Lean Startup, Lean City: Visiting Tony Hsieh's Vegas Downtown Project

Tony Hsieh, president, founder and chief executive officer of Zappos.com Inc.

Growing up around New York City taught me to be most comfortable in dense settings. I came out to California for grad school but as soon as that finished, hightailed myself from Palo Alto to San Francisco looking for concrete in my life. An urban space renaissance lead by tech, design and other creative industries has grown over the last 10 years. This wave transformed Brooklyn, is transforming Oakland and if Zappos founder Tony Hsieh has his way, will restore downtown Las Vegas to a glory last seen a half-century ago. His Downtown Project is investing $350 million into real estate, tech, education and arts development in a part of the city that most tourists don't even know exists.

Count me among those who had no idea what downtown Vegas held, other than the Pawn Stars store. Until visiting this past week my visuals had been limited to the wonderful photos by Geoff Ellis who spent the past year chronicling the Downtown Project and bootstraping the photography scene. Geoff's images were bold and colorful but I realized upon landing that they were only some of the pixels on an otherwise complex screen. Yes the Downtown Project is about murals, neon, and sun-stained white walls, but at its most basic, it's about getting to a density of 100 people per square acre, the target at which they believe urban vitality blooms. Today it's at 15.

After two days of hanging with the Downtown Project crew - meeting startup founders, speaking with team members, drinking and eating at new local restaurants and giving a talk about YouTube to ~125 locals - I emerged both energized and a little stressed out. Energized because it's truly amazing how unified and committed everyone was to the Downtown Project goals. Stressed because, wow, what a challenge. One where they need more help, more hands on the boulder, especially from the hospitality industry and local government. There's no supermarket downtown. No college campus. No geographic border which allows you to take a portion of the land and clearly set it apart from the rest of the desert scrub. It's just there.

The startup founders I spoke with all were thrilled to be in Vegas. Some were locals but most relocated from the Bay Area, New York and all points in-between. They prized the chance to be around a small committed group of other CEOs and focus on their work without too much distraction. A new coworking space provided home to many and others worked out of apartments in The Ogden, Downtown's fancy apartment (originally built as condos but when market crashed in 2008, the building was sold and converted to rentals). But at the same time people are still processing how to grow in Vegas. Will the Vegas Tech Fund, with a goal of blended Return on Investment and Return on Community, be better off creating a bunch of small companies or should they be focused on finding and nurturing a few big hits to put Vegas on the map? They need critical mass of talent and investment beyond what exists today.

Tony is really committed to making this work. He lives in one of the apartments and is moving Zappos from nearby Henderson to a building downtown. I'm sure he's got the drive to stick this out and here's hoping the rest of the city has similar stamina. The cab driver taking me to the airport probably said it best: "Impressive when someone takes their money and tries to do so much with it."

Photo: Jonathan Alcorn/Bloomberg via Getty Images

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