Insights from arguably the most inspiring life and business coach of all time.
My wife and I did his Personal Power program more than 20 years ago. We called the 800 number right off the television offer and two weeks into the course, our lives were changed for the better beyond our wildest imaginings. He has endured for over 30 years because his principles work. What follows isn’t a pitch for Tony’s program. It’s a conversation with a man at the epicenter of disruption about the role transparency plays in business and in our personal lives. The importance of trust. And ultimately, love.
Lucas: Thanks for sitting down with me, Tony. I’ve followed your career with admiration for quite a while now, and I know that you have followed the rise of TrueCar for a long time as well. We have seen that consumers identify with truth and transparency as a cornerstone of the TrueCar brand, on a very deep level. Do you think that we’re living in a period of time where brand transparency is becoming a precondition for consumer engagement, particularly among the Millennial generation?
Tony: We live in a world of radical transparency. There is nothing that’s really truly private long-term in the world we live in today. And while there’s something lost from that, there’s something gained. And the gain is an incredible priority on the truth. And in business, I believe truth is the ultimate advantage. I mean, it’s truth, and it’s trust. You can’t separate those two. Truth is the ultimate advantage because, if you have the truth, you can win out because— in a world where we’re all connected with social media and every other form through the web—we now live in a world where the truth will eventually get out. Now, if you go on the web, you can get every lie known to man as well. So the technology that empowers also can confuse. But I think there’s a resonance to the truth, as corny as it may sound, that every human being feels. You know when somebody’s bullshitting you. You know at some level it’s not the whole story. There’s something being held back. It’s instinctive in human beings. And not only do you take that and you magnify that with the interconnected world that we live in today in social media, now you’re at a place where if you don’t tell the truth, the consequences are just horrific.
Lucas: What do you think the impact of establishing trust with the Millennials is for brands today?
Tony: What is a brand? A brand is nothing but trust. I think about what TrueCar has done, and I think one of the reasons you guys have succeeded, and one of the things I’ve really always respected about Scott (Painter) as a friend, is that you guys have made your competitive advantage the truth. He’s talked about it as the Truth Multiple. It’s like, there’s a multiplied impact from the truth. And I know that’s always been true, but I think it’s more true today than ever before. You also have Millennials, an entire generation, that is coming into both their influence power and their spending power. They’re starting to enter into it. They have been raised around so much bullshit that they’re so sensitized to think everything is a lie very often. Not all of them, but most grew up in a time where the entire world economy almost blew up because of some people that didn’t tell the truth. There’s a statistic I read the other day. It was interesting. Ninety-three percent of Millennials say they distrust markets. And their lack of investment knowledge makes them lack confidence in any way of investing. And so Capital One did a survey. And do you know why? The answer is easy. They went through the economic chaos of 2008. And that was all happening while they’re forming, these young Americans. And so it inflicted scars on these Millennials. It made them look at investing in a different way.
So you have this massive distrust, and as a result, the Millennials are just opting out now. But it’s to their disadvantage because, as you and I both know, compounding is the most valuable tool you have to become financially free. So I think it is a must. I think truth is the ultimate business advantage. But I think it’s not enough to have the truth. You also have to build that trust. And I think you went through that experience as an organization when Scott went out there and started this. And the consumer, I think, started to trust a lot quicker than let’s say the dealers, who thought, “Wait a second. These guys are are gonna steal all my business, and they’re gonna hurt my margins.” And what Scott found is when you guys did your research, these Millennials aren’t looking to screw anybody over. They just want a fair deal. So if I remember the research, most of them thought that a 10 percent profit margin to dealers would be a fair deal and they thought dealers were making 20 percent. As you well know, dealers can make 1, 2, 3, 4, 5 percent or less. [Editor’s note: TrueCar research shows customers thought Dealers made a 20 percent profit margin, while a 12 percent profit would be fair. According to the January 2015 study “Dealership Financial Profile” by the National Automobile Dealers Association, Dealers make an average of 3.6 percent profit per vehicle sold.]
And so TrueCar started to show people, “Hey, you can tell the truth and do something fair, and you can add more value.” So, I think there’s zero question that truth provides a premium to business, but also the lack of truth can hurt and destroy an industry. It can cause people to just opt out even when it’s to their advantage to opt in, and the financial business is probably one of the best examples of that.
Lucas: We see that what’s really resonating in our advertising messaging is when we center around this notion of fairness. Upfront pricing information, through the TrueCar price curve, unlocks this concept of price confidence—I am getting a fair deal and not overpaying. What do you think, just at a human level, about this concept of fairness? Is it innate in us? Where does that come from?
