The Kingdom of Happiness

Inside Tony Hsieh's Zapponian Utopia

LIST PRICE $22.99

About The Book

Fearless gonzo journalism—an insider’s look at the enigmatic and successful CEO of Zappos, Tony Hsieh, and his quest to create his own version of utopia in the center of Las Vegas.

In 2010 Tony Hsieh was introduced to many as a visionary modern business leader. Under Hsieh’s leadership, Zappos became the world’s largest online shoe company by championing satisfied customers and a valued workforce. After his company was purchased by Amazon, even as he continued as its CEO, Hsieh engaged his energies and considerable fortune toward a much larger goal: building a new and more socially conscious Silicon Valley in the heart of downtown Las Vegas, all within his five-year plan.

Hsieh challenged business and technology journalist Aimee Groth to uproot her life and participate in his social engineering experiment. Beginning with couch surfing, moving to a Downtown Project crash pad, and then living in Zappos corporate housing above the Gold Spike bar, Groth had a front-row view of Hsieh’s efforts to build his ideal society.

With interviews from insiders on all ends of the Zappos spectrum—like the “broken dolls” who gravitate toward Hsieh’s almost cultlike personality and make up some of his inner circle, to the Zapponians who live and work on campus, to players in the top echelon of Silicon Valley—Groth offers a unique view of a world few people know much about, and sheds a new light on this complex, eccentric man.

The Kingdom of Happiness is the story of one man’s quest to create his own nirvana in the desert based on his exacting design and experimentation with lessons he’s gleaned not only from the incredible success of Zappos, but also from rave culture and Burning Man. Is it the business model of the future or a cautionary tale of hubris?

Excerpt

The Kingdom of Happiness – YEAR 1 – SHOOTING BULLETS
On Sunday, January 15, 2012, Zappos experienced its worst security breach in its history. Someone hacked into the company’s servers in Kentucky, putting its twenty-four million customers at risk. That night, Tony sent out an email to his employees telling them he needed all hands on deck.

The next day an entertainment executive from the Cosmopolitan hotel and casino by the name of Rehan Choudhry arrived at the Henderson campus for a tour. It also happened to be Pajama Day at Zappos.

“I couldn’t believe it,” Rehan recalled later. “It was the worst day in the company’s history, and everyone is as happy as they could be, walking around in pajamas.” Blown away by the corporate culture, the visit convinced Rehan to quit his job, build out a concept that he had been playing around with for years, and pitch Downtown Project on funding him. He spent his days at Michael Cornthwaite’s The Beat Coffeehouse and Records on the corner of Sixth and Fremont Streets. After suffering a heart attack at age twenty-three, he changed his priorities and began only chasing after the things that truly mattered to him. “I have never felt that time was on my side,” Rehan explained to a reporter.

He conceptualized Life Is Beautiful as a massive festival of music, food, art, and learning. “Imagine if you’re a hospitality worker–how far do your dreams go?” he offered, referring to the city’s backbone of hospitality and service workers. Life Is Beautiful was exactly the kind of branding that Downtown Project was looking for, and Tony bankrolled Rehan almost immediately somewhere between $22 and $24 million dollars. For Rehan, then thirty-two, it was the manifestation of his wildest dreams.

With a promise to transform downtown Vegas in five years or less, Tony planned on high-risk ventures and failing fast when necessary, applying the same principles of running a start-up to a city. Life Is Beautiful was one investment that DTP decided it would risk taking a significant loss on. The idea was that the festival would serve as a marketing tool for Downtown Project.

The data breach at Zappos happened just as the company was beginning its massive move to adopt Amazon’s technical infrastructure, which would require the focus of its engineering talent for years. It was also a moment where the company’s culture was stronger than ever before. “If you study tribes, when there’s an external threat, they band together,” Tony’s chief of staff, Jamie Naughton, explained. “That’s what happened to us. It was like 9/11.”

Ever since the hacking incident, the company hasn’t quite found its way back to that same collective energy. The planned move downtown led to resistance from some employees, but many stayed with the company nonetheless–Zappos was still a better place to work than most call centers in Vegas were. It was hard to come by a place where you could sport tattoos and commission office parades.

During Downtown Project’s first year, Tony encouraged everyone to move quickly, take chances, and fail fast. It’s what led to the rapid hiring of Andy White, who was part of the start-up community in Salt Lake City.

At a tech conference in San Francisco, Andy ran into a Zappos employee who was also a partner in the Vegas Tech Fund; this led to an interview with Zach at SXSW in March 2012. Andy was then invited onto the Delivering Happiness party bus, where he met the core DTP team. Everyone was dressed in raver gear; he was wearing a rainbow wig. He was told that as part of the vetting process, he would be given a list of ten companies to evaluate. But after meeting Tony on the party bus, he was in. That list of ten companies never materialized; he had already passed Tony’s culture test.

It’s the kind of recruiting that is typical in Silicon Valley to assess for culture fit, where candidates are observed in a casual social environment, usually at a bar. At the end of the weekend, Zach extended Andy an offer to lead the $50 million Vegas Tech Fund under his management–just like that.

