Joe Bob's America

Vegas Knows What to Do With a High Roller

May 10, 2017

Multiple Pages
Vegas Knows What to Do With a High Roller

PALM BEACH, Fla.—Hunter S. Thompson used to mail me giant photos of objects being blown to smithereens with dynamite or flung from some kind of skeet contraption so they could be exploded midair, and in most cases he was both the photographer and the destroyer. He would scrawl the precise date and time of the explosion on the bottom of the photo and copy it to the sheriff of Pitkin County, Colorado, who had repeatedly warned Thompson that he was in possession of illegal military ordnance, that he was in violation of pyrotechnic laws, and that he was in imminent danger of jail. As a Second Amendment radical, Thompson wanted to document exactly when, where, and how he had violated the law, then dare the law to do something about it. To me he would just write, “I’m on it.”

I tell this story to people who sometimes question the great Ur-text of gonzo journalism, Fear and Loathing in Las Vegas, disputing whether Thompson really did disrupt the National District Attorneys’ Association Institute on Narcotics and Dangerous Drugs while bugged out on mescaline, blotter acid, cocaine, uppers, downers, screamers, tequila, rum, beer, ether, and poppers.

He really did. He may have written it down later, when he was more lucid, but tromping all over the legs of district attorneys who had gathered at the Dunes to discuss how to hunt down deviates just like him was, in my opinion, one of the transcendent moments in American reporting.

Which is why, if you’re going to write a book about Las Vegas and call it “gonzo,” you’d better be ready to get down and dirty.

Aimee Groth went to Vegas to write what she calls “gonzo journalism”—in fact, according to her publisher, “fearless gonzo journalism”—without carrying the tool kit. She needed a stick of dynamite and a bazooka for targets that were huge and inviting, but ended up approaching them like a Vassar coed writing a sociology paper on sexual harassment.

Her book is called The Kingdom of Happiness: Inside Tony Hsieh’s Zapponian Utopia, and it describes a journalism project that was kind of doomed from the start. In 2013 Groth quit her job as an editor at Business Insider in New York in order to immerse herself in the hipster commune–cum–start-up accelerator–cum–urban renewal project–cum–weirdbeard performance-art scene known as the Las Vegas Downtown Project, initiated by Zappos.com cofounder Tony Hsieh, who believes that life should be based on the Ten Principles of Burning Man. Hsieh is one of those Silicon Valley capitalists who believes life is an extended version of summer camp, so even though he’s well into his 40s, he’s still collecting merit badges.

“If you’re going to write a book about Las Vegas and call it ‘gonzo,’ you’d better be ready to get down and dirty.”

He constantly spouts “better living” bromides normally not heard outside Deep South sports arenas and feel-good megachurches, including ideas derived from self-help books, positive-thinking books, management-theory books, the rave code (Peace Love Unity Respect), the Aspen Ideas Festival, the culture of SXSW in Austin, the wisdom gleaned from Silicon Valley’s sacred mountain in Eden, Utah, where Summit Series gurus dwell, the Electric Daisy Carnival, Further Future…and I hope I haven’t left out any of the other gatherings where people live in luxury yurts and ingest psychedelic Molly crystals while dancing in animal costumes. I don’t know if they have a name for this mindset in Silicon Valley, but I would suggest Nirvana Aggregator.

All of this would seem to be incredibly fertile gonzo grist, were it not for the author’s fatal flaw: “I was inspired by his vision and was willing to follow him anywhere.” She was dazzled by Tony Hsieh’s personality and his vision for downtown Las Vegas, even though she never tells us quite what was so compelling about it, and so she lost her gonzo credentials right away.

Tony Hsieh—in case you missed him at last year’s Coachella fire installation—is a Taiwanese-American who became a multimillionaire at age 24 when he and his Harvard digi-mate cashed out LinkExchange for $265 million during the dot-com boom. He rolled that money into a venture capital fund called Venture Frogs that invested in both Open Table and Zappos, the online shoe retailer that he built into a category colossus and then sold to Amazon in 2009 for $1.2 billion (apparently after Hsieh’s partner, Sequoia Capital, nudged him into an exit strategy). Hsieh had 38 percent of the Zappos equity but was having so much fun that he stayed on to run the company and, almost equally important, to preach the feel-good gospel of “delivering happiness,” which was the title of his 2010 book and national speaking tour.

