The $350 Million Social Experiment

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I had the opportunity to spend last week in Las Vegas, visiting the Downtown Project. Wow.


Tony Hsieh, founder and CEO of Zappos, had headquartered the company in Henderson, NV, because of convenience with logistics, and an ability to set up the world class customer service center they have built. Inspired, I have to assume, out of an effort to create a community in Las Vegas that supports Zappos, Tony decided that his next project would be the “city-as-a-startup”, so he created the Downtown Project. 

The Downtown Project is a $350 million investment in the downtown Las Vegas area: 200M in real estate, 50M in tech, 50M in education, arts, culture, and 50M in small business development. Many people assume downtown Las Vegas means Caesar’s Palace and the Bellagio, but the Strip actually was an unincorporated piece of land outside of the city of Las Vegas, a small desert town in Nevada. That small desert town, with an urban density of ~15 people per square mile, is rife with deserted lots, high crime-rates, and the among nation’s worst-performing education systems. The Downtown Project hopes to revitalize the region, measuring its success with a new metric: “Return on Community”.

As Andy White of the Vegas Tech Fund described it, return on community is counterintuitive to most perspectives on investment. While we tend to think of a commercial interest making stakeholders happy, they assume their stakeholders are happy, and operate from there. Under those conditions, commercial interest is a likely upside, but not the only one. And the only stakeholders that are drawn to this model are the ones who align with their value set, and will help them with their goal. It draws on lessons from the Zappos Culture story, where they focus on the values first, and trust that the upside will be a natural byproduct of the right values. It works well with a service-oriented e-commerce business, so why not with a city, right? Well, we’ll see.

TechCocktail, the organization that hosted me during my stay, has brought a fascinating group of thinkers and dreamers from across the spectra into the fold, and the Speaker Series, where I was very pleased to share some thoughts, was an audience of life-long Las Vegans: true community members, working on problems from their city, for their city. Tony Hsieh reminds me of Elon Musk in a way. They both have what I describe as Howard Hughesian ambition: they see a problem, no matter how big, and say why not? When met with “that’s impossible” they become more insistent, and they are pioneering models that others have no choice but to follow. And actually “returning community” might be the only thing that’s as difficult and worthy a goal as putting a man on the moon. Hats off. 

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