•  •  •

It’s some combination of idealism and the promise of a blank canvas that attracted people into Tony’s world. University of Iowa professor David Gould decided to become part of what he describes as a “fascinating social experiment” after being struck by the way his students followed Tony around the college town during his Delivering Happiness book tour. Former TEDMED speaker curator Lisa Shufro wrote in a Medium blog post that it was a “Good Will Hunting moment” that led her to quit her job in DC and “go see about a city.” Then there are followers like the Dancetronauts, an electronic music performance group that Tony met at Burning Man and convinced to relocate from California. “Tony collects people,” a downtown Vegas resident once told a reporter.

And that’s exactly what he does: collect people everywhere he goes. I could trace being collected back to the evening I met Tony in June 2012. The event was hosted by strategic partner Andrew Yang, founder of Venture for America. Tony donated $1 million to VFA in exchange for a stream of VFA fellows to support DTP, the sort of youthful energy that projects like this are built upon.

After delivering his keynote Tony was flanked by the Agrawal twins, Miki and Radha, whom he met at Summit Series. Miki Agrawal invited Tony to her gluten-free pizza restaurant in Williamsburg, Brooklyn, and he agreed to invest in a second location in Vegas. Andrew Yang grabbed Tony before the twins could steer him too far and introduced us. He invited both my colleague Lauren Brown and me to visit Vegas, and then walked back into the crowd.

I’m sure I didn’t make an impression that night, but I could understand why enthusiastic entrepreneurs like the Agrawal twins hung on to him like a magnet. Tony seemed genuinely interested in other people. I didn’t know much about Zappos, so I didn’t have many questions for him that night, but he had questions about Business Insider. In hindsight, I realized that one of his superpowers is just listening well to other people.

As it turned out, Business Insider could send only one of us. Over sushi later that week, Lauren told me that I should be the one to go. “It’ll be a great opportunity,” she said. And just like that, it was decided.

THE BLUEPRINT

Downtown Vegas felt like a blank canvas in September 2012. Fremont Street was filled with taped-up storefronts and empty parking lots.

Coterie, a clothing boutique owned by Sarah Nisperos, the woman who’d connected Tony and Michael, was the first brick-and-mortar DTP small business to open its doors. It received funding in the low millions of dollars. Sarah pulled out racks of high-priced hipster clothing onto the floor on opening day. Outside, show girls with large feather headdresses stood in the middle of the street. The upside-down Checks Cashed signage–left from the store’s previous owner–was a visual cue to the community of Tony’s influence in downtown Las Vegas.

Sarah earned her nickname, the Sorceress, in part for her role in the origin of Downtown Project. When Sarah stayed at Tony’s place (he maintains several rooms for guests), he would ask her every morning to brainstorm ideas with him for how to change the world.

Coterie means “gathering place” in French, Sarah explained (the term actually means “intimate and exclusive group,” something that she later told me got lost in translation when she was searching for synonyms for “community”). “We’re a place to hang out first, and a business second.” She was referring to DTP’s unique philosophy and approach to investing by focusing on ROC–return on community–above all else. The idea was that by focusing on people and community, “the rest would just work itself out,” Tony told audiences during his keynote. Later, when many companies struggled to turn a profit, DTP would abandon that strategy. But today anything was possible.

Sarah’s story of how she met Tony is, like many others, a spiritual awakening of sorts. At the time, she was working in the fashion epicenter of the world. “I remember dancing at a party next to Jay Z and Kanye West, and I was a hundred pounds and so unhappy,” she explained. Tony convinced her to quit her job and launch a yoga clothing line, Naked Yoga, which Zappos sold on its site. The business didn’t work out, and she says that she decided to live on $400 a month while doing a 365-day Bikram yoga challenge “to shed all of my layers.” She recalls meeting Tony at a bar that year while wearing cheap drugstore makeup. “I have never been so happy in my life,” she told him, and now me, as her face lit up. “We’re all just broken dolls. And Tony has brought us together in this beautiful way.”

In the early days of Downtown Project, Sarah would bring people into Tony’s apartment and do yoga with weed to calm them down. After she opened up her store, Tony would still send people to her to figure out how to better acclimatize to the downtown ecosystem.

Coterie was where start-up employees went to complain about being overworked and underpaid, and where Downtown Project’s chief evangelists troubleshot how to do their jobs when they no longer believed in Tony’s mission. Before the social sharing app Secret, a multimillion-dollar backed start-up that created a platform where users aired their “secrets” anonymously, became popular, frustrated Downtown Project employees aired their concerns behind the boutique’s counter. (Secret’s popularity ultimately led to its demise.) Incidentally, on the other side of the mirrored wall was Downtown Project’s office: a single room with a big whiteboard for members of the construction and finance teams who sometimes needed more privacy than sitting in bars with their laptops.

The strategy the first year or two (2012–2013) was to recruit as many people as possible to Las Vegas and to shoot bullets–that is, make a lot of bets. DTP attracted tech talent who found it difficult to attract investors in the Bay Area and other major tech centers such as New York, Seattle, and Boulder, Colorado. Like its small business investments, many of its early tech investments were first-time entrepreneurs who were not in a place to negotiate the terms of their contracts. One of the key expectations was that the company had to move to Las Vegas and contribute to ROC.

