Zappos CEO Tony Hsieh's Las Vegas Startup Paradise - Businessweek.pdf

122015 Zappos CEO Tony Hsiehs Las Vegas Startup Paradise shy Businessweek

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The Good Business Issue


By Susan Berfield December 30 2014

Photographer Michael Friberg for Bloomberg Businessweek

Tony Hsieh spent the last weekend of October celebrating with some 30000 people at Life is Beautiful a threeshyday festival in downtown Las Vegas withone main sponsor Hsieh People wrote their biggest dreams and fears on a wall two actors improvised love stories A Ferris wheel solarshycooked tacosand 53 custom cocktails were available Kanye West and Lionel Richie performed So did Hsiehrsquos favorite band Rabbit ldquoThey play only happy musicrdquohe says ldquoTheyrsquore our lsquoholdrsquo musicrdquo Hsieh is chief executive officer of Zapposcom the online shoe retailer known for boasting about the happiness of itsemployees and customers Hersquos also the founder financier and impresario of the Downtown Project in Las Vegas an ambitious social experiment inurban renewal



Hsieh whorsquos 41 and single sold Zappos to Amazoncom (AMZN) in 2009 for $12 billion He received about a third of that mostly in stock Two yearslater Hsieh promised to spend $350 million to create his own utopian community a place of inspiration and serendipity where everyone could becomesmarter and of course happier He wasnrsquot leading people into the desert exactly but to a downshyonshyitsshyluck neighborhood two miles from the Strip that hehoped to turn into a thriving hub of highshytech creativity When he started in 2012 his pitch was ldquoWhat if you could play SimCity for realrdquo Sometimes hecalls the project a startup city

Zapposrsquos headquarters is in Hsiehrsquos startup citymdashhe moved it from the suburbs to the old City Hall and bought 60 acres and 100 buildings in the areaaround it Hersquos promised money to 50 small businesses replacing checkshycashing operations and pawnshops with bars restaurants and coshyworking spacesHe owns the Inspire Theater on the main boulevard which has a cafe and two bars plus an auditorium

Hsieh has backed an additional 100 or so tech startups Theyrsquore run by friends family and acquaintances from around the country people who have ldquoabias to helprdquo he says and who are willing to live in or at least regularly visit downtown Vegas They have to be willing to hang out too the vettingoften includes an evening in a bar ldquoWould Tony want to have a beer with you and find out what you think about outer space and aliens Absolutelyrdquo saysDylan Jorgensen who worked for the Downtown Project ldquoIn a sense the city is curatedrdquo Amy Jo Martin runs a social media company called DigitalRoyalty Hsieh is a client and investor and Martin was among the first to follow him to Vegas She wrote on her blog ldquoImagine if Walt Disney ranSilicon Valley but everyone lived on the set of Cheersrdquo

Hsieh moved into a luxury apartment building called the Ogden He combined three apartments into one and rented 60 more as crash pads forguests

When Hsieh met Ashton Allen coshyfounder of Rabbit he called it a ldquoserendipitous collisionrdquo That was in 2010 at a conference in Hawaii Later thatyear Allen joined Hsieh for part of his bus tour to promote Delivering Happiness A Path to Profits Passion and Purpose his memoir disguised as amanagement book They began writing a song called Almost Fairy Tale Herersquos a verse ldquoItrsquos not as crazy as it seems Leaving the forest for the field ofdreams We didnrsquot make it but we didnrsquot fail We were an almostshyfairy talerdquo Allen moved to Las Vegas and became music director for the project On thebook tour Hsieh also met David Gould a professor at the University of Iowa Gould eventually joined the project too In the summer of 2013 he becamethe ldquodirector of imaginationrdquo

Hsieh often said he wanted his $350 million to generate a ldquoreturn on communityrdquo not just a return on investment Community is a loaded word in a placewhere unemployment is high and homelessness common It also gave some the impression that Hsieh didnrsquot consider the Downtown Project a business Ittook a while for him to realize this By early 2014 though Hsieh had begun to temper expectations He posted a note on the projectrsquos website in Februarysaying that people had misunderstood his goals The Downtown Project wasnrsquot going to do the work of government or charities Itrsquos ldquoa startupentrepreneurial venture that happens to also have good intentionsrdquo he wrote Instead of looking for a ldquoreturn on communityrdquo the Downtown Projectinstead wanted a ldquoreturn on connectednessrdquo

