There was a great New York Times interview with Zappos.com CEO Tony Hsieh, (Tony was rasied in New York City) on Sunday called  “On a Scale of 1 to 10 How Weird Are You?” that talks about Zappos now infamous culture.  This article was timely as I am taking advantage of Zappos Headquarter Tour while I am out in Las Vegas for a conference next week. I also managed to get an interview myself with Zappos Chairman & COO Alfred Lin for StatupAlley. I was surprised how incredibly accessible Alfred makes himself, but then I think that is part of the culture that helped Zappos build a $1B company!

What really got my attention in the article was the back story on how Zappos ended up being so obsessed with the company culture in the first place.  Tony explains in the interview that he and Alfred sold their first startup, LinkExchange, to Microsoft in 1998 for $256M not for the money, but because once the company hit 100 people the company culture tanked.  It started out as a typical startup of 5-10 super passionate people working around the clock, sleeping under their desks, etc but at 100 people the culture got so bad that Tony dreaded coming to the office in the morning and finally just threw in the towel.

At Trulia, we recognized early on the importance of culture in recruiting and retaining talent and just building a great company in general.  We created the acronym BOFFI to encapsulate our core values before we hired our first employee.  BOFFI has served us very well as we have grown from 5 to 100 people over the last four years.  You can read a detailed explanation of BOFFI here, but here’s the gist:

• Best Idea Wins! – whether you are a janitor or the CEO the best idea trumps all. But be careful what you wish for, as we will empower you to execute your ideas and hold you accountable for the results.
• Output Matters Most, Not Input – we don’t care what time you come to the office, what time you leave or how many hours you work as long as you meet or exceed your goals.
• Fun – we work hard, but we play hard too.  We celebrate success whenever we can and give all our employees 20+ days off per year and encourage them to take it to re-energize, travel, have adventures and share them with the rest of the company by posting pictures on our intranet.
• Feedback – we are all about transparency and helping people grow personally and professionally through constant and constructive feedback. You always know where you stand.
• Integrity – this one doesn’t really need explanation.

We referred to BOFFI as a guide on a daily bases in the early days for just about every important, big and/or difficult decision.  But now Trulia is at that magic 100 employee mark and while we are all still passionate and excited, there is no question the culture starts to change at this size.  For example, it is very hard, if not impossible, for even the senior management team to know everyone’s name, especially when we are hiring a few new people a week on average.  Also, in the early days you have lots of generalist working very closely together and everyone knows everything that is going on and is in on most every decision.  But at 100 employees most are specialists working within smaller, hopefuly cross-functional, groups and no one can possible know everything that is going on, as there is just so much happening.  Finally, it starts to get very difficult to recognize when an employee isn’t engaged and make sure you catch it early enough to do something about it.  Obviously, these are just a few examples of how a company and a culture starts to take on a life of its own at a certain size and why it is so important to foster it very early on.

Anyway, I am super excited to talk with Alfred next week to get his take on how Zappos managed to foster this incredible culture even at 1600 employees.  I am going to video tape the interview and we will also touch on lots of other topics regarding starting great internet companies, so check back next week and the week to see the interview.