The start-up scene was scrappy, just like the downtown area. A Vegas Tech pitch night was hosted in a no-frills room above the Emergency Arts center, an artists’ collective in an old medical building on Fremont and Sixth Streets, owned by the Cornthwaites and where the Beat is also located across from the El Cortez casino. Guests pitched apps and other unimpressive consumer-focused technology; most were variations on existing products. The collective Tech Jelly involved the cofounders of the garage sale app Rumgr at the Insert Coins bar on Fremont Street, a bar featuring classic arcade games located a few doors down from Emergency Arts. Near the end of the week, a larger crowd gathered for the Vegas Tech weekly community dinner at Romotive’s Ogden apartment.

•  •  •

Zach Ware led me on my first tour of downtown Vegas. It began with the Post-it wall in Tony’s apartment, continued through the Jungle Room–designed to look like a jungle with plants on the walls and hanging from the ceiling, with dark purple lighting–and then took us into the far room overlooking the new Zappos headquarters. (Tony’s twenty-third floor Ogden apartment is actually three apartments combined.) If you wanted to meet with Tony, it was a requirement that you went on the tour first.

“This is the blueprint for Container Park,” Zach told us, sporting jeans, flip-flops, and a button-up shirt. The architecture rendering depicted a park filled with stacked shipping containers, a playground in the center, and families walking around the park at the corner of Fremont and Seventh Streets, which, at present, was a desolate street corner. It was inspired in part by another shipping container park in San Francisco. “We’ll break ground on that soon, and it will open next year,” he continued.

Downtown Project had brought in consultants in the urban-planning space such as Richard Florida, whom Zach characterized as not all that helpful. They were going to do their own thing, a new kind of flexible urbanism (as some involved in the project would describe: a “shoot-from-the-hip” version). Zach told our small tour group, which included a couple from the Netherlands, that he initially declined Tony’s offer to join Downtown Project but was later convinced over a bottle of wine.

A few doors down from Tony’s apartment lived Augusta “Coach” Scott, whose job it was to motivate Zappos employees to pursue their dreams; and an elevator ride away, to the fifteenth floor, was the new headquarters for Tech Cocktail, which had just received $2.5 million in funding. I joined Tony the day that the media and event company’s founders arrived in Las Vegas. Cofounder Frank Gruber invited us into the new condo-office, complete with cherrywood floors and granite countertops. Frank and his cofounder and fiancé, Jen Consalvo, whom he met at AOL, bootstrapped their company for six years before securing outside funding. Frank and Jen’s mission with Tech Cocktail was to showcase start-up communities in cities across the United States (by the time they moved to Vegas they’d hosted events in forty cities). A 2009 Washington Post story called them “digital nomads” for being on the precipice of a much larger trend, part of a growing segment of the workforce that works remotely while traveling the world. They met Tony at the Las Vegas Consumer Electronics Show (CES) that same year and sparked a friendship. (“No one knew Tony in 2008, 2009,” Frank told me. “It was before his book. At least, they didn’t know him like they know him today.”) At SXSW in 2012 Tony invited them to visit downtown, and they took him up on his offer. “Then we just packed up our bags and moved across the country,” said Jen. Although there was never any formal agreement to host events for Downtown Project, Frank and Jen signed on to invite a fleet of entrepreneurs, investors, and media to downtown Las Vegas every month and put them up in the Ogden. They would absorb the costs of the events if Downtown Project provided the housing. “It was a train that just kept on coming,” said Jen. “It was hard because it wasn’t central to our business. It was a bit of an offshoot we’d capitalize on.”

This particular afternoon was a calm before the storm. Tony walked over to the balcony, where Frank was standing, and looked out onto the horizon. His eyes were set just beyond the Lady Luck Casino. I captured a photo of Frank and Tony standing there in that moment, and later noticed that Tony’s head covered the word “Lady” so it seemed he was looking squarely at the word “Luck.” That was the perfect photo to headline my Business Insider story.

An elevator ride away on the tenth floor, digital marketing firm Digital Royalty was also opening up an office. The company played a key role in publicizing Delivering Happiness through social media, and its founder Amy Jo Martin spent a lot of time on the bus tour. Tony wrote the foreword for her book, Renegades Write The Rules: How The Digital Royalty Use Social Media To Innovate, and she used the same marketing company as he did (Result Source) to ensure that her book was a bestseller. Tony also bought up a number of copies of her book, as he did with other authors in his ecosystem. Digital Royalty fell into a broad, growing category of companies that helped support Tony’s broader publicity and business goals around Downtown Project and Zappos. They weren’t in the same category as start-ups like Romotive, which could potentially deliver real exponential returns; instead, they were part of the PR arm. Providing seed-fund money for start-ups that were, in fact, marketing expenses, was part of the entire veneer of Downtown Project that would hopefully attract companies that could add more value to the tech fund. When I asked Tony about this, he provided a term that he used for these companies: “community investments.”

