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Daniel on AMA Social Media Panel 7/15

I spoke on the American Marketing Association's Social Media panel on July 15th.  The video is above.  Below is the original marketing information for the panel:

Innovation & Technology , How it affects the Marketing Mix

Date: Wednesday, July 15, 2009

I spoke on the American Marketing Association's Social Media panel on July 15th.  The video is above.  Below is the original marketing information for the panel: Innovation & Technology , How it affects the Marketing Mix Date: Wednesday, July 15, 2009 Time: 6:00 PM - 8:00 PM Location: John Hopkins University Krieger School of Arts and Sciences  Washington, DC Center 1717 Massachusetts Ave., NW  Room BOB  Washington, DC 20036 Cost: $40 Members & Students $60 Non-members Hors d'oeuvres included. All onsite registrants are subject to an additional $10 surcharge. Register Pre-registration closes at 5:00 PM on Monday, July 13th. Speakers: Aaron Brazell, CEO, Emmense Technologies, Founder, Technosailor.com Gray Brooks, New Media Ombudsman, Obama for America Shana Glickfield, Communications Consultant, Founder, DC Concierge Daniel Ruben Odio-Paez, COO, PointAbout, Co-Founder, DC Moblile Mondays Patricia Mejia, VP Marketing, Siteworx Moderator: Maurisa Turner Potts, Expert Marketing Consultant Every day a new social marketing outreach tool is introduced to the marketplace. Rapid innovation in technology has added new weapons to a marketer's toolbox. Both clients and companies are looking for the next new hot thing to differentiate their product or service. Facebook, Smartphones, Iphone Apps, Twitter, and U Stream are every day household names. New companies and industries have been formed to spread messages about products and services. Yet, a key question remains: How does innovation and technology affect the marketing mix? Come join five expert panelists on July 15, 2009 to discuss key innovations in technology that directly impact marketers. Aaron Brazell is a social media strategist and implementer. As a long time entrepreneur and technologist, he is most known for his blog, Technosailor.com - the most widely read business and technology blog in the Baltimore/Washington region. Gray Brooks helped pioneer the political New Media space. In early 2003 Brooks drove to Vermont, helping the Internet team power Gov. Howard Dean's presidential bid. In January 2007, Brooks joined Barack Obama's campaign. As New Media Ombudsman, he was the special projects manager for the New Media Director and helped integrate the department into the campaign at large. Over the two years of the campaign and presidential transition, Brooks managed efforts integrating web design, online video, email, text messaging, online advertising, social networks, and fundraising. Patricia Mejia is the Vice President of Marketing for Siteworx, Inc. Patricia offers a diverse background in public, private and non-profit organizations, having served most recently as VP of Marketing & Communications at IXI T Corporation. Prior to IXI, Patricia held leadership positions at Freddie Mac, the Mortgage Bankers Association and the Southeastern Universities Research Association. Daniel Odio is a co-founder of PointAbout, a company that is focused on unlocking innovation in the mobile space. Previously, Daniel was the founder of Cardea Commercial Real Estate Advsors and DROdio Real Estate, Inc, a resdental real estate brockerage. Daniel has been featured on CNN, CNBC, TLC, The Wall Street Journal and many other publications for his innovative use of technology in the real estate market. Shana Glickfield, an independent communications consultant, was previously the Director of Strategic Communications at Amplify Public Affairs. Shana is currently leading a workshop series to improve how Hill staffers use social media tools in the course of their jobs. She is the founder and author of renowned local blog, The DC Concierge and is one of the top 100 Twitters in DC. Maurisa is an accomplished marketing professional with more than 14 years of professional marketing experience. Her background includes developing innovative and customized marketing strategies, communication roll-outs, event planning, public relations, and partnership development. She has experience in a variety of areas such as economic development, hospitality, technology, telecommunications, accounting, retail and legal services. After spending a majority of her career working in corporate America, she launched her own marketing/public relations consulting business offering freshly tailored marketing solutions exclusively to small businesses, boutiques, entrepreneurs and other private entities. She serves on the Board for the Greater Washington Fashion Chamber of Commerce. She is also a member of Success in the City Professional Women Organization, Washington Women in Public Relations, and a Social Committee Member for the Virginia Tech Alumni Association (National Capital Region). Here's a transcription of the event: Subject: American Marketing Association's Social Media Panel Date: July 15, 2009 Location; Johns Hopkins University Speakers: Aaron Brazell, CEO, Emmense Technologies, Founder, Techosailor.com Gray Brooks, New Media Ombudsman, Obama for America Shana Glickfield, Communications Consultant, Founder, DC Concierge Patricia Mejia, VP Marketing, Siteworx Daniel Ruben Odio-Paez, COO, PointAbout, Co-Founder, DC Mobile Mondays Moderator: Maurisa Turner Potts, Expert Marketing Consultant Legend - Panel Members and Moderator AB - Aaron Brazell GB - Gray Brooks SG - Shana Glickfield PM - Patricia Mejia DO - Daniel Ruben Odio-Paez MT - Maurisa Turner Karen: So, I wanted to just make a couple of announcements, and then I'm going to turn the mike over to our Chapter President, Brendan Hurley. We've a few upcoming events, and I hope you like this space, because we're going to be meeting here a lot for the speaker series. So coming up on July 28th, we have a networking series that's gonna be with José Andrés, who is from THINKfoodGROUP. How many people have been to the Zaytinya, the Jaleo? Great restaurants. So that's going to be on Tuesday, July 28th, that's a lunchtime event. Am I correct? [Yeah.] Good. So on August the 12th, we'll be back here at Johns Hopkins, and the table speaker series on the 12th is on Sports Marketing. So if you are interested in sports and marketing, I hope to see you and see your smiling face on August the 12th. I put the time as 6[:00] to 8[:00] because I know D.C.; I know traffic. We're going to start at 6:30 every month, the speaker series, but I wanted us to have enough time to network, exchange business cards, and get to know each other. But anyway, I'm going to turn it over to our new Chapter President, Mr. Brendan Hurley, who's going to talk a little bit about the chapter, and we'll be starting in 5 minutes. Thanks. [...] You're welcome. Brendan Hurley: Thank you, Karen, and welcome everyone. Again, my name is Brendan Hurley. I'm the new Chapter President for the American Marketing Association here in DC, so I'm very honored to hold that title and to be here tonight, and to welcome you. I'd like to thank and welcome all of our speakers. Thank you very much for your time, and your insights, and your expert knowledge. I'm sure that our guests are going to learn quite a bit from you, so we appreciate that. For those of you who are not aware--we just began our new fiscal year. The Chapter begins the fiscal year on July 1st, so I just want to take this opportunity to tell you a little bit about what our goals and expectations are for the new year. All we wanted to, really as a chapter, we want to focus on our core competency this week--move forward to try to provide maximum member value, so we are really focusing on increased and better programming, and increased in better networking opportunities for you, as we know that is very important to our members. We're also going to be doing some internal and external research. We want to find out what, as members, you think of the organization. For those people who are not members--we want to know what you think of the organization, as well, so that we can continue to improve and grow as a Chapter. We believe in building organizational infrastructure and improving efficiency so we're very dedicated. Our volunteer force is very dedicated on focusing on those areas, so you have any input or suggestions for us, we welcome it. If you're interested in volunteering for the chapter, we really welcome that. As part of our desire to improve the infrastructure, we really need volunteers to fill our committees. Melissa Okimoto, our Director of Volunteers, raise your hand, Melissa, is here. If you're interested in talking to her, she'd more than happy to chat with you about some of the many opportunities available as volunteers at AMADC. So thank you again for allowing me to speak to you. Now it's my pleasure to introduce to you the moderator for this evening's discussion, Maurisa Turner. Maurisa also happens to be the Chapter's Vice President of Marketing and Communications. Maurisa is an accomplished marketing professional with more than 14 years of professional marketing experience. Her background includes developing innovative and customized marketing strategies, communication roll-outs, event planning, public relations and partnership development. She has experience in a variety of areas, such as economic development, hospitality, technology, telecommunications, accounting, retail, and legal services. Maurisa, is there anything that you really haven't touched on in your career? [Laughter] She launched her own marketing/public relations consulting business recently offering professionally tailored marketing exclusions, exclusively to small businesses, boutiques, entrepreneurs and other private entities. She serves on the Board of the Greater Washington Fashion Chamber of Commerce, which she was just featured recently, I might add. She's also a member of Success in the City Professional Women's Organization, Washington Women in Public Relations, and a Social Committee member for the Virginia Tech Alumni Association. So, welcome. Thank you. [Applause] Maurisa Turner: [I have to move this lower [microphone] for a 4' 11" person.] Good evening, everyone. Thank you for coming and thank you, panelists, for being here. Before we start off, I'd like to get a little poll in the audience about how much everyone knows about social media. And I'm going to start with the basic question. Raise your hand if you know what the definition of social media is. Who is currently using social media? [Laughs] We have applications here. How many people are using Facebook? YouTube? Twitter? How many people blog daily? [Laughter] OK, weekly? Alright. And how many people do it for business? Personal? For both? OK, alright. How many people work for organizations that make it a requirement in their business to have a social media plan? Do any have a work or an entity where they're adverse to using social media applications? [OK.] May I ask? [OK.] Is anyone Twittering right now? [Laughter] Alright. I just wanted to get a good pulse on just how the background of how many people are in the social media phase; how they're using it--business versus personal. And, of course, we are here trying to ask the burning question, how does this innovation and technology really affect the marketing mix? And, showing case studies, and proof-positives, and results from our amazing panelists that have used it very effectively and dynamically, and learn some of their points and tips, and how they carry it on into your background, into your career, as well. So, let me kick off one question I'm going to talk this to Gray [Brooks] [Laughs], as a very interesting and exciting track recently. This question is for you, and of course, everyone else still on the panel, please pitch in. Last year, we saw a political candidate and Marketer of the Year, beating out companies, such as Apple and Nike. Many would argue that the technology behind the Obama campaign helped drive the brand, and spark the excitement of President Obama. Please give us your thoughts on power of the 'Obama' brand and how technology affected the marketing of his candidacy. Gray Brooks: Sure, first of all, can you all hear me OK? [Yeah] Thanks for having us here tonight. You touched on a couple of the words in there that I think that are very crucial, but that sometimes they're too easily considered. And one is "technology", and the other is "brands". The people at the top of the campaign did varied work, and I think hired a lot of very good people. But this is my third campaign, and I [...] other campaign. [Laughter] It would be a mistake not to realize that even when we're screwing up, we got by ok because the package we were selling, the candidate himself, was really good. So, technology enabled some revolutionary things, but also it was still a matter of selling something that was already a good product. The other part of it is that, it would be a mistake not to realize how much effort went into the branding. I think the advertising industry was very conscious of, and very, I guess, more knowledgeable about the work that went into the branding of the campaign. Before the general election, we were hiring several graphic designers to focus that exclusively on adding artistic depth to the campaign at every level. On the Web site, we managed to subsume all the print design, all the [...] ads, everything that people saw down to the literature being handed out in mailboxes. We eventually were able to go through these two or three people, so there was consistence. It was based around a design that people thought conveyed a message even without words. And then the rest was kind of adding technology on top of that. But those two fundamentals of having really good product, and then actually truly focusing on brand, in trying to say something that you thought out. I was a huge part of that. Aaron Brazell: I