By summer Hsiehrsquos $350 million had mostly been committedmdash$200 million had gone toward real estatemdashand few of the projectrsquos companies wereprofitable Gould Allen Jorgensen and the rest of the 90shyperson Downtown Project staff were called into a meeting at the Inspire Theater in late AugustHsieh Fred Mossler who helped Hsieh build Zappos and others reviewed operations and said the project had to focus on those businesses that providedrevenue The reaction was subdued

Few thought there were would be layoffs When Gould heard they were coming he resigned He wrote an open letter to Hsieh that was published in alocal newspaper at the end of September ldquo lsquoBusiness is businessrsquo will be the defense from those you have charged with delivering the sad news But wehave not experienced a string of tough breaks or bad luck hellip While some squandered the opportunity to lsquodent the universersquo others never cared aboutdoing so in the first placerdquo Gould returned to Iowa

Allen was let go So were Jorgensen and almost 30 others oneshythird of the staff Hsieh referred to author Jim Collinsrsquos idea that companies should ldquofirebullets then cannonballsrdquo That is test lots of ideas then focus on the most successful He made public a fiveshyyear business plan and noted that theDowntown Project was on schedule Year Three time to streamline operations He also had to reassure everyone thatmdashcontrary to media reportsmdashhewasnrsquot stepping down as chief executive hersquod never been the chief executive In fact there was no CEO and there were no official titles He was theanimating force the founder to be more literal He listed all the investments he wasnrsquot responsible for The projectrsquos path he wrote ldquohasnrsquot been andwonrsquot be all unicorns and butterfliesrdquo Before there was a Downtown Project there were three bars on an otherwise desolate street in what had once been the geographic and commercial centerof Las Vegas Hsiehrsquos favorite was the Downtown Cocktail Room a speakshyeasy with a secret door The owner Michael Cornthwaite was part of a smallgroup of businesspeople and artists whorsquod begun to reclaim the area Cornthwaite wanted Hsieh to get involved He didnrsquot know that Zappos which todayhas 1600 employees had outgrown its offices in the nearby suburb of Henderson when he mentioned that City Hall would soon be vacant Itrsquos asemicircle of a building with a courtyard perfect for parties and itrsquos a few blocks from Cornthwaitersquos bar ldquoMichael is very persuasiverdquo says Hsieh ldquoTonyasked lots of questions I could see the wheels turningrdquo says Cornthwaite Instead of building a campus for Zappos Hsieh would build a city

Photographer Michael Friberg for Bloomberg



BusinessweekHsiehrsquos Inspire Theater in downtown Las Vegas

It was 2010 and Las Vegas was in trouble It had more homes in foreclosure than almost any other city in the country The Sands (LVS) was facingbankruptcy The Fontainebleau Resort stood unfinished Downtown had been neglected even during the good times The Strip had eclipsed it and themoney spent there stayed there Residents who could afford to left for the suburbs Sears (SHLD) JCPenney (JCP) and even the 7shyEleven (3382JP)closed A couple of casinos and hotels still attracted tourists as did the gaudy Fremont Street Experience a fiveshyblock entertainment district with whatrsquosbilled as the worldrsquos largest video screen The millions of visitors went no farther than the Heart Attack Grill though crossing to the other side of LasVegas Boulevard into the real downtown was too dangerous ldquoI thought if just 10 percent of what Tony was talking about happened it would beincrediblerdquo Cornthwaite says

In 2011 Hsieh left his mansion in a gated community in the Las Vegas suburbs and moved into a luxury apartment building downtown called the OgdenHe rented three apartments for himself combining them into one and 60 more as crash pads for guests Several Zappos executives and many newcomersended up living at the Ogden too In the early days visitors to Hsiehrsquos place used to put their ideas on Postshyit notes on a wall in one living room That wasthe master plan The notes are still there Another of the living rooms has live plants covering the walls and fake ones hanging from the ceilings Bottles ofliquor line the counters of the three kitchens with glasses nearby

Spending time with Hsieh there is like being granted an audience with a prophet preparing for a bachelor party When I meet him hersquos sitting on a rollingredshyplastic school chair in the dimly lit media room His laptop is open in front of him My chair has been placed close to his almost like a test Who willback away first ldquoA lot of people when they break up with someone they donrsquot talk to that person again for the rest of their livesrdquo Hsieh says as hedescribes the origins of his fairy tale song ldquoBut yoursquove invested all that time into itrdquo He pauses ldquoWhich one are yourdquo I pause I donrsquot think hersquoll like myanswer For the record hersquos the kind who stays in touch with former girlfriends There are no obvious reminders of them in his place But written on awhiteboard in bubble letters is the question ldquoWhat Would Love Dordquo

