Tony Hsieh Dies: Zappos Founder and Las Vegas Icon

Tony Hsieh, the previous leader of Zappos, who propelled the footwear company to prominence through its acquisition by Amazon and subsequently channeled the resulting profits into a substantial initiative aimed at revitalizing a neglected section of Las Vegas, Nevada, through investments in technology and broader business ventures, has passed away at the age of 46.

According to a spokesperson for Hsieh, his death was the result of injuries sustained in a house fire while he was with his brother in Connecticut. The extent of any other potential injuries remains unclear.

The precise cause of Mr. Hsieh’s death is currently under investigation, and further updates will be provided as more information becomes available. The complete statement from DTP Companies, the organization overseeing the Downtown Project (Mr. Hsieh’s extensive effort to rejuvenate the older, deteriorated area of Las Vegas), is included below.

This news has generated considerable shock, particularly during the Thanksgiving holiday weekend, and within a community – heavily reliant on tourism – that has been severely impacted by the ongoing global Covid-19 pandemic.

Hsieh was widely regarded as a remarkably innovative, unconventional, and genuinely kind-hearted individual, often described as a true visionary.

This assessment was well-deserved. Raised in the Bay Area, he sold his first company, a marketing technology firm known as LinkExchange, to Microsoft in 1998 when he was only 24 years old.

Leveraging the proceeds from this sale, he established a venture capital firm called Venture Frogs. One of his initial investments through Venture Frogs was in ShoeSite.com, founded in 1999 by Nick Swinmurn, who foresaw a growing trend of consumers purchasing footwear online.

Hsieh demonstrated astute investment judgment and later assumed a more active role in the startup, which ultimately became Zappos. As Zappos’ Chief Executive Officer, Hsieh relocated the company from the Bay Area to the outskirts of Las Vegas in 2004 to expand its customer service capabilities, operating under a distinctive management philosophy emphasizing employee empowerment and motivation. His direction was instrumental in the company’s significant expansion; by 2009, he had sold Zappos to Amazon for approximately $1.2 billion – a considerable sum for an e-commerce startup at that time.

He continued to lead the company and then dedicated the funds from this transaction to his next major undertaking: urban renewal.

Las Vegas is a city that does not dwell on the past. Located in the desert, the city has consistently prioritized growth, continually expanding and creating new opportunities. For many years, this meant that older areas of Las Vegas, particularly in the Downtown region, were left to decay, eventually becoming centers for crime and poverty. Like many urban areas, this created a negative cycle: investment shifted towards newer developments, further neglecting and endangering the older sections.

Hsieh recognized the potential of Downtown, appreciating its 20th-century modernist architecture beneath its visible signs of deterioration, and began acquiring substantial portions of the area, including apartment buildings, houses, small businesses, aging casinos and hotels, and vacant land.

His objective extended beyond simply becoming a real estate investor; he aimed to revitalize Las Vegas by incorporating the principles he understood best: technology.

He proceeded to invest in numerous startups, contingent on their relocation to Las Vegas and establishment of their businesses in the Downtown area, thereby fostering entrepreneurship and job creation.

The initiative included many unconventional elements, prioritizing enjoyment alongside serious business objectives. Inspired by the Burning Man festival, for example, Hsieh funded the transportation and permanent installation of several structures from the desert event in the Downtown area.

I recall a couple of memorable evenings spent with him in Las Vegas that vividly illustrated his presence in the city.

During one night, we moved between casinos, bars, and restaurants, eventually finding ourselves in a lively piano karaoke bar where his childhood friend and I performed duets of Duran Duran songs while he enjoyed Fernet Brancas. He attracted a considerable amount of attention wherever he went, with many people greeting him enthusiastically. I remember reflecting on whether this resembled the experience of being a mafia boss, with his friend acting as a trusted advisor and myself as a guest.

Naturally, the Downtown Project, as it became known, was an ambitious undertaking, and like many such endeavors, it experienced both successes and challenges.

This is not unexpected; simply desiring something to exist does not guarantee its realization, and the success rate for startups in the technology sector is inherently low.

The unconventional approach sometimes lacked clarity and obscured the underlying progress. For instance, Hsieh unexpectedly stepped down as CEO of Zappos earlier this year without providing any explanation, after serving in the role for 21 years.

Nevertheless, through both Zappos and his work in the city, Hsieh’s contributions and innovative ideas stand as a significant demonstration of the impact that the technology industry, and the capital it generates, can have with creativity, dedication, and perseverance.

We extend our deepest sympathies to his family, friends, and those within the technology and business communities he helped to shape.

Statement from DTP below: