Tony Hsieh and the power of human ecosystems

Tony Hsieh will be a featured keynote speaker at VERGE SF. Click here for more information.

I began my recent conversation with Tony Hsieh, CEO of Zappos, by asking him how he's leveraging the technology convergence we call VERGE to fulfill his ambitious goal of revitalizing downtown Las Vegas.

"I guess I haven’t really thought of that," he responded.

It turned out to be the wrong way to start an interview with Hsieh. Leveraging technology, it seems, is the least of what makes his plans noteworthy.

Hsieh is in the midst of moving his shoe and apparel retailer — which he still runs, despite having sold the company to Amazon in 2009 for $1.2 billion — from its suburban headquarters, in Henderson, Nevada, to a location about 15 miles northwest: the old City Hall in downtown Las Vegas, one of the most depressed cities in America.

It’s a bold move, literally and figuratively, but in some ways the relocation is the smallest part of it. Hsieh and some partners — outside of Amazon — are investing $350 million in what they have modestly called Downtown Project, with the goal of transforming Las Vegas “into the most community-focused large city in the world." The strategy: "inspiring and empowering people to follow their passions to create a vibrant, connected urban core.”

Please understand: The Las Vegas they’re talking about isn’t the glitzy Strip, the home of casinos, clubs, and over-the-top entertainment. Downtown Las Vegas, just north of the Strip, is the central business district. It reflects the gritty reality of Vegas, and of Nevada overall: There have been more foreclosures in Las Vegas than anywhere else in the United States; Nevada's unemployment rate is the highest in the nation.

Enter Hsieh and friends, who are investing $100 million in real estate, $100 million in residential development, $50 million in small businesses, $50 million in education, and another $50 million in tech startups through something called the VegasTech Fund.

We invited Hsieh to speak at our upcoming VERGE SF conference because his theme mirrors some of ours: the city as startup; the key role of platforms — technology and otherwise — in fostering a culture of innovation; and ecosystems of nontraditional partnerships and allies that lead to radical efficiency, systems thinking, and innovative solutions.

So, Hsieh and I quickly determined that the whole project isn’t that innovative, technology-wise. Indeed, he says, “It’s probably the lowest-tech thing that we’re doing. We’re just trying to get like-minded people together in a room and basically helping create the spaces for those people to share ideas.”

Sharing ideas, technologically or not, is at the heart of what Hsieh envisions for his downtown creation, both for his company, his employees, and all who interact with both. “We thought rather than just invest in ourselves, let’s invest in the community and invest in the surrounding ecosystem,” he said. “And in the long run, that’s actually going to help us attract and retain more employees.”

Hsieh’s goal is to have “everything you need to live, work and play within walking distance. And making it the co-working and co-learning capital of the world. So part of the investment is to invest in small businesses that help build a sense of neighborhood and community so things like cafes and coffee shops and bars and restaurants and so on."

Another part of the project is to invest in tech startup companies unrelated to Zappos, "and also invest in cultural stuff, art stuff, education, and so on," as Hsieh puts it. "And so I consider all those things to be part of the ecosystem, because you need all of those things to attract the employees of tech companies to want to move here, and those are the types of employees that are also beneficial to Zappos.”

Next page: The Four C's of Hsieh's Vegas Vision