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Tony Hsieh, CEO of Zappos.com, poses in the Ogden in downtown Las Vegas Thursday, June 7, 2012.
By J. Patrick Coolican (contact) 
Wednesday, June 20, 2012 | 2 a.m.
J. Patrick Coolican
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As a journalist, my job is to be skeptical, and given the incessant flimflammery in Las Vegas, I think I was entitled to be extra wary of the Tony Hsieh-Zappos-downtown craze. My outlook is deeply influenced by the “Simpsons” episode when the charismatic charlatan Lyle Lanley sells Springfield a rickety monorail (sound familiar?), so I always try to question what’s in that delicious Kool-Aid.
For years I’ve been reading glowing profiles of Hsieh, the prodigy founder of an Internet company he sold to Microsoft for millions before becoming CEO of online retailer Zappos. And he’s had plenty of media buzz — Inc. magazine, The New York Times, the visit from Oprah, the encomiums to Zappos’ unconventional corporate culture with its fun and wow and a little bit weird.
My favorite: speculation that Hsieh’s selflessness could be explained by his looking “like a young Buddha.”
I finally met Hsieh recently, and while I plead ignorance with respect to his resemblance to important religious figures, I’ll happily report that he’s persuasive that his Las Vegas vision is genuine, pragmatic and possible. I’ll go one step further: Not pursuing his brand of urbanism will doom us to being little more than America’s party capital and a tax haven for retirees and low-wage businesses.
What is this all about?
Hsieh loves cities.
Some of this is apparently imbedded in his psyche via what he describes as transcendent experiences of the hive mind, in the same way other people feel divinity in nature. In his book “Delivering Happiness,” Hsieh writes about being at a warehouse party and really getting music for the first time. “Steady wordless electronic beats were the unifying heartbeats that synchronized the crowd. ... Everyone in the warehouse had a shared purpose. We were all contributors to the collective rave experience.” (Don’t mock it unless you’ve tried it.)
He adds: “Research from the field of the science of happiness” — referring to social psychologists such as Jonathan Haidt — “would confirm that the combination of physical synchrony with other humans and being part of something bigger than oneself (and thus losing momentarily a sense of self) leads to a greater sense of happiness ...”
So Hsieh hopes to duplicate that intense feeling in our own downtown, not by throwing raves — though there’ll be some of that — but by building a vibrant city with friends and future friends and strangers.
To some ears, this may sound airy and even downright preposterous — is he building a Burning Man encampment downtown? But we have to remember that he’s a familiar type, though to this point rare in Las Vegas: Hsieh is a technology entrepreneur who blends a streak of bohemian communitarianism with hardheaded capitalism. (Our tycoons have tended toward the more conventional robber baron — sneering white men who fund right-wing political causes.)
Zappos was outgrowing its space in Henderson (disclosure: It currently leases buildings from our parent company). Despite all the empty commercial buildings, the company couldn’t find the right space in Las Vegas to accommodate it. Zappos considered building a suburban mega-campus, like Apple or Google. These campuses have creature comforts to induce workers to never leave, and/but they can be very isolating.
Hsieh had a radically different idea: downtown, because he believes, he knows, that workers in cities are more productive. He thinks Zappos will be more profitable downtown.
Here he leans on the work of Harvard economist Edward Glaeser, who notes that per-capita productivity increases by 4 percent as population density rises by 50 percent.
It’s not entirely clear why this is true, but Glaeser calls cities “machines for learning.” Humans have succeeded because of our ability to collaborate, and cities are the best geographical mechanism for doing so. Hsieh refers to “serendipity,” the chance encounters between technologist, thinker, social entrepreneur, artist and venture capitalist to create the new.
Let’s remember, however, that Hsieh’s vision isn’t about buildings — Detroit has lots of great buildings. Nor is it about Tony Hsieh, or Zappos, or even the $350 million Downtown Project they’ve established to build on their vision. It’s really about the rest of us wanting to build something new, better, more human.
It’s not like we have anything better to do, so I think it’s worth a shot.
Maybe I'm too politically correct on the issue, but Jonestown involved old people and children who did not know what was in the kool aid and some people who were forced to drink it.
Would one make a reference to the "showers" people who were duped into taking a shower and then being gassed in German death camps?
I was at the Cortez and the rooms were full at $22. midweek.
Love the forward-thinking, positive, and altruistic energy that Tony Hsieh brings into the Las Vegas landscape!
In many ways, he is blazing trails beyond what is "traditional and expected" of Las Vegas. Hsieh brings to the table a fresh, sustainable approach to the cosmic universe of business and community.
Power on! Blessings and Peace,
Star
I recently moved down because of the Downtown Project. I'm 99% confident that this will work, granted I came from an area that hosted one of the biggest downtown revitalization projects (Portland, OR).
