In 1996, LinkExchange was offered for sale to BigFoot. Tony Hsieh and Sanjay Mandan decided they would sell it for two million and each walk away with a million after five months of work but the deal didn’t go through. They needed more help to keep competitive so decided to hire more programmers. They opened up a real office in San Francisco and each started to recruit their friends. They now had 25 employees at LinkExchange. Jerry Yang, co-founder of Yahoo, asked to meet with them and offered to buy LinkExchange for 20 million dollars. Hsieh made a list of the pros and cons of selling the business and he could always start a new business. But he was already running a company he was excited about and his partners felt the same way so they decided to turn down the offer. They felt they had the opportunity to be a Fortune 500 company. More and more websites started signing up with them and they had a lot of fun together. Hsieh would periodically send an email out to all employees about a company meeting with all the investors expected to be present. Employees were requested to dress up for the occasion. This was one of the many jokes directed at the new employees as the other employees knew they didn’t have to dress up. Tony had a sense of humor.
Hsieh contacted Alfred Lin to see if he wanted to join them. Lin joined LinkExchange full time in 1997. They were growing quickly and hiring employees. They expanded to another floor and opened sales offices in New York and Chicago. They simply didn’t know they should have paid more attention to company culture. But as they grew beyond their 25 employees, they made the mistake of hiring people who were joining for other reasons. They were motivated but wanted to put in a few years at LinkExchange and move onto a different company. Eventually, they had over 100 employees in the company in 1998. Hsieh started feeling his company wasn’t where he wanted to be anymore. He wasn’t sure what he would do. They had built good relationships with people from Yahoo, Netscape, and Microsoft and they had all shown a lot of interest in what they were doing. All three companies were interested in investing in their financing and/or buying the company outright. Microsoft offered 265 million dollars if the founders stayed with them for a year, which was a pretty standard practice. In early November of 1998, the deal with Microsoft closed.
Hsieh’s college friends made a bet with him that he would become a millionaire within ten years. If he did, they would all go on a cruise together and he would pay for the trip. If it didn’t, they would still go on the trip and each pays their own. Early 1999, a group of 15 went on a cruise to the Bahama’s. It was like a college reunion with drinking, eating, partying and doing it all again. His friends said he seemed more self-confident and congratulated him on selling the business. Four years ago he would never have believed he would now be a millionaire and celebrating on a cruise ship. Now he questioned “what is happiness”, “what is success” and “what is he working for”. Hsieh went back to finish his year at LinkExchange while buying his home and traveling to Vegas and playing poker often. He already had all the money he ever needed and wondered what he was going to do. He didn’t know what he was going to do but he knew he wasn’t going to sit around and do nothing. He started to stop chasing the money and start chasing the passion.
A side note
A friend of mine has been following my posts on “Delivering Happiness: A Path to Profits, Passion and Purpose”. He stopped by today and I had the opportunity to discuss the book further. Now my friend, unlike me is not an avid reader, but I think I have convinced him to actually read the copy I lent him. He is an entrepreneur himself, http://www.phoenixaztreeremoval.com . Of all my college friends, he too was considered to be the “most likely to succeed”. I think he will probably relate to Tony Hsieh quite well. Hey, what are friends for if not to steer each other in the direction of success.—You are welcome, Buddy!