Tony: I think it has to do with socialization. I mean, think about it. You know, our competitive advantage in the marketplace of the world—the human beings competitive marketplace—is our ability to cooperate, right? Think about what we can accomplish through cooperation. You know, we’ve changed what life on this planet looks like—mostly for good. In some cases, maybe it’s for some bad, as in the impact on the environment. But it’s our ability to cooperate, our ability to link up, our ability to create solutions together that have given us such incredible advantage in our lives today. And if you look at it, what has created that is socialization, ’cause you’re taught when you’re very young the concept of reciprocation. That if I do something for you, and I keep doing it, and I keep doing it, and keep doing, most people start to feel the pressure. They don’t want you to keep doing it because they feel an internal pressure to do something back. And the reason’s really simple. As you were growing up, you were taught if somebody is a giver, if somebody keeps their word, if somebody does what they say, we have all kinds of words for them.
What are they? Integrity, right? Respect. They’re honest. They’re sincere. They’re real. On the other hand, if you’re somebody that breaks your word, if you’re somebody who just takes and doesn’t give back, what are you? You’re a taker. You’re a loser. You’re a cheater. There’s a million other terms. So socialization, the desire for us to be able to connect, has trained all of our nervous systems to look for fairness. And so there are people that wanna just cut a deal and get the best deal, and they live for it. Their identity is tied to almost taking advantage of the other side in a negotiation or even as a consumer. The vast majority of us have a sense of fairness that is trained into us culturally. There’s no real evidence that it is in our DNA, but you look at the history of mankind and how we cooperated and ask, “Where did it start? You know, is it really in our DNA?” But there’s zero question it’s part of our cultural upbringing, and it’s true in every major culture in the world.
Lucas: What about business as a force for good in the world? It seems like that’s becoming a precondition of people wanting to engage with brands and businesses? Are you seeing that? Is it a priority for consumers that businesses are engaged in more than just a pursuit of profit but also contributing in some way to the greater good? Certainly, you’ve lived that as a brand.
Tony: Without a doubt. I mean, there’s zero question that we have a world that’s all competing, an entire earth as opposed to a country or just a county or a region. Because of that competition, so many things become commodities. So now, a purchase becomes an expansion of my identity. If I’m gonna give you money, I want more than the product. I want something else. And for a large segment of the population, especially for Millennials, but also to be fair, for a lot of Generation X and a ton of Baby Boomers who grew up with that thought process—they wanna see what they do make a difference. And consumers today realize that the decisions they make can redirect the profitability of companies. And so the companies that have a conscience, the companies that are just, are companies that are getting more and more attention. And also because of social media, good news travels fast, bad behavior or bad news travels faster.
I also think you have a whole new generation of entrepreneurs, people like Scott Painter at TrueCar, but also my friends like Marc Benioff with Salesforce, and Steve Wynn and what he’s done in Las Vegas. And people like Peter Guber, these are individuals who are leaders. I mean, Marc just pretty much led the attacks on the new law that was just passed [in Indiana], trying to basically limit peoples’ capacity to have the freedoms and choices they should have because of their sexual preference. And Marc comes from a different culture. He comes from San Francisco. He comes from the tech industry. And it’s just not tolerated there. And so he led the charge and went out and reached out to other tech entrepreneurs. And the next thing you know, you’ve got people all over the country saying, “We’re gonna pull our employees out. We’re not gonna do business here anymore.” It was very successful.
Whatever gets rewarded tends to become a pattern. And so Marc’s been doing this his whole life, but I think I’ve seen an acceleration of businesses having a conscience, of businesses saying, “Listen, we have a responsibility to the communities that we serve. It’s wonderful that capitalism has brought us so much good. But if we get so associated with capitalism that it’s only about financial profit, we’re gonna lose our souls in the process.”
I think of technology as an open forum that leaders [and consumers] of every sort can command. If they have a truth to tell, and that truth appeals to something inside the majority of us, it tends to create a new trend. And I think TrueCar is an example of how that looks. There are economic rewards that come with that, but there are emotional and spiritual rewards that all business owners and entrepreneurs want to have as well.
Lucas: So this leads to my next question, which is around care and this notion of demonstrating your brand values through actions that are considerate of serving the greater good. Automotive dealers have such a legacy of serving their communities. It’s always been part of that culture. Can you talk about the importance of care in human relationships and in particular in business?