Additional comments on, "Why I Moved to Las Vegas (Hint: Downtown Project":
http://jaysoriano.com/downtown-project/
I'm all for revamping downtown because I already love it. But the fact that people worship Tony Hsieh as though he's some sort of savior for downtown is just disgusting. I don't think it's that selfless to change the city you live in to what you want it to be. Any of us would do it if we had the money. AND all the while he's buying up apartment complexes and evicting everyone.
(Our tycoons have tended toward the more conventional robber baron -- sneering white men who fund right-wing political causes.)
LMAO! ~ so true it wipes the smile off of my face, but not until I've LMAO - great line, Patrick - I would just add "old and ugly" before "sneering"
Did you ask Tony Hsieh if he's bought any politicians lately? Seems to be the latest craze of the uber-wealthy...seeing who can spend the most on their political puppet du jour.
This is probably the two-hundreth article I've read about his guy. They're always long and the writer always talks about the time they've spent with Hseih. I hear a lot about bars and drinking and going to work in your jeans, etc. but what else has the man REALLY done?
He started a fun dot-com that got purchased by Amazon thus making its founder and CEO ridiculously wealthy.
Great! But?
What else has he REALLY done? Any resume that doesn't quantify its history with results is, frankly, not very good. Zappos is doing great. Hseih is wealthy and obviously loves to go drinking with reporters and pretend that he's about to tell them the secrets of the universe. However, perhaps we should see what the long-term results are BEFORE we crown a genius.
"...the $350 million Downtown Project they've established to build on their vision." It is this, however, that truly bothers me. I don't want to live in a city where one guy and his pals decide what the genius loci is going to be. Cities are living entities. A truly great city is one that evolved over time and is the sum total of its seemingly disparate parts. They breath, they grow, they evolve, and sometimes they even die. When one man decides he's going to recreate an entire city to his own vision you get, well, Disneyland. And that is an amusement park, not a place to live.
I often think of the lines from Fiddler on the Roof:
If I were a rich man...the most important men in town would come to fawn on me...posing problems that would cross a rabbi's eyes! And it won't make one bit of difference if I answer right or wrong. When you're rich, they think you really know!
Ever since I started coming to Vegas 20 or so years ago, I had a fondness for downtown, having stayed at the Plaza, Las Vegas Club, Main Street, California and the Fremont over the years. There is no doubt over time, it has changed and most of that for the better.
I support Tony's efforts to revitalize downtown. But, as with any gentrification project like this, one must ask, what will happen to the long time residents? Sure the well payed hipsters will come in and make the place cool again. But what about those on the edges of downtown who live in the transient hotels or slum lord apartments? What is Mr. Hsieh's plan for them?
Again, I am supportive of the effort to revitalize and renew Fremont Street and the whole downtown, but where will the "un-hip" go?
When I moved here in 1980, one of my first jobs was downtown. I remember being intrigued, seeing all the fabulous lights, Neon signs, and old buildings against the night time skyline, EVERYONE dressed in Cowboy attire during Helldorado days, The Mint 400 was a big deal, parades,and public events were fun to attend. Downtown has since turned into a Ghetto, where I detest going.
30 years in this town and I finally see someone fueled by passion to make positive changes downtown, unlike politicians that just wanted to pad their own pockets. Tony has a vision that is positive, and workable, he also has the support of his company, and people like me, who are excited about the future changes, and want to spend more time downtown, then on the strip.
Tony if you read this, please start a movement to remove the Fremont Street canopy joke of a monstrosity, re-open the skyline and replace the Neon signs that once gave Fremont street it's character, and preserved our history, of the founding area of Las Vegas. I know YOU can do it !
Other than Fremont Street from the Plaza to the El Cortez...no one is going to convince me downtown is this utopian haven. I've witnessed it firsthand and venturing beyond those confines you better have eyes in the back of your head. There's still a lot of trash hanging out on Ogden and I'm still getting the "psst, got some money you can give me"? everytime I'm down there.
There's a lot of work that still needs to be done outside the parameters of Fremont Street.
The best thing about stories about Tony Hsieh, is they crowd out space for more Holly Madison ramp jobs.
Downtown died because most of the operators never upgraded their rooms. The likely fix for DT is to reduce the city room taxes. That would stimulate investment in some modern rooms.
Be afraid. Be very afraid.
Ask Tony about the extraordinarily high 'involuntary' employee turnover rate at Zappos. See if he is willing to disclose the number of employees 'lost' in the last 4 years and why....and the cost of replacing those employees (the investors know, so along comes Amazon and Zappos goes bye-bye, starting with the warehouse)...
new hires are told it's harder to get hired at Zappos than to get accepted into Harvard...at $11 an hour.
