The author of Delivering Happiness, Tony Hsieh is CEO of Zappos and previously co-founded LinkExchange. He initiated the Downtown Project to revitalize downtown Las Vegas and his company.

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Can a successful company and a run-down downtown vitalize each other?

Tony Hsieh, CEO of the phenomenally successful Zappos, is betting exactly that in Las Vegas. He moved his company headquarters into the former city hall and is integrating the Zappos campus into the surrounding neighborhood, meanwhile investing millions to provide a dense urban experience for the locals as well as his employees. His “Downtown Project” declares: “We’ve allocated $350 million to aid in the revitalization of Downtown Las Vegas. We’re investing $200 million in real estate, $50 million in small businesses, $50 million in education, and $50 million in tech startups.”

The fantasy is well along into impressive reality, according to a January 02014 article in Wired. What is being learned may change how cities and companies think of themselves---and of each other.

Hsieh’s theory of urban vitality comes from Edward Glaeser’s book The Triumph of the City: How Our Greatest Invention Makes Us Richer, Smarter, Greener, Healthier, and Happier. His theory of company vitality he has spelled out in his own book, Delivering Happiness: A Path to Profits, Passion, and Purpose.

The downtown company

The business advice that Tony Hsieh most took to heart came from an ad executive: “A great brand is a story that never stops unfolding.” With his own company, Zappos, he determined that “brand equals culture,” and made quality of culture the top corporate priority, followed by customer service, and then selling shoes and clothing. The formula worked so well that Zappos outgrew its collection of buildings in suburban Las Vegas. Time to build a campus.

Other suburban corporate campuses—Google, Nike, Apple—struck him as isolated and insular. He wondered if a company could be like New York University, embedded in downtown Manhattan, with all of its buildings and no end of urban amenities within a five-minute walk. Edward Glaeser’s book The Triumph of the City described how cities unfold forever, driven by density and intense variety, while companies all eventually go stagnant and die. Maybe immersion in a downtown could help keep his company unfolding, and maybe bringing company start-up culture to a decaying urban core could restart its vitality.

Zappos bet the company on the idea. They took over the abandoned city hall in the dead-end part of Las Vegas known as Fremont East and spent $200 million buying up nearby properties, $50 million on local small businesses, $50 million on tech start-ups, and $50 million on education, arts, and culture. Hsieh’s strategy is to increase: “Collisions” (serendipitous encounters); “Co-learning” (a community teaching itself); and “Connectedness” (density, diversity, and reasons to engage).

They built a Shipping Container Park with three stories of shops, amusements, and tech start-ups wrapped around a courtyard for food, play, and hanging out. They planted Burning Man mega-art on corners throughout the neighborhood “to keep you walking one more block.” Inspired by TED, the Summit Series, and especially SXSW (the South by Southwest festival in Austin), they built a theater for frequent talks and organized an annual “Life is Beautiful” music festival attracting 60,000.

Hsieh figures that “collisionability” can be quantified and designed for. He thinks that street-level interaction can be made so rich that it compensates for the lower density of low-rise buildings, with 100 residents/acre. Thus he blocked off the skyway from Zappos’s parking lot to its headquarters in the city hall. Use the street. Make street activities really attractive. Active residents, he calculates, will experience 1,000 collisionable hours a year (3.6 hours/day, 7 days/week, 40 weeks/year). Ditto for “purposeful visitors” (12 hours/day, 7 days/week, 12 weeks/year)—you are invited to be one.

If Zappos helps foster an urban “culture of openness, collaboration, creativity, and optimism,” Hsieh says, then the city can prosper, and the company with it, and both can keep unfolding their stories indefinitely.