Parenting Tips From Zappos’ Founder Tony Hsieh’s Mom And Dad

Note: This is part V of a five part series. Access the first installment HERE, part II HERE, part III HERE, and part IV HERE.

Tony HsiehWhat do Warren Buffet, Martin Luther King, John Wayne, Walt Disney, Harry Truman, Wayne Gretzky and Tony Hsieh all have in common? In addition to all of them reaching the pinnacle of their chosen professions, they also all started their careers performing the same job.

All of these extremely successful individuals were paperboys.*

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Deliver Happiness To Your Child – Encourage Them To Create A Job

Tony Hsieh (pronounced Shay), Founder & CEO of Zappos, discusses the litany of childhood jobs he created for himself in his book, Delivering Happiness. Although Tony’s career as a paperboy was relatively brief, he was fortunate to have parents who allowed their children to experiment, fail and ultimately succeed in their childhood enterprises.

When Tony was nine, he decided to go into the worm farming business. Rather than explaining to him that such an adventure was clearly a losing proposition, Tony’s parents encouraged him by making a two-hour round trip to purchase a $33.45 box of mud that was supposed to contain at least 100 worms. Despite feeding eggs to his worms, Tony eventually had to shut down his farm when his “livestock” either died or escaped from their makeshift cage (he never determined which).

Tony finally hit upon a winning venture when he began making custom buttons, which he sold mail order. He eventually ramped this business to two-to-three hundred buttons per month, later noting that, “…the biggest lesson I learned was that it was possible to run a successful business by mail order, without any face-to-face (customer) interaction.” Tony eventually passed the button business to his younger brother, when it became too tedious and time consuming.

Based on his button making success, Tony assumed he was, “the invincible king of mail order.” He soon began another mail order project, selling magic tricks. He invested $800 of his button profits to purchase a classified ad in Boys’ Life magazine. However, instead of repeating his prior mail order success, he received exactly one order, for $10. Despite its failure, the venture contributed to Tony’s entrepreneurial education. As he later noted, “I learned a valuable lesson in humility. I also learned that it was pretty painful to bet the farm on something that didn’t work out.”

Throughout Tony’s childhood entrepreneurial career, his parents were supportive. However, they did not make the mistake of many modern parents, who believe they must help their children avoid mistakes, disappointments and failures. It is better for an entrepreneur to taste the bitter dissatisfaction of a failed venture as child, than to do so for the first time as an adult. Heed this important lesson from Tony’s parents: step back and let your children fall, get up and dust themselves off without your help. As noted in Entrepreneurship Is Best Learned Experientially, startup trials and tribulations are most effectively internalized when they are experienced firsthand.

Through Rain, Sleet, Or Snow

Grit Paper BoyAt its peak circulation in 1969, the weekly newspaper Grit had a circulation in excess of 1.5 million. Each paper was delivered by a child and all of the money was likewise collected by children and sent to Grit’s main office by snail mail. Despite its inherent inefficiencies, Grit sustained a profitable business, reliant largely on youthful labor, for over 80-years. Surely a savvy, modern-day entrepreneur can utilize online tools to leverage young peoples’ collective energy and fervor. 

Similar to the entrepreneurial attributes described in The Lemonade Principle, a newspaper route not only built character; it prepared children for a lifetime of success. For children with a proclivity toward business, a newspaper route provided an invaluable opportunity to develop the following entrepreneurial skills:

  • Punctuality – Newspapers had to be delivered on time, irrespective of the weather, the fact that Sunday papers can weigh several pounds each or the requirement to wake up at the crack of dawn
  • P&L – Each route was effectively a small business. Newspaper boys collected the cash owed by each subscriber and dealt with delinquent payers. Chasing down deadbeats is an invaluable real-world experience. They also accounted for each paper and were often financially penalized for any papers that were lost, thereby developing strong internal controls.
  • Prizes Customer Service – As newspaper boys were the face of their employers, savvy carriers learned to establish healthy customer relationships to facilitate timely collections and generous tips.
  • Sales – Many publishers, including Grit, encouraged newspaper boys to create new routes and expand existing ones by aggressively selling subscriptions to non-subscribers. This pay-per-newspaper formula directly rewarded the children’s sales efforts and sparked a life-long entrepreneurial fire in generations of newspaper boys.

Make Money – Get Prizes

Newspaper delivery was not the only way that children in the US’s pre-litigious era could learn and deploy important entrepreneurial skills. Other entry-level experiences for budding entrepreneurs included selling items marketed in comic book ads.

The American Seed Company, as shown in the accompanying ad, encouraged young people to sign a simple “contract” that read:

“Please send me your Big Prize Book and one order of 45 packs of American Seeds. I’ll sell them at 20₵ a pack, send you the money and choose my prize.”

