Zappos’ Tony Hsieh Bets on Both Schools and Jobs to Jumpstart Vegas
Tony Hsieh's team tackles challenge to revitalize the Las Vegas community through schools and startups
Downtown Las Vegas is not on most tourists’ radar. Most attention is lavished on the Strip, that long-time glimmering outpost of vice, decadence and easy riches, swathed in that suggestive slogan, "What happens in Vegas, stays in Vegas". But beneath the veneer lies a drab reality: the metropolitan region is still reeling from the dubious honor as one of the country’s foreclosure capitals, along with an 11.8% percent unemployment (tied for the highest in the nation among areas with over a million people). Downtown lacks pizzazz or even homeyness; instead, homelessness is rampant. The local school district, Clark County, has the dubious reputation of having some of the most crowded classrooms in the nation, with the average class size pushing 35 students. And its high school graduation rate of 59.3% ranks dead last in the state.
But sometimes the areas that most people ignore are ones where entrepreneurs see as ripe for change. And downtown Las Vegas is exactly where Zappos CEO Tony Hsieh is placing his bets--a $350 million wager to turn the area into "the most community-focused large city in the world" through a grand urban redevelopment effort, The Downtown Project. And arguably one of its most audacious parts is a $50 million investment aimed at building a high-caliber, K-12 education system to support a sustainable, family-friendly community.
The Las Vegas project cuts to the chase in what’s become one of the most vicious debates around school reform: does improving schools free a community from poverty, or can you only improve education once you’ve tackled poverty?
Hsieh seems to want to tackle both--and use the lure of an "up-and-coming" environment to attract more capital and talent.
"For our city to thrive, families must not only aspire to live here but also to educate their children here," the project’s website reads. The groundwork for successful cities may be laid by one generation, but it takes future ones to sustain its progress. "Quality education will bring more families downtown and increase the activities of small businesses," says Connie Yeh, former VP at Citigroup as well as Hsieh’s cousin, who along with Meg Murray (who holds a ph.D. in education psychology), co-leads the Downtown Project’s education initiatives. (Good schools can also help boost real estate prices as well--something that the area’s depressed housing market could certainly use.)
Around the U.S., a host of school districts are building ecosystems that aim to infuse technology into schools in innovative ways: New York City’s Department of Education is bringing together educators, entrepreneurs and non-profit foundations through its Innovation Zone initiative to explore new tools and practices for schools. Los Angeles-based Gamedesk received a $3.8 million grant to study the development and use of games in a "classroom of the future." In Baltimore and New Orleans, non-profits including the Digital Harbor Foundation and 4.0 Schools offer professional development programs for "teacherpreneurs" looking to create solutions to impact their local communities.
In most of those big cities, urban reform is led by separate teams, often independent from the efforts to reform education. One of the most successful programs to date to rejuvenate troubled inner-city communities, the Harlem Children’s Zone, led by Geoffrey Canada, tackled the roots of poverty by providing a comprehensive set of education and social service programs "from cradle through college." The decades-long program, which now spans 97 blocks, has recently drawn attention from the likes of Harvard economics professor Roland Fryer, whose research suggest that its quality schools have led to increased academic achievement among the impoverished.
Yeh’s plans are a little more modest, calling for the creation of a series of private and/or charter schools, serving pre-K through high school, over the next five years. But she is in no rush and suggests that her team may work at a more conservative pace, starting with an early childhood school; elementary, middle, and high schools may be developed as deliberately as one grade per year. At the moment, she and Murray are in the process of purchasing a former church to convert into a preK to K private school, planned to open in August 2013.
This will not be a typical school system. As the education team thinks about bell schedules and curricula, it is learning from existing schools and education technologies. Yeh and Andy White, a partner at the VegasTechFund, were recently at the NewSchools-Aspen Summit and the LAUNCH Education & Kids Conference to scope out the latest and brightest of high-achieving school models and edtech innovations. They see models in High Tech High in San Diego and Rocketship Charter Schools in San Jose, both considered pioneers of "blended" models that leverage a healthy dose of technology into classrooms. Yeh points to what Salman Khan has accomplished with the Khan Academy as the inspiration that led her to leave her job at Citigroup in New York and head west for the Downtown Project.
Meanwhile, Hsieh’s economic development plans for downtown Vegas are going full throttle. Next fall, his flagship company, Zappos (now owned by Amazon), is expected to move 2,000 of its employees from nearby Henderson right to the heart of Las Vegas--into the City Hall building, no less. Hsieh is purchasing real estate to turn into new commercial and residential offices. He’s funded a tech library that hosts weekly Tech Jelly events where local entrepreneurs and seasoned pros mingle and swap ideas. He’s helped set up a local seed-stage tech fund for promising ideas. And the Project is partnering with Venture for America, a program that recruits and trains college grads for two-year stints at startups, to bring fresh blood and talent to Vegas. These are just the beginning of his larger plans to turn downtown into a startup-friendly "co-working capital of the world."
True to Hsieh’s emphasis on building a startup-friendly, coworking atmosphere, Murray and Yeh envision teams of edtech entrepreneurs sharing spaces and working side-by-side with teachers and students. In today’s "Lean Startup" environment that emphasizes rapid cycles of prototyping, feedback and iteration, one would imagine that Clark County School District--the fifth largest in the U.S. with over 300,000 students--could serve as an ideal testbed for those building the learning tools of the future. "It’s important to help entrepreneurs understand the difference between a solution and the tools they’re building," says White. "Sometimes they fall in the love with the tool and get out of touch with the customer."
In the meantime, Hsieh is putting more of his own money to work with existing schools, having contributed $1.2 million of his own dollars to Teach For America to attract 1,000 corps members and alumni to live and teach in downtown by providing subsidized, low-cost housing. (Las Vegas in past years has not been a very popular destination for TFA applicants.) In addition, Zappos has donated $300,000 to sponsor three schools--Sunrise Acres Elementary School, J.D. Smith Middle School, and Roy Martin Middle School. Zappos employees will be volunteering at these schools to build a tighter bond between the company and community.
Here in downtown Las Vegas, Hsieh is not only rebuilding infrastructure--but also a new culture, image, and identity. Says Murray, "Las Vegas has been known to be pretty transient, but this is an opportunity for the local community to claim its town, and get people to move here and raise their children." If the Downtown Project succeeds, the city ought to get a new moniker: "What happens in Vegas, the world will want to know."