This is an iHeart podcast. Guaranteed Human. Attention. Attention, rail travelers, platform paces, window gazers and armrest negotiators. Have you heard? The big rail fare freeze is here. Railfares have been frozen across England until March 2027 on standard class tickets, including off-peak, anytime and season tickets. For more information, visit nationalrail.co.uk slash fares freeze. Teas and seas next week. We'll apply. Stop paying to invest with free trade. You can invest without the legacy fees with a free isa, a free pension and commission free investing in funds, stocks, ETFs, bonds and more. Join over 1.6 million users on free trades award winning free platform. Go to free trade.io slash radio to get started. Capital at risk. Isa and sip rules apply. Other charges may apply. Turn up your taste buds with dolmio intensify pasta sources from mild creamy garlic and black pepper to bold smoky garlic and sun dried tomato. And spicy smoked paprika and chili. Try dolmio intensify pasta sources with serious flavor. Dolmio, yeah. Pushkin. Pushkin. A warning before we start. This cautionary tale discusses death by suicide. If you're suffering emotional distress or you're having suicidal thoughts, support is available. For example, from the 988 suicide and crisis lifeline in the US or the Samaritans in the UK. On the 4th of July, 2020 in Park City, Utah, two friends are drinking beer on the porch of the Airbnb they rented for the holidays. Happy fourth. They call out to a man walking past on the sidewalk. The passerby stops to chat. They notice he's not wearing any shoes. His clothes are tattered and his eyes are glassy. Perhaps they shouldn't have attracted his attention. What do you do? The shoeless man asks them. The friends exchange a glance. One guardedly volunteers that he works in recruitment. Oh, says the shoeless man. I'm recruiting people to come and live here in Park City. I'm building a community. I can offer you a fee for everyone you bring in. Let me tell you my number. The friend politely takes down the number, then forgets all about it. The man seemed high and homeless. It obviously wasn't serious. The shoeless man might indeed have been high, but he wasn't homeless. And he was deadly serious. He was billionaire Tony Shay. This is the second of two cautionary tales about Tony Shay, who made his fortune with the online shoe retailer Zappos. If you haven't heard part one, you might want to do that now. We heard how Tony wrote a bestselling book about employee happiness, then imposed a management fad that many employees hated. Tony loved ideas. The kind that sound wise in a TED talk, but work in practice only if you really think the details through. In this episode, we focus on one wise idea that Tony really didn't think through. Community. In his book, Tony links happiness to connectedness with others. He tried to build a community in Las Vegas, as we'll hear that didn't go well. Now in Park City, he was trying again. He wanted to surround himself with people who'd make him feel connected and happy. Instead, his misjudgments led to his death. I'm Tim Harford and you're listening to Cautionary Tales. MUSIC Philip Prentice was delighted to be offered the job. The salary was over $100,000 a year, pretty good for a newly qualified accountant in Las Vegas in October 2012. In today's terms, that'd be nearer $150,000. He'd get stock options too. Prentice's new employer was a startup called EcoMom. As the name suggests, it sold a variety of eco-friendly parent-related products. Diapers, baby food, clothes, toys. It was doing well. Also, it seemed. Its revenues were growing quickly. Just a few months earlier, it had raised millions in financing. One of those investments came with strings attached. The investor wanted EcoMom to move from Los Angeles to Las Vegas. Something to do with building a community. EcoMom's founder, a 47-year-old man called Jody Sherman, agreed to relocate and asked his staff to come with him. It was tough for Sherman. His wife had commitments in Los Angeles that she couldn't easily break, so Sherman had to leave her behind for now, along with his network of friends. Philip Prentice describes what kind of person Jody Sherman was. A great guy. Outgoing, personable, enthusiastic, funny. I never heard him say a bad word to or about anyone. Prentice loved coming into work. Morale was high. The staff were treated well. Prentice was EcoMom's very first accountant. Up to now, Sherman had outsourced its payroll and invoices to an external provider, but the company had grown big enough to need someone full-time in-house. And something wasn't right. Sherman didn't know what wasn't right exactly, but somehow or other, the figure in EcoMom's bank account kept going down. Prentice recalls that Sherman used to have heated discussions with his VP of marketing. What are you doing? Sherman would ask. Where's the money? Sales are great, the VP of marketing would reply. We're on track to hit all our targets. But where's the money? Sherman grew