Big Idea: The New Downtown

How Zappos wants to change our cities

Zach Ware

courtesy Zach Ware/nerdzach.com

When the online retailer Zappos moved to Las Vegas, it did more than buy up some real estate. It launched a $350 million effort, called the Downtown Project, to revitalize a struggling part of the city. Zach Ware, managing partner of the project’s tech fund, approaches urban renewal like a startup—and hopes other cities will follow suit.

In Ware's own words:

Zappos is a 24/7 company, and we wanted employees to feel like they have normal lifestyles. There are a number of 24/7 cities, but none more so than Las Vegas. You can go grocery shopping at 3 a.m., and the stores are busy. Our original focus was to create our campus so the majority of the services were a part of the city’s fabric. In the process, we realized there was an opportunity to do a lot more.

We formed Vegas Tech Fund, to invest in startups, and the Downtown Project, focused on real estate, arts and culture, and small businesses. Because we didn’t come with the history and assumptions that city developers do, we asked different questions. We have been thoughtful about building things that are adaptable and can be tried on a small scale. It’s very similar to how you build a technology company. You find an idea, validate it, and grow.

At Zappos, we focused on creating opportunities for people to connect with one another across different departments. That translated to the Downtown Project: Our number-one goal was to create opportunities for people from different backgrounds to collide. We’ve worked hard to minimize losing artists and other people outside tech. We don’t want small businesses that enrich the culture of the neighborhood to have to pay exorbitant rents. So we diversify our investments and look at them in aggregate. If you want a neighborhood to be interesting and fun, you need to make sure your investments always have a hint of that.

Cities will spend half a billion dollars on a single thing. Las Vegas has been obsessed with having a stadium downtown forever. Instead of having one or two large ideas, we said we’d rather have 200 smaller ideas that can continue to grow. If 50 percent of them fail, that’s fine because we didn’t invest the house on one idea. We wanted to test that thesis, and so far it’s proved to be successful.

More than half of the world lives in urban environments. We’re trying to figure out how to fix innovation, creativity, and happiness in our city, and other cities like Detroit, San Antonio, Phoenix, and Denver are also experimenting. If collectively we are able to make cities function properly, we’ll help the world function more effectively.