would say also that there was a huge emotional need in the constituency in the American people to have the technology come along to accent the product. I agree everything that Gray said. There was a great product there. The technology really enhanced it, but what really drove the point home was that there was a need for something, and that product and that technology enhanced that, and brought it out. I think any, no matter what it is, you're not going to get anywhere without the technology, and you're not necessarily gonna get anywhere with just the communications side of it in the product. But if you have three of those things all combined, I think you have a dynamic trifecta. Shana Glickfield: In my experience with social media consulting  professionally where I advise corporations and  nonprofits, and even individuals, I think a lot of people now want the Obama-like results. And I think it's important for marketers to understand that it was a big campaign, as the trifecta was taking place, and that you can have a very successful social media campaign without having the Obama-like results. GB: We definitely want to be over our two lessons we learned here is that it was merely a case study. It was a huge case study in one that has a lot of material to learn from, it takes years. It's just made up of best used strategies. The fact is, it's a mistake to see that something as ultimate, when really, it was just one example. Patricia Mejia: I would add that I think you had conversed a lot of things and also you're first?, you're innovative, so I think from a marketing standpoint, it's important to think about what the next thing is. Timing is everything when it comes to marketing, so I think it's a combination of things sort of lining up. It's like a perfect world in the negative, but things came together because of the timing, as well. AB: You have to drive that point home. If you look at it, it's just not a political panel here, but as an example, since we're in that space already with the Obama campaign, you look back at 2004 with the Dean campaign, they also did many of the things that the Obama campaign did do. They had arguably a great product. I didn't like the idea, but that's a different story altogether. [Laughter] They supposedly had a great product. There was a lot of great messaging there, but the emotional aspect of where the American people were with his outburst, and all these other things that happened just didn't coalesce the whole product, the trifecta - I love that word [Laughter], actually come together and do something where we saw completely the opposite side of the Obama side. MT: Great. Thank you. Of course, we know that each of you blog either on personal or business-related. There's been some questions out there that some think that blogging has jumped the shark', so to speak. What are your thoughts on that? GB: I don't mean to monopolize the time, but people say it's great. DO: So, first I'll say that it's a pleasure to be here. I see a lot of you out there that could be up here, so I wish this could be a roundtable where we all could be talking together because I'm sure that you're doing things that we don't know about, so I'd like to just open that piece of it up if you have thoughts, let's just share them. If I can step back for a second, I would say that it's really important to understand what social media is and isn't. I think a lot of people consider social media to be a medium, but I consider it to be a tool, like a telephone. You don't place an ad in a telephone; you place an ad in the yellow pages, and for me what social media is, is it's a vehicle. It's a tool that allows me to take the expertise that's inside the head of, let's say, whoever we're looking to profile, and share that with the people that need it in the moment that they're making a purchasing decision. So for example, if it's real estate - I started a real estate company six years ago, and we had really competent realtors, but nobody necessarily knows that unless you can use tools like social media to allow that expertise that's in their heads to get to the people that need to know it when they need to know it. So, what I would say about blogging, which to me is the component of social media, is that blogging allows you to do some things that you can't do otherwise. I like to say that Henry Ford would love blogs, because when you get questioned, you've answered twenty times already by e-mail instead of spending 15 minutes composing that answer again by email. Spend three hours writing a blog about it, a really researched in-depth answer; and then when somebody emails you that question, just send them back and answer the blog. You're making an assembly line of expertise, right? So, very importantly at the beginning [...], I would say social media is a tool, not a medium, and blogging is a very powerful tool. You also get great Google lists out of it when you blog with original content, which means that when people search for keywords, you're the one that comes up as a subject matter expert, so to me, blogging is so very pertinent. PM: I would add to that is that blogging is important, but authentic blogging is so much more important. So I think the authenticity people see through the salesy part of trying to sell you something to position yourself. The authenticity is what people are really looking for. They're really yearning for it, because they're kind of like over the marketing. I just had to add that. AB: To go the extra mile there, I agree with Daniel here. Blogging is one of those places where you create content that's going to be there forever, arguably, unless the internet blows up, which is always possible. They're also going to be there, and the search engine's Google, most importantly, is going to find it, it's going to be there all the time. You can certainly refer people to them over email, or whatever. I think one of the big questions about is blogging. Is blogging jumping to the shark? At least this is the side of the conversation I'm hearing from the technology side, it's the question that's posed, it's blogging versus social networks. So your Facebooks, your Twitters, your YouTubes and what have you, Tumblr. Why spend more time writing on a blog when all your costs are going into Twitter? That's the side of the conversation I'm hearing quite a lot. In fact, I don't know how many of you, do any of you know Dave Troy? [No.] Ok. So David Troy is an entrepreneur. Actually, more towards Baltimore, but he's involved with marketing, as well, so I thought some of you might have heard of him. Dave Troy asked a question on Twitter, maybe three weeks ago, "How many of you are blogging? Since Twitter came around, are you blogging more or less?" He was making the assumption that everybody blogged less. I find I blog more, because of Twitter and still sell all that much, but the reason why is you can have all these thoughts out there in social media, and social networks, etc., but, unless you have a place to put that to like really park it, and grow it, and create an audience around. And you just can't do that on social networks. You can certainly share your thoughts. You can share your links, and share your list, this and that and other thing, but it's hard to build community around that. And, if you're working with a product or company, you're trying to drive the product. You're trying to drive some software, you're trying to drive something that creates more sales, and you want to build community around it, because that community is going to turn into your biggest fan [trusts?] So, is it valuable to be out there on Twitter, absolutely. You're out there, you put your thoughts out there, you pick every opportunity, you can't conversate with the people who may be buying your product, may be buying your company, may be engaging with you in business somehow. But, if you really are going to build a community, you're going to need the blog. So no, blogging has not jumped the shark. That was a long-winded answer. SG: Blogging, in my experience, also, a lot of the great [...] that mention SEO[?], I like community building, a couple of other things, but I think the solid leadership comes from putting content out there, and I think a lot of people get stuck with blogging because they think they have to sit down and write this 3-hour think piece every time. And that's not the case. People don't even like to tune into a blog and see all the same text over and over. You think about how to take the pressure off and make yourself a better blogger. It actually takes less time to judge. If you're going to send something to a couple of your colleagues, from a newspaper or video on YouTube, instead of circulating it via email, I would just post it to a blog. It'll take just as much time, but you're really building your blog out. MT: You have a question? Unidentified Female Speaker A: Yes, I have a question. You're all talking about building communities, and so like sending it email around to people you know, or doing it on Facebook or Twitter, will it follow you? I find it hard to understand how is building communities around blogs easier, than building? GB: Just jump in. Part of my answer to you definitely revolves around my students' overall question, and there is a really, really useful plagiarism of Benjamin Franklin, don't live to geek." And it's cute and easy to remember, but it really does get back to the whole point of all this, and that is that no technology is good, or bad, or going to work, or not going to work. It's just another tool, and we're at a point today where we have more tools and more capabilities than we ever had before. But that gets us back to the original philosophical question of, "What are you trying to get done?", and then, "How are you going to do it?" And the technology, like blogging or anything else can help you, right, and if it's not helpful, then don't use it. The only thing that I think matters here is just asking yourself, "What was I doing already?" and, "Can I be even more efficient?" Or, as efficient, maybe, as with some side benefits by using this other thing. And, so, there are many times where you get other side benefits by blogging, as opposed other means without other extra costs and effort. Like you said, instead of emailing everyone in the company, if you post it on the blog, its adding content to your blog without any extra effort. U/i Female Speaker B: But how do you drive readers to the blog? GB: There are two ways to that. One is, if you compared to what you were doing before like sending an email with the content in there, and it [...] around the link, that's just as good. And, so you're not losing anything on the process. The other thing is, the more you write, the more content you create, and the more you do actually adds authenticity, and try to add something that's worth reading. People find that, and that's a great thing about Google, and a great thing about the internet is that quality material rises to the surface literally on its own. PM: One thing I would add is, I think as marketers we really need to stop thinking about us, and start thinking about the people that we are trying to reach. So, if I were you, I would think about what's my target audience care about. What influences them, what do they care about? And so, are blogs relevant? It really depends on who you're trying you trying to reach. If you that the people that you're trying to reach like to find out what you think, and like to, sort of, get into you head before they'll start to trust you, then I think the blog is a very useful tool. The other thing I would say about building an audience around the blog, it can be damn expensive. So, I understand what you're saying about how do you build that community on the blog if you're creating all this content on, why wouldn't you just jump on Facebook and put your original content out there, or put it on Twitter, because it goes to various people? AB: Can I ask a question?  Why would it be expensive to build an audience on a blog? PM: It depends on your topic, right? If you're blogging about something like Obama, then surely, everyone is always searching for Obama. AB: You're talking about buying keywords, is that what you're talking about? PM: If you're buying keywords, buying impressions through advertising - that's my opinion. I've seen it, it's expensive to build a community around [Cut off.] AB: [Cut in] I've never done that in my life. I've got the largest business and technology blog in DC, and I've been going at it for five years, and I haven't spent a dollar. GB: I think her point is very valid, and definitely reflects on everyone's company and that is, new media has infinite possibilities for being a black hole that you just pour money down. And it gets back to the question of, if you just think, I don't understand this, but, hell with it, we'll just spend $15000 and get some results, that's a foolish way to go about it, and you're pouring your money down the toilet. Whereas, it's important to realize that the baseline is free, and, starting off with just using these tools in a forthright and pragmatic way doesn't cost you anything. And you can add money to get more results from there, but it's a mistake to just add money and to get more results from there, but it's a mistake to just add money and expect results. DO: And to add to that, it's a very personalized, individualized thing for everybody, it's very easy to blow your budget on Google adware. I mean Google will just charge that credit card, and before you even know it, you've spent 20000 bucks. But, on the other hand, it can also be expensive in time, and not expensive in money. It takes time to put that original content out there. I'm a very pragmatic guy. I have a voice recorder on the table here, and a camera up there, I'm capturing this content. Why am I capturing this content? Because, this was really valuable content. If you think about this, what's all of our time worth? I don't know, $100 an hour, $200 an hour, more? And, how many of us are in this room? This is a very expensive session that we're having together, and the irony is that everyone's going to walk out of here, and all this content would have been lost. It's amazing, I have to think that in 20 years people are going to look back and say, for the first x-thousand years  of human civilization, you're telling me that content was just lost out there, with [...]