I’ve been meaning to write about this for a few weeks, but work’s been busy. Yep. That’s right. There are a lot of people working at Las Vegas startup companies that are too busy to fret over some misguided reports about what’s happening (or not happening) with the Downtown Project and in many regards the larger Vegas Tech community. However, as someone who could live anywhere in the world, but has chose to make Las Vegas my home, I’m very interested in the discussion.
I won’t recap here all that went down. In case you missed the flare up, check out Mike Yoder’s nice summary and also the statement from Downtown Project. That should give you a pretty good summary. The facts are that Downtown Project laid off 30 people or about 10% of the Downtown project staff and Tony still has the same role he’s always had in Downtown Project. Layoffs are never fun at any company and is a huge deal for those 30 people. My heart goes out to those individuals, but it’s hardly a sign that Downtown Project is over/failing or whatever other verb you prefer.
First, Downtown Project scaled so quickly, that there’s little doubt that there were some bad hires, bad fits, or some hires that aren’t needed as the project evolves. This is especially true when you think of Downtown Project as a collection of over 300 companies and legal entities. Plus, none of those layoffs were from the 100+ (I lose track of their actual number) tech startup companies that come from the $50 million Vegas Tech Fund. All in all, there really isn’t that much of a story here. Downtown Project is still on the same trajectory it’s always been on. However, I can see how an outsider media member might not understand the entire context of what’s happening.
However, the thing the media people seem to miss is that there’s a whole lot more to the Las Vegas startup community than just the Downtown Project. Sure, Tony Hsieh is the only one in the Vegas Startup community that can get on 60 Minutes (and he should get whatever exposure for Vegas that he can get), but that’s not to say that there’s not a number of interesting companies and people with no real relationship to Downtown Project doing business in Las Vegas. In fact, I’d suggest that some of the most interesting companies in Las Vegas have no ties to Downtown Project. One day, the media will discover this as well.
Plus, it’s worth noting that Downtown Project together with a variety of other factors have literally brought together a startup community in Las Vegas from nothing. I know first hand since I quit my day job to start my first company back in 2010, a full 2 years before Downtown Project even existed. I’d done my Masters at UNLV. I’d been to all the local tech meetings. In 2010, there was no tech startup community for me to look to for my new company. There were a few tech startup companies, but literally no community.
In 2011 (6+ months before Downtown Project), Rick Duggan and I started this blog to try and do something to bring together the Las Vegas startup community. We knew of 20 startup companies and figured there had to be at least 20 more that we just didn’t yet know about. Boy were we wrong. We’ve now lost count of companies, but there are hundreds of tech startup companies in Las Vegas.
However, the number of companies really doesn’t matter. Maybe there have been hundreds of tech startup companies in Las Vegas all along. What we discovered was that none of these companies knew each other, supported each other or worked together. The first Startup Weekend Las Vegas (Side note: the 8th Startup Weekend Las Vegas is happening next month), the Vegas Jelly, and the #vegastech hashtag started bringing the tech startup community together in a really extraordinary way.
Now, hundreds of startup companies and thousands of startup company employees interact, support, and help each other. That didn’t exist in 2010 in Las Vegas, but it does now. Tony Hsieh’s $350 million Downtown Project has just thrown gas on the already burning fire. The Supernap’s InNEVation Center has contributed the same. Now the fire has spread and the Las Vegas Startup community isn’t dependent on either organization. However, I don’t expect either the Downtown Project or the InNEVation Center to stop what they’re doing anytime soon. They’ll both keep contributing in a big way.
That’s not to say that the Las Vegas startup community is out of the woods. I’m not saying we couldn’t take a step back. We definitely will takes steps forward and backwards. There are cycles that we’re certain to see. Not to mention we could benefit from more outside investment. We could use some nice acquisitions from landmark companies like Google, Facebook, Apple, Twitter, Microsoft, that are big enough that they leave the company in Las Vegas.
We’ve had a number of “singles” and “doubles” as far as exits, but the startup community will really benefit from some much larger exits that will fund the next generation of startup companies. We haven’t had that yet, but that will take some time to build. We also need to do a much better job engaging the wealth in the broader Las Vegas business community. Not to mention, we need to work to develop the entrepreneurial culture in our high schools and colleges. Although, those present tremendous opportunities considering we haven’t had their support and we’ve already made it this far.
Who knows if Downtown Project is going to be a success or a failure for Tony Hsieh and his other investors. It’s already 300 investments in including $200 million in real estate. I think they’ll turn out just fine. However, regardless of what happens to the Downtown Project, the Las Vegas tech startup community is 100 or maybe even 1000 times better today than it was before Downtown Project was started. Some of that was thanks to Downtown Project, but a lot of it happened totally separate.
Even if Downtown Project were to close its doors today (which it’s not even close to), the Las Vegas startup community would continue to thrive. Those who’ve only taken the Tony Hsieh tour of Las Vegas won’t understand that, but those of us who’ve lived the change know that a community is much more than an area of downtown and its most visible member.
The 20 year outlook for the Las Vegas startup community is very bright. I’m excited to be a part of it.