Ask Tony how many times he makes it upstairs to the call center to just say "Hey! Good job!". The answer will tell you all you need to know about his character.
$12 and hour for 12 years service...about right, but they do have good medical benefits...it's not the money but the 'honor' of working at Zappos that counts...the young lady should feel lucky - she could be pulling down a mere $17 an hour at our resort call center, doing less work.
Tony seems driven by ego more than altruistic ideals, and this whole downtown thing may just be a rich mans hobby, to be tossed aside - or sold - when it gets boring or loses too much money (Amazon to Downtown's rescue too???).
"I spoke with a young woman the other day who was being celebrated by the company for twelve (12) years of service. She received a pay raise which increased her hourly pay to match her years of service. $12 an hour after twelve years of service?"
---------
Are you kidding? $12/hr after 12 years? Terrible.
The problem is employees today are making $8/hr and when they get their "big" annual 5% raise (a whole 40 cents) we are supposed to say "well done employer, you're giving out 5% raises".
20 years ago when I was making $8/hr to start, after a year my raise was $1.00 (my boss himself considered a "cent" raise to be an insult as he saw some of his fellow businessmen do this...and this was an employer!!!) He gave us raises because we did a good job and he used to say "how can I give a 30-40 cent raise and look people in the eye? A truly good man. It's a different world.
"It's really about the rest of us wanting to build something new, better, more human."
I have a great idea for a downtown facility that would fulfill this wish. This venue would occupy a big empty lot like the Western. It would cost as much to build as a large casino, and would have showrooms and restaurants and a parking garage -- but no hotel. Think of a big casino without room or slot revenue -- no gambling would be allowed in this joint either.
Think about that handicap as you're pitching this to investors, and there are several other features bundled into the facility that are *very* expensive.
But it would be a cultural mecca for millions of people around the globe. When they're visiting the Strip they would come downtown to see this wonderful place and enjoy it and spend their money and go away happy.
Would this grandiose cultural center be a good thing to build as part of the Downtown Project? Absolutely; I have no doubt. The problem is the place would be lucky to break even. It would be so expensive to build and get up to speed you'd have to empty Tony's pockets and probably dig deeply into Oprah's.
The point is, no matter how much we wish to improve our lives and our neighborhoods, the Bean Counters still run the world, and until that old paradigm is smashed, only enterprises that look profitable will be taken seriously. Otherwise, what are we talking about here, philanthropy? Go away.
These other "new", "better" and "human" enterprises will always remain wishful thinking, and downtown Las Vegas will be redeveloped in a very predictable pattern.
If the LV Sun was a person, it's nose woud be Zappos Brown.....these stories kill me. Every one of them is about Tony's "vision" and the project will "save downtown"....the economics simply don't work. You can't revitalize a city by encouraging mom & pop restaurants to open up and by bringing young, burning man kids into the scene. There's not enough money there to get it done.
You need to bring in big money corporations who have thousands of well-paid workers to diversify. Zappos current headquarters is near the Green Valley Ranch District....is that place booming? Is it sparking an economic revolution? No, it struggles just like every other place in Vegas. What makes people think Zappos will do anything different in Downtown? It's crazy.
Mr. Hsieh's vision is a transcendent one in which he rightfully credits happiness with a positive and supportive social structure. He correctly identifies Nevada's top issue as being isolation from each other. In societies that have overcome these isolationist tendencies and provided equality, social & financial,to citizens there is an almost incomprehensible rate of collaboration and mutual advancement.
Given enough time and a relentless pursuit of such a vision Mr. Hsieh can and will succeed. No amount of keyboard jockeys & nay sayers will stop it. The reason is evident. While others scream at walls, Mr. Hsieh will continue to change the environment and the minds of the people within it.
None of this is opinion. It is history and calculated research; which I'm sure Mr. Hsieh has studied.
I'd still like one of the local "journalists" to talk about the impact of Zappos on Henderson - past, present, and future.
If Zappos moving to downtown is the most amazing financial boon since the invention of paper money why didn't Henderson even sigh when it was announced that the company was relocating? If urban financial success is predicated on the existence of Zappos and its Supreme Leader then why isn't Henderson a global example of that success?
I'd like to see an article that talks about the many businesses at the existing location that were wildly successful due to Zappos' presence. Last time I looked the much ballyhooed District at Green Valley Ranch is right across the street and is still limping along with an uncompleted phase two after almost 10 years and an appalling vacancy rate.
Anyone who can't see that this guy simply wanted to move his business closer to his home and place of boozing is a fool. I wish I was rich enough to buy up my entire neighborhood and throw everyone out to make nifty new place for my friends to live and hang out. Isn't that essentially what he's doing?
