Tony Hsieh's new $350 million startup | Hacker News Reader

Tony Hsieh's new $350 million startup

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162 pointsbrownday44 comments

I'd be really interested in doing a tech startup (well, moving one) to Las Vegas -- aside from a stupid Clark County registration law, and the risk of financial/social problems due to so many foreclosures, it would be great. Good infrastructure, cheap flights, super cheap housing (sign me up for a 4500 sf McMansion for $300k...), etc. Easy to get people to visit for a few weeks at a time, easy to get hotels, generally low cost of living, and 24h everything, subsidized by old people and stupid people who can't do math.

Everyone at my startup is into firearms, so we'd far prefer Nevada to California. Clark County's handgun registration law is the main reason we haven't bought a place there already.

Schools suck, but that's not personally an issue, and I'm sure a 100+ person company with ~10 students could figure out a solution for employees.

Everyone at my startup is into firearms, so we'd far prefer Nevada to California. Clark County's handgun registration law is the main reason we haven't bought a place there already.

Wow, you sound like a cool outfit. Mind telling me more? :)

And here's why I think Tony Hsieh is the next, better Steve Jobs that understands business, people and community like no other leader today. Why better? Because the man radiates a genuine compassion towards others that Jobs never had. If any other business leader had announced such a visionary idea I would have been incredibly skeptical, but I have total confidence in Hsieh and find his vision inspiring and quite convincing.

I want to be a person like Tony Hsieh. I'm not even talking about business, I'm just saying an all around human being like him. Everything I read, watch, or use related to him makes me feel like there is hope for this world. Yes, he's a business man and this may all be part of the image but I don't think so. If you've read his book, you know he's genuinely a great person who really wants to make a difference. Success usually follows such people.

Your excitement about what Haieh is doing is awesome, but what does it have to do with Jobs? One of the biggest annoyances I have with the tech press is their tendency to throw Apple/Jobs into any article, no matter how unrelated. I'm gonna have to call your comment out for the same thing.

I'm excited about it too, but the men had completely different approaches for different industries and, while I'm trying to stay neutral on the issue, Hsieh has quite a ways to go before he's anywhere near as revolutionary as Jobs. Comparing the two is an unnecessary distraction which doesn't really serve any purpose.

Both are massively successful business leaders in IT both with different interpersonal approaches. I think comparing their managerial styles is interesting important, especially if startup try to emulate them.

Jobs was a consumer electronics tycoon with an obsession for design and product; Hsieh is a touchy-feely retail tycoon with an obsession for customer service and company culture. They're about as different as two founders can get.

Sounds like he is trying to build Silicon Valley in Vegas.

Reminds me of this PG essay: http://www.paulgraham.com/maybe.html

Or this one: http://www.paulgraham.com/siliconvalley.html

Well, warm weather, no state income tax, cheaper real estate but still close to CA... if only it wasnt Vegas. :>

As a current resident of Vegas, "warm" might be understating summer temperatures a little :) Everything is air conditioned (and there are 24 hour air conditioning maintenance companies!) so you'll be inside most of the time.

One things they're missing is a major university. Not sure that would ever work in Vegas.

UNLV is pretty big.

I suspect he meant "major" in terms of research and reputation more than size. Something to play the same role as Stanford/Berkeley in the Bay Area or MIT/Harvard in Boston.

UNLV's major programs, iirc, are hospitality. Lack of tech talent might be a bit frustrating, though it's not exactly the middle of nowhere.

I love this idea, but I couldn't help but think of Foxconn City and that one Simpsons episode where Homer moves into a great new job with a supporting city run by an evil genius.

http://www.wired.com/rawfile/2010/11/thomas-lee-foxconn/ http://en.wikipedia.org/wiki/You_Only_Move_Twice

If he turns into Hank Scorpio, sign me up! In all seriousness, though, I think this could turn out like the SLU neighborhood here in Seattle. Paul Allen bought all the land and turned it into a major biotech hub, and now Amazon, tech stars, and others are taking it over.

Unless things have dramatically changed in the last 6 months since I left Seattle, SLU is still kind of a failure.

The big vanity streetcar Paul Allen wanted got built, and is still as useless as ever. He wanted "mass transit" in his neighborhood, but it's neither frequent enough, nor fast enough, to really make a difference. SLU remains as isolated from the rest of Seattle as ever, except now a lot of people are forced to make the commute (try asking a east side resident how they like their commute).

Some condos got built, but the area is still largely undeveloped, and it doesn't seem like there's a lot of residential development going on. Commercial tenants are moving in, but the residents aren't following.

Ditto, residential-support businesses (restaurants, coffee shops, corner stores, etc) simply haven't arrived at all. The neighborhood still shuts down after work, barring a select number of expensive bistros. I've heard through the grapevine that Vulcan is being extremely selective about their retail tenants - and anything that's not archetypically urban-chic (and expensive) need not apply.

