So What’s the Latest with Tony Hsieh and the Downtown Project?

A second statement was released yesterday 10/2/2014 by Tony Hsieh to address questions since the announcement of 30 staff layoffs from the Downtown Project on 9/30/2014. In a follow up article Re/code shares his response to the negative publicity circulating around the Downtown Project and it’s management. It also highlights the accomplishments of DTP to date and their business plan, an extract of DTP accomplishments is included below. 

A Dark Side?

There’s no question the Downtown Project hasn’t been a positive experience for everyone involved. In a “The Dark Side of Techtopia“, Slate Magazine talks about the focus on upbeat happiness and parties, a stark contrasts to the suicides by three prominent members of the Downtown Project, the effect on its entrepreneurs and the quiet press these deaths received.

Gigaom, in their article 5 questions for Tony Hsieh and the Downtown Project provides a great perspective on the Downtown Project, in particular the focus it should have maintained to build a community. Making the Downtown area of Las Vegas viable and sustainable as a community for residents of multiple backgrounds, not just young and tech driven, should have remained part of the overall goal in a redesign for the community.

That said, this project was very unique, (overly?) ambitious and perhaps better for the effort made than to have let the area remain stagnant. Many of us were excited to learn about the Downtown Project and to see a turn in the area. My neighbors introduced me to La Comida and EAT, both part of the Downtown Project, both great places to relax over a great meal. These restaurants gave you an insight to what was possible to bring people downtown.

Container Park was exciting to see under development, a previously gritty quadrant became  family friendly, with live music, food, drinks and shops. I still think it’s a great achievement but one impression it left with me was that it was – contained, in a box, and not yet part of a larger community. Think about places like New York City or San Francisco, you can walk miles along city blocks and have a sense of community, shops, music and food. I believe it was/is achievable in Downtown Las Vegas, and that it was/is a matter of time for the culture of community to spread and draw new residents in to live downtown. It just doesn’t have to be the center for a bunch of young 20 somethings.

From the articles that are appearing since the news of the DTP layoffs, many questions fall around funding, of the $350 million invested by Tony Hsieh, have they run out? Are they running out? Was there a business plan to manage these finances? The $3.5 million purchase of The Atomic by the Downtown Project is incomprehensible, since the previous owners picked it up for $500,000 in 2013. Las Vegas Inc provides more detail about the sale here. A sudden pull from Factorli after a $10 million dollar investment is noted in Joe Downtown’s article:

The idea was so groundbreaking—manufacturing in Downtown Las Vegas?—that President Obama singled out McCabe in June, declaring Las Vegas could become the center for “a revolution … in American manufacturing.”

Factorli received a $10 million dollar investment and existed from May 2014 to roughly August 2014, until investors pulled suddenly from the project.

We’ll have to wait and see what comes next and what economically viable projects remain. In the meantime we’ll have time to figure out what the heck Holocracy means, but from the latest post by Re/code, it should be interesting, as it’s a key element to the working methods within the Downtown Project team:

Holacracy® is a workplace management technique invented by software engineers as a non-hierarchical corporate system that seeks to eliminate employee and management egos. There are no titles, no chatter about personal life allowed, no bosses who can tell anyone what to do or when. It is a unified, organically evolving organization that moves toward a singular purpose.


From Re/code, accomplishments highlighted by Tony Hsieh and the Downtown Project:

We are currently in year 3. Here’s a quick look back at the various milestones we’ve hit so far:

1. We assembled about 60 acres of land (year 1 goal) focused on an area of downtown Vegas that most tourists don’t know about called “Fremont East.” The purpose of doing so was to guarantee connectivity in order to ensure the ability to help build a walkable neighborhood, as Vegas has generally been a car-driving town.

2. We helped accelerate a tech ecosystem by investing in (and often relocating) about 100 tech companies (goals for years 1 and 2).

3. We invested in a critical mass of small businesses as well as our own operations (mostly food and beverage) to help make the area both safer and more walkable. These include: Carson KitchenO-Face DoughnutsNacho DaddyLa ComidaBin 702Big Ern’s BBQKappa ToysEATGrass RootsHydrant ClubCoterieInspireScullery,The Bunkhouse SaloonGold SpikeThe PerchOak & IvyWILD, and many others.

4. We launched Downtown Container Park to help incubate local small businesses and create an urbanized version of a town square for locals to connect and collide, with both daytime and nighttime activation. One of our other goals was to significantly increase the number of kids and families that hang out in the area, and we look at metrics such as “stroller count” as a proxy for that. In less than a year, we’ve had well over 1 million visitors to Downtown Container Park and are happy to report a lot of kids and families hanging out, especially on weekends.

5. We launched over 50 construction projects…

6. We helped create over 800 direct jobs through businesses that we have either invested in or wholly own.

7. We identified winners that are financially viable and good bets that we want to focus our cannonballs on (push additional resources and follow-on investment dollars towards). These include restaurants as well as tech investments…

8. We increased the number of collisions (meaning serendipitous encounters between people) in the area which, when combined with diversity in perspective, knowledge, and experience, results in an increase in idea flow and collaboration, which ultimately drive innovation and productivity increases.