increasingly exasperated. I'm not seeing the money in our bank. Jody Sherman was a great guy, said Prentice, but he was not a numbers guy. Whenever Prentice tried to show him a sheet full of figures, he'd wave it away, saying, no one can understand this. He also approved everyone's spending requests with barely a glance, Prentice noticed. Could this be the root of the problem? Prentice investigated. No, all the employees were honest. There were no inflated expenses claims, no dodgy-looking invoices. And yet, when Prentice pulled together the figures for October, they showed Ecomom had lost over half a million dollars. November would be better, right? The Black Friday sales were clearly going well. In the Ecomom office, someone rang a bell after every hundred order. The bell rang more and more frequently. And yet, when Prentice did the sums at the end of the month, he found that in November, Ecomom had lost nearly a million dollars. Higher sales, bigger losses. Prentice saw the problem. Ecomom had issued so many discounts and voucher codes that every sale was losing the money. An average order brought him $60, but cost nearly $90 to fulfill. It's not unusual for a startup to sell with a negative margin at first, but it's generally a conscious decision as part of a wider strategy for becoming profitable somewhere down the line. As far as Philip Prentice could see, Ecomom had no such strategy. Jody Sherman called a high-powered management meeting and Prentice prepared an analysis. If Ecomom were to stop selling anything he worked out and all the employees simply sat around and played ping-pong all day, they'd have enough in the bank to pay themselves for two more years. But if sales kept growing, they'd run out of cash in just three months. The management meeting, recalls Prentice, was surreal. Nobody asked him to present any of the figures he'd prepared. The only figure anyone presented was the year-on-year growth in sales, which looked amazing, as the VP of marketing had said they were hitting all their targets. Still, Jody Sherman made it clear they had to do something better. But what? The meeting discussed market strategies for selling the Ecomom lifestyle, Prentice recalls. It discussed expanding our email and customer base. It discussed expanding our marketing team. I can't remember exactly what else was discussed, but I can tell you for sure the word margin and the word profit were never mentioned. In December, sales continued to go well. The number in the bank account kept on getting lower, and Jody Sherman became even more frantic. Prentice again tried to present his figures, and Sherman again waved them away. Phil, he said, just tell me how much we need to sell to break even. He did not understand margin, recalls Prentice. He did not understand that increased sales resulted in increased losses. Sherman tried desperately to raise more money from investors. He asked Prentice how much longer the money in their bank account would last if he sacked half the staff, some of whom he was all too aware had uprooted their own lives in Los Angeles to follow him to Vegas. I feel terrible about this, he said. And those weren't empty words. Sherman was clearly feeling the pressure. He started saying things like, I'm too old to start over. He handed a document to his secretary. That's my will, he said. He sent an email to other company founders in Las Vegas to propose a get-together. Oftentimes, he wrote, I find myself with no one to talk to about the challenges I might be facing, the frustrations, the stress. I thought, hey, I know a bunch of founders who probably find themselves in similar situations, I should hang with them. A meeting was arranged, but Jody didn't make it. Police found his body in his car, in the mountains outside Las Vegas. Jody had taken his own life. The investor who had required Jody Sherman to move from Los Angeles to Las Vegas was, of course, Tony Shea. After Amazon bought Zappos and kept him on as CEO, Tony committed $350 million of his own money to the Downtown Project, or DTP. He moved Zappos from its office in the suburbs to the old city hall building in the heart of downtown. The area was seedy and run down, but Tony was going to change that by buying up real estate and investing in businesses. He wouldn't measure the project's success through ROI, he explained, return on investment. He'd measure it through ROC. Return on community. He'd bring together entrepreneurs like Jody Sherman and their former community. He wanted to turn downtown Las Vegas into the most community focused large city in the world. And yet somehow, what Jody Sherman had needed so desperately had been a sense of community, but it hadn't been there for him. Cautionary tales will be back after the break. When a young woman's car is found abandoned on a New Jersey bridge, detectives want to know how did she simply vanish into the night? Nobody knew where she was. It was a 19-year-old girl who would have normally been attached to her phone and she was off the