“Happiness” is a huge deal with Hsieh. If you interview for a job at Zappos, you’re asked to give your “happiness number” between 1 and 10. (Important: Don’t say 10, they’ll know you’re lying.) Then you’re evaluated for a “culture fit” to make sure you party hard enough to be Zappos material. There’s no handbook for what the culture fit entails, but it apparently helps to have tattoos, unnatural hair shades, cargo pants, and Halloween costumes you’re willing to wear to the office. A fondness for Bikram yoga and the art of Japanese rope bondage works in your favor, but Republican political views do not. Zappos also has its Ten Core Values to match those of Burning Man, and you can be fired for a “values violation.” You also need to drink fernet. Everybody drinks fernet. I must admit that, even though I’ve splashed joyfully through several dozen of the world’s most exotic alcohols, I had never heard of it. It’s an Italian herbal liqueur. Hsieh apparently buys it by the container ship.

Zappos was originally based in San Francisco, but Hsieh moved the company to Vegas in 2003 because he loved poker and saw the city, as many other companies have, as prime recruiting territory for a call center. To hear him tell it, Zappos is the happiest place to work in the world, a permanent micro-rave where you’re free to do vodka shots at your desk or bring your Vietnamese pig to work. Hsieh has spent years installing a system of self-management called “Holacracy” in which job titles are eliminated and there are no clear standards for compensation, hiring, or promotion. It’s all about groupthink, or what a Belgian organizational guru calls “teal consciousness,” and the inner workings of the company are full of concepts like “serendipity,” “collisions,” “processing tensions,” “vulnerability sessions,” and various rah-rah concepts that are as old as Dale Carnegie and as battle-scarred as the Maharishi Mahesh Yogi but updated with terminology from The Matrix.

Hsieh’s big move came in 2012, when everything took a turn toward Thomas More. Hsieh announced that the principles of entrepreneurship, start-up culture, and Zappos-style happiness could all be applied to the endemic problems of big cities. What was needed, he suggested, was more “community,” the sort of community in which the individual is enveloped by the larger rhythms of the 24/7 rave. And what would be a better laboratory for that than the slums and abandoned buildings and vacant lots of downtown Vegas? The vanguard of the proletariat would be the Downtown Project, with Hsieh moving Zappos to the old City Hall building (after a $40 million renovation) and pumping $380 million into real estate and start-ups, because, “When you fix cities, you fix the world.”

This is the moment when Hsieh invited Groth to join him—oddly, as his “platonic date” at a wedding in Kona, Hawaii—and offered her “a blank canvas” if she moved to Vegas and chronicled the transformation of Sin City into a “creative capital” and “the most community-focused large city in the world.” For the next three years she would couch-surf up and down Fremont Street as the high drama of hipster idealism played out just two blocks from Room 1850 of the derelict Mint Hotel, where Raoul Duke and his Samoan attorney once turned Vegas into the most drug-focused large city in the world.

With Groth cheering him on, Hsieh started handing out money like candy. Got an idea but no experience? That’s okay! We invest in passion. Downtown Project wrote a check for $3 million for a clothing store called Coterie whose owner proudly announced, “We’re a place to hang out first, and a business second.” (After three years, they were neither.) Hsieh would run into people in bars and tell them they should decide what their dream was because he wanted to fund it. The term sheets for his $50 million Vegas Tech Fund stated that start-ups must prove out not only Return on Investment, but Return on Community (whatever that was). He even spent $2.6 million for ROCeteer, a support system for entrepreneurs that used “neuro-linguistic programming” to will success for the 74 companies funded by the Downtown Project.

