How Downtown Project is Recreating Zappos’ Culture to Turn Vegas into Utopia

September 26, 2012

1:00 pm

This post is part of Tech Cocktail’s overview of the Downtown Project, a $350 million fund that aims to revitalize downtown Las Vegas by funding new buildings, education, small businesses, and tech startups.

“Your culture is your brand.”  This was the very basic premise behind Tony Hsieh’s philosophy of building a successful company.  Turns out, he found a billion-dollar gold mine.

In his book Delivering Happiness, Hsieh outlines his background as an entrepreneur, beginning at nine years old as an earthworm farmer.  After successfully exiting with his first startup (LinkExchange, which sold to Microsoft for $265M), Hsieh left Microsoft before his vesting period, leaving $8 million on the table.  Although this acquisition was a success on many levels, Hsieh left feeling unfulfilled, saying, “I was the co-founder of LinkeExchange, and yet the company was no longer a place I wanted to be at.”

This marked the turning point for Hsieh.  He would go onto to make culture the central component to Zappos’ brand – the rest is history.

Today, Hsieh is taking an even more radical approach with applying this cultural philosophy to an entire city.  Although he alludes to it from time to time, the correlations between the Zappos culture and what Hsieh is attempting to recreate in Downtown Las Vegas are evident.

In the following post, we examine each of the ten core values that constitute the Zappos culture, including an excerpt of each value from Delivering Happiness, and demonstrate how these principles are being applied to Downtown Las Vegas.

1) Deliver WOW Through Service

To WOW, you must differentiate yourself, which means do something a little unconventional and innovative.  You must do something that’s above and beyond what’s expected.

Aside from the free apartment room (aka “crash pad”) stocked with five days worth of bottled water and snacks, the airport shuttle service provided by Zappos, the free Downtown Project party bus to and from First Friday (fully equipped with a DJ, strobe lights, and complimentary bar), the tour of Tony Hsieh’s compound (three conjoining apartments), a happy hour hosted by Hsieh in said compound, and a free Friday night speaker series…the WOW factor was barely noticeable.

A sample of the Downtown Project hosted happy hour.

2) Embrace and Drive Change

Although change can and will come from all directions, it’s important that most of the changes in the company are driven from the bottom up – from people who are on the front lines.

Considering that the space immediately surrounding the Ogden, with the exception of the two-block radius adjacent to Fremont Street, is either vacant, occupied by casinos or tourist traps, or run down (putting it nicely), change is not only embraced, but demanded.  The community-focused approach of Hsieh’s urban revitalization enables those already living in the area to incite the change themselves.  Downtown Project will provide resources for those capable, passionate, and willing to follow through on their vision – whether it be a dog park, yoga studio, or ice cream parlor.  The Downtown Project website even includes a form to submit your own idea to the project.

3) Create Fun and a Little Weirdness

On the left: The Staircase at Zappos Headquarters; On the right: Hsieh’s apartment and home of DTP informational tour.

When you combine a little weirdness with making sure everyone is also having fun at work, it ends up being a win-win for everyone: Employers are more engaged in the work that they do, and the company as a whole becomes more innovative.

Did I mention the Downtown Project party bus?  Much like the Zappos offices, where company-organized happy hours are a regular occurrence, many of the formal and informal Downtown Project-affiliated events revolve around adult beverages.  From the perspective of a company that hosts events with a similar theme, we know firsthand, fun may often result (and the occasional stolen limo).

But if we interpret weird as unique or different, this is one of the core cultural traits of Downtown Project.  As Hsieh mentions in his interview with Tech Cocktail, they’re looking to fund projects that are “the first, most unique, or the best.”   But I think this point is proven best by the flaming grasshopper at Container Park.

4) Be Adventurous, Creative, and Open-Minded

By having the freedom to be creative in our solutions, we end up making our own luck.  We approach situations and challenges with an open mind.

“We don’t know what this is going to look like,” says Andy White during a walk-thru of Hsieh’s compound, amongst a sea of building blueprints and mockups.  “The changes are going to be community driven.”

A pretty laid back mentality, especially considering there’s $350 million of Boss Man’s money on the line, not to mention the bright spotlight following each move this project takes.  But Hsieh and co. are convinced that in order for this project to succeed, the bulk of the weight must be carried by those on the ground floor.  In other words, for Downtown Project to succeed, open-mindedness isn’t an option, it’s a requisite.