Although Amy, Frank, and Jen had worked for years to bootstrap their companies (Amy founded Digital Royalty in 2009), a number of community investments were new companies and appeared to provide its founders with a brand of lifestyle entrepreneurship.

One outsider, a young woman who noticed some of Tony’s community investments at events that she attended, the ones that typically cost several thousand dollars and a special invitation to attend–such as TEDActive (the experiential side of TED) and Summit Series–asked innocently enough, “What is going on? Are there scholarships?” She’d gone through traditional means to secure venture capital funding for her fashion tech start-up. “But then someone pulled me aside and explained, ‘Oh, honey, they’re not real companies. They just have founder titles to support the cult of personality.’ Meanwhile, I’m living off of five dollars a day because I want to create a company that matters.”

Another way to look at community investments is to view them as a loose experiment with universal basic income–a much-talked-about system that would alleviate the jobs lost to robots and provide everyone with a paycheck. The idea is that universal basic income will allow more people to follow their passions and ultimately elevate universal consciousness. That’s the theory, at least.

When I was weighing my decision to move to Las Vegas, I had lunch with one of my colleagues, Jim Edwards, a deputy editor at Business Insider. I told him that I had a start-up idea, but it wasn’t fully formed. “Listen, Tony isn’t going to pay you to figure out what you want to do with your life,” he told me as we sat on the patio at Almond, a restaurant in the Gramercy neighborhood of Manhattan. He was half right. Tony did, in fact, pay people to figure out what to do with their lives. He saw value in community investments.

The entire DTP/Zappos/Delivering Happiness ecosystem is designed in such a way that all of these interests are interconnected and feed one another–sort of in the way that Alphabet is the holding company of an ecosystem of Google divisions, and Google Ventures (now simply called GV) invests in outside start-ups (some founded by ex-Googlers) that could potentially support the larger brand. All of the investments are intended to support the larger ecosystem. The broader alignment in Tony’s world is that most everyone needs to be a culture fit.

CULTURE FIT

Sitting in the very back of DCR, behind the heavy black curtain and in black leather seats, Vegas Tech Fund lead Andy White explained to me how he vetted entrepreneurs. He was dressed plainly in cargo pants and a T-shirt, in line with the unofficial uniform for Downtown Project. His close-cropped hair and measured way of speaking, along with his perceived self-discipline, could make Andy pass as being in the military. His low-key demeanor was a good fit for DTP: he appeared quick to take marching orders and support the culture of personality.

“It’s all about ROC and culture fit,” he explained with gusto. “They need to deliver a return on the community and fit in with the community.” Downtown Project took a page out of the Zappos playbook by investing in strict culture fits. But unlike Zappos, DTP doesn’t have a set of core values that determines the sort of person it hopes to find. If you asked him or any of the other investors–Fred Mossler, Tony, Zach Ware–what culture fit was, exactly, or how they measured ROC, the answer was ambiguous. It was mostly about finding nice people, they said.

Most investments were the laid-back engineering types who are more comfortable behind the scenes; not the sort that would raise hell. (After all, those types were pounding the pavement in San Francisco and Silicon Valley.) They often reflected the young, male Silicon Valley founder archetype that has since been parodied on the popular HBO show Silicon Valley.

Research shows that venture capitalists tend to invest in those who remind them of themselves, and the Vegas Tech Fund was no exception.

“If I had come out of a traditional VC firm, this would drive me nuts,” Andy told me. “No traditional due diligence materials to work with,” referring to the typical review process that entrepreneurs go through that helps investors weigh whether they are a reliable and trustworthy investment. “It’s all about how much you believe in the team.”

When Brooklyn writer Jay Dixit pitched Tony on funding a writer’s colony, Tony mostly looked at him with his poker face and then asked what kind of writers he was planning to invite: “Just as long as they’re not mean writers.”

At Zappos, job candidates are screened in multiple ways. The company sends a driver to pick up candidates from the airport. Later, the driver, along with the folks at the front desk, are asked what they thought of the candidate. “Was the person kind? How did they treat you?” Downtown Project also took a page from this: when entrepreneurs visited, Andy, Zach, or whoever the host was would send out an email to the Downtown Project staff with questions like: “What do you think of this person? Did you run into them at the Beat or DCR? Were they the same person at night as they are during the day?”

