Mr Hsieh, 46, who had been on a family visit at the time, only recently retired after 20 years leading Zappos, acquired by Amazon for more than $1bn.
He also played a key part in the restoration of central Las Vegas.
Tributes poured in on social media. Zappos said that the world had "lost a tremendous visionary".
Tony Hsieh also wrote the book Delivering Happiness, which set out his philosophy of focusing on both customer and employee care.
A statement from, DTP Companies, the company Mr Hsieh invested in to transform downtown Las Vegas, said he was with his family when he died on Friday. Details of his injuries and the cause of death have not been released.
"Tony's kindness and generosity touched the lives of everyone around him, and forever brightened the world," the statement said.
Zappos.com paid tribute on its Twitter feed:
It is with very heavy hearts that we are sharing some very sad news, as we have learned that Tony passed away earlier today (11-27-20). The world has lost a tremendous visionary and an incredible human being. We recognize that...https://t.co/RUMNOFrItZ pic.twitter.com/NSAFGW8p4L
— Zappos.com (@Zappos) November 28, 2020
Amazon acquired Zappos in 2009 but Tony Hsieh stayed on as boss, saying: "We think of Amazon as a giant consulting company that we can hire if we want."
Current Zappos chief executive officer, Kedar Deshpande, said Tony Hsieh's "spirit will forever be a part of Zappos".
The Las Vegas Review-Journal said Mr Hsieh had pumped a fortune into the once-neglected central Las Vegas and became the face of its revitalisation.
His "Downtown Project" helped fund start-ups, restaurants and other ventures.
Las Vegas Mayor Carolyn Goodman told the Review-Journal Mr Hsieh's death was "a tragic loss".
Ivanka Trump also tweeted about the loss of a "dear friend".
Celebrating the life while mourning the loss of my dear friend Tony Hsieh. Tony was a deeply original thinker always challenging me to reject conformity & follow my heart. Tony was driven by the mission of delivering happiness & brought joy to all who knew him. Rest In Peace Tony pic.twitter.com/Nd5o6U7wV9
— Ivanka Trump (@IvankaTrump) November 28, 2020
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Zappos ex-boss and Las Vegas entrepreneur Tony Hsieh, 46, dies after house fire - BBC News
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