Hsieh calls himself an introvert In our conversation he says he would like to be anonymous and he wears an undistinguished uniform of jeans anduntucked shirts Yet thousands of wouldshybe entrepreneurs business owners academics artists celebrities and journalists have walked through hisapartment at the Ogden Initiation into the Downtown Project used to begin there The tours usually included a ride on the Delivering Happiness bus hersquodbought when he was promoting his book They ended with a pubshycrawl Hsieh would do shots of Fernet Branca a bitter Italian liqueur and talk about theonceshyinshyashylifetime chance to fix a city ldquoThe big bet is that it will lead to happiness luckinessrdquo he would say ldquoWersquore maximizing longshyterm ROC andROL return on collisions and return on luck Wersquore accelerating serendipityrdquo

Hsieh usually says his motivation for wanting to turn downtown into a modern workersrsquo paradise is practicalmdashmore than half the worldrsquos population livesin urban areas He also had a personal motive ldquoI want to live where there are places I enjoy hanging out in and people I enjoy being aroundrdquo Now hedescribes the Downtown Projectrsquos brand as ldquoTED + SXSW + Burning Man but as a lifestyle instead of as an annual eventrdquo

ldquoHe has created the most incredible marketing I have ever seenrdquo says Las Vegas Mayor Carolyn Goodman ldquoI love Tonyrsquos spirit Itrsquos fun to watch himrdquo

Hsiehrsquos goal at first was to amass 10000 more residents in an area where about 20000 already lived It was a figure hersquod settled on after reading TheTriumph of the City by Edward Glaeser a professor of economics at Harvard Glaeser argues that urban density is essential for innovation To buildexcitement about downtown Hsieh flew in friends gave interviews and spent money If he met someone he liked he invited them to visit When AmandaSlavin arrived in Vegas in 2011 after talking with Hsieh at a conference she says Hsieh didnrsquot remember her A few months later they were friends andhe agreed to invest in an events company she started CatalystCreativ The Downtown Project was her first client

Connie Yeh and her husband Don Welch visited in the spring of 2011 They were traders at Citibank (C) in New York looking for a chance to dosomething meaningful Yeh is also Hsiehrsquos first cousin ldquoTony asked us lsquoWhat would it take for you to move to Las Vegasrsquo rdquo Welch says Yeh told hercousin she was interested in education Hsieh said he would fund a project Yeh opened a private school where the teaching is based on the latestneuroscience research and the focus is on entrepreneurship Twentyshynine kids the oldest in kindergarten are enrolled at the 9th Bridge School Tuition is$15750

ldquoI had a passion for small businessrdquo Welch says Hsieh gave him $50 million to invest ldquoWhen I heard the amount I thought lsquoOh sshyshyshyrsquo rdquo Welch says Hehad no experience running a business or investing in one ldquoBut in the last three years I think Irsquove gotten 30 years of experiencerdquo Hsieh gave Welch littleguidance ldquoDon built a team I donrsquot know the details of how they interact or vet investments or negotiaterdquo he says ldquoI trust him I guess I tend to fall inlove very easilymdashnot in the romantic senserdquo

Welch and his group sorted through more than 2000 proposals to find about 50 businesses to support The founders receive noshyinterest loans usually acouple of hundred thousand dollars though sometimes more and salaries After they pay back the loansmdasha largely theoretical proposition so farmdashtheysplit any profit with Hsieh The Downtown Project has helped open bars clubs and restaurants some run by chefs who used to work on the Strip Therersquosa gourmet doughnut shop a glutenshyfree pizza place a sushi bar a juice bar a highshyend clothing store and a membersshyonly dog park Recently a yogastudio a florist and a bookstore opened A bar and one of the two coshyworking spaces have already closed ldquoBusiness is toughrdquo Welch says ldquoJust becausenot all of them have gone out of business doesnrsquot mean theyrsquore all killing itrdquo In the layoffs Welch lost two of the four people in his group includingsomeone hersquod hired a month before ldquoWhen business pivots it pivotsrdquo he says Afterward the remaining Downtown Project staff moved into the defunctcoshyworking space

