Tony Hsieh, the CEO of Zappos, invests heavily in human capital. And he does so in a very unique way. He re-located Zappos headquarters from San Francisco to Las Vegas in 2013, with an ambition to turn the entire downtown into a mecca for entrepreneurs. He invested his own money to re-invigorate an old town into a vibrant community in which cool people live, co-learn and collide on a regular basis.
Through an enterprise called Downtown Project, he has been implementing his vision to transform a town based on people, but not so much on new developments or construction. Substantial money has been poured in to support organizations/individuals who’d relocate their business, or to open a new one in Las Vegas to become part of the movement.
As a result, Downtown Project relies heavily on renovating and refurbishing existing buildings, rather than building new ones. The center of the entrepreneurial ecosystem is Zappos HQ. It is in a former Las Vegas city hall, renovated into a LEED-Gold certified office. As seen in the above pictures, it looks peculiar.
Hsieh’s 21st century version of Silicon Valley, the next generation tech utopia, doesn’t look futuristic nor sleek. Instead it looks like a scene from Tarantino’s “Pulp Fiction,” with artistic twists. Many buildings still look they are from the 60’s or 70’s, from the outside. But they are covered with the designs and arts of today, and once you are inside, you feel a welcoming atmosphere that comes from a unique blend of old and new. Actually, “Vision 2045 Downtown Las Vegas Master Plan” identifies “the funky charm of downtown’s historic building stock and gaming legacy” as one of the three fundamentals driving the growth.
If the re-development focused on demolition and construction of new buildings, Downtown Project would have looked futuristic, but it could have been faceless. It could have looked like any of the other new tech parks in the world, and there would have been no way it would’ve had the “funky charm.” The charm is giving the project the impression that it is run and operated by people with faces and personalities, not by real estate developers or return-on-investment calculations. You can feel the excitement that “something must be happening here.” And that excitement is created by people — enthusiastic, talented, innovative, creative and entrepreneurial.
Downtown Project is a development of the people, for the people, by the people. It does not focus on generating money from new construction, or bringing in large commercial complexes or businesses. It aims to build a very organic network of people capable of creating and producing something valuable on their own. Financial robustness is supported by the productive capabilities of people in the community, not by the consumption facilitated by large businesses.
It all sounds great and exciting. However, the project has been seeing ups and downs. Nearly five years into the project, results have been mixed. “Critics point to a less-than-robust tech scene, layoffs and shuttered businesses as major stumbling blocks, while others applaud the community’s transformation,” according to CNBC news.
What is going wrong? A lack of consistent foot traffic is a major issue.
This is an interesting perspective. Tony Hsieh likes to use the words “serendipity” and “collision” when he talks about an ideal community, but you would need certain population density for people to be able to collide. You cannot collide on an empty street. But as you can see from the above pictures, downtown Las Vegas is a typical American development of the 50’s ~ 60’s: it’s designed for driving. Each individual project – restaurants, retail or venues for co-learning is charming, but they are scattered around in a big town. It’s not easy to walk around from one place to the other. Even if each place is designed to be collision-friendly, unfortunately they are not sitting on a collision-friendly format. In order to rectify the problem, Hsieh and the city are developing apartment complexes and living spaces to increase the number of residents in the neighborhood.
As discussed in Chapter 3: Abundance by condensation, “big” is not always beneficial to increase deep-rooted satisfaction and happiness. Especially when it comes to living, “big” can be alienating and disengaging. Since the key to the Downtown Project is a people’s network, some level of density or smallness would have helped local businesses and more collision to occur.
In that sense, Container Park is small and dense. It is a commercial complex made of stacks of re-purposed shipping containers. Visitors can enjoy a variety of shops and restaurants, many of which are owned by an ambitious start-up entrepreneur that is willing to grow a business from a container to something much bigger. Because of its smallness, the collection of container shops creates a very friendly, intimate atmosphere that people of every age can enjoy.
It may not be a coincidence that Shigeru Ban, Pritzker-award winning Japanese architect, also used containers for temporary shelters after the Tohoku Earth quake on 3.11.2011. Since containers are minimal structures, they look to be a great material for a temporary home (container park owners are expected to grow their businesses and eventually move out for something bigger) that provides maximum flexibility at a very low cost. Indeed, none of the shops looked identical, and each had its own charm.