. [Laughter] It doesn't make sense to me. So, I capture the content whenever I can, I have a woman who lives in Washington state who transcribes it for 15 cents a minute, and I put it on my blog. And, I've been able to get a page rank 5 on Google for a domain name, PointAbout, that's been around for less than a year, which is amazing. Google is thirsty for original content. So, you're asking me about driving traffic, that was your original question. And, my answer would be, only one of your goals is driving traffic. Another one of your goals is saving time. If you can write something on a blog, instead of writing it a thousand times by e-mail, poorly, write it once on a blog, well, and send that blog out - a] you've gotten a time savings out of that for all the future people that ask that question, but, b] by putting that original content out there, or even better by capturing content - capture your CEO, or CMO. When I was doing real estate, I would wear a lapel mic, and I would tell my clients, "Do you mind if I just record me showing you homes?" Because there are people out there that have never bought a home that would love to know what the experience is like. [Laughter] And, then I would have a woman transcribe it for 15 cents a minute and put it on my blog, right?  Right, and that's a lot of rich original content, and Google will reward you for that. SG: I think we have time, two things that I want to talk about, that I'm not an expert on Google search engine optimization, but I do think we should just say for the audience here, in case people don't know, like Google Juice, the way Google ranks you is based on how frequently your website is updated, in addition to how many times you use those keywords. So, I encourage all of you to get with your web team, if you're not already, or whoever has your analytics, and find out what words people are using to find your site, and really optimize around those. And, a lot of people start their web experience with search. [Aside to panel] I don't know the statistics, do you guys, it's like 90%? [AB confirms it's about 90%.] So, when we're talking about like a pragmatic strategy, I would definitely say start with your search terms and [to DO], do you want to talk about Google? DO: I just going to say that Google is very smart about it. They even know of the domain name address, where the domain name was registered is the same, it matches up to the address on your website, they will give you credit for that, because that shows that you are actually the owner of that domain name; it gets down to that level of detail. So, Google SEO - search engine optimization should be for any business, I think, a key part of your initiative, because that's like buying real estate in New York in 1900. You can rent that space through ad words, but if you put the time and effort now into buying that space, you get Google to like what you're doing now; it's going to pay off for the next 100 years. GA: The one thing I was going to just put on top to what the gentleman said a couple of times before was, he is incredibly right, because one third of new media as a whole is content, content, content. And, you're crazy if you have a company blog that is updated once a week. And you're crazy if you have a Twitter feed, but, don't actually don't create anything new, you just link to what you're already, [changes thought], fresh content is crucial. And the fact is, he's ahead of the curve on all this, but every person in here should blog and say, "Today I went to this forum, and here's a link to the video." It's connecting to what someone else has done, it's good content is right behind having you done[?] the content yourself. MT: Let's bring us into organizations, and it's interesting that there are still companies that still convincing of having a social media plan. Us, as marketers, we have some executives you can to talk to until you're blue in the face and try to convince them to change or consider a new idea. But those companies are for those individuals that work for companies that are adverse to this social media craze, how can you convince them that this is good for their business? AB: I think all you got to do, and I'm going to avoid doing the normal, somebody's going to bring up Zappos, someone is going to bring up Dell, somebody's going to bring up Southwest Airlines, but, I think [Some bantering and laughter]. I think if you look at the [changes thought], once you get away the head of the tail of the big companies that everybody knows that using social media, I think there a whole lot of really great examples of companies that are doing it really well. And I wrote a blogpost on my blog the other day, just like the greatest experience I ever had with customer service, via Twitter; and that was with my bank, 1st Mariner Bank, in Baltimore. I was having a really bad day as a result of them, and went ballistic! [Laughter]. Their customer service guys on Twitter reached out to me and through a couple days of exchanging direct messages, and him going above and beyond wearing more than the minimum pieces of flair [Laughter]. I'm telling you, it was great example. You take a look at that, and now this guy is getting all kind of attention outside of my blog, outside of 1st Mariner Bank, there's a number of other posts that have been written about my experience, and all of a sudden you start seeing a pattern that there's a direct line that goes from the engagement in social media to the ROI that the company wants to have, every company wants to have. And I think that, when you're talking to the executives, when you're talking to the people that make the decisions at the top, they want to know where is the value for the company. It's nice that there is this experience; it's nice that you can talk to customers, but how does it actually help us run a business and make money, because everybody wants to make money, and that's the end of the day. PM: And more and more marketing is going online, I just looked at some Forrester[?]  today that was looking at the growth in interactive, where it's coming from, it's coming from traditional channels. The emphasis is there, the audience is there, so I think it becomes a lot easier when you start to see your competitors being there. As a business-to-business marketer who has always been inside companies having to sell ideas before they actually get approved, a lot of times people will respond best to what they're seeing their competitors do, or where see an opportunity where their competitors are not. A lot of the time that I spend in my job is looking at what our competitors are doing, or not or doing, so that we can do it first. SG:  I'd say Pew Internet and American Life, they do all the demographic research of who's using social media, and I think that's really important information for executives who haven't been convinced yet, to really dissolve the myth that the blogger is a teenager in the basement. And, I think the fastest growing demographic right now on Facebook is women 50 and older, and it's growing by hundreds of percentages a month, and we just had the officication of Twitter [Laughter]. We're also absorbed at who's using it - it's our world. But, I think people, who it's not their world don't really realize that is where the majority of people are, and you have to go to where your consumers are, and that is Facebook and Twitter. DO:  I'll just use a couple of real examples. I'm a very pragmatic guy, right? So, as an entrepreneur you have to be really pragmatic. PointAbout is a company that makes Ifonets, we actually made an Ifonet for 1st Mariner, but, I'll use real estate, because it's such a backwards industry, nobody even knows how to check e-mail in real estate. So, it's really easy to get progressive in real estate. And, I'm a big fan of YouTube, I use Vimeo now, but, it's just like YouTube. I am a big fan of, for example, I made a lowball offer video, which is just 'drodio.com/lowball.' It's our real estate company name .com/lowball. And, I walked potential clients through what the steps were to make a good lowball offer. And, there are some things that we do that are different from norm, or whatever. I can't tell you how many clients came to us and said, "I watched your video and I want to work with you." It was a warm referral lead, the thing that realtors will kill for. This is very significant, we had cold marketing leads coming to us as if they were warm referrals, because they felt like they knew what we were capable of. Again, it's getting the expertise out of your head, and into the hands of the people that you don't want making that decision, so I think the really way to start is with something like YouTube, and to take a video of the product manager, don't take a video of the PR person, take your video of the product manager at your company who has lived and breathed that product and knows it in and out. A very real video, into what you're saying, does not marketing speak, don't edit it, don't make it look all glossy, make it gritty and real, and put that up on YouTube, and then send people to it, or use Google search engines and officications[?] who can find it, and you will find that's a very easy way to have a small test, and all about making the food before you build the restaurant, don't spend all this money on building the restaurant and nobody wants to eat the food. So, small tests, and you can then show your boss, "Hey, I did this video and we got 20 sales out of it." And it's a very trackable thing. MT: For those that work for organizations, if you don't mind me asking, that are still on the fence, or adverse to it, what's the reason? [Some disjointed comments from the audience.] U/i Female Speaker C: [Extremely poor audio.]The reason is the RY[?], there has been a lot of research with Twitter and other social media[?] that talk about the RY to try to shield my company's [...] officers. [...] field marketing has a 45 [...] RY [...] the numbers go up [...]. Social media is not there, and, so, even though we have a lot with Twitter, and [...] everybody will comment, but the weak [...], and everything,    I personally maintain it's great, but my CEO [...] and he [...] numbers wise . So, I would say that probably is a lot of [...], we want to get the highest return on what little resources we have, [...] social media [...]. DO: See, I take a big exception to that, and it's not with you, it's with your CEO. I will call your CEO personally and talk to him or her [Laughter.] Because, the cost is zero, it's an intern's time. And, you know what, the intern can do it the best that of everybody at the company. So, take the unpaid intern and have him do a small test - a very small pragmatic test. PM: I disagree with that. I tell you. I think it depends on the business, right? And so, in some businesses and certain niches, it's fine. Your intern's going to do a great job of representing your brand. I think with other businesses where you have a complex product that you're trying to sell, or complex solution that you're trying to sell, it's something that needs to be bought in at the top level, because it requires the involvement of high-priced people. And that's just been my experience. So, looking at it from different perspectives, small business - large business, business - consumer versus business-to-business, it really does matter. AB: I can see where you're coming from, and I've already fought with you about it today [Laughter.] What I would say is that I find it really interesting that your CEO would put more stock in ad words that he would in social media engagement. Cause, at the end of the day, I hear the argument that he is making. At the end of the day, you're putting your money into ad words and, you might get the results, what are the results? So many impressions that actually turn into an actual sale. And, these are rhetorical questions, right, so I'm asking not asking you directly. What I 'm saying is you can put $5000 into a campaign and never get a sale out of it - that's trackable, Google delivered those impressions, but is that actually a valuable investment when there's no sale, on the other hand, like an intern, or somebody, anybody in the company getting out there and talking to people like they want to be talked to in the effort and hope that you might get a sale out of that, probably has a much higher chance of actually converting than, instead of following ad words up there and spending thousands of dollars. GB: So, I think that part the confluence of where I believe both Aaron and Patricia are right, has to do with, I've been advocating for a very realistic and down-to-earth investment of money in the media. I do believe that it's worth investing in, and I believe it can be done well. He's right, that when it comes to the financial investments, well, part of it's very minimal manpower, and very minimal financial investments, it started. The important question though is whether or not the upper echelon and the leadership, as a whole, are willing to invest in the media, personally. And if you have an organization where you tell the unpaid intern, 'Hey, go do this, ok, how many [...]   