Tony Hsieh: Entrepreneur, Community Builder

Much coverage of Tony Hsieh’s legacy has been, deservedly, about his business success. After all, Tony’s incredible track record in leading Zappos has been hailed by corporate and leadership experts for creating a fanatical company culture passionately committed to teamwork and customer service in a way that powered sustained growth over his 21 year tenure as CEO.

Entrepreneurs everywhere revered Tony for staying true to his vision and values in how he did that. Notably, he was the only example we could point to as a super successful entrepreneur not being Amazon’d after being acquired by Jeff Bezos in 2009 for $1.2 billion.

But the story not being given much attention is how Tony’s vision and values pointed the company, and others, to join him in making a social impact with a private sector driven experiment for rebuilding the dead end Las Vegas neighborhood of Fremont East — resulting in a community movement he spawned known as the Downtown Project (DTP).

Zappos started in the Bay Area, but in 2004 moved headquarters to the Las Vegas suburban community of Henderson. The appeal for Zappos was driven by a lower cost structure to scale up the company’s primary teams of customer service, logistics and support workers needed to fill all those online orders.

As the company grew, employees spread across different buildings in a suburban business park and with even faster growth anticipated following Amazon’s acquisition, the forecasted needs for more space spurred planning for a corporate campus that would be supportive of the company’s quirky and purpose driven culture.

Instead of pursuing the conventional path of another suburban location, Tony chose to head into a decaying urban neighborhood believing that immersing his team on a mission of looking outward to build community around them would strengthen company culture and innovation, eventually leading to redefining Zappos company purpose as “Delivering Happiness” across their 4 C’s of Clothing, Customer Service, Culture, and Community.

Building Community

With that purpose in mind, as Tony explored urban Las Vegas he was struck by the long vacant and deteriorating former City Hall building and its surrounding neighborhood of Fremont East. So began the odyssey to bring about transformational change that his vision, and Zappos values, would drive to be a legacy extending far beyond the company itself.

How does one guy inject purpose, vision and values into a strategy for building community?

Following Zappos’ 2014 move into the awesomely renovated former City Hall building, Tony Hsieh described the strategy as being focused on scaling up efforts behind Downtown Project’s (DTP) own 3 C’s:

  • Collisions: Serendipity that happens when people being in the right place at the right time result in starting of a new relationship that blossoms into downstream impact
  • Co-learning: People in the community teaching each other — including mentoring and helping at a person to person level without necessarily a paid role
  • Connectedness: The number and depth of connected relationships in the neighborhood

With this strategy, Tony and DTP’s private investors invested $200 million in real estate, $50 million in small businesses, $50 million in education, and $50 million in tech startups. The impact today includes 407 ongoing or completed construction projects, 61 small business investments and an estimated 130,000 annual visitors for the Life is Beautiful Festival and DTP-related entities.

More than the numbers, it’s the impact on life in Fremont East that can best be experienced by actually visiting there and talking with residents, many of whom have had their lives change as a direct result of the transformational change DTP had on the community.

Inspiring example for others

I had only been an occasional visitor to Las Vegas, not paying attention to the community. But as a Silicon Valley entrepreneur who boomeranged back to my Upstate New York hometown, I was on my own community building journey helping others start and grow companies in the newer industries across the downtrodden Upstate NY region.

Ever on the prowl for following innovators with similar goals, I started tracking news on DTP — particularly Tony’s thinking behind how engineering conditions could get more of the right people bumping into each other resulting in “creative collisions” that would ultimately lead to meaningful relationships entrepreneurs needed to find resources like mentors, investors, team members and customers.

That experience mapped directly to my own startup history beginning in the late 80’s as a rookie entrepreneur with zero relationships in the tech community. After some difficult initial struggles, it was the pivot towards targeting emerging tech that got me plugged into the openness and pay it forward nature of Silicon Valley. Those Silicon Valley creative collisions then led to my growing TriNet to what has evolved to become a NYSE listed company with $4 billion in annual revenues.

Along the course of that journey I relocated my family from Silicon Valley to my hometown in Upstate New York. By 2013, my non profit Upstate Venture Connect was in our third year of building a connected network across the state. We adopted a mantra of scaling up the volume and quality of creative collisions as a core strategy filter for choosing where we would put our energy and resources.