Zach Ware helped oversee Zapposrsquos move into the old City Hall Then Hsieh put Ware in charge of the Vegas Tech Fund giving him $50 million toinvest in tech startups or companies that wanted to relocate to Vegas Zirtual a virtual executive assistant service moved its headquarters from SanFrancisco to Las Vegas OrderWithMe which allows small businesses to get better deals from suppliers relocated from China They along with DigitalRoyalty are doing well enough that Hsieh announced he will give them more money and advice Early on Hsieh invested in Romotive which buildssmall personal robots The company was such a success that its founders had to move to the Bay Area Las Vegas didnrsquot have enough tech talent Warespends most of his time now as CEO of Shift a carshy and bikeshysharing network backed by Hsieh and expected to start service in Las Vegas in 2015 Thecompany got considerable attention in the spring of 2013 when it placed an order for 100 Teslas Itrsquos not clear if Shift actually plans to buy all those carsWare said via eshymail that ldquofocusing on our Tesla order is like focusing on the carpet in a Frank Gehry buildingrdquo The Vegas Tech Fund also invested inFactorli a smallshybatch manufacturing facility President Obama visited the site in June Two months later the fund shut down Factorli over concerns aboutthe cost When asked about other failed companies Ware said ldquoIf I quote statistics about which companies are not operating anymore itrsquos not an accuratereflection of how and why we investrdquo

ldquoWersquore starting to understand what opportunities there are that could potentially both generate profitability and also a return on collisionrdquo says MaggieHsu whorsquos focused on business development at the Downtown Project ldquoThatrsquos what makes us different from any other real estate company or hospitalitycompany or food and beverage companyrdquo Hsu wrote Hsieh on a whim in the spring of 2013 After earning a degree from Harvard Business School shersquodtaken a job at McKinsey and wanted a change She didnrsquot know Hsieh but when she first visited he gave her a crash pad and a list of 20 people to meetfirst names only no contact information ldquoAt the time I didnrsquot quite understand the methodologyrdquo she says ldquoWhat I think in retrospect was it wasintentionally organic It was back on me to build those relationships and see where I could best fit inrdquo Her first project was implementing a selfshyorganizing system of management called Holacracy that Hsieh also is using at Zappos Itrsquos supposed to distribute authority across a company notconcentrate it in a few hands There are no titles or hierarchy but therersquos a 25shypage constitution



Photographer Michael Friberg for BloombergBusinessweekThe outdoor mall is close to profitability in ldquosome monthsrdquo

Hsieh bought the Gold Spike an old casino and hotel in the spring of 2013 for $22 million Hersquod recently brought on Michael Downs the director ofoperations at the Bellagio and a friend for more than a decade ldquoI was hired to activate assets for the Downtown Project to try to create some memorableguest experiencesrdquo he says Hsieh gave Downs two weeks to turn the Gold Spike into a place suitable for work and play Downs stripped the casinoexcept for the bar and put in long tables with stools lounge chairs a bed and oversize games Therersquos a bean bag toss in the middle of the room ConnectFour darts and a pool table The backyard has hopscotch fire pits an Airstream trailer and a Tumbleweed a miniature wood home on wheels Therersquosmusic sometimes live every night The hotel roomsmdashofficially called crash padsmdashare loud Zappos and Downtown Project employees live on two of theseven floors

ldquoItrsquos profitablerdquo Downs says of the Gold Spike ldquoIrsquom supermotivated by making money Itrsquos one of the things I enjoy about my positionrdquo He alsooversees the Container Park an outdoor mall made up of shipping containers created and owned by the Downtown Project Music plays at festivalvolume A 40shyfootshytall metal sculpture of a praying mantis once on display at Burning Man stands at the entrance Sometimes it spews 12shyfoot flames Atreehouse and slide occupy the middle of the park ldquoVery familyshyfriendlyrdquo he says ldquoWersquore very very close to being profitable some monthsrdquo

If therersquos ambivalence about downtownrsquos revitalization itrsquos often because many of the businesses backed by the project seem to be run by newcomersldquoItrsquos as if this is a moving train Itrsquos pretty nice and better than what we had beforerdquo says Michael Borer an associate professor of sociology at theUniversity of Nevada in Las Vegas ldquoBut people arenrsquot sure if theyrsquore just watching or if theyrsquore allowed on And if so where do they get to sitrdquo

ldquoSomeone like me Irsquom out in a collisionable way three or four hours a day seven days a weekrdquo

In the past two years a young man working for the project and two wellshyknown entrepreneurs including one featured in a New York Times Magazine storyabout Hsieh committed suicide Hsieh brought in a therapist for a time Now therersquos a consultant who advises entrepreneurs His company is calledROCeteer (ROC as in Return on Collisions)

On many afternoons there are still more people in the lobby of the Golden Nugget casino and hotel with its $30 million swimming poolmdashand shark tankmdashthan in downtown Las Vegas Affordable housing remains scarce Desks at the coshyworking space are available People rarely have to wait in line at thegrocery store or make a reservation for dinner Therersquos a lot of colliding with the same people over and over again