The Downtown Project mission is lofty and intentionally vague: to be the most community-focused large city in the world. Yet, for all of its perceived transparency around its goals and accessibility with the tours and the Post-it notes, the unspoken message is that “community” applied only to a certain subset of people. After Tony, those on the front lines vetting for culture fit were primarily Andy White, Zach Ware, Don Welch, and Maggie Hsu, a young McKinsey & Company–trained analyst who was a contractor for Downtown Project. Fred Mossler has always deferred to Tony. Even then, their tests weren’t foolproof. Casting such a broad net inevitably attracted a range of people, including a club owner with a history of bank fraud and massive financial liabilities. Las Vegas resident Joshua Ellis, who even worked for one of its startups, raised some red flags early on about the insularity of Tony’s initiative. He wrote a pointed blog post titled, “Vegas Tech, We Need To Talk,” echoing the sentiment of other longtime residents. He criticized Downtown Project for aggrandizing its noble intentions, arguing that it masked more capitalistic and libertarian goals. Time proved both to be true:

Like a growing number of locals, I am deeply, deeply conflicted about the vision for Downtown that’s being laid out by Tony Hsieh and his circle of friends, employees, and business partners. The problem, I think, is how one defines the words “community” and “happiness,” which are words you hear a hell of a lot in Vegas Tech. Hsieh wrote a best-selling autobiography/manual for success, in fact, entitled Delivering Happiness, and “community-building” is the number one activity that Vegas Tech people engage in, with an enthusiasm that often borders on the unnerving. A phrase you often hear muttered around Vegas these days is “drinking the Kool-Aid,” and you often hear Zappos and the Downtown Project–and Vegas Tech at large–compared to a cult. . . . When I began to venture downtown every week to go to the new Tech Jelly meetups/geek hangouts at the Beat, there was very much the same feeling that Tom Wolfe described about Ken Kesey’s Merry Pranksters in The Electric Kool-Aid Acid Test: you were either On The Bus, or Off The Bus.

Like the many yes-men and yes-women around Tony, Andy White filled his role well: he always stayed on message. At a Zappos “Enlightenment” party, in the vein of the movie The Matrix (which evokes Zen Buddhism philosophy), he wore a red sweater with a piece of paper attached and the question “How far down the rabbit hole will you go?” Tony guarded the entrance dressed as Morpheus from The Matrix, a character he quotes in Delivering Happiness. (“There’s a difference between knowing the path and walking the path.”)

Andy subscribed to the system: he went to all the community dinners, Downtown Lowdowns (monthly community events at which Downtown Project employees showcased their progress), and devoted his evenings to entertaining visiting entrepreneurs. He leased a place at the Ogden with his Russian-born wife, Oksana, and together they lived and breathed the culture (though she didn’t work for the Project). Andy told me that he doesn’t drink (and clarified that, though he previously lived in Salt Lake City, is not Mormon). It’s difficult not to drink–especially when Tony is bonding the group over shots–but it’s not a requirement for entering his ecosystem.

Andy previously worked with entrepreneurs at an accelerator start-up in Salt Lake City called BoomStartup. Accelerators are short-term, cohort-based programs that provide mentorship and resources to help founders develop ideas and get companies off the ground. His right hand was a young VFA fellow who had just graduated from college, Laura Berk. Together they were tasked with figuring out how to manage the $50 million fund. In the early days, you could find the two sitting at small tables at the Beat, a vintage coffeehouse that was filled with old records and an adjoining Burlesque Hall of Fame shop that played fuzzy black-and-white videos. If not at the Beat, they were sitting at the high tables under the dim lights in DCR. With infinite capital at their disposal and no failures just yet, it was an exciting if not overly romanticized time in Downtown Project’s history.

MODERN-DAY CLUB BIO

One of the most integral guardians of Tony’s reputation is Jenn Lim, CEO of Delivering Happiness. They met at the height of the nineties rave scene in San Francisco, in his penthouse suite at 1000 Van Ness. Tony had recently sold LinkExchange and was enjoying a season of immediacy, extraordinary wealth, and no obligations. He had conquered the world by age twenty-four. For a young millionaire in Silicon Valley, that meant sharing the wealth with his friends in order to attract more friends. It was a season of excess, reminiscent of the Roaring Twenties in New York City, as depicted by F. Scott Fitzgerald in The Great Gatsby. It was an era marked by Prohibition that spawned an underground market for bootlegged alcohol. But instead of Prohibition, during the dot-com boom, there were laws around recreational drugs; and instead of speakeasies with jazz, there were gritty warehouses playing house, trance, and other electronic dance music. There was a shared belief that there would never be a time in history quite like this again.

At a rave in Oakland in 1999, Tony ran up to a booth on the edge of the crowd, shirtless and sweating from dancing. The booth was managed by DanceSafe, a nonprofit that advocates for awareness around safe use of MDMA, the base form of the popular party drug Molly. DanceSafe founder Emanuel Sferios recalls how Tony asked if he could donate, and then escaped back into the crowd.

During the dot-com boom, a number of DanceSafe’s donors were millionaire tech CEOs. MDMA, a recreational drug, is not legal, although it’s being used in clinical trials to study its effectiveness for therapeutic use (to treat post-traumatic stress disorder, for example). The value that researchers place on MDMA is its ability to rewire the brain and allow for feelings of empathy to arise for most users. In the way that Prohibition led to the black market and bootlegged alcohol that had fatal repercussions, MDMA is sold on its own online black market and can be fatal when users ingest unknown chemicals. Tony didn’t discuss MDMA in his book, but he wrote about the profound impact that raving had on his worldview and how it increased feelings of connectedness with his tribe. When I asked him about MDMA, he told me that “I stay away from talking about religion, politics, or drugs in general because those topics are very polarizing and people have already made up their minds on what side of the issues they want to be on.”

