Cities, like companies, are often built from nothing.
Among the wreckage of a failed "anything" often comes the biggest and most promising opportunities of all. But making lemonade out of lemons is no small feat and requires an extraordinary amount of vision, leadership and resolve.
When the economic bust stripped down much of the "local" Las Vegas -- from jobs to real estate value to small business -- it was hard to see the silver lining. While luxury hotels and world-class shows continued to stay above water, downtown essentially became a ghost town; construction anywhere outside the new Vegas strip came to a grinding halt; and thousands of people lost their homes if not their livelihoods.
A few weeks ago, I was having a long overdue "coffee catch up" with my friend and fellow entrepreneur, Maren Kate, who founded Zirtual in 2011. On a whim she told me I should meet up with her in Las Vegas the following weekend to check out their new HQ and what was happening with the startup scene there. While I had read and heard about the Downtown Project and the massive influence Zappos' founder Tony Hsieh had on the Vegas startup community, I was ill prepared for what I would experience -- on a soul-moving level.
Community, collisions, and co-learning
"According to Krissee", our tour guide extraordinaire, the goals of the Downtown Project are three c'd: community, collisions, and co-learning. The first (community) is fundamental to having any sort of long-term success; the second (collisions) is not so obvious. It stems from the idea of urban density, in which 100 people per square acre are required in order to have a thriving city center. When people live and work in close proximity, often colliding with each other in natural ways, magic can happen. Co-learning is also fundamental to building a sustainable infrastructure where "Return on Community" reins supreme. Without shared knowledge and education, all bets are off.
Real money and the real gamble
The Downtown Project is armed with 350M and has divided the funds in four key areas:
1.$200 million for real estate
2.$100 million for education
3.$50 million for technology startup investments through the Vegas Tech Fund
4.$50 million for local, small business
But how will Las Vegas, a city best known for its desert-laden landscape and tawdry, tourist attractions overcome the perceptions and be taken seriously for emerging startups, their founders and teams? Will they be able to attract enough talent to support companies who commit to building and growing in Vegas?
According to VegasTech's Gabriel Shepherd, one of the ringleaders of the emerging startup scene, it's not a secret that Las Vegas is typically thought of in the context of casinos:
"As someone who grew up here, tourism is certainly an industry I am appreciative of, and that will never go away. But it's exciting to hear other startup communities, founders of successful companies, and investors mention Vegas in the larger discussion about viable tech startup cities."
Andy White, who spearheads efforts at the Vegas Tech Fund, has a front row seat to the impending startup explosion. When I sat down with him to pick his brain specifically with regard to their recent investments, I was impressed with the number of startups that have both emerged from the local community and those who have made the move to Vegas to launch their companies. Unlike other investment vehicles, which typically evaluate nascent startups primarily in terms of team strength and passion as well as product viability, the Vegas Tech Fund requires founders to be heavily involved in the local community and committed to seeing it thrive.
LaunchKey (a passwordless user-authentication app), Bluefields (an organizational app for sports teams), Skillshare (a global markeplace for classes), and of course Zirtual (subscription-based, virtual assistant services) -- which fundamentally changed my life in about three days flat -- have all "bought in" to the new Vegas vision. The founders of these companies are committed not only to building profitable companies but to creating local jobs, giving back to the community on a variety of levels, and ultimately re-investing resources into Las Vegas.
A city as a startup
Beyond just typical tech-driven companies, other organizations within the startup ecosystem have begun moving operations to downtown Vegas.
Frank Gruber, founder of Tech Cocktail, recently opened an office in Las Vegas and believes in the mission of the Downtown Project:
"I saw a community being built in downtown Vegas that reminded me of the approachability of Boulder before it was crowned a startup city. Yet Las Vegas, as a whole, has a huge name and brand, with unique resources. We opened an office in Vegas because we were excited about the notion of helping to build 'a city as a startup'. We'll continue traveling the globe looking for and covering startups and showcasing different communities, but we can do that from anywhere, so decided to make Las Vegas our home because we fundamentally believe in the long-term vision."
Why should startups consider Las Vegas?
Convenience: Las Vegas completes the West Coast trifecta of Los Angeles and San Francisco. Not only is it a short, cheap flight in and out of either of those cities, but it's also home to some of the biggest tech conventions in the world. Those who choose to set up shop in Las Vegas will have access to world-class events in their backyard while being able to easily shift between two other tech and media hubs.
Cost of living: This is perhaps the biggest barrier for emerging startup teams often living on small salaries, as they pour every cent into building their company. Beyond Vegas' tax breaks for businesses, the low-cost of living is extremely appealing. Not many tech-friendly cities offer 2,000 square foot, upscale, three bedroom apartments for less than $2500/month. You can pack a lot of developers into a living space that size.
Capital: If a founder is committed to the Downtown Project vision (assuming the product is solving a problem) the chances of securing capital is relatively high compared to other funding environments. $350 million is a good chunk of change and that amount is only growing as outside investors are beginning to "buy in" to the opportunities being created in Las Vegas.
As I stood in Hsieh's corporate apartment overlooking downtown, observed the construction happening within a five block radius, and listened to Krissee talk about the Downtown Project, something hit me like a ton of bricks: this was the ultimate American entrepreneur success story.
You build a massively successful company rooted in customer service and leverage technology to do so; you sell that company for a colossal amount of money and decide to re-invest that money into re-building a city, or at least a part of a city. Sure, it makes economic good sense, and of course money will be made; but above all else, you believe in building community and you believe in the importance of investing in people, not things.
This is the new Las Vegas. And I'll bet on this Las Vegas any day of the week.