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What small towns can learn from Zappos remaking downtown Las Vegas

By Becky McCray

Prosperous entrepreneurs can reshape communities. That’s one of my key beliefs, and an example is playing out in Las Vegas right now. Zappos, the online shoe retailer, is relocating their corporate headquarters from suburban Henderson, Nevada, to downtown Las Vegas, and they’re bringing hundreds of millions of dollars in investment in revitalization with them. We’re going to talk about what small towns can learn from this example.

Las Vegas Downtown Project
The Las Vegas Downtown Project is underway. 

Business Insider just published an update on the Las Vegas Downtown Project and a slide presentation by Zappos CEO Tony Hseih.

Hseih is the public champion of the project. He wants a vibrant community around their new location so the Zappos people can interact with the community and each other. He wants a corporate campus that encourages people to interact serendipitously, to meet people they otherwise wouldn’t. The cornerstone idea is moving Zappos headquarters into the old City Hall building downtown.

Downtown Las Vegas isn’t the vibrant environment that Hseih and his team want, at least not yet. The people have a strong sense of community, and there are plenty of bars for after-work drinks and meetups, but other pieces are missing.

Investing in Serendipity

How can we put where we live, where we work, and where we play within walking distance?
That’s a question from Hseih’s presentation that every small town needs to start answering.

It helps that Hseih and the Downtown Project have millions in very patient capital to invest, but that’s a luxury most small towns don’t have.

“Instead of short term ROI, maximize long term ROC (return on community) and institutionalize ROL (return on luck–serendipity),” Hsieh said in his presentation.

Small towns may not have the millions, but we have other assets to use, including government, private community supporters, and local businesses. And small town people tend to spend our creativity before our dollars anyway.

The serendipity comes in as people collide: co-workers running into each other outside working hours, Zappos people happening to meet people out in the community. They can learn from and with each other, dream up projects that otherwise wouldn’t happen, and create good things for the community and the company.

“By accelerating collisions, community, and co-learning, we can accelerate happiness, luckiness, innovation and productivity,” Hseih said.

The most common way we do this in small towns is by holding multiple roles. The small town banker is also involved in the educational foundation, and helps out at the local car show. That gives us more chances to run into each other, and it’s how we create serendipity.

Population Density and Interaction

“When people live more closely, they interact more frequently, which creates more opportunities for them to learn from each other,” Hseish said.

Downtown Las Vegas is targeting residential density of 100 residents per acre.

Even with less density to work with, small towns can still intentionally build more serendipity by creating chances for interaction across the usual social lines, breaking up cliques. We can also work to increase density with infill programs, and upstairs downtown housing.

Hseih points out urban research that says when cities double in size, productivity and innovation per resident increases by 15%. The same increasing benefits are not true for companies as they increase in size. In other words, that “economies of scale” benefit that mega-corporations claim they get is BS, but cities do get something like an economy of scale benefit. See the TED talk by Geoffrey West: The surprising math of cities and corporations

Every small town cam start now and plan to grow, even if they don’t try to double in size.

Density is just one factor. The other is interaction. Street-level activity encourages interaction. How can you create more downtown street level interaction?

Promoting Entrepreneurship

The Downtown Project is investing in owner-operated small businesses that show passion, contribute to the community in some way, are sustainable, and have something that makes them the best at what they do. They are enticing tech start ups because they can grow quickly and create a lot of jobs.

Two businesses that are operating now, with support from the Downtown Project, are eateries. One is a cafe called “eat” and the other a barbecue stand. Other businesses are rolling out now or will be soon. Not all are bricks-and-mortar businesses.

“We believe you can change the world with a laptop,” one of Hseih’s slides declares.

Co-working spaces give startups affordable places to work, to inspire each other and collaborate in ways that inspire innovation.

Every small town can do more to promote small business and entrepreneurship. Co-working and startups hold big promise for small towns. If it’s true that you can change the world with a laptop, what do you need to do right now to help your residents do it?

Content Management for Towns

After bringing more people together, encouraging interaction and supporting entrepreneurs, the next piece for the Downtown Project is to manage the kind of content that shapes people’s thinking.

Hseih emphasizes that education, arts, and culture are worth investing in. The project involves recruiting additional teachers, supporting arts in the area, and even opening a charter or magnet school in downtown.

The Downtown Project is also attracting thought leaders to speak at TED style events everyday in Las Vegas.

Any small town can adapt this idea. How can you bring more smart people to your town and feature the smart people you already have? How can you generate smart interactions? Do you have local experts that you neglect because they’re “too local”? Throw out the idea that you have to be from 50 miles away to be an expert and start tapping your local smart people.

Summary

Even though Zappos and the Downtown Project are operating on a huge scale, they hold big lessons for small towns. How can we put where we live, where we work, and where we play within walking distance? How can we increase our town’s density and start more interactions? What can we do to support more small business development? How can we shape people’s thinking with smart content?

Address those questions, and you’ll have a big start on remaking your small town

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  • About the Author
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About Becky McCray

Becky started Small Biz Survival in 2006 to share rural business and community building stories and ideas with other small town business people. She and her husband have a small cattle ranch and are lifelong entrepreneurs. Becky is an international speaker on small business and rural topics.
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December 31, 2012 Filed Under: Best of, economic development, rural

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  1. Jason Hull says

    December 31, 2012 at 7:21 pm

    One of the important things which, in my opinion, has helped the Downtown Vegas project gain a foothold is that Hseih encourages Zappos members to take part in cultivating the startup culture there. For example, Vegas Jelly has been a great point for helping entrepreneurs and startups gain traction and to find both validation and resources for their ideas. Creating a support network where the ideas have a chance to germinate and bloom in a low-risk environment can improve their chances of surviving.

    • Becky McCray says

      December 31, 2012 at 11:01 pm

      Jason, I agree. For a small town, that could be a co-working event like Jelly, an entrepreneur network or club, or even regular meetups of potential entrepreneurs.

Trackbacks

  1. Best of Outright Weekly Roundup: Overwhelmed Edition | The Bottom Line says:
    March 26, 2013 at 1:23 pm

    […] What Small Towns Can Learn from Zappos Remaking Downtown Las Vegas – Zappos is a very forward thinking company, and their latest investment in downtown Las Vegas continues to prove it. […]

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