So I was elated to come across an Entrepreneurs’ Organization conference in Las Vegas with Tony keynoting on building community and an optional tour of the Downtown Project. Both were highly impactful for me, culminating with a debriefing in the DTP war room located in Tony’s apartment when he strolled in to chat with us fellow entrepreneurs and shared his personal insights “off stage” that gave us a true measure of the man he was.

In the years since, UVC’s community has grown to more than 16,000 people across our Upstate region, slowly evolving towards the connected community we envision. I recently published More Good Jobs, a book that shares that experience and outlines strategies for those who are trying to retain their city’s top talent. Yet in writing the book, I somehow missed mentioning Tony Hsieh. I’d been using the term creative collision so frequently over the last eight years that I even forgot to give attribution to Tony for both the concept and execution focus to make it work.

There was no bravado about his own role in creating DTP. Tony’s view was that it was all a community effort that he just helped bring together a few of the right people who were now making things happen.

Tony Hsieh’s story of the Downtown Project is rich and deserves to be told. Tony shouldn’t be remembered as just a renowned entrepreneur, but also as a community builder whose leadership continues to shape downtown Las Vegas and individual lives there.

Across America, there are lots of talent exporting cities with leaders looking for options on how they might do better at retaining their city’s top talent instead of watching the next generation move away in search of opportunities in the newer industries.

In hearing Tony’s story, who knows how many more people like me will be inspired to pick up where he left off. Orchestrating high impact creative collisions inside communities is one path Tony pioneered that can help us make a difference in impacting quality of life at scale.

Recognizing Startup Community Builders

With a twist on the traditional “Entrepreneur of the Year” awards celebration, Upstate Venture Connect has partnered with Upstate Venture Association of NY to do our first ever celebration to recognize people who are making a difference in building our burgeoning startup ecosystem across the Upstate region.

Entrepreneur leaders make things happen by powering the launch and growth of activities and initiatives ranging from Startup Weekends, angel investor funds, accelerator programs, tech meetups and hackathons to name just a few from the diverse range we already see here in Upstate NY.

Who comes to mind in your community that is out front and leading with their actions to help startup entrepreneurs launch and grow companies?

You can nominate them here for one or more categories in our Venture Ecosystem Awards.

All too often, startup community leaders are people motivated by no more than wanting to leverage their time and talent to make things happen. Our goals include putting the spotlight on those making a difference as well as sharing examples that will motivate others to step up and lead.

Don’t delay as nominations close Monday August 31. The nomination format is easy – if you know someone making a difference they will be in good company.

Sign up yourself to attend our October 9th celebration luncheon at Turningstone Resort in Vernon. We anticipate a turnout of 2-300 people who are leaders and supporters from throughout the Upstate startup ecosystem.

Join us in the fun and show support for those that are building Upstate’s startup economy.

See you there!

Confidence and humility are not mutually exclusive

As I meet entrepreneurs seeking to launch their first startup, I’ve begun noticing behavioral traits I wasn’t paying much attention to before.

Signals I’m picking up more frequently are from entrepreneurs coming across as super confident (even aggressive), perhaps in an effort to show they are hard driving and ambitious.

While confidence in one’s beliefs is indeed a critical asset for a startup entrepreneur, my BS detector begins kicking in when I see a total absence of humility. The tells are things like:

– working their accomplishments into the conversation
– no hint of what they don’t yet know or are seeking to learn
– expressing no curiosity about whom they’re interacting with
– interactions appear motivated only by potential self interest – no evidence of “pay it forward”
– how they interact with others who serve or bump into them seems different than their style of interacting with those in a professional context

Because I’m an investor who looks hard at leadership qualities of the CEOs I want to work with, my mind gravitates towards thinking: “If this is what I’m noticing now, I wonder how it translates to future interactions this entrepreneur has with others they seek to recruit and lead?”

Humility as a leadership trait

If you’re looking for thoughtful insights backing up the quality of humility in leaders, check out Jim Collins’ Good To Great and his work profiling Level V leaders. His research supports the thesis that CEOs embodying the unusual combination of fierce resolve and personal humility ended up being a critical leadership trait for top performing companies in the study.

My own view was shaped most by my Dad and my wife Krista, but also the good fortune of having close contact with a bunch of exceptionally strong leaders who personify humility in how they lead and interact with whomever they meet.