just go do it", and no one talks to that intern, and they attempt it on their own, you're going to have terrible results. And the question is, if that intern is allowed to, once a month, take a video camera and have 30 minutes of the CEO's time to do a direct-to-camera video for the YouTube Channel - that's going to work, and that didn't cost any money other that the CEO's time. But that's the problem is while these organizations where the CEO says, "Yeah, but I don't have time for it, my managers don't have time for it. We want someone to go do something." MT: Let's take a couple questions. U/i Female Speaker D:  I work for a large government contractor and we are just now, we just hired a social media manager, and started a YouTube channel, but it's taken a long time and it's a fairly sizeable company. And I think the resistance is security, as she mentioned. But also, our clients are government decision makers, and they tend to be[?] older, and the belief is that social media is for a younger generation. So, what have you found in your research and your findings that I can take back to my CEO and say, "No, there is research that shows this attracts older government decision makers." PM: So, Forrester just put out a report, a social technographics report. So they look at different demographics, and they map their social behavior. So, they start at the most engaged all the way down to people who are just spectators or uninvolved. And that's the kind of data that you could put in front of a C-level person, or director-level person. They want to know what's the survey data telling you about the kinds of people that you're trying to reach. I would definitely recommend looking at something like that. [Clarifies for questioner that the organization is Forrester Research.] DO: Also, Pew Internet just recently did a talk at the Web Editors Roundtable which is a great event. I captured the content, so you're welcome to come see it. It's on the site, pointabout.com - just search for Pew, and you'll find that. It's called, "The Nine Tribes of the Internet", and it talks about very specific slicing of all the different types of users, and what the growth trends are, or, they're not all growing, but, many of them are. A lot of them do skew, just actually like [...] was saying. And Patricia, just for the record, I'm not going disagree with you at all. I completely agree with you. In the best of both worlds, this is a top-level down strategic thing that's being done, but I feel like we're all kind of sneaking out of the house in the middle of the night. It's like you have to go show some small successes in order to be able to get that big budget, and I guess that was my point. MT: Let's take two more questions on the topic. SG: I think one thing that we haven't gotten to that could reach your audience is that journalists are watching social media, because that's where the buzz is coming, and even if it's not reaching your consumers, it's reaching the people who write to your consumers, who are still reading the paper on paper, probably. So I think you can relationship build with journalists directly, you can keep story ideas, and position yourself as a thought leader, via Blogink, so that when it comes time for they need an expert for their story, and they either Google, or they've seen you Tweet about it, then they're going to reach out to you. So, that's our long term. U/I Female Speaker E: And that's what exactly we've done. We've used it on a PRN, but not so much in the market. MT: Carrie, in the back, do you have a question? Carrie: [Very poor audio] I've noticed with some companies that the push for ROI comes [...] in that it vies with traditional things like advertising and public relations. It's actually not, [changes thought], you can't always make that tie from placing that ad to placing that sale, and [...] metric. So, they still do it, because they've always done it. And, the social media is damned[?]. And, I'm wondering, take the part that says that's part of it, and also, maybe some tools to overcoming that problem[?]. GB: One thing which I think is to your question, and to the question right before it, it's worth trying to double[?] show them surveys and results that have been done by their people, but it's incredibly important to be tracking the work you're doing in the meantime, it's sourcing everything you can. And between Google Analytic and YouTube accounts, they now have analytics built into it that you can actually see the sex breakup, the age breakup of people watching your videos. On all these things you can be tracking what's going on in the meantime. And, you can be saying, "I know that someone came to this part of our website and bought this from one of our ads, because we can track that." And, it's of incredible importance to be trying to convince these people by saying, "I've doing this for the last few months and here, I can show you quantitative results." And try to get that from your TV advertisement, department, or you old media, because you just can't. Not like this. U/i Male Speaker A: I have a comment on that, too. You can do targeted access campaigns. So, I'm a big believer of doing a lot of testing, as well. That's what I was going to tell you. Google allows you to target by domain, target by geography, and target by time of day. So, if you're trying to reach government influencers, 8[:00]-to-5[:00] from D.C., from Punjab, Thai domain names, and whatnot. [...] if you do a lot of really small parts to see what kind of traffic is running to your site, outgoing [...]. GB: Just the one thing that already enforces that, and I forget about this, but, ad from Facebook? You can target it to say, I really want these people to see this if they work at the department of whatever, and such, or, I want people to see this if they are literally on a computer in the Capitol Building. You can target like nobody's business. DO:  You can also get on the content side. Google offers a great set of tools. How many people in this room are doing AB Multivariate testing, for example? I not surprised the answer's zero, so AB Multivariate testing is for every piece of content you have, every web page you have, you have the a] control, and, the b] contender. And Google offers this for free, where you can say, "Google, I want you serve up about a 50-50 ratio of what I think is the best page, and then what the intern thinks is the best page, or whatever. And let those two pages 'duke it out'." And Google will tell you which one is performing better, and you just keep repeating that cycle. You can increase your conversion rates from 1% to 7% on a page by doing that. Which is very significant, you just increased by 700% the number of people that are contacting you off of a page. So, there are tools you can use like that. Also, just very quickly to your point, there are some very non-threatening things that you can do with social media. You're saying that you're already, for example, interviewing the CEO, or your doing a blog list. Start, transcribe it, and turn it into text. All that great video and audio, Google can't see that, it's opaque to Google. So, you've just spent all this time creating all this great audio and video, but you're not getting any Google credit for it. Spend $.15, $.25, $.50 a minute for that on Craigslist; you'll get tons of responses from people willing to transcribe your content into text. Put that below the page, but, the video and the audio, the transcription is not for the humans - it's for Google. MT: Let's talk about 'Buzz', and what is Buzz tracking, and can we honestly measure that. How can you honestly measure that? AB: I think everybody's going to say Twitter. Hash Hacks[?], but, I think that's also kind of a game system, and I don't think it's a very good system. But, certainly, although I don't know if there's an answer to that, I don't know if anyone here has an answer to that, you can probably patent it. But, there are all kinds of different [changes thought]. NY Times has BlogRunner, which is sort of their top news in a variety of different verticals. It's not just NY Times content, they track blogs, and they track other things, as well. In political space, there's the media randoms, and the technemes, and the Technoratis, and all these different sites that will sort of give you a picture of what people are talking about at the moment, with Twitter you have the hashtag and the trending topics. I don't know if there's really an answer to that. SG: How many people in here are familiar with the concept of the long tail? The idea is that the top 10% of, like, say, blogs are getting 90% of the readership, and then there's long tail of like 90% of the blogs are only getting 10% of the readership. And, they are these very niche communities. But there is a lot of value, and there are books written about this, and it's a big popular theory in social media. There is a lot of value in the long tail, and that's where people even see the internet going with trends with hyper logo[?], and things like this, the way we are able to do all this targeting. So, you can generate Buzz with a very small community, but it can be a very important community to your brand, or your mission. So, it goes back to the Obama-like results, that are graded on a national level, but it really depends on who your audience is, and who you're trying to reach. And it could be very easy to get the attention now, it's like, you can't really get the mommy fear, but maybe just the mommy fear who knit, too, or has a child who's dealing with an illness, and they're doing a lot of doctor's visits, but that may be a very key audience for you. So, the idea is maybe don't worry about getting the biggest Buzz, but really getting a buzz with your niche audience. DO: So, two quick thoughts - one about long tail, and the other about Twitter. First, Twitter. How many people have an RSS feed of Twitter searches set up right now? So, three people. Alright, you can do this when you get home tonight, and this is awesome. I'll tell you, this is going to change your life, maybe. [Laughter.] So go to search.twitter.com, and just search for anything, search for your name, your company's name, maybe a product that you're interested in, you know, 'F22 Raptor', whatever it is for you defense folks [Laughter.] And then, on the top right there's a little RSS icon which most of you, do you understand RSS? Right, so you can click on that and you can come into your e-mail, or into an RS reader - you will be amazed at what you find. The interactive manager for Coca-Cola was doing this, Coke has this Coke Rewards thing, and I asked her, her name is Carol. I said "Carol, are you tracking what people are saying about My Coke Rewards?" She said, "No, we're not." I said, "You should be, let's do it!" [Laughter.] And, people were like sharing codes on Twitter, and bashing it, it was very enlightening. So, that's super simple, it's free, it takes a second to do, it'll make you look like the smartest person in your office. You also get the news first when it's something that is pertinent to you, so that's very user [cut off.]. AB: You can also embed it. You embed those searches in Twitter. You use Twitter.com, you do your search on the sidebar, and then you can actually save that search and keep going back to it, as well. DO: So, it doesn't really answer the Buzz question, but it, at least, let's you personally see about things that you care about quickly. PM: Well, there are also tools, like Metrics, and I think, Nielsen, either they bought Metrics, or they have their own competing products that actually look at brand perceptions, and so, will look at beyond just what's happening on the web, overall perceptions with the brand, with the social media being a component of it. So, that is a tool that's out there, or a capability that's out there, that if you're in an organization that's very brand sensitive, very focused on what people are saying about you, you may want to invest in something like that. GB: Just one quick thing. I agree with using all of these tools. My umbrage connect comes back to the original question, and I'm not a big fan of Buzz, intrinsically, because in my mind, Buzz is ephemeral, and it's too ghostlike to just chase it for its own good. And, I think it's a mistake to not be focusing consistently on the question of whatever we're doing right now, already; can we use these tools to get an extra 5%? Can we use it to become more efficient with what we're already doing, and see it as a more down-to-earth disimprovement[?] of your results, as it is? MT: What were you going to say about long tail? DO: Do you want to hear about long tail? [Laughter] Are there any realtors in this room? Can you raise your right hand and say, "I will not share this with any realtor?" Seriously, just raise your right hand, "I won't share this with any realtor!" That was your let hand, by the way. [Laughter] So, when you Google search for any home that's for sale in the D.C. area, D.C. Virginia, and Maryland, my own real estate company typically comes up number one in they Google search results. How do we do that? We use the long tail. There are probably only one-to-ten people searching for any specific property, but because we were able to expose a database of content and get Google to spider that content, there are apparently 1000 people a month that submit leads off of those terms. This realty company gets 1000 leads a month from exposing a database. And, so the point is, to the long tail point, if you have a database of data that you can expose to the internet, and you can make it so that there might only be very few searches for each of those terms, but there are so many of them. And also, part of the theory of long tail is when people are searching, for example, for a specific property address, they've done their research, they've probable driven past the house or they know the street. People tend, on the long tail, to be much more serious searchers. If I'm just searching for Alexandria homes, I might not be nearly as far along in my home searches if I'm searching for 1234 Main Street. So, if you have a database of content, you can use the long tail to really drive a lot of searches to your site. MT: Let's talk, this is kind of a two-part question, a personal question, but, social media as this tool is fairly new. How has it helped you in your business? If you could highlight maybe