When I was recently visiting Tony Hsieh and his new redevelopment of the older part of Las Vegas, I stopped by to talk to the team at Downtown Project. Alongside investment in real estate, culture, retail and learning, the Zappos CEO has set aside $50 million to invest in start-ups that will make the city their home. I spoke to Andy White a partner at the tech fund at Downtown Project about the investment into the city:
What has a tech fund got to do with the redevelopment of downtown Las Vegas?
We understand the importance of the entire ecosystem. You can’t have any one of these, without the others and have it be sustainable. Part of the reason that Las Vegas got hit so hard in a downturn was that we don’t have a very diverse economy. Once the one industry got hit, all of the house of cards fell. Our goal is to try and help rectify that.
We know that tech or, more specifically, high rate growth business provides your best opportunity to grow and expand that rapidly. We are looking for founding teams that are focused on community first. Give before you get, understanding that we help each other along the way and that it’s not just about giving back once you are successful.
What does this fund mean for the local community?
We are looking for companies that will be located in downtown Las Vegas that will be building out upwardly mobile positions, so that their employees have opportunities to grow with the company, they can advance and gain new experience throughout that. We’re not looking for someone relocating their call center division to here. That’s not the type of thing that we’re investing on.
Are you expecting those startups to be focusing their product around Las Vegas?
No, not at all. In fact, that would probably be a bit of a detriment to them. I mean, if you’re doing something where Las Vegas would be the focus, then that’s going to be something very difficult to scale. That kind of defeats it. There are certainly advantages to being in Las Vegas and we’re all for people wanting to be a part of it.
What are those advantages?
For specifically what’s happening downtown right now, we have an incredible opportunity to be a part of building out the infrastructure for the city and being a part of that next phase of what we’ve become.
With a fairly clean slate?
What existing infrastructure is there in Las Vegas to support a start-up community?
We already have important infrastructure. We’ve got good power grid, we’ve got incredible Internet access and data hosting facilities.
And then, of course, there’s the traditional advantage of Nevada with the no income tax, low cost of living, housing opportunities, and those are an additional part of it. But the most important part is that everyone understands the why behind what we’re doing, believes in that vision and wants to be a part of making this change.
We need a lot of different people helping in many ways and it’s not only on your business, it’s about being a part of the community and having a special interest, having friends and people that you can collaborate with.
Can you tell us about some of the companies that you’ve supported so far?
Two of our 11 companies have already raised to series A – Romotive and Ecomom. Beyond that, the others are in very early seed stage, we’ve got several that are getting good traction and could be to that point soon. And just a lot of really great dynamic teams, some very big variety in what we’re doing.
There’s no specific focus – it’s quite broad?
Yeah. You can’t do economic diversification by being focused on a particular industry.
Ecomom is about green products. They do the testing and reviews and can show you that this fits your criteria for purchase. It’s eco‑friendly. It’s safe. It doesn’t do animal testing, whatever those things are that are important to you. You check those off to make sure that all the products that you are buying fit that particular desire.
Romotive build smart phone powered robots. They’ve just announced their second version of the robot. They are doing a Kickstarter project, which is already fully funded. But they’re looking to exceed those goals. You plug an iPhone into the robot. It builds out your personality for your particular robot. Then you can control it with another smart device, and use it as telepresence. You can also dig into it and program it to different types of activities and personalities. It’s a pretty cool little thing.
It will be interesting to follow what you guys do and how the community develops.
We feel like this is being looked at in a little different way with the latest amount of data that we have. We don’t have any legacy coming from, “This is how we’ve always done things.” So we’re looking at everything in a new light. But if we can execute on this stuff in Las Vegas where we don’t have a set of major universities, we don’t have major sports teams, we don’t have any specific natural resource that is here.
Do you think that the learnings you have here could be applied elsewhere?
Yeah, absolutely. We’re already learning from other communities that there’s a constant dialogue going on, back and forth, and we want to share everything that we do learn, both good and bad. Anything that we can do here will hopefully be able to be recreated in other places with your own bit of change to it to meet the resources that you do have. But yeah, this is an incredible opportunity in this day and age to be able to share the knowledge as easily as we can.
How has Las Vegas reacted to you?
We have a tremendous number of visitors each week coming through for various pieces of the ecosystem. It’s great. What’s really nice is that’s already a part of the fabric of Las Vegas, so we’re not having to create that. It’s just a matter of really fostering it and we’re definitely getting it more focused. You create the atmosphere, and when you get the people in the room to be open to building these connections, they happen. We already have a great set of amazing stories, people that, both live in New York, had heard of each other but never connected, and now they come out to Las Vegas and they get to know each other. Or different parts of the country or they met here and are now connected.
We’ve had friends come through town that were just visiting and get job offers and end up staying and they now live in Las Vegas. We’ve had cofounders where one of the founders was here in Las Vegas, the other cofounder came out for a visit and they decided that, yeah, this is where they need to relocate.
No funding, no extra promise of anything, it’s just this is a dynamic community that we love and we think this is the best place for us to build our business. That’s what we want to continue. There’s a place here for anyone who really believes in the mission and understands the why behind what we’re doing and is passionate about it, then there’s a place for you within what we’re doing right now and every opportunity to make something happen.
It’s just, it’s a pretty amazing feeling to be a part of that.
Thanks Andy for taking time to share details on an amazing project and the work that you do. I wish you all good luck!