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April 19, 2015

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Finally buying into the Zappos hype

Tony Hsieh’s dreams seem lofty, but they are worth pursuing


Steve Marcus

Tony Hsieh, CEO of, poses in the Ogden in downtown Las Vegas Thursday, June 7, 2012.

Tony Hsieh in the Ogden

Tony Hsieh, CEO of, poses in the Ogden in downtown Las Vegas Thursday, June 7, 2012. Launch slideshow »
J. Patrick Coolican

J. Patrick Coolican

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.

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  1. 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,

  2. (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.

  3. 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 !

  4. 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 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.

  5. 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.

  6. Have to love those people that do nothing but complain about those that try to do something.

  7. 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 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.

  8. 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.