The dirty little secret about gentrification is that it always comes at the expense of those who can afford it the least. While this pompous nouveau-riche exec decides to turn his new neighborhood into the new Haight Ashbury his ardent admirers (all 21st-century hippies and wannabes) have decided to put their usual bleeding heart morals aside and pretend that for every low income apartment Hseih buys someone isn't going to be looking for a place to live.
Hseih's accomplishments are always talked about in the future tense. Only time will tell but so far I'm not impressed.
More facts and less romance about Mr. H. would be most welcome. But then again, this is a city that still moons and swoons over the fictitious "good old days" when murderers and extortionists ran the town and anyone who wasn't white wasn't allowed in the front door of their hotels.
That just about sums it up, I'd say.
Good for Tony. At least he seems willing to put his money where his mouth is.
However, unless we start pulling in more research & production related businesses from out-of-state or startups, all we're really doing is shuffling the county's service-sector deck chairs on the Titanic and hoping we don't hit any more icebergs.
On the plus side, there could be a symbiotic benefit generated by a Downtown-UNLV nexus that could act as a catalyst for real development & diversification. Add in attracting businesses from California or overseas looking for a new US location and we might actually have something. And while it might take some zoning changes and political vision & communication to gain traction, it shouldn't cost taxpayers much.
Tony Hsieh could simply be lobbying for the Starwood Group, owners on the cheap of The Ogden (formerly Streamline Tower), Newport Lofts, Juhl, One Las Vegas, Loft 5, Monterey at Las Vegas Country Club and Montage.
Anybody believing Tony Hsieh is on some Zen inspired mission to help this town is naive to say the least.
C'mon, Sinatra, give the man a chance. Someone gave you a shot back in Hoboken, right?
This guy is a Godsend. He could have picked any US city, but chose LV because downtown NEEDED a boost. We see empty, dirty, fenced in lots as eyesores. He sees potential.
I've noticed many positive changes already.
Nightlife especially. People actually, willingly w/no gun to their head, are spending their free nights downtown.
When I first got here, sober, law abiding citizens went downtown for one reason & that was to get a Sheriff's card.
Nice job, JP Cool. As usual.
Have to love those people that do nothing but complain about those that try to do something.
Visionaries are easy to attack, especially from behind your monitor.
Las Vegas has one in Tony. His goal isn't the purchase economically. His goal is the purchase by buy-in, by emotional grasp, by psychological grip and by human interest in what we might do better.
He sells shoes for a living, ok? But what else he does is influence, invest in compassion and human development, civility and spiritual connections. His plans for happy employees includes their kids, their universes and their tomorrows, not just their health care, wages and benfits. Go ahead and attack him if you want to. He's one in a million millionaire. He's got stuff in him that you won't find on Wall Street, Main Street or Back Street. he's got guts to match his vision.
He also has pretty good staff, happy co-workers and some of the best minds on the planet believing in what he does.
I may be going out on a limb here, but I'd venture to say that he is doing what most of you couldn't or wouldn't do if you had that kind of dough in the bank. He's doing what's right for others.
As most of his income derives from the shoe business, one little step at a time, it would be easy to shuffle Tony off as just another gum-shoe, a soleman.
But truth be told, his forte runs deeper than just the place where the rubber hits the road.
The over-arching support he offers his people - whether they be calling in to order a pair of Guccis or the ones taking the call, kicking back in their 24/7 order room - the comfortable, old-shoe, friendly environment Zappos has created and improved upon remains unmatched in modern workplaces.
Those lucky enough to be associated with - or just to take the tour of- the Zappos which many have come to know and love, will walk away smiling in the knowledge that someone understands 'walk a mile in my mocassins.'
The fact that gratitude for success breeds gracious acquiesecence in shouldering community loads is merely a reflection of the soul, the wisdom behind the vision. How many billionaires treat their world as a place full of new friends to meet? How many pay to discover how their people could prosper and find fulfillment through improved educational opportunities? And how many strive to share the joie de vivre that accompanies good works and kind deeds?
Vegas, you have a winner. No ring-ding-ding-ding required. Walk soft and carry a big smile.
Tony Hseih at the age of 38 is worth 400 million dollars.At the age of 24 in 1998 he sold his company Link Exchange to Microsoft for 265 million dollars.He currently is the CEO of Zappo's.com.Zappo's currently has yearly sales of about 184 million dollars.
Not bad for a young man with great ideas for downtown Las Vegas.When we look at what he has accomplished in a short period of time,we can only stop and listen to what he has in mind.Sounds like a win-win situation for all Las Vegans.The nay sayers will always be there.
I think a lot of it is a simple answer. When you work where you live, in a concrete jungle, you have no yard, limited pets, friends only in a work place, not much outside interaction with people, so you have more time to work.