It's like Belltown, except less organic, more artificially high-end, without any trace of nightlife, and way more boring. This is fine if Paul Allen imagined SLU as an office-park neighborhood, but that's not Vulcan's vision. Overall, I'd consider SLU to be the most sterile and soulless neighborhood on that side of the lake.

Yes, you're largely correct in that description. Hopefully Hsieh does a better job in Vegas.

How far is too far for building a culture of "fun with a little bit of weirdness?"

I find Zappos dedication to fun weirdness to be a little much to begin with. But now buying land surrounding your call-center with plans to build an entire city for employees to live/work/play in? And "dorms" to live in? That's a lot.

I'm all for free jet flights (http://www.launch.is/blog/leak-zappos-ceo-gives-employees-fr...) but this is a bit much for me. Guess that's why I don't work there.

I like to separate my work and life (especially when working for someone else) and I don't think I would like to live in a company owned building.

It's not really clear that this is actually a new startup, but regardless of that, investing in Las Vegas real estate strikes me as an extremely bold move.

Extremely bold, you have to love not only Tony's vision for what he wants to see in a city but also that he has the fortitude to act on it

Yes, it reminds me of Sim City 2000's arcologies, which, as I'm sure anyone who loved that game as much as I did would agree, is the sort of thing dreams are made of (I'll pass on the rocket boosters though). It's really unfortunate for me that this iteration is in Vegas.

Seems to me that he's investing in Zappos. That investment just happens to come in the form of buying real estate in Las Vegas.

I wonder what the monetary difference is between building up Vegas and building their own campus. If you accept the fact that you need a decent campus to attract top talent then your investment only needs to make up the difference between the cost of building your own. Throw in the fact that it's more attractive to have your campus downtown than out in the sticks of Henderson and you're really not looking at needing to make up a ton of money. Even if you end up losing a little bit of money you could very well come out ahead.

As the article says, Hsieh is after the synergistic effects that you get with melting pots; things that manifest themselves in a chaotic, cross breeding, art meets science meets business meets community world that you rarely find on a corporate campus.

Yup. People who think he's investing in this as real estate are totally missing the big picture.

Yes, extremely bold move.

Take this as someone who had a company move to Vegas and more than half (including myself) the company left because of it. There is a certain type of people that can stand the culture and atmosphere that is Vegas, and intelligent tech people usually aren't that type.

His point that Zappos isn't a technology company, but rather a customer service company makes Las Vegas the perfect fit. Las Vegas is the #1 city in the world for service industries.

As a practicing urban designer, this strikes me as a great piece of investing if done right. These plans will take years or even decades to come to fruition (a big horizon for most tech people), but I am sure he will end up a real estate tycoon at the end of it. Commit a significantly run down area to a vision, and there is huge money to be made, as well as (potential) benefits for the general public....

Surely $350M doesn't even get them started tho? Particularly with new high-density residential construction...

$200 million of it will go towards land purchase and residential development.

Since when did real estate speculation become a "startup?"

And he wants to develop more residential areas in the city with the highest foreclosure rate in the US? And among the cities with the most empty houses.

I hate to be critical, but...this seems like a bad idea. $350 million is also probably not enough money to create significant impact - to do anything on the scale of a neighborhood or borough, you are talking a multibillion dollar project.

Interesting. Building a community of tech startups is probably key to feeding more talent to zappos longterm too. He can also fund companies that solve some of zappos key problems and have them close at hand.

I'd be very excited to see a follow up to this every 6 months to see how things are coming along. Rebuilding a city is tough

I wonder how many startups will actually get work done that close to the Strip? Seems like a major source of distractions.

Downtown is not the Strip, it's a mile or so north from the northernmost part of the Strip. Downtown has a more funky, 70's era-somewhat gritty vibe to it. More Fear and Loathing in Las Vegas than The Hangover, if you will. A good vibe, though, with plenty of distractions of its own I guess.

Having lived in Vegas for the summer it is not as distracting as it seems. You really will only go to the strip when friends come into town or for the show/poker tournament etc. Residential Vegas/Summerlin is actually a really beautiful area.

Have they acquired all the surrounding lands yet? If not, announcing this expansion plan might push up the price.

It will be exciting to see how this works out. Hsieh seems to really understand people and their motivations. He's the perfect person to try an pull something like this off.

If you build it, they will come? I hope so. This seems like a very risky venture.

"Build a campus, or build a city".

They had to build something, might as well try to become the heart of downtown Las Vegas instead of investing in the purgatory of suburban sprawl.

Well, at the very least, the people who work for him will come- and thats hundreds of well paid, educated white/asian young people. That's a pretty good start.

seems like 350 million is a drop in the bucket for something like that

I dunno- I think all you have to do is improve schools honestly. Young parents in America are starving for good education. For example, you could start really good charter schools that only allow residents from the area. The trick is making money off of the whole deal. I think that's where the investment in commercial and residential space comes in.

Didn't click the link, but I hope it doesn't have anything to do with Internet security (zing!).

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