Tony Hsieh suffered a 'psychotic break' on a bus trip in late June. It led loved ones to attempt interventions and paved the way for his Zappos resignation.

  • Former Zappos CEO Tony Hsieh experienced a psychotic break in late June, friends told Business Insider. 
  • During a bus ride while on vacation in Utah, an apparently delusional Hsieh asked friends to "sign a pact" that they wouldn't "intervene with this journey."
  • The incident marked a turning point for the troubled entrepreneur. 
  • Loved ones became concerned for his mental health, and he eventually stepped down from Zappos in late August. 
  • If you're experiencing a mental-health crisis, the National Institute of Mental Health has a number of resources.
  • Visit Business Insider's homepage for more stories.

A late June incident marked a dark turning point for Tony Hsieh, and may have sparked a series of events that led to his quiet resignation as the CEO of Zappos weeks later, Business Insider has learned.

In late June, the Zappos CEO left his budding community in Park City, Utah, for his first real vacation in 2020. On the charter bus — his preferred method of travel — he experienced what one friend who was there described as a "psychotic break." Hsieh's behavior was so bizarre that many people wanted to get off the bus immediately, another person familiar with the matter said. The friends spoke to Business Insider on the condition of anonymity to discuss sensitive subjects. 

During the incident, Hsieh, 46, appeared to be having delusions, the friend on the bus said. 

"He was getting frustrated. In his manic state he said, 'I don't want anyone to question me, I want you to sign a pact with me that you're not going to try to intervene with this journey,'" the friend said.

Hsieh had not been sleeping, the friend said. But they emphasized that Hsieh had not been a violent person and he didn't seem to intend harm to himself or others. 

See more: Tony Hsieh sold Zappos for $1.2 billion in his 30s. He was dead by 46. Inside his final Park City months, where he hoped to deliver more happiness as he spiraled.

Hsieh unexpectedly left the trip after the episode, which had unsettled many of his fellow passengers. The Zappos CEO returned to Park City, while the rest of the group continued the trip on the bus. Shortly after Hsieh's return to Utah, on the morning of June 30, an anonymous male friend of Hsieh's called 911. The friend said Hsieh had broken several things in his house and was threatening to hurt himself, per call logs obtained last week by Business Insider.

The call was coded as a psychiatric incident, according to the call logs. Emergency services made contact with Hsieh on his patio and got him out of the home, then transported him to a hospital. It's unclear exactly where Hsieh was taken; the area has one hospital, and its spokeswoman declined to comment, citing privacy regulations.

The bus incident marked a turning point that caused close friends and family to become concerned about his mental health and they subsequently tried to intervene.

They struggled to access Hsieh because of his Park City security team and digital isolation. Hsieh had eschewed technology and relied on assistants and his community to bring him messages. Business Insider and others have reported that Hsieh was surrounded by a small group of largely new contacts in Park City who carried out his vision and, per loved ones, enabled his spiral.

One of the sources familiar with the bus incident believes it was communicated to Zappos' senior leadership, who later brought it to Amazon, Zappos' parent company. Amazon kept Zappos at an arm's length, and most senior leaders at Amazon weren't aware of Hsieh's personal issues, said people with knowledge of the situation. Amazon declined to comment on the matter.

Weeks after the bus incident, Hsieh quietly stepped down from the CEO job at Zappos, where he'd worked for more than 20 years and was beloved by employees.

The short internal email by current Zappos CEO Kedar Deshpande announcing Hsieh's resignation in August, which Business Insider obtained, suggests the abrupt and unplanned nature of the change in leadership:

"I'm reaching out to share that Tony has decided to retire as CEO of Zappos. We want to thank Tony for his 20 years of work on behalf of Zappos customers and employees and wish him well in his next chapter.  Effective today, I will be assuming the role of CEO and will be working to make this a seamless transition. As always, we are focused on wowing customers and the 10 core values that drive us every day." 

A representative for the Hsieh family declined to comment. The family has earlier said in statements that they are focused on his legacy, rather than on the events that led to his death. 

"We hope to carry on his legacy by spreading the tenets he lived by – finding joy through meaningful life experiences, inspiring and helping others, and most of all, delivering happiness," they said in a statement this month. 

Increasingly erratic behavior in Park City

Hsieh died November 27 in Connecticut following injuries he sustained in a local house fire more than a week prior.

His death elicited an outpouring of emotions and memorials from many Zappos employees, former colleagues, and other people close to the internet entrepreneur, considered a life inspiration to many.

Hsieh was an out-of-the-box thinker whose happiness-focused leadership spawned business school case studies and site visits from CEOs of the world's biggest companies. He first invested in Zappos and then ran the shoe company for 21 years, and he remained on after selling to Amazon for $1.2 billion in 2009.

Even after the sale to Amazon, he remained a hands-off CEO, seeing himself as an architect who empowered individuals to make decisions, not an in-the-weeds leader. His visions weren't limited to Zappos. He embarked on a multi-year effort to revitalize downtown Las Vegas by courting friends and entrepreneurs to live in apartments and Airstream trailers. Hsieh continued a similar effort this year in Park City, where he also acted as a "guardian angel" to local businesses struggling in the pandemic, Business Insider previously reported.

In Park City, Hsieh's behavior over the summer became increasingly erratic and concerning to some of his friends.

In mid-August, a friend called police to express concern about Hsieh's safety. The friend said Hsieh was "very paranoid" and alluded to Hsieh's use of nitrous oxide.

Hsieh's alcohol use has been well-documented through the years. He was known to hand out Fernet bottles — his favorite type of drink — to people he met, according to Zappos employees. During the summer in Park City however, as the pandemic upended life around the country, friends say that Hsieh's drinking and drug use escalated to a dangerous level.

On the day before he died, Hsieh was planning to check into a rehabilitation center, the Wall Street Journal reported. 

If you're experiencing a mental-health crisis, the National Institute of Mental Health has a number of resources.

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