one major success, and you draw it back to the applications that you have, that you utilize today; and the second question is, out of all these social media applications, what is you favorite, and why? Gray? [Laughter] This may be easy for you. GB: With the campaign, everything was, media was an equal player at the table to every other department. And, its success story was enhancing the finance field, political operations, every element that was pretty [..] in the campaign. I got more done because of media, and that's it. And, it was not worth it, intrinsically, it was worth just a management part that was already there. SG: I would have never expected that this would be my career. I was a lobbyist, and I went to law school, and I am a non-participating lawyer, social media consultant, who blogs about D.C. [Laughs] So, it was really unexpected, but I think that I just really loved tinkering with the tools world, experimenting and really engaging in community, [Changes thought], I knew all these people from the social media community, the tech community, even if we only Twittered at each other, it's just grown my network exponentially. And, my favorite tool would probably be Twitter. PM: Siteworx is different from others here, we do website development. I'm a B2B marketer. I think for us, what has helped us be is relevant. So, we have a lot of very technical people in our organization that talk tech all the time. From a marketing standpoint, I don't want to talk tech, I want to talk business problems. So, I want to understand what people who are in our space care about, it's helped us, in my mind to be more relevant. And I will say Twitter, but Twitter Search. Oh man, it's just awesome being exposed to what people are thinking, and from a marketing standpoint, I spent my whole career of trying to get into peoples heads, right? This is like right in their head, like all day long, so I think that to me is the best tool. DO: So, a great story about Twitter, because I think a lot of people are trying to figure Twitter out. I know that I'm still trying to figure out. But, I think the greatest thing about Twitter is an elementary teacher would Tweet what was going on in the classrooms to all the parents, so that when their child came home, they could, instead of saying, "How was your day?", and not getting a response, they could say, "Hey, how was that project in Christopher Columbus?" So that's a great example of the power of Twitter. Twitter Search, I completely agree, to me is the most powerful part of Twitter, it's not sending Tweets out, but it's seeing what other people are saying. I think I've given a lot of examples. I got to say that this idea, like Gray is saying, that social media is a tool, it's magnifying the others things that you're already doing. It's taking that content and distributing it out to the people that need to see it. I feel very strongly that's how you have to think about social media - as a magnifying glass, maybe that's a great way to say it. AB: Well, if it wasn't for social media, I'd still be working for one of the companies you work for. [Laughter] So, I'm self-employed, I have my own company, I built my company around social media, around WordPress, specifically, and added to my [...]    as well, in there. And, if it wasn't for my engagement, and, honestly, social media has leveled the playing field for many people. It just allowed us all to compete on levels that we weren't able to compete on before. If it wasn't for that, then, I wouldn't' be where I am today. So, certainly it's been very important in my career and my life. I will also say Twitter, it's the best tool out there. Is that the trend? [Laughter] MT: Well, speaking about Twitter, maybe, do all you think that it can survive without having to sell any ads? Is it going to stay? AB: Oh, this is really a good question. Actually, we run a Twitter business model, that's cool. That would be a great conversation, actually. I think what they're probably going to end up doing is not selling ads, because the ad market is, kind of 'eh.' And, too many people were getting their Tweets not through, 'Tweetered up', huh? Through TweetDeck and Seizement[?] Desktop, and, whatever your household variety Twitter climate[?], Twitterberry, whatever, they're not going to be able to thread ads in there. So, don't think that that is really the way it is going to probably go, but, partnership of carriers. How many of us use Twitter on a mobile device?  Ok, yeah. So, if AT&T, or Verizon, wants to start taking a little bit of a Twitter tax out, I see that as a way for them to make money, and possibly, Twitter'd make money that way, as well, in priority. But, that's net neutrality, and that's not really what I want to hear. [Laughter] DO: A great example of what one of the founders of Twitter mentioned, they've been very tightlipped about they're going to make money. But, after a lot of prodding, and I think, and all things, D Conference, the guy said, "All right, give us an example." "Imagine the flower shop has flowers that are going to be dead the next day, they can send a Tweet out saying, half-priced flowers if you come by before we close today." So, the stuff like that I think would very, very powerful. GB: I'd like to pursue a bit of the Craigslist model. I like the fact that I don't have to pay the post from Craigslist. And the way they do it, funny, if someone wants to have a business model based around posting on Craigslist, then they charge a very nominal fee. And, so you can make it so it's free for everyone who's at home, everyone is just an individual. I think we want to actually organize this small, and there are a lot of possibilities therein. If you charge something that's incredibly nominal, and then the other part that's really overlooked here is the amount of data they accumulate is enormous. And, for the first time in history, we're able to take enormous amounts of data, and really start crunching it in very interesting ways. If you can start actually drawing graphs and very rich details about how Coca-Cola sought you out, the potency there is enormous. DO: Speaking of kind of keeping t

Tony Hsieh - CEO of Zappos at INC 500 Conf

Note: Video may take 30 seconds to start playing.

Today I had the pleasure of watching Tony Hsieh, the CEO of Zappos.com, speak at the INC 500|5000 conference.  Above is a video and below is the transcript from his speech - a must-watch/read for any entrepreneur.  You can also see Tony's slideshow here

Here's a transcript of Tony's speech:

Good morning and welcome to the 2009 INC 500/INC 5000 conference.  You know, yesterday, I was reading the newspaper. And I read that according to certain economic indicators, we're getting to the end of the recession. Let me say when I look out at this crowd, I think maybe we are at the end of the recession. Many of you asked me last night how many attendees were here. I'm happy to say that this is the biggest conference that we've ever had, 1,700 people, and I would like to thank all of you for coming--our sponsors, our INC 5000 [...] team, and the great team of the conference organizers. During this conference, you'll be hearing from a number of entrepreneurs, many of them who've been in the magazine before. For instance, our first speaker, Tony Hsieh, was on the cover just a few months ago. So in a sense, this conference is kind of like INC live. You'll also, of course, be meeting each other, talking to each other, and seeing some people. Also on stage, who've been on this list before, which I think is particularly pertinent to the people here. I would like to just tell you about a few of the people on the list. I mean, I could go on and on, because as I read the profiles as our reporters delve into your stories, one is really more fascinating than the next. So I just pulled a couple out, and I just wanted to tell you about these people. I need my glasses for this.

Note: Video may take 30 seconds to start playing. Today I had the pleasure of watching Tony Hsieh, the CEO of Zappos.com, speak at the INC 500|5000 conference.  Above is a video and below is the transcript from his speech - a must-watch/read for any entrepreneur.  You can also see Tony's slideshow here Here's a transcript of Tony's speech: Good morning and welcome to the 2009 INC 500/INC 5000 conference.  You know, yesterday, I was reading the newspaper. And I read that according to certain economic indicators, we're getting to the end of the recession. Let me say when I look out at this crowd, I think maybe we are at the end of the recession. Many of you asked me last night how many attendees were here. I'm happy to say that this is the biggest conference that we've ever had, 1,700 people, and I would like to thank all of you for coming--our sponsors, our INC 5000 [...] team, and the great team of the conference organizers. During this conference, you'll be hearing from a number of entrepreneurs, many of them who've been in the magazine before. For instance, our first speaker, Tony Hsieh, was on the cover just a few months ago. So in a sense, this conference is kind of like INC live. You'll also, of course, be meeting each other, talking to each other, and seeing some people. Also on stage, who've been on this list before, which I think is particularly pertinent to the people here. I would like to just tell you about a few of the people on the list. I mean, I could go on and on, because as I read the profiles as our reporters delve into your stories, one is really more fascinating than the next. So I just pulled a couple out, and I just wanted to tell you about these people. I need my glasses for this. Number 17 on the list is P3S Corporation, the daughter of a Mexican immigrant mother, and an American father, Mary Ellen Trevino grew up in Port Isabel--a town on the Texas-Mexico border--under difficult circumstances. Her father was a stroke victim and unable to work, so Trevino studied hard in high school, earned a scholarship, and attended college at St. Mary's University. She went on to get her MBA and began a career in the federal sector. She started P3S Corporation in 2005 to provide a variety of business solutions to the federal government. P3S is the highest-ranked female-owned company on this year's list. Congratulations, Miss Trevino. On number 225, was raised by blue-collared parents in Niagara Falls, NY. Gregory Celestan wanted a ticket out of town and needed a way to pay for college. He was accepted at West Point Military Academy, a great way to get a way to pay for college. He became a Foreign Area Officer, studying the language in culture of a region for military intelligence, specialized in Russian. In 2004, Celestan retired, having served 20 years and reached the rank of Lieutenant Colonel. He recalls watching large defense contractors at work and thinking, "I can do better". So after the end of his service, he founded Celestar, which provides intelligence support to government organizations. The concept of "I can do better", how many of you looked at something and thought, "I can do better"? Number 1507, Liberty Tire Recycling has kept a hundred million rubber tires from landfill; of the equivalent 25% of the country's annual scrap tires. Thank you, CEO Jeffery Kendall. Thank you, Jeffery. And last, I'd like to mention my old friend, Kingston Technology. Kingston Technology was started by Taiwan immigrants, David Sun and John Tu, in 1987 and became the number one company on this list in 1992 with $141 million in revenue and a growth rate of--dig this--117,000%. It has shown up three times since then, which means, it has kept growing and growing and growing. If you wonder who's at the, toward the bottom of the 5000 list, well, you can look at Kingston Technology at number 4445. It is $4 billion in revenue and 4,500 employees. Of course, all these companies are much more than a series of impressive numbers, but the INC ranking is at its heart a celebration of numbers. The list is not about what's cool, or who the editors like, or the result of some kind of squishy methodology. The list is about the revenue growth, and we know from publishing this list over the years that revenue growth often leads to people getting hired and great things getting done. And I'm not the only who thinks so. A friend of INC's really wanted to be here; and when he found his own conference was scheduled at exactly the same time, he asked if he might say a few video words instead. Given that he's a very smart man--some might say brilliant--and that he's highly articulate, and that he's extremely accomplished and knowledgeable, I said, "Yes, please. Thank you." Could we roll the videotape? [...] 