At the far end of Hsiehrsquos property sits Fergusons Motel It was supposed to become a retail complex with three taverns and boutiques in some of therooms But Paul Cline whorsquod overseen its development during the past year was let go in September ldquoThey told me my position doesnrsquot exist anymorerdquohe says ldquoThey were following a script that corporate America is using these days for layoffsrdquo He estimates the project would have cost $9 million in allldquoI think their appetite for that doesnrsquot exist nowrdquo Kim Schaefer a spokeswoman for the Downtown Project says ldquoWe are currently evaluating thefinancials of this proposed projectrdquo

Downs says the Downtown Project is considering leasing some unused property to other developers Hsieh would become a landlord earning a return oninvestment if not collision He says he doesnrsquot think about the risk hersquos taken or the money hersquos spent In any case the value of his 60 acres has increasedsince he bought it as has whatever Amazon stock he still owns ldquoIrsquom never going to be homelessrdquo he says ldquoThe consequences just arenrsquot that badTwenty thousand years ago the worstshycase scenario was that you get eaten by a sabershytoothed tigerrdquo Hsieh quietly assumes his place in the front of a room at the Scullery a restaurant and meeting place on the ground floor of the Ogden that Cornthwaiteruns with Downtown Project backing Hsieh is there to give whatrsquos essentially his marketing pitch to a dozen or so futurists from companies such as WaltDisney (DIS) and General Motors (GM) Hersquos given it often His reputation for turning an online shoe seller into a model employer ensures he getscrowds at business conferences and gatherings such as South by Southwest Still he looks uncomfortable no handshakes no small talk ldquoWhen we firststarted we thought we had to invest a lot in residential we thought we had to build highshyrises or lots of small spaces to get a return on collisionrdquo he tellsthe executives Hsieh says he soon halved his goal of recruiting 10000 residents calculating that his people would be twice as collaborative as otherpeople He did some other math ldquoWhat is the value of a resident If they stay home theyrsquore not collaborating or contributing to the community Someonelike me Irsquom out in a collisionable way three or four hours a day seven days a week So Irsquom worth about 1000 collisionable hours a yearrdquo

Hsieh also came up with a way to calculate the value of people who ldquosubscribe to downtown Las Vegasrdquo but donrsquot want to live there Hersquod tried topersuade Jake Bronstein to leave New York in 2012 Bronstein is the founder of Flint amp Tinder which makes the 10shyYear Hoodie and other clothes Hsiehinvested in the retailer and says Bronstein comes to Vegas one week every month ldquoWe did the math on Jake When hersquos here hersquos out about 12 hours aday 7 days a week for 12 weeks a year So hersquos worth 1000 collisionable hours toordquo

Hsieh began to apply this metric to investments that might not make money for a while ldquoSay we want 100000 collisionable hours a year from aninvestment That works out to 23 hours per square foot per yearrdquo he says with a slight smile ldquoIf wersquore going to invest in a 3000shysquareshyfoot restaurantwe can do the math and see if it yields that 23 hours per square foot per year Wersquore kind of agnostic about what goes into a space Itrsquos lsquoare you going toyield those collisionable hoursrsquo If not we can say no without judging the quality of the ideardquo



Determining the number of interactions between people and their value had been Jorgensenrsquos job He was the collision scientist until he was dismissedldquoTony has an understanding of how to build Zappos and DTP but itrsquos gut instinctrdquo he says ldquoYou put up a bar and people drink together and becomefriends We know thatrsquos how it works I was trying to put some math behind it But it was going to be a very big investmentrdquo Someone will have to findother ways A recent public document from the Downtown Project says ldquoGoal 10 million collisionable hours per year inside the llama footprintrdquo Llamasare Hsiehrsquos talisman the 60 acres he owns roughly form the shape of one

Hsieh has other measures of success Back in his apartment he says ldquoIn the beginning almost everyone I ran into was someone who I or someone on ourteam had recruitedrdquo A year later he says 1 out of every 10 had come on their own He hopes that by the end of five years at least 50 percent of thepeople downtown will have moved there independently What if that doesnrsquot happen ldquoThen itrsquos not going according to the fiveshyyear plan It might takesix yearsrdquo Hsieh says downtown Las Vegas will eventually be all that he imagines ldquoBut there are some places where it takes 20 yearsrdquo he says ldquoI donrsquotwant to wait that longrdquo