Jack Stack, Founder/CEO of SRC and visionary behind the Great Game of Business would certainly top my list in exemplifying resolute commitment and personal humility. SRC is not only a phenomenally successful company that has transformed thousands of lives, but beyond Jack’s Southern gentleman’s humble style, his open sourcing of the GGOB and open book management practices empower a generation of entrepreneurs like me to embrace principles around getting everyone in a company to think and act like owners – the ultimate management humility as it means running an organization with the power bubbling from the bottom up.

Back in 1995, Anthony Martin, now retired Chairman/CEO of global staffing giant Select (and subsequently Vedior) picked TriNet to invest as one of the 40+ companies in his portfolio. Much to my benefit, he traveled “across the pond” for 10+ years to sit on TriNet’s Board of Directors. Soft spoken with never a wasted word, his gracious, gentle, almost patrician manner helped set the tone for our board meetings with wisdom that came through penetrating observations and questions that were so much more effective than the contrasting style of boards featuring competition to demonstrate who is the smartest guy in the room.

In the emerging tech world, anyone that knows or interacts with uber VC Brad Feld (@bfeld) will attest he gives so much of himself to so many causes (building entrepreneurial ecosystems, women in tech, computer science education and entrepreneurship globally to name just a few) and notwithstanding an incredibly packed and productive schedule and contact list, still shows an uncommon curiosity and willingness to pay it forward with each new person he bumps into.

Humble, super successful people stand out

So I take notice when I encounter a super successful person who isn’t showing the expected trait of being the center of attention in a dialogue among a small group.

My respect grows as they instead show curiosity in others and demonstrate care and concern for people they don’t know, as well as how they contribute talent towards things not driven by self interest.

Encounters like these also reinforce my not losing sight of humility in what I say and do.

Paying it forward is going to be a theme I hope to keep shining more light on. Not only to help keep me centered, but also my belief that raising awareness of success beyond financial measures is the real story behind entrepreneurs with the most impact.

Ecosystem investment helps propel new startup creation

Yesterday morning I had several unsolicited requests for funding from Mohawk Valley entrepreneurs. It seemed odd, since a bunch came in at the same time from the local area.

Then someone pointed out an article in the Utica OD profiling my donor advisory fund at the Herkimer and Oneida County Community Foundation.

While the article wasn’t inaccurate, I can see now that when people think of entrepreneurs helping startups and the word funding is included, than conclusions gravitate towards this being about investment dollars going directly into startups.

It’s true that I’m one of Upstate’s most active startup investors. I’ve touched more than 70 companies through both direct investments and LP relationships in seed and private equity funds. My portfolio and investing interests are profiled on my UpVentures.com site.

But the High Growth Entrepreneur fund at HOC Community Foundation is different. That fund is not about my investing directly in companies, but instead towards supporting infrastructure that helps build our local and regional startup ecosystem.

Startup Ecosystem Infrastructure

For me, startup ecosystem infrastructure includes things like programs, activities, events, online assets and other resources that help bring the right parties together.

Building such infrastructure is my full time volunteer role as I created and help run Upstate Venture Connect, a 501c3 non profit now in our fifth year of operations. (Visit UVC.org to see some of our program initiatives and resources that bring entrepreneurs into contact with others who can help.)

Among the initiatives brewing locally is the thINCubator – a college student startup accelerator program housed at Baggs Square, the Commercialization Academy at AFRL’s Rome Labs and accelerated curation of a startup ecosystem map and events calendar that will bring more visibility to our local startup resources and activities.

Also being worked on is launch of a Mohawk Valley seed capital fund comprised of high net worth individuals qualifying as accredited investors who work together to invest as a group, as well as help mentor and support the startups they come into contact with.

With the Community Foundation donor advisory fund I’m interested in supporting leaders with similar ecosystem building aims – likely to include some new ideas on what could bring the right people together such as experienced entrepreneurs, technical talent, investors, service providers even academics and community leaders. The common denominator is a personal passion for being committed to help startups.

Who knows? Maybe a Startup Weekend, Tech Meetup group, Hackathon, 1 Million Cups chapter or something else not even on our current menu will percolate up.

I’m looking forward to seeing proposals and helping support leaders who are ready to put themselves out there to get something going that helps entrepreneurs and startups.