Tony: I would up the ante from care to a word that some people don’t like to use in business—love. Every time I look at a business owner, and I wanna help them succeed, I always know the chokehold of the growth of the business is psychology and the skills of that individual, but it’s also the culture that they create, right? We all know businesses are cultures because in the beginning, if you’re a small business, you can do it all yourself. You know, if somebody wants something, you can over-deliver to them. But if you’re gonna scale anything, if you’re gonna have an impact, if you’re gonna grow a serious business, and you’re gonna go beyond self-employment to a real business, you gotta go with culture. And I believe the only way you have a successful brand in the world today is you have to create raving fans. And the only way you create raving fans is do more for others than anybody else is doing. And the only way you do that and create that sense of constant innovation—not just in terms of technology or tools—is in the way people are treated. I always tell people, “You gotta fall in love with your customer. Fall in love with your client. Don’t fall in love with your product or service ’cause products and services can change overnight.” I mean if you doubt it, look at Blockbuster. You know? There’s a company that had the chance to buy Netflix for, what was it? Fifty million dollars? And they said, “What do we need that for? We’re a $4 billion firm.” Well, they went bankrupt, and now, Netflix is the dominant force worth billions on the planet. You know, I can look at dozens of examples. Kodak came up with digital photography. They’re blown from the scene.
So I think we live in a world of disruption, and the most powerful disruption you can make, the greatest advantage you can make, is to do more for others than anybody else. But you gotta fall in love with your client, which means if you fall in love with them, when you love somebody, what do you do? You find out everything you can about how to light them up. I mean, in the beginning of the relationship at least, that’s what most people do. When people have the most dynamic relationships—intimate, personal, and business—it’s a relationship of serving because you want to, not because you have to. Not because there’s an outcome at the end. And if you are always trying to figure it out, if you love your client, you ask, “What else can I do for them? What else can I do to blow ’em away? What else can I do to make their life easier? Better? More enjoyable? More comfortable? More exciting?” And if you’ve got a massive number of people of doing that—now that’s your culture. That’s when you get a Zappos. They connect massively with their customer. They are there for that customer. They said, “Listen. We wanna give you convenience. We wanna make it easier. We’ll pay for the shipping both ways. You don’t want ’em? Ship ’em back!”
By meeting the emotional and psychological needs, [Tony Hsieh] built a multi-billion dollar business. He’s selling happiness. He’s providing happiness. It isn’t the product or the service. It’s the love of the client and the capacity to innovate and find ways to morph for them that creates, not just a satisfied customer—satisfied customers go away—but rather creates raving fans. Raving fans stay.
I have a resort in Fiji, 525 acres. We have only 20 rooms, 20 houses, homes, little private villas on the water there. And we’re sold out in that place. And the reason we’re sold out is we’re the number one resort in the country. And we’re top 10 in the South Pacific. [I built it because] I was touched by Fiji’s culture. I was touched by these people that have this incredible sense of happiness over the littlest thing. It’s like if you leave your puppy dog for five minutes, when you come back, it’s like you’ve been gone for six months, right? That tail is going crazy. Well, the culture there has that kind of joy. You drive down the street and people yell, “Bula, bula, bula!” It means welcome, be happy, we love you. And you come back five minutes later, and “Bula, bula, bula!” And no one’s paying them to do it. That’s the culture. So all I did was I said, “We’re gonna expand that culture into this resort so that when you’re there, you feel loved.” When people leave the Namale Resort and Spa, they all cry. No exaggeration. I mean, maybe some men don’t, but their wives always do, and a good portion of the men have tears in their eyes ’cause they feel like they’re leaving family. They feel like they were never cared for so much in their lives. And that’s why we have people who come back year after year for 20 years. I have people who got married in Namale, and they’re having their 25th wedding anniversary at our resort. That’s the power of loving your clients. That’s what creates the raving fans.
I really believe it’s [back to] truth. The truth is: this is what we do. And social media helps us get that truth out because we don’t have to say it. If we say it, you’re gonna doubt it. If you read it everywhere else, and you see the ratings by real people, you go, “Oh, my God. This is the best place on Earth to be able to go.” But also, it’s trust. And you get trust by consistency, by putting the client first. And then I think the love is what makes it all worthwhile. Meaning when your people feel like they’re loving on their clients, they love themselves more. They feel like, “My life isn’t just about doing something. My life is making a difference.” You combine those three and you soon start helping to create an environment, a culture, a company that has legs and that can grow for years and years. And you’ll have the brand. You’ll have the business success. But you’ll have the emotional fulfillment and spiritual fulfillment as well.