I asked Verma why they&#8217;re so big. The key, it seems, is in the Pinterest platform.</p>
<p>&#8220;That is where Pinterest and Facebook are very different,&#8221; Verma told me. &#8220;Pinterest is all about products.&#8221;</p>
<p>Facebook is about <a href="http://venturebeat.com/2012/12/05/pinfluencer-pinterest-better-than-facebook-for-followers-impressions-and-sales/">conversation and brand awareness</a>, he said, while Pinterest drives sales. According to Pinfluencer, the average brand on its platform boosts website page visits per pin by 400 percent, doubles the pageviews per pin, and boosts revenue per pin by 50 percent, from $0.14 to $0.21.</p>
<p>In the December shopping season, Pinfluencer says, its clients took home a massive $0.64 in revenue per pin.</p>
<p>Zappos used Pinfluencer&#8217;s free version for four months before making a decision to jump to paid levels, which is typical, Verma says. Signing on gives companies competitor tracking &#8212; Pinfluencer currently tracks 10,000 brands on Pinterest, and will be bumping that to 100,000 &#8212; Pinfluencer&#8217;s marketing and analytics suite, and unlimited users, for an annual price that &#8220;fits on a credit card.&#8221;</p>
<p>“Through Pinfluencer, we have been able to boost audience engagement, site traffic and virality which results in increased earned media conversations and sales for our company,” Graham Kahr, a social scientist at Zappos, said in a statement. &#8220;We now have a way to actually measure the ROI of our Pinterest initiatives. This is huge for us as a company and for the industry.”</p>
<p>With Pinfluencer currently tracking 10,000 brands on Pinterest and planning to bump that by an order of magnitude, I wondered aloud if the company has a relationship with Pinterest, perhaps using an API.</p>
<p>&#8220;I think the only thing I&#8217;m allowed to say is that they&#8217;re aware of what we&#8217;re doing,&#8221; Verma answered.</p>
<br />Filed under: <a href='http://venturebeat.com/category/business/'>Business</a>, <a href='http://venturebeat.com/category/entrepreneur/'>Entrepreneur</a>, <a href='http://venturebeat.com/category/social/'>Social</a>  <img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=venturebeat.com&#038;blog=342986&#038;post=621301&#038;subd=venturebeat&#038;ref=&#038;feed=1" width="1" height="1" />]]></content:encoded>
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		<title>How Zappos became Zappos (video)</title>
		<link>http://venturebeat.com/2012/12/06/how-zappos-became-zappos-video/</link>
		<comments>http://venturebeat.com/2012/12/06/how-zappos-became-zappos-video/#comments</comments>
		<pubDate>Thu, 06 Dec 2012 23:52:26 +0000</pubDate>
		<dc:creator>John Koetsier</dc:creator>
				<category><![CDATA[Business]]></category>
		<category><![CDATA[Entrepreneur]]></category>
		<category><![CDATA[featured]]></category>
		<category><![CDATA[pivot]]></category>
		<category><![CDATA[startup]]></category>
		<category><![CDATA[Tony Hsieh]]></category>
		<category><![CDATA[zappos]]></category>

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		<description><![CDATA[<p>How a tough decision turned into a billion dollar&#160;idea.</p>
<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=venturebeat.com&#038;blog=342986&#038;post=585886&#038;subd=venturebeat&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
				<content:encoded><![CDATA[<p style="text-align:left;"><a href="http://venturebeat.com/2012/12/06/how-zappos-became-zappos-video/large_3347610009/" rel="attachment wp-att-585900"><img class=" wp-image-585900 aligncenter" alt="large_3347610009" src="http://venturebeat.files.wordpress.com/2012/12/large_3347610009.jpg?w=922&#038;h=691" height="691" width="922" /></a>As a startup, how do you become what you know you need to be? Especially when it might cost you some or all of your sales?</p>
<p>Zappos faced that existential crisis soon after its founding in 1999.</p>
<p>Originally, the online shoe retailer (that now has arguably the best customer service available anywhere online) was a dropship company: sell a product, tell a factory to ship it, and pocket the cash.</p>
<p>&#8220;On paper, that was a great idea,&#8221; founder Tony Hsieh says in a new video from <a href="http://www.atotaldisruption.com/" target="_blank">A Total Disruption</a>. &#8220;But we couldn&#8217;t control the customer experience.&#8221;</p>
<p>So the fledging company made a tough decision: no more dropshipping. Immediately, revenues dropped 25 percent. Zappos wasn&#8217;t profitable at the time, couldn&#8217;t get funding, and the U.S. had just been attacked &#8212; Sept. 11, 2001 &#8212; was in recession, and was about to start a war.</p>
<p>But Hsieh, whose parents had wanted him to become a lawyer or doctor, persisted. And over time, Zappos found more and more customers &#8212; by word of mouth, and by repeat business.</p>
<p>Here&#8217;s the story of the pivot:</p>
<p><span class='embed-youtube' style='text-align:center; display: block;'><iframe class='youtube-player' type='text/html' width='560' height='345' src='http://www.youtube.com/embed/1LCmM374d9w?version=3&#038;rel=1&#038;fs=1&#038;showsearch=0&#038;showinfo=1&#038;iv_load_policy=1&#038;wmode=transparent' frameborder='0'></iframe></span></p>
<p>&#8220;We take most of the money we would have spent on paid advertising and invest it into customer service,&#8221; Hsieh says.</p>
<p>The result?</p>
<p>Hsieh sold the company to Amazon for $1.2 billion in stock, and it now sells in excess of $2 billion worth of product annually. But that&#8217;s not quite enough to satisfy his parents, says Hsieh.</p>
<p>&#8220;My parents say it&#8217;s not too late for me to become a doctor!&#8221;</p>
<p><em>photo credit: <a href="http://www.flickr.com/photos/theredproject/3347610009/" target="_blank">mandiberg</a> via <a href="http://photopin.com" target="_blank">photopin</a> <a href="http://creativecommons.org/licenses/by-sa/2.0/" target="_blank">cc</a></em></p>
<br />Filed under: <a href='http://venturebeat.com/category/business/'>Business</a>, <a href='http://venturebeat.com/category/entrepreneur/'>Entrepreneur</a>  <img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=venturebeat.com&#038;blog=342986&#038;post=585886&#038;subd=venturebeat&#038;ref=&#038;feed=1" width="1" height="1" />]]></content:encoded>
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