‘Love and work are the cornerstones of our humanness.’
Some years ago, I listened to Tony Hsieh read the audio version of his book, Delivering Happiness: A Path to Profits, Passion, and Purpose. It is an inspiring read (or listen) for anyone interested in entrepreneurship.
I found it particularly useful. Hsieh and I are roughly the same age. And many of the customer-care focused strategies he instigated at Zappos, we aim for today at Wealth Morning.
Hsieh co-founded an advertising network business in the early days of the internet — LinkExchange. Sequoia Capital invested $3 million. And in 1998, the business was sold to Microsoft for $265m.
Using his share of the windfall, Hsieh co-founded Venture Frogs. An incubator and investment firm. This led him to an investment in shoe e-tailer Zappos, where he would serve as CEO from 1999 to 2020. During that time, Amazon [NASDAQ:AMZN] acquired Zappos in a deal worth around $1.2 billion. Hsieh is said to have made at least $214m from the deal.
At the time of his death on 27 November 2020, Hsieh had a net worth of more than $800 million
This is a tragic story. He was 46. Had just stepped down as CEO of Zappos. And left no will.
It seems semi-retirement didn’t bring out the best in Hsieh. Those close to him said he grappled with the isolation of the Covid pandemic. His drinking increased. And he began experimenting with drugs such as mushrooms and Ecstasy.
Friend Philip Plastina said, ‘Things were falling apart for him.’
Meanwhile, another unnamed friend said Hsieh had become fixated on starving his body of food and oxygen. Allegedly using nitrous oxide — laughing gas. But Hsieh had been making plans to check into a rehab clinic in Hawaii.
During the last days of his life, he was reportedly staying in Connecticut with long-time girlfriend and former Zappos executive Rachael Brown.
He was in a shed attached to the home, apparently using a heater to lower the oxygen level. When a fire started, an emergency worker was heard telling others that Hsieh was barricaded inside.
He eventually died from smoke inhalation.
The remarkable contributions Hsieh has made to entrepreneurship and the city of Las Vegas are well-documented.
But the real question for Wealth Morning readers has to be this: How could such a wealthy and successful investor descend so quickly into ‘falling apart’?
Wealth can give you options, but it can also undermine you
In 2011, Boston College’s Center on Wealth and Philanthropy conducted a survey of very wealthy households. The average net worth per household was $78m.
Let me share some of the most interesting findings with you here:
- Those who inherited their wealth, especially — as opposed to those who earned it — found having wealth no more fulfilling than being moderately prosperous.
- Those with children had concerns that their offspring would become ‘trust fund brats’ — entitled, lacking in compassion, growing up with a skewed view of the world, or harbouring resentment over inheritance distributions.
- Many felt outside relationships had been altered by wealth. With some relationships being contingent on having wealth.
- Most respondents did not consider their situation as ‘financially independent’. They would need at least 25% more to achieve it. Signalling that, for many, wealthy lifestyles come with high and competitive running costs.
- High wealth can take away some of the joys of living. Some reported they no longer looked forward to holidays, since gift-giving had become complicated. And special occasions like eating out at good restaurants or travelling overseas lost their allure.
- Extreme wealth can engender isolation. Work takes up most people’s time and provides context for interaction. If you don’t need to work, your commitment to a workplace may be more transitory.
- Meanwhile opulent homes and big yards tend to separate wealthier people from neighbours and community. Or put them on guard.
The upshot of the study is that wealth as a generator of happiness or life satisfaction barely makes the list. Positive relationships and satisfaction in work are far more valuable.
Psychologist Robert Kenny, one of the survey’s architects, notes the Freudian dilemma. ‘Freud was right,’ he says. ‘Love and work are the two things you have to do in life. And great wealth often undermines both.’
I had rather hoped Tony Hsieh might’ve had time left to write another book. I would’ve read it. Or listened.
Delivering Happiness: A Path to Profits, Passion, and Purpose was written in 2010.
This more recent story serves as a warning.
How quickly purpose may be lost. Relationships misconstrued. While wealth hastens a fall into the abyss.
Invest wisely. We can make money in the markets. Which is useful work. But the markets care for no one.
Your best ‘growth positions’ will likely be in quality relationships. And hard but satisfying work.
Editor, Wealth Morning