One evening at Club Bio, which is what they nicknamed his penthouse, Jenn watched as the DJ announced Tony on the stage. “Now let’s bring all the ladies up to the house!” the DJ called out. “At that moment, I thought, ‘Aw, that’s too bad; he’s just like all the others,” she recalled. “But then the next night, I saw him for who he really was.” She joined Tony’s tribe, and they developed a friendship. Over time, Tony entrusted Jenn with culture work for Zappos and with Delivering Happiness, the offshoot consultancy connected to the Zappos brand. When I later asked Jenn who Tony was, she didn’t provide an answer. I had a difficult time figuring out exactly who he was too.

During my last night on that first trip to Vegas, I watched as revelers moved in syncopation with the Dancetronauts, who were directing the crowd in the courtyard behind the Ogden as fog machines filled the area with mist. Tony and his posse swept into the scene in a Flying V formation. I stood on the edge of the crowd with Andy White; Michael Cornthwaite and his wife, Jennifer, were standing farther outside the dancing, near a food truck.

Jenn Lim noticed I was standing on the periphery. “Here,” she said, taking my hand and inviting me into the circle to dance. We had met earlier that day during a tour of the Shadow Lane house, a mansion in the nearby Scotch 80s neighborhood that Tony recently purchased to host parties. He brought a group of friends to tour the place, which was reminiscent of a funhouse, with rooms filled with dolls, mirrors, and whimsical artwork–a perfect sort of setting for a masquerade ball.

Jenn’s invitation into the circle was the split second that put me on a crash course with Tony and his great experiment. That encounter in the fog machine mist led to the elevator ride up to the twenty-third floor of the Ogden, where I encountered Tony’s modern-day Club Bio. A collection of mostly young people were mingling around the living room and sitting in colorful roller chairs. In the corner of the couch sat Tony’s cousin Connie Yeh, who was joking about how her husband, Don Welch, was passed out in the hallway somewhere. They are an unlikely couple: Connie is Asian, petite, and unassuming, while Don embodies the “bro” fraternity brother archetype. They met at Citigroup, where Connie was a derivatives trader and Don worked in sales and technology, and neither had prior experience in education or small business, something they wear on their sleeves with a dose of insecurity and humility.

For Connie and Don, joining Tony’s mission was the opportunity of a lifetime. They were living and working on Wall Street as the country reeled from the Great Recession when Tony started courting them over multiple dinners in New York. “I sat at my desk on Wall Street one day, looking at all of my screens, and thought, ‘There is so much more in Vegas,’ ” Connie recalled. “But I had no experience in education. I asked Tony, ‘What if I fail? What if I don’t know what I’m doing?’ And he said, ‘Then you’ll learn.’ ”

As Alfred Lin explained to me once from Sequoia Capital’s then-sparse Silicon Valley offices, “When you’re doing something as crazy as Tony’s doing, you’ve got to surround yourself with yes-men and -women. At least at the start.”

Across the way in the kitchen, members of the hipster rock band Rabbit were raiding the cupboards for chips and EZ Cheese. Tony collected the musicians at the Fairmont Orchid hotel in Kona, Hawaii, where they were performing at a venture capital conference in 2010. At the time, the Florida-based musicians were living in a van while touring the East Coast. Tony was attracted to Rabbit because its music is “happy,” he told me, featuring only upbeat tonality and lyrics. In fact, he ensured that Rabbit’s music is what Zappos customers heard when they were placed on hold after calling the customer service line. It didn’t take much convincing for the two male members of Rabbit to leave their nomadic life and build out the music scene in downtown Las Vegas.

Tony walked out of the kitchen carrying a tray with shot glasses and a bottle of Italian fernet liqueur, wearing his usual Zappos T-shirt and jeans, a uniform that he rarely deviates from. He passed them around to everyone, including a Zappos employee and his fiancé sitting in the roller chairs. The Zappos employee announced that Tony was going to officiate at their wedding.

“How many weddings have you officiated by now?” someone asked.

“Um . . .” Tony’s voice trailed off in the way he does when he is uncomfortable. He’s received a number of requests ever since marrying a couple onstage at a Zappos All-Hands a few years ago. Zappos All-Hands are the company’s much-anticipated quarterly meetings that involve a general business update and also spectacle, complete with entertainment and talks by famous guests, and an afterparty.

Jenn was falling asleep on the oversize beanbag, still listening to the hum of conversation into the early hours of the morning. She became especially accustomed to Tony’s pace of life during the Delivering Happiness bus tour and when she supported his book writing process, a marathon two weeks fueled by vodka and coffee beans just before the Amazon sale closed.

After downing the shots of fernet, a young female Zappos buyer sat next to me on the couch. As everyone began trickling out of Tony’s apartment, we walked over to the balcony overlooking Fremont Street.

“It’s not New York, I know,” the young blonde buyer hedged. “But it’s exciting. I left FIT [Fashion Institute of Technology] to come out for this.”

The music from the bars below bounced off the walls of the Ogden. We could see patrons standing outside the Beauty Bar, the Griffin, DCR, and the crowds across the street just inside the Fremont Street Experience.