A few weeks later in midshyNovember a group of downtowners volunteered to move into some Airstreams that Hsieh had bought earlier Itrsquos a beta test tosee if they can evoke the spirit of Burning Man in an unused parking lot downtown Therersquos a community kitchen and a nightly campfire The formercollision scientist is in an Airstream Hsieh has one too

With Patrick Clark

Berfield is a writer for Bloomberg Businessweek in New York Follow her on Twitter susanberfield

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Guest bull 2 days agoDont believe the hype about this over glorified cult Group tatoos anyone How about the suicides and the unaccounted for money How aboutfriends and family calling the shots on this utopian experiment Fact of the matter is this If you are not a loyal minion to king tony and his court ofsycophants DT project does not want you This article is a great fluff piece and it looks like king Tony has scored some nice year endpropaganda If you want the real story check out the multipart series recode did

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joebatch bull 4 hours agogt Guest

Guest Your post100 true Lets add that this soshycalled utopian experiment is nothing more than a fancy way of calling what it isGentrification I moved downtown in 2008 and you should not believe all the horror stories about how God less and dangerous the areawas The Strip is much more so but you dont hear all about that in the news I felt then a lot more safer Downtown than I ever wouldgoing to the Strip I felt more at ease in my movements then than now The utopian experiment shut down stores and businesss thathad been here for years the good and the not so good The experiment has done nothing but add more bars and expensive restaurantsand then call it community building that like calling the Strip Mayberry Hsieh Co have tried to run out people who have lived here foryears and drove out those businesss we relied onAnd dont get me started on the so called life is beautiful festival every year wherewe oldshytimers are pinned into our apartments and homes and blocked from going any where we need to go for at least a week We arecut off from public transportation (the bus stops are closed off with no bus service)Barny Fife security telling people they cant walkdown certain sidewalks and the area churchs are told they cant hold their Sunday services and to change to another day All this tobenefit trustshyfunded hipsters to access to the area to party for 3shy4 days and nightsAll in all nothing but hype thats all

Walt bull 17 hours agogt Guest

ℳy classmates stepshymother makes $70 every hour on the laptop She has been out of a job for 6 months but last month her paycheck

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bull Reply bull

ℳy classmates stepshymother makes $70 every hour on the laptop She has been out of a job for 6 months but last month her paycheckwas $20101 just working on the laptop for a few hours look these upRead More

bull Reply bull

Jeffrey Johnson bull a day agoThe bottom line on this overhyped playground is that either you buy into a shoe salesmans idea of utopia or you arent invited The Gold Spikewas not much before but at least it was honest Now it is overrun with goofballs throwing beanbags The real collision they are interested in iswhen Metro runs off anybody who doesnt fit their ideas about suitable denizens for their future ghost town If you need a good laugh peruse thelist of companies they decided to invest in unfortunately for most wouldshybe entrepreneurs they are just not whimsical enough to make that cutand they are a pretty whimsical group to start with When you rank investment priorities on something as nebulous as collision potential insteadof something like oh say economic values because the luckiest shoe salesman who ever walked the face of this earth subscribes to it wellLas Vegas has serious problems and it is a shame to see such capital and investment applied in such willyshynilly fashion Keep your fingerscrossed once the bloom is off the container park maybe we can find a place to squat

6

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Cent Parkway bull 9 hours agogt Jeffrey Johnson

No kidding The first few paragraphs scream bars bars BARS Like the selling point is maybe youll get lucky enough to be dateshyrapedby the Dear Leader himself upon your first serendipitous visit

No thanks 1

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Guest bull 20 hours agoSo a bored misguided dipshyshit with too much money gets to play God by lording over a few hundred typical Vegas misfitsumcoolnotreally

5

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HEY bull 2 days agoDoes anyone else find it funny that his name shy with the correct tone of course shy means shoe in Mandarin

5

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Yo bull a day agogt HEY

No 1

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Mark Thien bull a day agogt HEY

envy

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richardparker bull 17 hours agogt Mark Thien

well he is a chanaman

bull Reply bull

Mea Tmycomputer bull 2 days agomoving to a desert just where I want to be as this planet turns into Venus

5

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Laughingswordfish2 bull 17 hours agoNice puff piece but Tony Hsieh is WAAAYY overhyped in my opinion In reading this story I notice all the people from flossy (read HighIncome Ivy Leaguer) backgrounds but about no one else Theres no tie to the local university (UNLV) and no outreach or vision for the local community he hasfoisted himself on