The overriding goal was to get lots of people—smart people, young people, “culture fit” people—to move to Las Vegas permanently. Hsieh invested in Romotive, a company devoted to iPhone-controlled robots, because the founder was a professional rock climber who happened to be passing through town. He invested in Rabbit, a hipster rock band, because their music reinforced his happiness theme. He bought into a Fremont Street club called Krave in an effort to promote “the biggest gay nightclub in the world.” He persuaded an electronic-music performance group called the Dancetronauts to relocate from California. He created his own Burning Man-style festival called Life Is Beautiful. A company called Shift was a plan to buy 192 Teslas and run a taxi service for downtown Vegas that would outclass Uber and Lyft. Melonhopper was the latest in high-end Japanese-style cosplay fashion. And, of course, he moved his own company from suburban Henderson to the remodeled City Hall building.

The problem was, nobody wants to live in downtown Vegas. Hsieh’s own employees, accustomed to raising families in Henderson, didn’t even like driving there every day. Much of the Downtown Project capital was spent simply promoting the idea—a million-dollar digital media firm to document everything, an elaborate “Catalyst Week” to bring decision makers to Vegas, rent for 150 “crash pads” so that people from New York and San Francisco could sample living in Vegas. Tech Cocktail was a $2.5 million investment in showcasing start-ups in order to attract other investors. At one point Hsieh calculated that there are “100,000 collisional hours per acre per year”—meaning, if you buy enough real estate and get enough “culture fit” people to move onto that land, they’d be bumping into each other like pinballs and coming up with truly inspirational business ideas.

But it was all for naught. The book is a blizzard of names, companies, projects, trendy self-help titles, and buzzwords as thousands of people, attracted by Hsieh’s money or vision, show up for funding and party hearty, but pass on relocating. Hsieh’s tech fund became something of a last resort for projects that couldn’t get money from New York, Boston, San Francisco, Boulder, or Austin.

And then the ones who did relocate…started killing themselves. Jody Sherman, the founder of a start-up called Ecomom, blew his head off with a shotgun one day before the company was to be liquidated. A year later, Ovik Banerjee, a 24-year-old Venture for America fellow, leaped to his death from the balcony of his 7th Street apartment. A few weeks after that, Matt Berman, founder of the Bolt Barber start-up, hanged himself at home a day after sending out a happy “let’s all get together and hang out” email. After the suicides, Hsieh removed the word “community” from the Downtown Project mission statement, telling the media, “We’re not a charity.”

No. No, he wasn’t.

This is where Groth should have been exploding the underlying assumptions of the whole grandiose geniocracy that was being artificially imposed on one of the most historic neighborhoods of Vegas, but she continues to plod through the narrative with an on-the-one-hand/on-the-other-hand blitheness. (Her brief mentions of Vegas history are inaccurate and out of context. She refers to the El Cortez, the oldest continuously operating casino in the nation, as being somehow out of place, as though all the years between 1941 and 2012 didn’t count. When Hsieh buys the Gold Spike for $27 million, she nowhere mentions Jackie Gaughan, the original owner and one of three or four men who built Fremont Street. She seems unaware that Gaughan was watching the whole Downtown Project saga from his penthouse at the El Cortez, no doubt calculating the odds and writing off Hsieh’s minions as clueless interlopers, and equally unaware that Gaughan died there in 2014.)

In other words, what was being created was less about “fixing” Las Vegas and more about building an antiseptic sealed-off party house, like one of those artificial habitats for the Elon Musk mission to Mars. When faced with long-term problems like homelessness and drug addiction, Hsieh did things the old-fashioned Vegas way—evictions and roundups. When he noticed that a lot of people were starting to live in his Airstream Park who were decidedly not culture fits, he told his managers to tell them to leave because their space was needed for new construction. It was a lie to get rid of them. His innovative 9th Bridge School, the education component for the Downtown Project, was so expensive that no one who actually worked for Zappos could afford to send his kid there. The people who lived and worked in the Downtown Project regarded the Fremont Street Experience—the tourist casino part of downtown—as an irksome nuisance that attracted winos. Of course, Hunter S. Thompson had already covered this in Fear and Loathing: “In Las Vegas they kill the weak and deranged.”

