Issue link: http://www.e-digitaleditions.com/i/55957
Entrepreneurial by Sharon Shinn A lfred Lin is fascinated by the potential of online commerce. Al-- though he's currently COO of Zappos.com, an Internet-only emporium of shoes and accessories, he's dedicated his whole career to e-businesses. And so far he's made what have been pretty accu- rate guesses about the models most likely to succeed in the online world. The figures don't lie: Before joining Zappos, Lin held top finance positions at Tellme Net- works, which offers voice-based services for computers and mobile devices, and LinkExchange, an Internet ad banner network. Each company eventually was sold to Microsoft—for $800 million and $265 mil- lion, respectively. Not only that, last year Zappos was acquired by online retailing giant Amazon.com for close to $1 billion. It's easy to pinpoint the characteristics that made Zappos worth the price— Sole Alfred Lin of Zappos.com thrives in the VC world, whether the product is shoes or services or something yet to come. a strong, quirky corporate culture; superb customer service; and growing sales that had hit $1 billion by 2008. But none of these were in evidence in the company's early days. When Zappos was founded in the late 1990s, customers placed orders online, and manufacturers drop shipped items to buyers. The dot-com crash, 9/11, and the first recession of the 2000s put the company on shaky financial ground, and the management team decided to refine its business model. Rather than outsource its fulfillment operations, Zappos would buy and warehouse its own inventory. It would also differenti- ate itself from other online shoe stores by focusing on customer service. 18 BizEd SEPTEMBER/OCTOBER 2010