If you want to work at Zappos you had better be from Somewhere Else (anywhere BUT Vegas) and preferably with a degree from an eliteuniversity Zappos and his other businesses (I use the term advisedly) have an explicit We Dont Hire The Locals policy And hisHappiness Tours make me roll on the floor laughing Since when has anyone from Corporate America ever sincerely cared about workerhappiness In fact I think that as soon as Hsiehs boss (Jeff Bezos) gets wind of the contrast between Zappos and the rest of the Amazonempire (famous for sweatshop conditions companywide) this whole thing will collapse like the house of cards it is

Face it Las Vegas is a lowshywage lowshyskill GHETTO totally and utterly dependent on the volatile and discretionary hospitality and gamingindustries The last thing it needs is an outshyofshyplace outshyofshy touch entrepreneur trying to transform it into a personal playground for himself andhis friends

3

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David Scarpitta bull 2 days agoYou know I love Tonys work concept I read his book and understood his concepts However at the end of the day his hippie experimentswere possible because of the immense cash he generated even from his first company he created that he sold off before even opening ZapposIts just entertaining to me that many see him as a visionary because he has unlimited funds to do this stuff but others that do this type of stuffare considered hippies or burnouts because they think the same way but they certainly didnt have the luck and timing that goodol Tony had

3

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David Scarpitta bull 2 days agogt David Scarpitta

I think if more 1 percenters had a create wellshybeing mentality we all would be happier campers in todays economy 1

bull Reply bull

tylerzambori bull a day agogt David Scarpitta

Problem is hes not creating wellshybeing hes just promoting himself How can a bunch of tourist trap restaurant and bars createthis wonderful community It cant

4

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marcus bull 19 hours agoultimately this vision will die I visited the downtown project lots of dedicated well meaning people but Vegas will not work as a high tech hubwhen I consider high tech hubs the common denominator is a feeder university Silicon Valley has Stanford Vegas has nothing worse yet Ifound no initiative at the downtown project to foster cooperation with a local university (ie endowed professorships in CS etc)

without a university hub the downtown project is a pipe dream and will be another chapter in a long history of failed dreams that makesVegas so intriguing

2

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Jackov bull 20 hours agoI left Vegas before the housing bust Based on the low wage job casino market I knew that it was unsustainablePostshyrecession Vegas offers no state income taxes and lower rents than even Detroit or Newark but a lowshyskill labor force a horrible familyenvironment and no mass transitWith Caesars defaulting on $20 billion in debt NV faces thousands of layoffs Vegas leads megashycities in employment rate

2

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Jokersmile bull 16 hours agogt Jackov

I left for the same reason 1

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brendan howley bull 11 hours agoCult is rightand Im a fan of Zappos customer service

Compare and contrast Brooklyn or Pittsburgh or Manchester or Boulder to this fiasco Zappos is a classic win at the online casinomdashHsieh hadalready made his nut with LinkExchange the sale of which funded Zapposmdashnot a licence to turn a cultural wasteland into a petri dish Hes acomputer scientist not Steve Jobs who come to think of it did have the taste and vision to coshycreate a a city that worked because he knewhow to marry tech to culture (both inside and outside the company) Pixar

But Pixar aint Vegas to say the least Moreover there are hard and fast rules regarding gentrification and urban renewal not least of whichiswhere are the DJs the sexual outlaws the bands living in basements the hot young chefs the visionary club owner the musicshyhungryuniversity students the network of software folk looking for urban authenticity the crossroads cafeacute where the coders hang with the poets anddancers and musicians These folks show up because theres a scene not because theres Airstreams Really Trailers as beta test forBurning Man Wow

Peter Drucker said it best Culture eats strategy for lunch Hsieh is a pretty fair business strategist but cultures gonna eat him alive Or dearthof it Hes going to cost himself dearly proceeding this way Until Hsieh figures out is tastes in his mouthmdashhe should read a good biography ofLorenzo de Medici and fastmdashhell be having boozeshyfree huddles with his accountants with increasing frequency

1

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Guest bull a day agoFremont East is and always will be a DUMP

1

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Bombshell bull a day agoGeez where to start on this Need a week to digest

1

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Jokersmile bull 2 days agoGood luck in the valleygaming is dying a slow death and now the FBI is investigating junkets so this is the tip of the new mob and moneylaundering Been inside the monster you learn to shut up and look the other waypaper trail to cash LOL LOLsure go ahead and dig you willfind more that you expected

1

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billcarsonbill bull an hour agoAn update for this article Kim Schaefer is no longer with the Downtown Project as of yesterday She posted a farewell on Facebook and theDowntown Project blog (which she was in charge of editing) has been removed from the site (downtownprojectcom)

govskeptic bull an hour agoThe success or failure may depend upon Tony and crew kissing the ring and feetof Sen Harry Reid and those of all his Las Vegas attorney sons Madam Mayor maybe an ally but there is a rather small circle that completely runs Vegas it failures