As it turns out, Hsieh proved pretty adept at running his own casino. When almost every one of his start-ups failed, he brought in Michael Downs, former director of operations at the Bellagio, to fire staff, shut down companies, and generally treat all those passionate “return on community” people like high rollers who got a little overextended at the baccarat table. How fast can you leave town and, by the way, we always give you ten bucks for the bus. Most of the Downtown Project people had been living in a luxury high-rise called the Ogden, but the proprietors used Hsieh’s infusion of capital to mark up prices, convert every unit from a rental to a condo, and basically kick the hipsters out. That’s how Tony ended up living in Airstream Park with his pet llama Marley and girlfriends who dress like Trinity from The Matrix. After all, there’s always another rave or, failing that, a TED talk.

As to the people who upended their lives in places as far away as Australia and were now left with no job and no “community,” literally ejected from the party, we have to go no further than the gonzo Bible of Hunter S. for a description of what happened. “What [Timothy] Leary took down with him was the central illusion of a whole life-style that he helped to create…a generation of permanent cripples, failed seekers, who never understood the essential old-mystic fallacy of the Acid Culture: the desperate assumption that somebody—or at least some force—is tending that Light at the end of the tunnel.”

There was no Light—not in the ’60s and not a half century later in the teens. There was no 100X payout at this particular craps table. The only thing Hsieh made money on was flipping the real estate. (The jury is still out on Container Park, which uses 250-square-foot shipping containers to house small retailers in a makeshift tavern/playground/flea market.) Like hundreds of Vegas operators before him, he learned that, at the end of the day, you’re always paying rent to a Mormon. That’s the way Vegas rolls. That’s what Mayor Oscar Goodman could see from the first time he sized up Hsieh and asked him how big his bankroll was. Goodman pulled strings and made arrangements so that Hsieh could buy the old City Hall and launch his circus. Oscar used to work for the Mob. He knows how to roll an outsider.

As to Aimee Groth, she eventually starts describing the Downtown Project as a “cult of personality,” but uses the term without irony. Mostly she just accumulates a series of interviews, some pro-Hsieh, some con, until she proclaims, “I don’t want to be a data point in Tony’s experiments.” Then she has a series of meetings with him, during which he types 56 “tensions” into his laptop and the two of them hash out their relationship over tearstained fernet glasses. She returns to the “blank canvas” metaphor at the end of the book, but we don’t know whether that means she feels success or failure.

What she could have done is simply quote page 68 of Fear and Loathing in Las Vegas, the passage in which Thompson explains why spiritual things are born in San Francisco but go to Las Vegas to die:

San Francisco in the middle sixties was a very special time and place to be a part of. Maybe it meant something. Maybe not, in the long run…but no explanation, no mix of words or music or memories can touch that sense of knowing that you were there and alive in that corner of time and the world. Whatever it meant… [It] seems entirely reasonable to think that every now and then the energy of a whole generation comes to a head in a long fine flash, for reasons that nobody really understands at the time—and which never explain, in retrospect, what actually happened…. There was madness in any direction, at any hour. If not across the Bay, then up the Golden Gate or down 101 to Los Altos or La Honda…. You could strike sparks anywhere. There was a fantastic universal sense that whatever we were doing was right, that we were winning…. We had all the momentum; we were riding the crest of a high and beautiful wave…. So now, less than five years later, you can go up on a steep hill in Las Vegas and look West, and with the right kind of eyes you can almost see the high-water mark—that place where the wave finally broke and rolled back.

The wave always breaks and rolls back. The fact that it took five years for this particular social experiment to be revealed for what it was means that the tension-processing should have started back in 2012 with someone shaking Tony Hsieh by the shoulders and saying, “Dude! Snap out of it! You’re good at selling shoes, man! That’s what you do! You’re gonna hurt somebody!” And then mix a few Molly crystals in a fernet glass and send him home.

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