Meanwhile, Tony was lying on another beanbag in the next room, which was filled with architectural renderings and all of the colorful Post-its with ideas for businesses downtown. The young Zappos buyer explained Tony’s plans for downtown Las Vegas, pointing to different properties, all within the shape of a llama. Somewhere along the way, Tony decided that he had a thing for llamas and that fetish has been integrated into various aspects of Downtown Project–even determining the shape of his $200 million property investment. The goal was to increase the number of downtown residents significantly over the next five years. Tony explained it to us this way: “If you do the math of one hundred thousand collisionable hours per acre per year, that translates to something like 2.3 collisionable hours per square foot per year.”

Tony’s investment in downtown coincided with investment from Wendoh Media, an influential entity in Las Vegas. Wendoh and Downtown Project both shared a vision for turning downtown into a Brooklyn, an Austin, a Seattle–with its own spin of course–transforming it into a creative capital brimming with young hipsters, entrepreneurs, and artists. Wendoh’s young male founders also share a similar belief system around the fusion of work and play. To attract the demographic that would make the vision a reality over time, first they needed to get people there–anyone who vaguely fit that description.

I must have fit the description, because early in the morning, before we all trickled out of Tony’s apartment, he told me that he was going to be in New York the following week. Did I want to join him at a charity gala? Of course I did.

“IT’S LIKE MAGIC”

“If you could do anything in the world, what would you do?” Tony asked me while we sat on the couches atop the Hudson Terrace, a high-end nightclub on the Hudson River overlooking Manhattan. I was intrigued.

It was a simple question that led many people to relocate to Vegas and support his Downtown Project, which was largely about selling dreams–the same sort of escapism that Vegas has always sold, just repackaged for the aspiring entrepreneurial set. I responded with something about owning a media site–and then poured my second straight glass of vodka out of nervousness.

“The decisions you make this year will dramatically change the course of your life,” he responded, sounding more like a prophet than a CEO.

On paper, I had a great job and an exciting life in New York. I had just been promoted to a senior editor position at Business Insider. But I realized that I wanted to be outside the office, on the ground, meeting interesting people. I wanted to set the rules.

That night, I continued to treat the Grey Goose like water. In fact, I partied so hard that my cab driver decided to drop me off at a Brooklyn hospital instead of at my apartment because he thought I had alcohol poisoning. I was surprised when Tony and his date appeared to pick me up. Apparently the cab driver had called one of them before he dropped me off.

I would later discover that partying hard was the norm when people entered Tony’s world–and surely stranger things had happened. Zappos is different from most companies in that employees are rewarded for partying with their CEO. I never heard of anyone in his sphere suffering repercussions from doing something outrageous or unsavory. Those sorts of events only seem to bond the tribe.

The very next day, I joined Tony, his date for the weekend, and a few others on a tour of a micro-apartment in Soho designed by architect Graham Hill who pitched Tony on investing in his company, LifeEdited. The progression of the week’s events led to a night at the Ainsworth on East Eighteenth Street in Manhattan and the Ace Hotel, when I met a charismatic young woman named Amanda Slavin.

“It’s like magic,” Amanda told me in a hushed voice, sitting on the rooftop of Soho House in New York City later that week. “Tony plants seeds.” Amanda met Tony while at Summit Series, one of the original inspirations for his utopian vision, where she was working one of its events. When she traveled to Vegas to check out Downtown Project, she was surprised to see Graham Hill sitting next to her in the Zappos airport shuttle. “I couldn’t believe it: one of my favorite TED speakers was sitting right next to me,” she continued. “It was a sign that I just had to be there.”

Over a two-hour brunch in downtown Vegas, she and Tony worked out the details of a potential partnership. “What do you want to do with your life?” he asked. Amanda, a petite and fashionable brunette in her midtwenties, was working for Paige Hospitality Group, a NYC-based events company. She was overworked and downing several drinks a night at the events she hosted regularly in Manhattan, the Hamptons, and LA. “It wasn’t healthy,” Amanda lamented. She told Tony that she wanted to combine her backgrounds in education and events management. He asked her how many of her friends she could get to Vegas every month to re-create an event like Summit Series. She had an extensive network through Paige Hospitality and guaranteed that she could attract a good turnout. Amanda is originally from New Jersey and a natural hustler, something that Tony picked up on immediately.

He agreed to fund her to form an events company, CatalystCreativ. Their main focus was “human capital ROI,” similar to ROC. And they did a good job of creating experiences to attract talent: around 30 percent to 40 percent of the people came back to visit, she told me. While the public will likely judge Tony’s efforts by measurable impact in downtown Las Vegas, that does not account for a very important demographic: the many people who passed through, or heard his keynote, and took the idea to create something in their own city–perhaps completely unrelated and unreported. Tony’s message was powerful like that. For every person who acted upon a solution in Vegas, there are likely several more who made even microimprovements in their lives and/or work elsewhere.

