ImpactAlpha, Dec. 4 – You could almost see the tumbleweed blowing down the streets of downtown Las Vegas when Tony Hsieh launched The Downtown Project in 2012. After selling the shoe retailer Zappos to Amazon for $1.2 billion, Hsieh moved the company downtown and poured $350 million into revitalizing the blighted area far from the city’s glitzy Strip.
The Downtown Project invested in 50 small businesses, from restaurants to toy stores, as well as 50 tech startups that located in the area, and seeded arts festivals, residential housing and an early education center. The project may have been overhyped, and was criticized for its over-reliance on real estate investments. Hsieh left the active management of the project in 2014. Much of the 45 downtown acres it acquired remain undeveloped.
Hsieh died this week, several weeks after being injured in a house fire. Social media lit up with paeans to the customer-obsessed culture Hsieh pioneered at Zappos.
He was also an early mover in place-based investing. Hsieh created an opportunity zone before there were Opportunity Zones. Steve Case launched his Rise of the Rest initiative to invest in “emerging communities” in 2014; Hsieh was already neck deep in one.
Hsieh eschewed top-down master-planning and invited residents and businesses to co-create a community; ‘return on community’ was a key metric of success.
Natalie Young, a former chef on the Strip, opened the restaurants Eat and Old Soul after Hseih gave her a $225,000 interest-free loan. She now runs an internship program for at-risk youth and transitioning adults. “Tony was a sweet, gentle soul who marched to the beat of a different drummer, thank goodness.“ Young said. “That man changed my life in the most profound, positive way possible.”