grid. Secrets, trust and a friend's ultimate betrayal. I'm Juju Chang. From 2020 and ABC Audio, listen now to Bridge of Lies wherever you get your podcasts. Another party invite? Well, here's a way to make their big day feel even more special. With small shops in Etsy, you can discover thousands of original birthday presents, like sparkly sashes and customized drink glasses or festive balloons and streamers to make the big birthdays feel even bigger. From the personalized to the practical, we've got you covered with millions of active listings to choose from. Birthdays don't celebrate themselves. Shop at Etsy.com and discover your perfect find today. When Zappo's employee Rob Ponte returned home from work, he was surprised to find police tape across the door of his apartment. Inside, he saw that someone had been rummaging in his drawers and poking around in his computer. He called the police department and asked, what's going on? The police were surprised to hear from him. They said, we thought you were dead. There'd been in Ponte's apartment, they explained, looking for a suicide note and for details of his next of kin. Ponte later discovered they'd phoned his mum. Thankfully, she didn't answer. Ponte and the police pieced together what had happened. Someone who looked like Rob Ponte had killed himself. The dead man turned out to be a young employee of Tony Shae's downtown project. Less than a year had passed since Jodie Sherman's suicide. A few months after that, another entrepreneur who'd taken funding from the downtown project took his own life. The downtown project wasn't that big, just a few hundred people. So three suicides seemed like a pattern. Were there underlying factors? What might they be? The journalist Nelly Bowles asked around. At an event, she sat down next to Tony and asked for his thoughts. Suicides happen anywhere, Tony said. Look at the stats. Then he got up and moved to another chair. But others she spoke to did have some theories to share. In the last episode of Cautionary Tales, we met the idea of the profit-seeking paradox. The economist John Kaye points out that the most profitable companies tend not to be those that focus directly on profits. But this is only one example, says Kaye, of a wider principle he calls obliquity. Many other goals in life are best pursued, not directly, but obliquely. Another example, happiness. The more you try to be happy, the more elusive happiness seems to be. This isn't a new idea. 150 years ago, the philosopher John Stuart Mill observed that the happiest people he knew have their minds fixed on some other object other than their own happiness. On the happiness of others. On the improvement of mankind. Even on some art or pursuit. Followed not as a means, but as itself an ideal end. Aiming thus at something else, said Mill. They find happiness by the way. But is this observation true? In 2011, researchers devised an experiment to investigate. They got some subjects to read an article about how important it is to be happy. Because happy people are more healthy and successful. Then they showed a video that should evoke feelings of happiness. About a figure skater winning a medal and celebrating with her coach. Then they asked, how happy do you feel? The subjects who'd read the article on happiness were less happy than those in a control group who'd watched the video but hadn't read the article first. It seemed that being prompted to think about the importance of happiness made people second guess themselves. That video should have made me happy. Why am I not happier? That's disappointing. People who weren't thinking about the importance of happiness simply watched the video and felt happy. Under certain circumstances, the researchers conclude, valuing happiness may be self-defeating. When he launched the downtown project, Tony Shea had just published his best-selling book on happiness. He'd also been reading about what makes cities productive. Including chance encounters between productive people, or what Tony called collisions. The bigger the city, the more of these serendipitous encounters you might expect. Tony decided that serendipity, like happiness, was a goal you could pursue directly. He invested in spaces where collisions could happen, such as bars. He wanted to institutionalize return on luck. He came up with a metric. Maximizing collision-able hours per acre per year. All this piled expectations on the entrepreneurs who had moved to Las Vegas to get an investment from Tony. There's a pressure to socialize and go out, one told the journalist Nelly Bowles. There's a pressure to party. Everyone at the parties would be either another entrepreneur or an investor. People felt the need to put on a mask, a counselor told Nelly Bowles. And say, everything's great. They knew they were supposed to be happy. If they weren't, they felt disappointed. Even ashamed. They had no one to confide in when they had a bad day. The focus on happiness, says the counselor, was not psychologically healthy. The irony is that