Tony had this idea that the Summit community would become a key part of his plan for Vegas; many of its entrepreneurs have developed an ability to stretch limited amounts of capital to solve big problems. CatalystCreativ would brand its vision as a community design firm; the intention was to get as many young entrepreneurs to Las Vegas as possible, and, hopefully, some would relocate. Amanda immersed herself into the craft of hosting a speakers’ series, often falling asleep while listening to TED Talks. Alongside Tech Cocktail, CatalystCreativ would become one of the primary recruiting tools for Downtown Project. When she invited me to attend the first Catalyst Week, I said yes.

The inaugural Catalyst Week occurred the weekend before Thanksgiving 2012. Several people from the Summit Series community flew in, including a few Googlers, social entrepreneurs, and an independent filmmaker. Some had been on the ground in the New York area supporting relief efforts after Hurricane Sandy devastated parts of the Northeast. For this crew, Vegas literally was the calm after the storm. Two tech entrepreneurs-turned-nomads even showed up after driving across the country in their Airstream.

“That’s the lifestyle. One woman I know traveled around the world and didn’t have an apartment for a year. It’s just the Summit way–they all live like that,” one Catalyst employee observed. “They figure it out.”

The inaugural group included Google engineer Dan Fredinburg, who was hacking his way into Google X, a division of the company devoted to “moonshot projects” such as self-driving cars (now just called “X” through the reorganization under Alphabet); Adventure Project cofounder Becky Straw, whose nonprofit funds entrepreneurs in developing countries; and a host of other social entrepreneurs and rising stars with equal ambitions. Meredith Perry, who was on the verge of raising several million from investors (including Tony) for her start-up uBeam, with a mission of providing wireless charging technology to the world, was my roommate in the Ogden.

Like Summit Series, the week’s events were designed to spark breakthroughs and social bonding. Everyone gave talks in the trailers in the Learning Village with his or her grand visions for changing the world, and the week culminated in a vulnerability session. During a morning yoga session with the group on the twenty-fifth floor, I was able to finally get into a pose that had been impossible for years. Dan Fredinburg, who was training to climb Mount Everest to take photos for Google Streetview, was sitting on the yoga mat next to mine.

During a community dinner, I asked one of the two men who arrived in an Airstream what they did for a living. “I’m here for one reason: love,” he responded. I later learned that he sold an advertising company for millions and was now living a nomadic life, traveling the world and engaging with indigenous tribal communities. I wanted to know exactly how one gets to a place where he can live so freely.

The week was highly curated and wasn’t an entirely accurate picture of the place: it incorporated all the best elements from downtown and resembled the festivals that Tony experiences around the world. This group primarily saw his investment in the same way he did: as an experiment that they could enjoy from above and afar, without getting too involved.

During the week, I felt so out of my element that I opted out of spending too much time socializing with the group after hours. The last day, instead of traveling with them in the Airstream and partying just outside the city center, I chose to stay downtown and find some of the DTP employees I had met that week. They felt more accessible.

While meandering around Fremont Street late Saturday night, I walked by Le Thai, which was packed with patrons celebrating the Thai eatery’s one-year anniversary. Next door, Wendoh Media–owned Commonwealth, which describes itself as a “pre-Prohibition style cocktail bar” complete with a semi-secret speakeasy, was celebrating its grand opening. I saw Tony inside the entrance to Le Thai, and he pulled me inside and handed me a shot of fernet. I was relieved to have found him, since I’d been walking around alone with no real destination. I joined his growing posse on the way to DCR, where we picked up Michael Cornthwaite, and ended up at Drink N’ Drag inside the Fremont Street Experience.

Under the strobe lights at Drink N’ Drag, a gay nightclub on the other side of Las Vegas Boulevard in the Neonopolis, Tony turned to me and asked, “Why don’t you write the real story of what it’s really like to live here?” For someone who plants ideas all the time, I don’t know if he even remembers saying it, especially a few drinks in on a Saturday night. But that was the dare, and I wanted to take him up on it. The bar was loud, and moments later, Michael walked up to us and handed us more drinks. I don’t know if Michael also had a tab open that night, but usually anytime you’re out with Tony, he covers the bill for anyone in his periphery. Coach and the Tech Cocktail founders made their way over and pulled us onto the dance floor, where we stayed for a while.

After that, I lost the group somewhere along the way and ended up in the Ogden, where a DTP employee was DJ-ing for a small group until dawn.

Coach, who was celebrating her sixty-second birthday that night, told me that the energy rises when Tony is there and falls when he’s away. It was true: the lifeblood of downtown, at least in that moment in time, was connected largely to one person.

About The Author

Kristin Vogt

Aimee Groth is an independent business journalist who writes primarily for Quartz, a division of Atlantic Media Company. She previously served as a senior editor at Business Insider. Her work has been highlighted by several publications, including The Wall Street Journal, NPR, and the Harvard Business Review. In December 2013 she broke the news about Zappos’s adoption of Holacracy, which led to coverage by dozens of news organizations around the world, including CNN and The New York Times.

Product Details

  • Publisher: Atria Books (January 2018)
  • Length: 336 pages
  • ISBN13: 9781501129919

Browse Related Books

Resources and Downloads

High Resolution Images