In bold print, the ad also states, “Send NO MONEY, We Trust You”. The ad includes two coupons, under the heading “Mail One Coupon Today – Give the other to a Friend,” an example of old-school viral marketing. Wow, a simple contract, a statement of trust and viral marketing, three great lessons for young entrepreneurs.

Since the late 1980’s, opportunities for children to run their own businesses have been supplanted episodic fundraisers in which children are asked to sell a variety of over-priced items, such as wrapping paper, community coupon books, candy, etc. Unfortunately, such campaigns are generally carried out by parents, rather than their children. In addition, the money generated goes to the charity, not into the kids’ pockets. By breaking the link between work and reward, such endeavors do little to foster youthful entrepreneurship. Understandably, the pricing has to be excessive to provide sufficient margin for the product’s producer and an adequate incentive for the non-profit organization. Yet when a child attempts to sell exorbitantly priced items, the experience is often discouraging, due to the poor cost / value equation.  Rather than encouraging entrepreneurship, such fundraising campaigns actually discourage it.

Boys To Men

PaperboyUnfortunately, the paperboy has met the same fate as the iceman, milkman and diaper service. Rather than pining for the past, the demise of the paperboy represents a huge opportunity for an entrepreneur who can harness the talents of enterprising 12 – 17 year olds.

In order to devise a job that will accommodate modern youth, it is instructive explore why the paperboy turned into the paperman.

Plaintiff Trial Lawyers – Plaintiff trial lawyers, who excel at bringing frivolous lawsuits against entrepreneurs, found that juries were particularly partial to young people hurt while working, irrespective of the actual culpability of their employer.

Working Parents – The trend toward families in which both parents worked fulltime made it increasingly more difficult for children to also hold down a job, as the parents’ ability to assist the paperboys during inclement weather was diminished.

Nonsense of Entitlement – Families in which both parents worked increased the average family’s disposable income, which was passed along to their children in the form of relatively large allowances and overall largess. As noted in (Non)sense Of Entitlement, a spoiled, privileged attitude is detrimental to an entrepreneur’s success and to a would-be paperboy’s motivation.

Death Of Dailies – Prior to the late-1970’s, most cities had morning and afternoon newspapers. As newspapers consolidated, morning papers became the sole survivors in most cities. Although paperboys continue to deliver decreasingly delivered morning papers, the early hours, hazardous conditions (e.g., darkness during the winter) and the other issues noted above combined to severely limit their numbers. Once the afternoon dailies ceased publication, the century-long era of the paperboy essentially ended.

Calling All Entrepreneurs

There is little disagreement that modern kids spend an inordinate degree of their waking hours interacting with their computers, gaming consoles and phones. Rather than bemoaning this reality, parents should focus on how they can encourage their children to expend their youthful energy and creativity in an entrepreneurial fashion, without asking them to wake up at 5:30 and slog through the snow, ice, sleet and rain.
Martin Luther King Jr
The old-world newspaper business model is vanishing. However, with change comes opportunity. Maybe your young entrepreneur will eventually devise the modern equivalent of the paper route. If it was possible for publishers during the past century to leverage the talents of hundreds of thousands of young people with the rudimentary technology of their day, such opportunities will certainly emerge in the Internet age.

Not only will such a venture generate significant wealth in the near-term, it will also help a new generation of young people establish and develop vital entrepreneurial skills that will serve them well as they ascend to the height of their chosen careers, in the footsteps of Buffet, King, Wayne, Disney, Truman, Gretzky, as well as the failed worm farmer, Tony Hsieh.

For more suggestions regarding parenting an entrepreneur, check out parts I, II, III and IV of this series. 

* I realize numerous girls also delivered newspapers, but I could not locate any who went on to prominent careers. I hope that my decision to avoid an awkward, yet politically correct description, such as “paper carriers”, does not offend anyone.

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John Greathouse is a Partner at Rincon Venture Partners, a venture capital firm investing in early stage, web-based businesses. Previously, John co-founded RevUpNet, a performance-based online marketing agency sold to Coull. During the prior twenty years, he held senior executive positions with several successful startups, spearheading transactions that generated more than $350 million of shareholder value, including an IPO and a multi-hundred-million-dollar acquisition.

John is a CPA and holds an M.B.A. from the Wharton School. He is a member of the University of California at Santa Barbara's Faculty where he teaches several entrepreneurial courses.

Note: All of my advice in this blog is that of a layman. I am not a lawyer and I never played one on TV. You should always assess the veracity of any third-party advice that might have far-reaching implications (be it legal, accounting, personnel, tax or otherwise) with your trusted professional of choice.

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