Alfred Lin, COO/CFO of Zappos, discusses how the company has evolved since 1999 to focus not just on selection and customer service but also on building a strong culture and delivering happiness to both customers and employees. He emphasizes that companies should establish a purpose beyond just making profits in order to inspire employees and build a great culture. Research shows that vision, meaning and higher purpose are key to individual and business success. Lin recommends studying the science of happiness and applying those principles to businesses for improved performance and passion.

1. Delivering Happiness Nordic E-Commerce Summit Alfred Lin, COO/CFO alfred@zappos.com May 19, 2010 1

3. A Little About Me (Alfred) ’97-’98 ’94 ’99 ’05 - Today ’01-’05 © 2009 sunnibrown.com

6. Fast, Free Shipping. Free return shipping. 365-day return policy.

8. Over 4 million items in warehouse

10. Customer Service: Establishing a personal emotional connection with the customer

11. Clothing, Customer Service, Culture Culture Customer Service Clothing

12. Clothing

13. Customer Service

14. Culture

15. Clothing, Customer Service, Culture Culture Customer Service Clothing

16. Delivering Happiness(customers and employees) “People may not remember exactly what you did or what you said, but they will always remember how you made them feel.” © 2009 sunnibrown.com

17. Building Great

18. CULTURE “Committable Core Values” Don’t make your core values just a meaningless plaque on the wall…

19. Example: Core Values Deliver WOW Through Service Embrace and Drive Change Create Fun and a Little Weirdness Be Adventurous, Creative, and Open-Minded Pursue Growth and Learning Build Open and Honest Relationships With Communication Build a Positive Team and Family Spirit Do More with Less Be Passionate and Determined Be Humble

20. “That’s great, but it would neverwork at my company…”

21. ALIGNMENT It doesn’t matter what your core values are… as long as you commit to them.

22. VISION “Whatever you’re thinking, think bigger.” Does the vision have meaning? Chase the vision, not the money…

23. WORDS OF WISDOM Don’t chase the paper; chase the DREAM. Sean Combs, a.k.a. “Puff Daddy” Biggie Smalls, a.k.a. “Notorious B.I.G., ” © 2009 sunnibrown.com

24. ENTREPRENEURS: “What would you be passionate about doing for 10 years even if you never made a dime?”

25. EMPLOYEES: What’s the larger vision and greater purpose in their work beyond money or profits?

26. What’s the greater vision and purpose of employees’ work? Go beyond the profit motive. © 2009 sunnibrown.com

27. VISION MOTIVATION vs. INSPIRATION

28. Motivation is different from inspiration. © 2009 sunnibrown.com © 2009 sunnibrown.com

30. 2003 Customer Service

31. 2005 Culture and core values as our platform

32. 2007 Personal Emotional Connection

33. 2009 Delivering HappinessEvolution of a Brand

34. Take a step back. Stop and ask yourself: What is your goal in life? © 2009 sunnibrown.com

35. WHAT IS YOUR GOAL IN LIFE? Grow Company Get a Great Job Boyfriend / Girlfriend Be Healthy why? why? why? why? Retire Early Make Money Find Soul Mate Run Faster why? why? why? why? Spend Time w/ Family Buy A Home Get Married Run A Marathon why? why? why? why? HAPPINESS

36. “If happiness is your goal, ask why 5 times about every matter.” – TaiichiOhno why why why why

37. HAPPINESS People are very bad at predicting what will bring them sustained happiness. “When I get ___, I will be happy.” “When I achieve ___, I will be happy.” RESEARCH HAS SHOWN:

38. There is a SCIENCE behind many aspects of business including: conversion psychology of buying direct marketing customer acquisition metrics repeat customer behavior, etc. What if you spent just 10% of your time studying and learning the SCIENCE of HAPPINESS? How much HAPPIER could you be? Happiness

39. WHAT IS YOUR GOAL IN LIFE? Grow Company Get a Great Job Boyfriend / Girlfriend Be Healthy why? why? why? why? Retire Early Make Money Find Soul Mate Run Faster why? why? why? why? Spend Time w/ Family Buy A Home Get Married Run A Marathon why? why? why? why? HAPPINESS

40. A FEW DIFFERENT ON HAPPINESS f r a m e w o s r k © 2009 sunnibrown.com

41. Perceived Control Perceived Progress Connectedness Vision / Meaning (Being part of something bigger than yourself) A FEW DIFFERENT FRAMEWORKS ON HAPPINESS:

42. Maslow’s Hierarchy:

43. Rock Star (Pleasure – chasing the next high) Flow (Engagement – time flies) Meaning/Higher Purpose (Being part of something bigger than yourself) 3 TYPES OF HAPPINESS time time time

44. Happy Great Great PeopleEmployeesBusinesses Pleasure Job Profits Chasing highs Comp/Benefits Financial Performance Flow Career Passion Engagement Recognition Passion Meaning Calling Purpose Purpose PurposePurpose time time time

45. Important Questions © 2009 sunnibrown.com

46. What of your time do you want to spend learning about the SCIENCE of HAPPINESS? How can the SCIENCE of HAPPINESS help your business, your brand, and yourself? © 2009 sunnibrown.com

47. If the research shows that vision / meaning / higher purpose leads to happiness… What is your company’s higher purpose? What is your higher purpose?

48. Recommended Books

49. PEAK Chip Conley TRIBAL LEADERSHIP Dave Logan, John King & Halee Fischer-Wright FOUR HOUR WORK WEEK Tim Ferriss HAPPINESS HYPOTHESIS Jonathan Haidt RECOMMENDED BOOKS:

50. Delivering Happiness A Path to Profits, Passion and Purpose by Tony Hsieh Launching June 7, 2010 RECOMMENDED BOOKS:

51. THANK YOU

54. Email alfred@zappos.com for: This presentation Free culture book (need physical mailing address) Go to http://tours.zappos.com for: Tour of our offices when you’re next in Las Vegas (takes about an hour) We’ll pick you up from the airport or your hotel in a Zappos Shuttle! Contact info and tours!

55. Questions

56. THANK YOU