the entrepreneurs might have had people to confide in before they moved to Vegas. Jody Sherman, for example, had left behind his wife and friends in Los Angeles. In Vegas, he found himself with no one to talk to. Tony had seemed to think that you could simply bring entrepreneurs together in collision-able spaces and their former community. But community can't be forced. Like happiness, you find it, if you're lucky, while aiming at something else. Tony had launched the downtown project with big ambitions to turn Las Vegas into the most community-focused, large city in the world. As the project floundered, Tony changed his mind. He was going to stop using the word community. He'd learned that it gave people the wrong idea. People expect us to address and solve every single problem that exists in a city. He said, for example, mental health. We're not the government. Instead, Tony turned his attention to a different world. Tony turned his attention to a different community. His own personal community that he curated around himself in his personal quest for happiness. Tony moved into an airstream trailer in an empty lot in downtown Las Vegas and moved some of his closest friends into other trailers. Because Tony believed in work-life integration, those close friends tended also to be either his employees or business partners. Having them live around him meant he could call them in for work meetings at any hour of the day. Airstream Park had fire pits and a stage for musical performances and shipping containers that housed laundry facilities and crates of Furnette Branca, Tony's favorite drink. It had chickens, dogs, cats, and a pet alpaca called Marley. A journalist described his experience of a night at Airstream Park. A bearded man was doing a handstand, a high school girl sang and played guitar, a saw Tony pick up a tambourine, a gather that this idyllic scene was typical of life in Tony Shae's magical kingdom. Not every employee friend of Tony wanted to live in his trailer park idyll, though. Tyler Williams, who we met in the last episode, had grown close to Tony through his work as the fungineer at Zappos. In charge of projects like the instant dance floor in the Zappos lobby, push a button, labeled, never push this button. And the lobby would pulse to booming music, disco lights, and smoke from a smoke machine. Tyler was Tony's drinking buddy, but Tyler's wife said, No, we're not living in a trailer. Tony wondered if Tyler's wife might like to work for him, like other residents of the trailer park. No, she said. When Tony started to experiment with Ketamine and got Tyler to take it with him, Tyler's wife told him to stop. I don't like who you are when you take that drug, she told Tyler. You're not the same Tyler that I know. Ketamine seemed to be changing Tony too. Tyler had access to Tony's Apple Watch data, and he could see that Tony hardly ever slept. Tony threw a party for a friend called Ryan, which involved Ryan being blindfolded, bundled into a car, handed a mysterious ice cold package, and driven around Las Vegas before arriving at the party venue. The mysterious package turned out to be a frozen salmon. This all apparently made perfect sense to Tony, but not to anyone else. As Ryan put it to a fellow guest, what the fuck is going on? An old flame visited Tony, was shocked by what she found, and begged him to get some sleep. When he insisted he was fine, she began to cry. The next morning Tony showed her a wall of post-it notes in his trailer. Each note had the name of a friend and a number from plus to minus three. You were a plus two till last night, Tony told her. Now you're a negative 1.5. You were judging me, and I don't like to be judged. Tony needed help, but it was hard to tell him that while remaining positive on his post-it wall. Ryan of the frozen salmon had a try. You're CEO of Zappos, he reminded Tony, and Zappos is owned by Amazon. You might think you can handle the drugs, but what if Amazon disagree? They could fire you, you don't want that. There's a rehab place in Park City. You like it there. You go to the Sundance Film Festival every year. Ryan was persistent and persuasive. Tony checked himself into rehab. But after less than two weeks, he checked himself out again. This was, he decided, perfectly fine. But perhaps he'd overlooked something. He asked Tyler to compile a list of the things that had made some of his friends think he needed rehab. As we heard last time, like his ambition to become seven feet tall, recycle his urine inside his body, and solve world peace. He saw nothing on Tyler's list to worry about, but he decided that he wasn't going back to Vegas. Things hadn't been working out there, and he'd learned lessons. He would apply those lessons to build a new community in Park City. Cautionary tales will be back in a moment. When a young woman's car is found abandoned on a New Jersey bridge, detectives want to know how did she simply vanish into the night? Nobody knew where she was. It was a 19-year-old girl who