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be an ally but there is a rather small circle that completely runs Vegas it failuresand successes Is the old Fremont Hotel within these boundaries or still around

bull Reply bull

Gerald Bowman bull an hour agoSome would say that Hsieh is brilliant First buy up a huge chunk of a blighted downtown Second make strategic investments in businesses toimprove the provenance of the area shy make it hip Gentrification on steroidsshy and with a soul The real estate investment may take 5shy10shy15 yearsbut ultimately will be worth multiple times what he paid Support numerous startshyups with a relentless energy and ruthless flexibility Cut the weakfrom the fold without regrets or hesitation If only a few of those start ups is wildly successful it will all pay off It is long term vision It is not a 5year planshy it is a 10shy15 year plan But it is actually quite smart

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billcarsonbill bull 2 hours agoHsieh says he soon halved his goal of recruiting 10000 residents calculating that his people would be twice as collaborative as other peopleHe did some other math

This sounds like pseudoscience to me

ldquoWe did the math on Jake When hersquos here hersquos out about 12 hours a day 7 days a week for 12 weeks a year So hersquos worth 1000collisionable hours toordquo

Does one collision provide a return Does one in ten collisions produce a return Or does Jake have to collide with the same person twicethree times before theres a return

In fairness to the author thats not what this article is about What shakes ones faith in what Tony is doing is hiring people he feels good about(like Citibank traders to run a preschool and his small business investment fund no prior experience) and like Downs whose primary focus ison making money period (not very ROC) His head of science or RampD chief Dylan Jourgenson has no college degree yet hes in charge offiguring out how to measure the success of collisions

Add to that Tonys attitude of it being all play money to him (ldquoIrsquom never going to be homelessrdquo) and it leaves one with little optimism And I dohope I am wrong because there are great people downtown (Zach Ware being one of them) and this is too cool a project to wish failure upon it

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rubber_samuel bull a day agoZappos must have been a bad buy for AmazonEbay is the place to go for deals and selection

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Avraam J Dectis bull a day agoThey may be limiting their appeal with the alcohol centric recruiting approach

Many people prefer cannabis and despise alcohol and they will feel unwelcome

Perhaps they should try to get a referendum on cannabis legalization for 2016 to try and reverse that Seemed to work out well for Colorado

bull Reply bull

Cent Parkway bull 8 hours agogt Avraam J Dectis

Colorado the most overrated state in this country which is really just Denver and the rest of the state Home of the Columbineshootings Ramsey killing multiple church shootings Ludlow massacre etc due to all the sickos that live there The suicide rate is twiceas high as the national average for a reason Denver itself only boasts a population of 500000 while the suburbs have more than2000000 Most of the suburbs are filled with corporate a$$hats who dont know the definition of passing in the left lane The people areextremely clicky and act like they are better than you Dont tell anyone that you are from another state or else feel resented The cityitself is completely overpriced with drug addled bums begging for change on every corner Downtown itself is nice when compared toshtholes like Los Angeles or Detroit but otherwise its full of snobs and ssholes The city is completely dead every night except whenthe Broncos win a game or the Rockies make the playoffs Its a maze of gentrified neighborhoods filled with yuppies and guppies feelinga need for a sense of direction The rest of the city is full of people working for 8 dollars an hour while living with 5 roommates andhitting the pipe andor shooting up every night Have fun there where the cowtown mentality still exists The kids in Denver are usuallytrying to act hard after moving from a bigger shthole state like Texas or California To them cowtown Denver is cosmopolitan but if youput one of the undercover hardcore kids in a real city like Miami New York Chicago etc theyll get chewed up and spit out Coloradois for those who want to pretend they are in a wonderful important state but cant handle anything with diversity culture tradition orcivilization in general

1

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rubber_samuel bull a day agoFriend of mine got mugged in Vegas just off the striphe was ok but it could have been much worseknocked in the head and shaken uppretty badly

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With Patrick Clark


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bull Reply bull


12

bull Reply bull



bull Reply bull





Favorite

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From Businessweek




bull Reply bull


bull Reply bull


6

bull Reply bull



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With Patrick Clark


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bull Reply bull


12

bull Reply bull



bull Reply bull





Favorite

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Share rsaquo

From Businessweek




bull Reply bull


bull Reply bull


6

bull Reply bull



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bull Reply bull


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Zappos CEO Tony Hsieh's Las Vegas Startup Paradise - Businessweek.pdf