Corporate and community building in the new Las Vegas

Tony Hsieh introduces his talk with two lessons from Jim Collins’ book Good to Great: all great companies have strong cultures, and all great companies ...

Tony Hsieh introduces his talk with two lessons from Jim Collins’ book Good to Great: all great companies have strong cultures, and all great companies have a vision beyond just being profitable.

Hsieh gets our attention not just because he’s a spellbinding speaker but also because he sold his first company, LinkExchange, to Microsoft for $265 million, then he sold Zappos, the world’s biggest online footwear retailer, to Amazon for $1.2 billion, then he wrote a best-selling book called Delivering Happiness: A path to profits, passion, and purpose. He turns 39 this month.

I’m hearing him at the VERGE conference on technology convergence organized by Greenbiz.com in San Francisco, where he’s expanding on the idea that as culture is to a company, so community is to a city. That’s the thinking behind his unprecedented privately financed city-building vision.

Hsieh moved his company to a suburb of Las Vegas in 2004, and in his search for a new home for its 1,400 employees, he discovered the just-abandoned old Las Vegas city hall. He owns it now. It’s being retrofitted for a workforce of up to 2,000, including a workplace doggy day care, the No. 1 request from employees.

“A great brand is a story that never stops unfolding,” he said, explaining the story of his three Cs: accelerating collisions, community and co-learning. “We thought rather than just invest in ourselves, let’s invest in the community and the surrounding ecosystem, because that’s actually going to help us attract and retain more employees.”

Las Vegas is meteorologically hot, for sure, but economically frigid: the depressed central business district is north of the well-known gambling strip, in a city where one in 39 homes was in foreclosure last year – the highest foreclosure rate in the U.S. – and unemployment is still over 11%.

“If we can do this in downtown Las Vegas, anyone can do it,” he said.

“It” is what Hsieh describes as “a weird hybrid between corporation, community and city” with the goal of creating “the most community-focused large city in the world.”

The key ingredient for growing this hybrid is the collision part. We’ve all had these chance encounters on a sidewalk that turned into something remarkable and unforeseen. Hsieh’s dream is to create a community with the maximum “collisionable hours” per year – serendipitous interactions, nurtured in ground-level meeting places. “Nothing replaces in-person contact.”

At the Zappos headquarters, he does this by requiring everyone to leave and enter through the front door, where they can’t avoid meeting other employees. Translating this to city building, Hsieh starts with density: a high collision rate needs at least 100 residents per acre. Then he adds the special sauce: $350 million of his and other investors’ money: $100 million going into real estate, $100 million for residential development, $50 million for tech startups and $50 million for small business investment.

The small businesses have to be owner-operated, community-building, sustainable, first or best in their field, well run and “story-worthy.”

Hsieh will measure his success in making Las Vegas the most walkable live/work/play urban centre in North America by counting ROC (return on community) and ROL (return on luck – think serendipity). I have no idea how he will measure this.

The project is reaching out to attract “purposeful visitors.”

“If you come to Las Vegas I’ll have you picked up in a limousine, and you can have a free room to stay in,” Hsieh told the enthralled conference audience.

He believes that in 12 months all these efforts will have created more new jobs than Zappos’ growth.

“You just need to get people together and believe it’s possible.”

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