would have normally been attached to her phone, and she was off the grid. Secrets, trust, and a friend's ultimate betrayal. I'm Juju Chang. From 2020 and ABC Audio, listen now to Bridge of Lies, wherever you get your podcasts. Get three months' half price when you switch to an unlimited sim with three. That means quick streaming, faster downloads, and more money to spend on the things you love. Join the UK's fastest 5G network and get your unlimited sim today. Buy now in store or see 3.co.uk. Unlimited 24-month light plan, proof of switching required, based on Ucla's BTEST intelligence data to age 2025, all rights reserved, subject to credit checks and terms. Tony invited some of his friends to join him in Park City. Not all of them, though. Not Frozen Salmon Ryan, for example. Ryan had manipulated him into going to rehab when there'd been nothing wrong with him. One lesson he'd learned from Las Vegas was to cut off the people who tried to hold him back. Ryan was no longer welcome. It was early spring 2020 when Tony left rehab. In the COVID lockdown, he seemed to thrive. He was drinking less. He seemed to be off the ketamine and the psychedelic mushrooms. He took long hikes in the mountains outside Park City. He looked fit and healthy. But he wasn't always making sense. He asked executives at Zappos to abolish organizational calendars and instead get all employees into a collective state of flow. If they were all in the same flow state, he explained, they wouldn't need calendars. They'd just know where and when to turn up for meetings. As the lockdown eased and restaurants reopened, Tony came up with a new idea called 10x. Participating restaurants in Park City would give members of the 10x scheme unlimited food and drink on Sundays. Tony would foot the bill. Membership of 10x would cost just $10. How could this possibly work for Tony? Everyone shrugged. He was a billionaire. He'd probably thought it through. 10 became Tony's watchword. From his experience in Vegas, Tony had drawn the lesson that he hadn't been ambitious enough. Everything in Park City would be 10 times bigger and happened 10 times faster. Tony offered members of his entourage a 10% commission for spending his money in the ways he asked. He started buying property in Park City. Whoever closed the deals for him got 10% at the price. He started recruiting people to join his community, offering them a salary to well, to do whatever they wanted pretty much as long as they agreed to be happy. Whoever recruited these new community members would get 10% of the salary Tony paid them. Tony bought a fleet of buses and asked an assistant to arrange a luxury makeover. It cost $3.68 million. The assistant pocketed $368,000. In June, Tony invited some friends to go on a road trip in one of his luxury buses. Among them was Tyler Williams, who was still living in Las Vegas and working as the Zappos fungineer. When Tyler arrived in Park City, he realized that he didn't know many of the people who now surrounded Tony. One of them he learned had only just met Tony and he'd immediately offered her $10 million to start a business, any business she liked. Tony got on the bus for the road trip, wearing pajamas and carrying a box of crayons. He took a shower and stayed there till the water tank ran dry. He explained that they were all trapped in an AI simulation and proposed that he break them free by setting fire to the bus with everyone inside. Then he asked for more mushrooms. After the bus trip, Tyler messaged Tony's dealer. Please don't sell Tony more drugs, he wrote. I know I can't match whatever Tony is offering, but I'll give you everything I have in this life. Tyler's phone pinged. It was Tony, with a screen grab of Tyler's message to the dealer. The dealer had shared it with him. He went behind my back, said Tony. Tyler never heard from Tony again. In August 2020, Tony invited the folk singer Jewel to visit his ranch in Park City. Tony had met Jewel a few years earlier at a retreat on the entrepreneur Richard Branson's private island. They'd become friends. Jewel found that Tony's ranch was filthy. Old food and dog feces littered the sign said not to clean up. Tony thought it was natural to leave trash lying around. Candles burned everywhere, dripping wax onto carpets and countertops. Tony had become fascinated by fire. All the taps were running in all the bathrooms. Tony liked the sound of running water. A surfboard was propped up against the window to Tony's room. Tony didn't like using doors. Jewel had met some of Tony's other friends in Las Vegas, but she didn't recognize anyone here. These people were new. Tony's doing great things, the new people told her. Tony's going through a creative metamorphosis. He's finding himself. Tony's a genius. Jewel found Tony sitting in underpants surrounded by empty canisters of nitrous oxide. He looked thin and gaunt. He showed Jewel a post-it note on which he'd scribbled some numbers. This, he said, is the algorithm for world peace. Jewel tried gently to engage