On the left: Hsieh’s cubicle at Zappos Headquarters; On the right: Part of Hsieh’s compound at the Ogden.

5) Pursue Growth and Learning

So there are no experts in what we’re doing.  Except for us: we are becoming experts as we do this.  And for anyone we bring on board, the best expertise they can bring is expertise at learning and adapting and figuring new things out – helping the company grown, and in the process they will also be growing themselves.

Never built a city before?  It’s okay, neither have the people paying the bills.  It’s readily apparent that this is a learning process for all parties involved – but this is to be expected of something that’s never attempted before.

Many of those flocking to the city are doing so to put their fingerprint on a city in formation.  The doors are open to those who want to be part of growing (verb, not adjective) a city.

6) Build Open and Honest Relationships with Communication

Fundamentally, we believe that openness and honesty make for the best relationships because that leads to trust and faith.

Nothing about this project is done from behind closed doors.  If you want to see what’s going on, you can visit the headquarters to witness for yourself.  If you want your voice to be heard, you can attend one of the local meetings or, again, take the Downtown Project tour and talk with one of the project’s organizers.  No other CEO of a billion-dollar company makes him/herself as accessible as Hsieh.  He’s dropped any and all walls between the city and himself.

7) Build a Positive Team and Family Spirit

An Ogden apartment room which plays headquarters to Vegas startups Rumgr, Ayloo, Counterless and Fandeavor.

We believe that the best teams are those that not only work with each other, but also interact with each other outside the office environment.  Many of the company’s best ideas have been the direct result of informal interactions outside of the office.

Because the lines between work, play, and life have been blurred, it’s hard to say what “outside the office environment” means in Old Las Vegas. But if there is one unofficial meeting ground for the Downtown crew, look no further than Downtown Cocktail Room.  After wrapping up their 9-5, this nearby dimly lit lounge plays host to many of Downtown Project figure heads, as well as its startups and many weekend visitors.  Because the “team” is a little less defined than that of a corporation, this crew consists of members who are currently involved, those who have one foot in the door, and others contemplating getting involved in the Project one way or another.

Another point of assembly is The Beat.  If you hang around long enough, you’ll run into the likes of VegasTechFund‘s Andy White and Laura Berk, Downtown Project staff write Kim Schaefer, Dylan Bathurst and the Rumgr team, amongst the many others who comprise the community.  Everyone at The Beat knows everyone at The Beat – and on a personal level.  It’s the Cheers of cafes.

8) Do More with Less

We believe in operational excellence, and realize that there is always room for improvement in everything we do.  This means that our work is never done.

Three hundred and fifty million dollars is a lot of money to you and me.  When it comes to building a city, however, it’s a much more humble figure.  Hsieh and team recognize that in order for their vision to become a reality, they must be very strategic with how their money is spent in hopes of their projects inciting supplementary, organic change.  Downtown Project is only rolling the snowball; it’s up to the community to build the snowman.

9) Be Passionate and Determined

We are inspired because we believe in what we are doing and where we are going.  We don’t take “no” or “that’ll never work” for an answer, because if we had, Zappos would never have started in the first place.

This value is crucial to Downtown Project’s success, because “that’ll never work” has unsurprisingly been lobbed in their direction in many occasions.  On a micro level, this principle is embodied by their investment policy; Downtown Project won’t fund any projects whose leader isn’t wildly passionate about its creation.  On a macro-level, passion is the thread that ties this team together – you get the sense they believe that it’s already happened and they’re just waiting for time to catch up.

10) Be Humble

We believe that no matter what happens, we should always be respectful of everyone.

It wouldn’t take much to alienate a community when rebuilding a city.  Oftentimes money flows from egos, and egos don’t typically opt for inclusion.  Hsieh and co. have been consistent in their stance of being “anti-master planning”, and instead focusing resources on enabling those on the ground level to head the change.  Compassionate capital is precisely the strategy that Downtown Project is taking.

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When Zach Davis isn’t getting lost in the mountains, he is hustling from Boulder, CO as Tech Cocktail’s Director of Marketing. He is the author of Appalachian Trials, a book chronicling the mindset necessary for thru-hiking all 2,181 miles of the Appalachian Trail, a feat he accomplished in 2011. Zach is a green tea enthusiast, die-hard Chicago sports fan, and avid concert-goer. Follow Zach on Twitter: @zrdavis.

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