30 year history, many of the household name company, things we know today, like Microsoft and Oracle. Once we're found on this list is the nation's 500 fastest growing privately-owned companies. Congratulations to this year's INC 500 and 5000 honorees. Your accomplishments including accurate revenue of $214 billion dollars and immediate 3-year growth rate of 126% were impressive and particularly inspiring, given the challenging economic climate we face this year. I'm proud of the record-level prosperity that America experienced when I was President. And while I believe the government's policy is at a critical role at playing in creative conditions for economic growth and rewarding innovation and hard work. I never forget that the heavy lifting of the American economy doesn't take place in Washington DC. In factories, labs and offices all across America run by people like you who turn ideas and products and services make the impossible possible and work hard to make sure their companies can compete. In addition to creating the jobs that are important in turning our economy around, a lot of you also know as I do, about the importance of giving back to your communities. Many of you participated yesterday in INC's day of service. I encourage all of you to make public service a regular part of your lives for the opportunities that are found everywhere. For example, I'm pleased to have INC as a part of my foundation's Clinton Economic Opportunity this year. Through this partnership, we've created the Entrepreneurial Mentoring Program, which pairs entrepreneurs learning how to grow companies in intercity communities, was successful business leaders in entrepreneur mentors, like INC's own Norm Brodsky and Jake Owens. The current program is working with businesses in Oakland, Chicago, New York and Newark. We're building programs in several more cities across America, including Philadelphia. I look forward to continuing to work with INC to reach more entrepreneurship, and I hope some of you will agree to service and prepare mentors as well. Thanks for letting me say a few words today. And I hope you enjoy the conference. Thank you, President Clinton. We're grateful that the President's so passionately interested in entrepreneurs, and I hope that some of you will consider joining the mentoring program. I understand that a day of service yesterday was an incredible success. Many of you went out to do that, and perhaps, some of those who were inspired to do that would also be inspired to be a mentor. There's an explanation of the mentoring program in your bag, and I hope you will take a look at it. And now, here to introduce the first speaker is Richard Quigley, President of Chase Business Cards. Thank you very much for coming. President of Business Card for JPMorgan Chase. We're thrilled to be here today with you to celebrate your inclusion on the INC's 500/5000 list; but maybe even more, as Jane said to celebrate the fact, that you've been incredibly successful in these very difficult economic times. And I think JPMorgan Chase, we've been so inspired by your resiliency and your resourcefulness through this difficult period. In fact, we've been so inspired by the energy and passion of small business owners that just yesterday, we launched something called INK from Chase, which is a suite of new business cards that are especially designed for small business owners. The other thing we did just recently was ask all of you to participate in a survey, and it has some pretty interesting results from this survey where you gave your opinions about your business strategies. And one of the things that you said, which was very striking I thought, was how important customer engagement is to all of you. In fact, 54% of you said that customer engagement was critical to your business strategy going forward getting more revenue from your existing customers. And I think nobody exemplifies that notion of customer engagement more than our first speaker today, Tony Hsieh, CEO of Zappos. They've done an absolutely amazing job of building a brand that's really all about catering and service to [...] customers. Zappos, if you don't know, is a 10-year old company. Tony started in 1999; and in that brief period of time, they've gone from having $1.6 million dollars of gross merchandise revenue to today over $1 billion dollars. I, myself, live in a Zappos household and my wife is an avid Zappos customer. I think she thought it was just amazing that instead of having to actually go to the shoe store, the shoe store would come to you--and we've made a substantial contribution to his $1 billion dollars in sales. Another thing, which I think is an interesting evidence of Tony's connections with his customers is that if you were to go to his Twitter page, there's 1.3 million people who've followed Tony and what he has to say on Twitter every day. I think it's on that level that he has this disengagement and this relationship with his customers, which is truly amazing. So please join me in welcoming a really extraordinary entrepreneur, Tony Hsieh. So, I wanted to do a quick survey first. How many people have heard of Zappos prior to this? And how many of you have actually shopped with us before? OK. So normally, when I do the survey, the ratio of people that have shopped with us is about 2:1 women to men; and a lot of the men tell me that they themselves have not actually shopped in Zappos, but their girlfriends or wives have. I ask this same question about a year ago to a record executive from one of the major record labels. He was turning our offices in Las Vegas--and by the way, I'll give information later on about the tours there. They're actually open to the public, so next time any of you are in Las Vegas, I would definitely recommend coming for a tour. It's a lot of fun and takes about an hour. And so he was walking through the merchandising area when I asked this question, and then, I took him upstairs to our customer loyalty team--and that's our name for our call center--and as he was walking by, I asked if he had shopped from us. He said, "No," but he suspects his wife has because these white boxes keep showing up, but then they disappear, and he doesn't know whether his wife actually bought the shoes or returned the shoes or what was going on. And anytime he asked his wife what was going on, she just refused to tell me. So, he sat down next to one of our customer loyalty team reps and forced her to pull up his wife's account. And discovered that she had spent over $62,000 in her lifetime; and so as far as I know, they're still not divorced. Anyways, I definitely recommend coming for the tour. So before getting into Zappos, I wanted to talk a little bit about what led me to Zappos, and the story actually begins with pizza. I was running a pizza business in college with a college roommate and was hiring the workers and dealing with suppliers, occasionally making the pizza myself. And this guy named Alfred, who's actually our CFO and COO today at Zappos, would stop by every night and order a large pepperoni pizza from me. And it wasn't that weird. I didn't think anything of it at the time 'cause in college, we actually had a couple of nicknames for Alfred. We would call him either the 'human trash compactor' or 'monster,' because anytime we went out to a Chinese restaurant--there would be like 10 of us--and he would literally finish everyone's leftovers, and he just really enjoyed eating. And so, he would stop by every night, buy a large pepperoni pizza; but then sometimes, he would come by a few hours later and buy another large pepperoni pizza from me. And I thought to myself, "OK, this boy can definitely eat." Well, I found out a few years later, Alfred was taking the pizzas upstairs and selling them off by the slice so, I guess that's why he's our CFO and COO today. So after the pizza business, the same guy was running the business with, he and I started a company called LinkExchange, and we grew that to about 100 or so people and ended up selling that company to Microsoft in 1998. But what a lot of people don't know is actually the reason why we ended up selling the company. I remember when it was just five or ten of us; it was a lot of fun. We're working around a clock is kind of like you're typical .com back in the day--had no idea of what day of the week it was--sleeping underneath our desks, showering occasionally. And then, we didn't know any better to pay attention to company [Pulitzer]; and by the time we got to 100 people--like I remember, I, myself, tried getting out of bed in the morning and that was kind of a weird feeling 'cause this is a company I had cofounded in--if I, myself, didn't look forward going into the office, then how must the other employees feel? And so, we ended up selling the company to Microsoft, and then Alfred and I got together and formed an investment fund. And we invested in about probably 20 or so different internet companies and Zappos just happened to be one of them. But over the period of the next year or so, I realized just sitting on the sidelines and investing what was pretty boring, and I really missed building something and being part of building something. So I joined Zappos full-time within the year, and I've been with Zappos ever since. And then also, actually, back in July we announced Amazon--the deal hasn't actually closed yet, we're expecting to close before the end of the year--but Amazon just announced that they're going to acquire Zappos. And so we're pretty excited about that in being able to build Zappos brand under the Amazon umbrella. So at a glance, most people think of Zappos as a footwear, online footwear retailer, and that's actually how we started. But internally, we think of Zappos brand very differently. We're actually hoping ten years from now, people won't even realize that we've started selling shoes online. In fact, today we sell a lot more than shoes. We sell clothing, beauty products, kitchenware, housewares; and really, we just want Zappos brand to stand for the very best customer service and customer experience. And we even have customers email us and call us and ask us if we would please run an airline or start or run the IRS. And you know, we're not going to do either of those things this year; but 20-30 years from now, I wouldn't rule out a Zappos Airlines. That's just about the very best customer service with the best customer experience. So one brand we look to for inspirations sometimes is Virgin. They're in a whole bunch of different businesses: music, airlines, and so on. The difference is that the Virgin brand is more about being hip and cool whereas we just want the Zappos brand to stand for the very best customer service. So we've gotten a lot of recognition--especially this year--but the one that we're actually most proud of in terms of publications is making the Fortune 100 Best Companies to Work For. We actually were the highest ranking newcomer to the list this year, and that was a goal that we had set out earlier on because we wanted to make sure that we didn't make the same mistake that I made at my previous company. So we're all pretty happy about that. So in terms of our focus though, a lot of people think that the way you need to get more customers is to focus on marketing and always think about how to market to new customers. Our focus is really on how do we make the customer experience better and better. We have a little over 11 million customers; and on any given day, about 75% of our orders are from repeat customers. And our philosophy is take most of the money that we would have spent on marketing; and instead, put it into the customer experience, and then let our customers do the marketing for us through word of mouth. So over the past ten years, we basically grown from no sales in '99 to over a billion dollars in gross merchandise sales, up in 2008; and then the number one driver of that growth has been through repeat customers and word of mouth. So what is customer service? Well, it starts with our policies. We offer free shipping both ways, so a lot of customers will order 10 pairs of shoes, and we'll ship all of them there to where they're living for free. And then they'll try them on with 10 different outfits and then ship back the ones that they don't like or that don't fit. We have a 365-day return policy for people that have trouble making up their minds or committing, and we have a 1-800 number that's at the top of every single page of our website. And that's pretty different from most websites. Most websites--it's very hard to find any contact information, it's normally 30-like, 5-links deep--and then it's an address that you can only email once. And we take the exact opposite approach. We actually want to talk to our customers. It's funny 'cause sometimes I'll speak at branding or marketing conferences, and there's a lot of discussion about consumers being bombarded with thousands and thousands of marketing messages everyday. How do you get your messages to stand out? How do you get your brand to stand out? And as kind of unsexy and lo-tech as it may sound, the telephone is actually one of the best branding devices out there. You have the customer's undivided attention for 5-to 10-minutes; and if you get the interaction right, what we found is that the customer remembers it for a very long time and tells her friends and family about it. And so, what we've also found is that most customers that call us actually does not result in immediate sale. So, we're not there trying to up-sell people or try to convert every call into a sale. In fact, we run our call center very differently from most call centers. There's no scripts; there's no call times. We actually just found out that our longest phone call just happened about a month ago. It was 5 hours and 57 minutes 'cause customers sometimes call; they just call for all sorts of reason. Maybe it's the first time going through the return process or maybe there's a wedding this weekend, and they just want some advice on what to wear and, sometimes they call just 'cause they're lonely and want to talk to somebody, and we're happy to help them out. The other interesting thing is even though we sell online, but what we found on average every customer calls us at least once sometime during their lifetime. So most of what we focus on though is what happens after the sales been made. There's a lot of websites where you can order something; and maybe a day later or a week later, that we get a message back saying, "Oh sorry, that items actually on back order; it's out of stock and not available," so for us, we decided to go with the philosophy of actually only showing on our website what we knew was physically in our warehouse. Our warehouse is located about 15 minutes from the UPS Hub; and because we run the warehouse 24/7, which is actually not the most efficient way to run a warehouse. The most efficient way is to let the orders pile up; and then when the picker has to go pick all the items, they don't have to walk as far. But we decided we're going to sacrifice some efficiency in order to make the customer experience better. And so a lot of customers will order as late as midnight Eastern--and because we're so close to the UPS Hub, because we run our warehouse 24/7, and because we will do surprise upgrades to overnight shipping for