Tony in conversation about a project she was working on, a project about addiction. Tony told her, I'm the 1% of people that can use these substances and they become good. They become a skill. He added, I've gotten rid of anybody who doubts what I'm doing. Jewel began to subtly interrogate everyone on Tony's ranch. What's your purpose here? Somebody assumed that Jewel must be after Tony's money and helpfully explained how to get it. Just write your project and a dollar amount on a post-it note and ask Tony to sign it. Not too much or his lawyers might raise questions. Anything up to a couple of million should be fine. Others took Jewel to a quiet corner and whispered, I want to help but I don't know how. I saw what happened to Ryan and to Tyler. Jewel had agreed to sing some of her hit songs for Tony and his guests. Tony wasn't there to hear her. He'd stayed in his darkened room surrounded by candles. After her visit, Jewel couldn't get Tony to return her calls so she wrote him a letter. She addressed it to someone at the ranch who she thought would make sure that Tony read it. He did. I am going to be blunt, Jewel wrote. I don't think you're well and in your right mind. The people you're surrounding yourself with are either ignorant or willing to be complicit in you killing yourself. If the world could see how you're living, they would not see you as a tech visionary. They would see you as a drug addicted man who's a cliche. Please get sober. I say this with love and as possibly the only person in your circle who is not on your payroll. It's a long letter but Jewel could have summed it up in a line. Who will save your soul if you won't save your own? Tony died three months later in November 2020 in a fire. He was 46 years old. It's not completely clear what happened. He'd locked himself in a shed with nitrous oxide, candles, post-it notes and a propane heater. By the time the fire brigade got the door down, Tony had inhaled too much smoke. Tony was killed by his addiction but also by his ideas about community, connectedness and happiness. He'd thought he could make a community by gathering entrepreneurs in collisionable spaces. Then he'd thought he could pay people to surround him in Park City and feel connectedness that would make him happy. He hadn't understood that genuine connections arise obliquely. You could only put yourself in situations where that might happen and recognize if it does. Tony didn't recognize which kind of connections to cherish, the kind where you can speak the truth and hear the truth. The kind of connections Jodie Sherman tried to find too late when he emailed other founders in Las Vegas. I find myself with no one to talk to about the challenges I might be facing. Or the kind of connection Tyler Williams had with his wife when she told him, I don't like who you are on Ketamine. You're not the same Tyler that I know. And he listened and stopped. She knows who I am, Tyler later recalled, and she would check me. Tony had people who knew who he was and tried to check him, like Jewel and Ryan and Tyler himself. Tyler later said that he often wonders if he hadn't had that connection with his wife. Who would I be? Perhaps, like Tony, a drug-addicted cliche. We all need someone who knows who we are, but they can only save our soul if we let them. Key sources for this episode were Happy at Any Cost, the revolutionary vision and fatal quest of Zappos CEO Tony Shea by Catherine Seher and Kirsten Grind, and Wonder Boy, Tony Shea, Zappos, and the myth of happiness in Silicon Valley by Angel O'Young and David Jeans. For a full list of sources, see the show notes at timharford.com. Cautionary Tales is written by me, Tim Harford, with Andrew Wright, Alice Fiennes, and Ryan Dilly. It's produced by George Emils and Marilyn Rust. The sound design and original music are the work of Pascal Wise. Ben Nadaf-Haffrey edited the scripts. It features the voice talents of Melanie Guttridge, Genevieve Gawnt, Stella Harford, Masea Monroe, Jamal Westman, and Rufus Wright. The show also wouldn't have been possible without the work of Jacob Weisberg, Gretta Cohn, Eric Sandler, Carrie Brody, Christina Sullivan, Keira Posey, and Owen Miller. Cautionary Tales is a production of Pushkin Industries. If you like the show, please remember to share, rate, and review. It really does make a difference to us. And if you want to hear it, add free and receive a bonus audio episode, video episode, and members only newsletter every month, why not join the Cautionary Club? To sign up, head to patreon.com. We know social media isn't great for our well-being, but logging off is harder than it seems. People are trapped. They are kind of forced into a situation where they're on social media, even though they would be happier if social media didn't exist. Why does this happen, and what can we do about it? Hear from the researchers behind this year's World Happiness Report on the Happiness Lab. Listen to the Happiness Lab with me, Dr. Laurie Santos, wherever you get your podcasts.