Whether you’re a startup seeking investment or you see an opportunity to help contribute to building the ecosystem, you can message me through the Babinec.com web site. And consider commenting right on this post below and/or sharing the link with others you know who might have interest.

This is a fun journey with big time impact in helping our best and brightest talent – join us!

Startup Optimism Grows in Mohawk Valley

No one is likely to mistake my hometown area of Upstate’s beautiful Mohawk Valley with the dynamism of Silicon Valley. But those who know me are also aware of my deep commitment to help foster an Upstate wide startup ecosystem – so seeing some meaningful progress close to home is especially motivating for me.

Before I explain this new source of optimism, let me give some Upstate NY geography context. I reside in the Utica/Rome SMSA of about 300,000 persons. An area once heavily industrialized, but now struggling with the gut wrenching changes arising from the region’s inability to adapt from loss of high paying manufacturing jobs and closure of what was once a huge Air Force base in Rome.

Air Force Research Laboratory

Last year I attended a briefing at the Air Force Research Laboratory (AFRL) to hear about plans to commercialize defense research by engaging Upstate college students to help drive the initial commercialization phase.

My expectations coming in were pretty low. After all, the whole model seemed to be grounded as a government led play – something that runs counter to my principles of how to build a startup community. In fact, were not for the urging of my Upstate Venture Connect Board Member John Zogby, I would not have gone to that briefing at all.

My first surprise was that the head of AFRL, Georg Duchak – a former Air Force general, presented a compelling vision that touched on key elements from Brad Feld’s book Startup Communities. A book he not only read, but incorporated themes from as he envisioned how this initiative would unfold.

Ok. That was impressive and it got my attention. But I could still foresee the many roadblocks yet to overcome, not the least of which was to find an entrepreneur capable of leading this charge amidst an alphabet soup of government bureaucracy and to stitch together an outreach to get some of the best and brightest students from around our Upstate region to come and participate.

It’s about the entrepreneur, stupid

The brilliance of George’s choice in successfully recruiting and relocating Mike McCoy as the entrepreneur to lead the effort was so clearly shown this past weekend when the Commercialization Academy’s first graduating cohort of 9 student teams pitched to an auditorium of excited investors, business professionals and startup community supporters.

Since I helped start and run the StartFast Venture Accelerator, I’m a guy who can appreciate all that was involved to recruit and season talented startup teams for this inaugural Commercialization Academy program.

This was a very professional output that I would rank up there with what we typically see in mature accelerator programs of the big startup hubs like NYC and Boston. All the more amazing when you consider it was comprised of student teams that came from 13 different colleges.

While not all of the student teams finished with a viable product opportunity, there was little doubt that this program just created a whole new crop of highly charged entrepreneurs and startup candidates who will soon populate Upstate’s startup scene.

Live interactions spur other outcomes

There was also a true “wow” effect from the perspective of the nearly 200 Mohawk Valley residents fortunate enough to be in the audience to take part in the Commercialization Academy demo day.

You won’t hear any of those attendees grousing about lack of potential for growth opportunity here Upstate. They saw our future in front of them and suddenly realized we have the assets to start creating real companies that someday generate a lot more jobs than the big box efforts we still hear about from our political leaders.

Another near term outcome from this event is that it has likely been the tipping point for us now to start building a Mohawk Valley seed capital fund so that our successful local entrepreneurs and professionals can join forces by pooling funds that will help get some of these startups into motion.

As UVC has done this already in Albany, Syracuse, Rochester and Buffalo, we have the pattern recognition to know what it will take. It’s exciting to see the Mohawk Valley now arrive to this level of startup ecosystem development.

Community effort begins with individuals willing to step up

Kudos to George Duchak and Mike McCoy for their prescient vision and more importantly, disciplined execution staying true to key Startup Communities principles like being led by entrepreneurs and crossing boundaries to engage others way outside the scope of their own organization.

I am totally jazzed about the fabulous success of this first true hometown effort and am looking forward to doing all I can to help propel the program forward as they become a leader nationwide in defense research commercialization.

For more info on these and other efforts in the Mohawk Valley and Upstate register on the Upstate Venture Connect website at www.UVC.org and/or follow my blog or twitter feed.

