Small Business Briefing

Zappos CEO aims to turn Sin City into Startup City

The Globe and Mail

Tony Hsieh, CEO of Zappos.com and author of Delivering Happiness (Rosa Park)

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Tony Hsieh spending $350-million of his own to redevelop downtown Las Vegas

Las Vegas certainly hosts its fair share of gamblers. And now, Tony Hsieh, the chief executive officer of online shoe and clothing retailer Zappos.com, is betting $350-million of his own money to turn Sin City's depressed downtown area into a startup city -- a thriving neighbourhood "teeming with artists, entrepreneurs and Internet workers," reports Bloomberg Business Week.

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The story calls it "one of the most unconventional redevelopment efforts" in any U.S. city ever. Mr. Hsieh is using his own dough, it reports, to "buy empty lots, seed new businesses and subsidize schools"; next year, he plans to move his company's 1,400 local employees from the suburbs into a refurbished city hall -- interestingly, with second-floor jail cells that may be turned into meeting rooms, the story reports.

As the story relates, it all started with Mr. Hsieh's thoughts about moving his company's quarters, thinking first he might build an enclosed kind of campus akin to Apple's quarters in California. Then he began to spend time downtown, and it set his mind to thinking differently. Mr. Hsieh, who sold Zappos to Amazon for $850-million in 2009, left his Vegas mansion and moved into a downtown building, which, the story says, has become a "command centre for his revitalization efforts."

Mr. Hsieh, who plans to move his company into a renovated city hall next year, is personally spending $100-million on land purchases, $100-million on apartment developments, and $50-million on backing tech startups that open in the area, the story reports. And over the next few years, another $100-million will go toward schools and small businesses that come into the area. (The story notes that Mr. Hsieh did not seek any government funding to avoid dealing with bureaucracy.)

The story also notes that it isn't a totally "selfless" project: He has a company called The Downtown Project that will take chunks of equity in businesses it funds.

Will he succeed? "Nevada is stil a place where individual audaicty can be really successful," the story quotes one academic.

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