a lot of our customers--and they receive their order on their doorstep eight hours later and actually raise that whole "wow" experience for the customers and generates that word of mouth. And a lot of people ask us, "isn't that expensive to do, to upgrade to overnight shipping?" And it is very expensive for us, but for us, we really view that as our marketing dollars because that's improving the customer's experience and that's what's getting our customers to talk about us to their friends and family, and really trading an emotional connection with the customer. The other thing we do is when the customer calls and let's say they're looking for a pair of shoes, and we're out of stock with a certain size, everyone's trying to actually look on at least 3 other websites; and if they find the shoe there to direct the customer to the competitor's website. And yes, we obviously lose that sale, but we're not trying to maximize every single transaction. We're trying to build a lifelong relationship with our customers. So I talked about all these different things that we do on the customer experience side, but our number one focus out of the company is actually not customer service. Our number one focus is company culture. Our whole belief is that if we get the culture right, then most of the other stuff, like building a long-term [...] brand or delivering great service will happen naturally on its own. So we actually do a lot of different things to make sure that not only does our culture not go downhill as we get bigger and bigger, but our culture actually scales and gets stronger and stronger as we grow. And it starts with the hiring process. We actually do two sets of interviews. Our hiring manager, the hiring manager of his or her team will do this standard within the team, relevant experience and technical ability and so on; but then our HR department does a separate set of interviews, purely for culture fit. And they have to pass both in order to be hired. So we've actually passed on a lot of really smart, talented people that we know will make an immediate impact on our top or bottom line; but if they're not a culture fit, we won't hire them. And the reverse is true, too. We'll actually fire people, even if they're doing their specific job function perfectly fine, if they're doing something that's not living up to our core values and is bad for the culture. And our performance reviews are also 50% based on whether you're living our core values, or if you're a manager and inspiring the core values in others. The other thing we do is everyone that's hired in our headquarters in Las Vegas--it doesn't matter what position you're in, you can be in accounting or lawyer, software developer--you go through the exact same training as our customer loyalty reps or our other call center reps. And so we go over our company history, our philosophy about customer service, [...] customer culture, and then you're actually on the phone for two weeks taking calls from customers. And the reason we do that is because if we really want our brand to stand for the very best customer service, then our philosophy is that customer service shouldn't just be a department, it should be the entire company. And during our busy season, and Q4 around the holidays, it's great because people from every department has had training, they can jump on the phones as well, so we've found that's been very helpful. The other thing we do is during that training process which is a 4-week processing in Las Vegas; and then we also send you to Kentucky for a week, which is where our warehouse is. And you do all the warehouse functions picking, packing, and receiving, and so on; but while in Vegas at the end of the first week, we make an offer to everyone in the class. And the offer is this: we will pay you for the time you've already spent working and being trained plus a bonus of $2,000.00 to quit and leave the company right now. And it's actually a standing offer 'til the end of training, and we actually just extended it even further so that the last couple months after training. And the reason for that is because we don't want people at Zappos just for a paycheck. In Las Vegas, there's plenty of other call centers--and $2,000.00 is pretty significant amount of money--and starting pay that is $11.00 an hour. And we really want people that believe in our long term vision and want to be a part of our culture, so these are some of the things that we do in order to help protect our culture and make sure it gets stronger and stronger. So for 2009, in terms of how we're thinking of the Zappos brand, we're really thinking about going the three C's. Really, we think of this in terms of the life cycle of the customer. If you've never heard of Zappos before, we want to make sure that you understand that we have a large selection of clothing and shoes. If you know about that, then we want to make sure that you understand that we're about the best customer service, and that's not something that we say, so much that people experience when they get that surprise upgrade to overnight shipping or when they call and talk to one of our call center reps. And for people that know that, we want to make sure that they understand our culture and our core values because that's the platform that makes everything possible. So we've actually had customers email us and tell us that Zappos is happiness; and above this, that excitement they feel when they get that perfect outfit or the perfect pair of shoes. So whether it's the happiness they feel from getting that perfect item or the happiness that customers feel from dealing with someone that's a real person on the other end of the phone, we feel the customer service, or the happiness the employees feel by being part of a culture that they really believe in, the thing that ties all of this together for us at Zappos, is that Zappos is really just about delivering happiness. Whether it's to customers or employees, and we also apply that same philosophy to vendors as well. So what is the Zappos culture? Well, for us we came up with a list of ten core values, and this is something where we approach it a little differently. We didn't go and just have a few people go on a retreat somewhere and say, "Oh what should our core values be?" We actually emailed the entire company and asked them, "What do you want the Zappos core values to be?" And the keyword here is actually committable core values because a lot of companies have things called--they might call them core values or guiding principles or so on--but the problem with most of them is that it usually reads like a press release, like a marketing department put together, it's very lofty sounding. And maybe you learn about it on day one of orientation, but then it just becomes this meaningless plaque on the wall, and we wanted to make sure that it didn't become meaningless. And so by committable, it means that you're actually willing to hire and fire based on those core values. And so these are our ten core values at Zappos, and we actually have interview questions for each and every one of these. The probably one that trips us up the most is actually number ten, be humble, because there's a lot of smart, talented people out there that are also egotistical. And at Zappos, we interview someone that's really egotistical, no matter how smart or how much they can contribute to the company in the short-term, we won't hire them. It's not even a question, whereas at most companies, probably the conversation afterwards would be, "Well, this guy can add a lot of value to the company, and he might be annoying and rub you the wrong way occasionally, but he's going to add a lot of value so we should hire him." And I think that's why company culture start going downhill at larger companies because that one hired isn't going to break or wreck the company culture, but making compromises like that over and over and over again is what eventually brings the company culture downhill. So we have different interview questions, just as an example for number three, create a fun or little weirdness. One of our interview questions is actually on the scale of one to ten, how weird are you? If you're a one, then you're probably a little bit too straight-laced for the Zappos culture; if you're a ten, you might be too psychotic for us. But there's no actual number that we're looking for. Our belief is that everyone's a little weird somehow and really, this is just a fun way of saying that we recognize and celebrate each person's individuality. And we want their true personalities to come out in their interactions with employees as well as their interactions with customers over the phone. Number four: be adventurous, creative, and open-minded. So one of the questions we ask is on a scale of one to ten, how lucky are you in life? One is, "I don't know why bad things always seem to happen to me." Ten is, "I don't know why good things always seem to happen to me." Well, we don't want to hire the 'ones' because they're unlucky, and they would bring bad luck to Zappos. We don't want bad luck to bring to Zappos. But actually, this was inspired by a research study that I read about a few years ago where they actually asked the exact same question to random groups of people. And so they got answers all over the board; and then they asked the participants to do a task, and the task was to go through a newspaper and count the number of photos that were in that newspaper. Now what they didn't know was that it was actually a fake newspaper; and sprinkled throughout the newspaper were these headlines that would say things like, 'if you're reading this headline now, then you can stop, the answers 37 and plus and collect an extra hundred dollars for seeing this headline from the researcher.' And what they found is that people who considered themselves unlucky in life, generally, never noticed the headlines. They went through the task at hand; and eventually, got the right answer. But the people that considered themselves lucky in life, generally, noticed the headline, stopped early and collected the extra $100 dollars. So the takeaway isn't so much that people are inherently lucky or unlucky, but that luck is really more about being open to opportunity to beyond just the task or the situation as it's being presented. And so that's why we ask that question for core value member for him. One of the other things that one of our other core values about being open and honest, and we've really found that committing to transparency, whether it's with employees or with vendors, or customers has really been something that we really believe in and has had a lot of benefits. So we have a lot of different ways we commit to transparency. If you go to Twitter.Zappos.com, we have 400 employees that are on Twitter. And we actually just aggregated all of their tweets together, and you can get a good sense of what our culture is like by going there. For our vendors, we have an extranet, where they can log in and see the exact same information our own wires can see. They can view on-hand inventory, sales and profitability, markdown and so on. We did ask sometimes, like aren't you worried about that information getting out in the hands of the competitors? And realistically, I'm sure some of the information does get out there; but on the flip side, we work over a thousand different vendors. And for us, it's like having an extra thousand pairs of eyes helping us co-manage the business, and we've just found out the benefits far outweigh any perceived cons or risks to it. We also have a Zapposinsights.com where we really, it's a video subscription service. And we really just share anything and everything about how we run our business; so with anyone that's a member that can go in and ask a question about recruiting. Or for our interview questions, for example, then we'll have the head of recruiting answer that question. And we also have a live event where companies from all over the world come in, and we really just open our doors and share how we do everything. So this is a common response that we get, "That's great." "Happy, you have a nice culture Zappos, but it would never work at my company." Well, I know Jim Collins is speaking, and he's written several great books butGood to Great is one of our favorites at Zappos. And what he's found is that actually it doesn't matter what your core values are or what your culture is as long as you commit to them. The most important thing is alignment. The other book I would also highly recommend is Tribal Leadership, which also looks into this aspect; and actually, if you go to Zappos, you can download the audio version of Tribal Leadership for free. That's something that we do just to help out other entrepreneurs and businesses. The other thing I wanted to talk about is vision. When we started out, our vision was 'let's just sell a lot of shoes.' And then three or four years later, we sat around one day and asked ourselves, "What do we want to be when we grow up?" "Do we want to be about shoes or do we want to be about something more meaningful?" And that's when we decided we really wanted the Zappos brand to stand for the very best customer service and customer experience. And so, when we made that decision and announced it to the company, what we found is that so many employees were a lot more passionate about the company. And when customers call up, they can sense the other person on the other end of the phone, really truly care about delivering the best service; and when vendors came, they could tell that 'wow,' like they can really sense the passion of the employees. And so for us, it was kind of an accidental thing. But what we found is that when we expanded the vision where it wasn't just about profits or revenue or being number one in the market, that suddenly just the whole business seemed to move forward. So I get asked sometimes, "What's a good market to go into?" by entrepreneurs. And I would say, actually, think