Tribute to Bill Burrows – Local Entrepreneur Philanthropist

  My hometown of Little Falls NY mourns the recent passing of Bill Burrows, Chairman of Burrows Paper Corporation and in a less visible role, a significant philanthropist leaving an enduring mark on our community. In one sense, his business world was a bit different than mine. He was fourth generation in his family to […] Read More »

Paying it Forward with High Impact Mentoring

Our Syracuse based StartFast venture accelerator just completed our third cohort – graduating six teams at our August 14 Demo Day that featured 250 enthusiastic attendees.

For the third year in a row, ours was the largest gathering of accredited startup investors ever assembled in Upstate NY.

While startup teams and investors are in the Demo Day spotlight, watching the event unfold made me think about the real back story involving hard work and dedicated commitment of both the StartFast staff and our network of mentors who gave so much to propel these teams forward over the 3 months of the StartFast program.

StartFast mentors are volunteers. While some may advance to become an investor in a participating startup, the majority are taking time away from their own businesses and activities to help our fledgling teams without getting any compensation beyond their own satisfaction of making a difference.

This is pay it forward in the spirit of Silicon Valley and something we’re working hard to spread throughout the Upstate region.

Mentoring Comes In Different Flavors

Mentors have varying degrees of involvement, typically driven by finding the right match between the startup’s needs and mentor’s interests.

Some mentors will drop in for a site visit, interview each team and offer insights, possibly capping a visit by making a presentation to the overall cohort.

Others are tapped by Nasir Ali and Chuck Stormon (StartFast Managing Directors) to help fill an identified need for a particular team that is in line the mentor’s background and/or relationship network.

Whether it’s strategy, tactical options to fix a problem or opening up doors to a critical resource – these spot engagement can be very helpful to the startup and not require a big time commitment on the part of the mentor.

An even bigger contribution comes when a mentor evolves into an ongoing advisor role, staying involved in guiding the startup through multiple stages of the program and potentially beyond.

High Impact Mentor

The highest level contribution comes when a mentor believes so passionately in what a startup is doing that they dig in and find ways to help craft and execute some aspect of what the team is trying to achieve that it puts the startup on a different trajectory than the one they were planning at the time they entered StartFast.

Our case study for this involves StartFast alum SwipeToSpin (STS) – an intuitive interface making 3D imaging of objects easy for users to navigate as they examine a product from any angle of their choice while inside a browser.

Entering StartFast, the STS value proposition was aimed for high ticket luxury goods and content oriented web properties where 3D images would have some user appeal.

As with most startups, STS experimented with several product market categories, seeking to find the right segment where the STS solution solved a user problem that customers were ready to pay for.

Soon after some testing started in the automotive sector, STS began interacting much more with StartFast mentor John Max Miller, a serial entrepreneur with several successful exits in the auto sector – a guy knowledgeable about issues from the customer perspective, and also someone with a deep set of industry relationships.

John helped STS understand the need in the market and was active in shaping the STS product for this new target sector. He even personally called upon his dealer relationships and helped close initial sales.

In just a few months, STS’s growth in the auto dealer sector gained faster traction than any of the other verticals the company was marketing to. With further market analysis and the proven speed at which new sales were now closing, it was blindingly obvious that this segment was worth pivoting significant company strategy towards.

That growth spurt in turn raised investor confidence and following Demo Day, STS closed an equity round led by StartFast that included institutional investors.

The company continues its trajectory and is on plan for key milestones. John remains involved as he introduces the company to major partners and other vendors in the space, as well as supporting management in both strategy and execution.

STS is shaping up to be a company with lots of upside potential, creating opportunity for investors, the team and our Upstate startup ecosystem.

All of this made possible because one mentor tuned in, and then didn’t give up in his quest to help. In character of the persistent entrepreneur that he is, John steadily engaged with the STS team helping them navigate through a vertical previously unfamiliar to the team. Not just with strategic input, but the tactical execution of the tasks necessary to get there. All of this required his time and mindshare commitment without expectation of a financial return.

We salute John, STS and all the mentors who helped StartFast become an accelerator program built in the spirit of TechStars by engaging experienced entrepreneurs who give of themselves to help their earlier stage brethren. Interactions like these are the lifeblood of building a true startup ecosystem and it is gratifying to seem them take root and set the example for many others to follow.