about what you're actually passionate about and believe in and is meaningful to you. And don't just chase the money directly. Now I like to say is chase the vision, not the money. A movie called Notorious came out awhile back; and actually, Puff Daddy says to Biggy Smalls or Notorious PIG, "Don't chase the paper, chase the dream." I just wanted an excuse to put this slide in here. I know there's a lot of entrepreneurs here. I would challenge you to think about what would you be passionate about doing for ten years, even if you never made a dime? And if you have employees, what's the larger vision and greater purpose in the work beyond just money or profits or being number one in the market? You know there's a big difference between motivating employees and inspiring employees. And our whole philosophy is don't worry so much about the motivation part of it; but if you can inspire the employees to a larger vision, that's meaningful to them--that you yourself are passionate about--then you can accomplish so much more through inspiration instead of motivation. So, this is kind of the evolution of how we thought of the Zappos brand. We started out with just wanting to be about a selection of shoes, and then we evolved to customer service, and then we started thinking about our culture and core values more. And then in terms of customer service, how do we want to do it? We wanted to do it through a personal and emotional connection; and then this year, the thing that ties all of it together is really, it's just about delivering happiness to employees and customers. And that's really what we want our brand to be about. Wanted to tell another pizza story. This was two or three years ago in Santa Monica. I was at a Sketcher's Sales Conference and a bunch of us, after the conference, decided to go bar hopping in Santa Monica. And I never really been out in Santa Monica before, so there was a few of us from Zappos and a few of us from Sketchers, and we went out to the first bar and ordered a round of drinks. And then someone--I'm not actually sure who ordered a round of shots--and so, we took the shots and finished the drinks. And we went to the next bar and ordered another round of drinks; and then someone else ordered a round of shots, and we had to drink the shots because you can't let the alcohol go to waste. And so we drank the shots, and then we went to the 3rd bar; and someone ordered a round of drinks, and then I'm not sure how many shots were ordered after that. But what I do know is that we ended up basically, going from bar to bar and eventually last call in Santa Monica's 2am; so eventually, we finished and wound up and started walking back to the hotel. And during this walk to the hotel, one of the Sketchers girls that we were with kept talking about this pepperoni pizza that she had seen on the room service menu; how she was looking forward to like eating the pepperoni pizza as soon as we got to the hotel room. Like she was going to call room service and order the pepperoni pizza, and it was only a 5 minute walk, but it seemed like it was much longer with her constantly talking about it. And so we eventually wound up in the hotel room, and she ordered and calls room service; and unfortunately, learned that room service doesn't deliver hot foot after 11pm. So she was dejected, and she's like, "Oh, I was so looking forward to this pepperoni pizza. I was thinking about it all night." And I'm like, "I know." And so the rest of us from Zappos--in our inebriated state--said, "Call Zappos, call Zappos." Like to us, it was literally the funniest thing that we could have in the world, really. And so, she put it on speaker phone, took us on our dare, called Zappos and said, "I'm like in Santa Monica, and I've been thinking about this pepperoni pizza all night, and I tried calling room service. Room service doesn't deliver after 11pm; but they do, but they don't deliver hot food after 11pm. And like, is there anything you can do to help me 'cause I heard you're about the best customer service.'" Well first there was an awkward silence. And the rep said, "You know you called Zappos, right? Like, we sell shoes. We sell clothes, but we don't sell pizza, yet." She was like, "Yes, but I've just been craving this pizza all night and so..." "Ok, hold on" and came back two minutes later with a list of the five closest places in the Santa Monica area that were still open delivering pizza at the time. Now I hesitate a little to tell this story because I don't want all of you to start calling Zappos ordering pizza. But I just think it's a fun story to illustrate that obviously we don't have a proper procedure for this; but if you get the culture right and make sure everyone understands the long-term vision of the company, then most of the other stuff like delivering great service, billing or brand will just happen naturally on its own. So I have a few minutes left, so just wanted to take a quick step back and ask you guys to think about...forget the business of it, just think about what is your goal in life? And think about what it is you actually want to accomplish out of life. What's interesting is if you ask different people this question--and I want you guys to actually think about what is your personal goal in life--you get all sorts of different answers. Some people say they want to grow a company or get a job, find a boyfriend/girlfriend, and then, you ask, "Why?" And then you say, "Oh, I'll find a soulmate or retire early." And then ask yourself, "Why again?" "Then, I can get married, spend more time with family"; and if you keep asking, "Why" enough times, and I would keep encouraging you to keep asking yourself  "Why" for whatever goal in life that you have. Actually, eventually everyone gets the same answer. And what's interesting is that people are doing whatever they're doing because they believe that it's actually what's going to bring them happiness. So, a few months ago, actually about 12 months ago, I started getting interested in this whole field called, that's basically about the science of happiness. And prior to 10 years ago, 11 years ago, this field didn't even exist. Today it's called, Positive Psychology because psychology used to be about, you know, looking at people that have had something wrong with them, trying to make them normal, but no one ever studied normal people in making them happier. And one of the things that came out of the research is that people are actually very bad at predicting what will actually bring them long-term happiness. Most people think once I get this, then, I'll be happy; or once I achieve this, I'll be happy. But there's been so many studies of lottery winners, for example, you look at their happiness level right before winning the lottery; and then look at their happiness level a year later, and it's usually the same or lower. So I thought that was pretty interesting; and then I thought about, OK, I'm so focused on Zappos, and there's a science behind the lotto stuff; business that I'm doing. And Zappos for me is very exciting; but in terms of the business, I'm looking at the science of conversion or direct marketing or repeat customer behavior. And I thought, "What if, and I don't know the right percentage, but what if you spent just some of your percentage of your time, just studying and learning about the science of happiness? How much happier could you be, if you applied some of those concepts to not only your personal life, but to your business? To your customers? To your employees?" You know, people go through life trying to achieve all these different things. You know a lot of them actually never even make it to the happiness stuff; but if the eventual goal is happiness, what if just by trying to understand some of the research that's already been done out there on happiness, you can basically take a short cut and go straight to the happiness and avoid a lot of the stuff in between that might be unnecessary. So, I thought that was interesting. I'm actually running out of time, so I'm going to make this presentation, but I want to give all of you information; but just a few different frame works, you'll be able to look through the slides of happiness that's come out of the research. And one is that happiness is really just about perceived control, perceive in progress, connectiveness, and vision--or meaning being a part of something bigger than yourself--and if you have those 4 things, then what the research is showing is that that's actually all you need for happiness. Another one is Maslow's Hierarchy. There's a book called Peak, by Chip Conley that basically takes Maslow's Hierarchy, and then condenses it to three levels and applies it to customers and employees and investors. So as an example, for employees, the three levels would be job versus career versus calling; and for us at Zappos, that's really our focus for our employees is really for them to get to think of their work, not as a job, not as a career; but really, as a calling. And then the other framework is that there's actually three types of happiness: pleasure, engagement, and meaning. And what the research have shown is that the first type of happiness--which I like to call the rock star type happiness--it's all about chasing the next high; and it's great if you can constantly find that source of stimulant that gives you the next high, but the problem is that it's very hard to maintain. So as soon as the source stimuli goes away, then your happiness drops right down to where it used to be so it's very hard to maintain unless you're a rock star, basically. The second type is, there's a book called Flow, but it's got those times when you're so engaged in something that, it seems like 20 minutes have passed, but really 3 hours have passed; and so for some people it might be running, for other people, it might be painting. For professional athletes, they refer to it as being 'in the zone' when peak performance meets peak engagement; and this is the 2nd longest type of happiness. And then the 3rd type that they've found through the research is actually the longest lasting type of happiness, and when part of something that's bigger than yourself. And so for some people, for example, might be volunteering for your favorite charity that they really believe in. So what's interesting is most people go through life, chasing after the first type of happiness with the thought that once I achieve that; then I'll work on the 2nd type of happiness. And then if I ever get the time, then I'll work on the 3rd type based purely on the research and data. The proper strategy is actually to focus on the 3rd type of happiness, and then later on, the 2nd type, and then, the 1st type, which would be icing on the cake. So, I would encourage you to learn more about the science of happiness.Happiness Hypothesis, great book, one of the most impactful books I read in the past five years, and you don't need to write down any of this information. Basically if you want this presentation, you can just email me, tell me at Zappos.com. Also, we have something that we put out once a year, we ask all of our employees to write a few paragraphs about what the Zappos culture means to them; and except for typos, it's unedited. And I'm holding it right here. It's a physical book; and so basically, it's like customer reviews you might find on websites except their employee reviews. So I need your physical mailing address if you'd like a copy of that. I'd be happy to send out for free. And if you're ever in Las Vegas, you know, tours at zappos.com to schedule a tour. And we'll pick you up from the airport, drop you off at the hotel. So just wanted to leave you with thinking about if the ultimate goal when your life is happiness, what percent of your time do you want to spend learning about the science of happiness? I compare it to training because it's like training for a marathon. We all instinctively know how to run, but there's certain things about training for a marathon that they've done research. And there's certain metaphysics for marathon that are actually better and some are kind of intuitive to what you may normally think if you're not a marathon runner. So just think that how can the science of happiness help yourself, your business, your brand; and if the research shows that on the company's side that companies that have a higher purpose and a bigger vision that has meaning end up doing better as shown through books like Good is Greater,Tribal Leadership. And then to parallel to that, if focusing on your personal happiness, if having a higher purpose leads you to personally be happier, then think about what is your company's higher purpose and what is your own personal higher purpose. You know, I'm not up here trying to sell another pair of shoes; but hopefully, through this presentation you've been inspired to deliver better service to your customers and make customers happier, or you've been inspired to focus on company culture to make your employees happier. Or you just been inspired to learn more about science happiness and make yourself happier than I'll have done my job in helping us at Zappos accomplish our higher purpose, which is all about delivering happiness to the world.  Thank you very much. Hello. I'm Dan Farrar, [...} of INC. Thanks, Tony. INC's story about Randall Grahm was cut-titled, The Do Over. Randal took his $30 million dollar company, Bonny Doon Vineyard; and essentially, stopped doing the things that made him comfortable and successful, no half-measures just stopped. Randall had built a reputation as a good winemaker and a great way witty marketer. At a certain point in his life, he realized he got the equation wrong. What he really wanted was to make brilliant wines, whatever the cost, his bottom line, which is why as the story says, he renounced his magical powers. He's going to talk today about how he remade his business and his life. Please welcome Randall Grahm.

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