The anticipated failure of startup urbanism

The city is not a company; community is not a brand; citizenship cannot be mistaken for consumption. .. The city is not a startup. It is not a market than needs to be disrupted in order to stimulate competition and growth. The city is not a platform that can be hacked. Despite the optimistic talk, it is an old language that is being spoken here: Startup Urbanism is gentrification by another name.

Excerpted from Leo Hollis:

“Can one re-imagine the dynamics of the city in the same way one thinks about a tech startup? The rhetoric of Startup Urbanism offer a new vocabulary that foregrounds disruption, open source, and connectedness as values that can be transposed from the Internet straight onto the organization of our cities streets. It supposes that, if you can get the code right, the script will run without glitches. However, such technological solutionism is simplistic, naïve at best, and, more likely, dangerously short-sighted.

The city is not a startup. It is not a market than needs to be disrupted in order to stimulate competition and growth. The city is not a platform that can be hacked. Despite the optimistic talk, it is an old language that is being spoken here: Startup Urbanism is gentrification by another name.

Las Vegas is a fascinating test case for this new form of urban thinking. In a PowerPoint presentation given at the Techonomy conference in 2013, this philosophy is summed up in three essential alliterations: collisions, community, and co-learning — which, in turn, inevitably lead to “happiness, luckiness, innovation, and productivity.” In this vision, Downtown is more than a place where people meet, but an accelerator for “the most community-focused large city in the world.” And, in this figuration, the business of urbanism is transformed into “utopia delivery system” that can be packaged and sold, guaranteeing repeatable success.

In this way, Hsieh is not just investing in property, but hacking together an urban algorithm that can be used anywhere in the world. Nevertheless, the fact that Hsieh owns so much of the real estate in Downtown Las Vegas should raise questions. While the mainstream press generally sees Hsieh’s investment as bold, or even faintly humanitarian, he could just as easily be using the company he leads to inflate the value of the land he personally owns around Zappos’ campus. It looks to me like a scheme, albeit an extremely clever one, for Hsieh to make a huge personal killing by using Zappos to influence the local real estate market.

Furthermore, downtown Las Vegas is being developed like a startup. Hsieh’s project began in 2009 when Zappos moved its customer service department from San Francisco to Henderson, a suburb of Las Vegas. Here, Hsieh continued perfecting Zappos’ corporate culture in the belief that if you got the company culture right, then great customer service would follow. In 2013, in a move that couldn’t symbolize Startup Urbanism more, Hsieh moved Zappos’ headquarters into the old Las Vegas City Hall. Now, Zappos’ company culture is spreading from the call center into the streets of Downtown.

Renovations have turned the old urban fabric into coworking hubs and sharing spaces. The whole place is being set up with WiFi. There is an outdoor mall constructed from shipping containers. There are plans for a cultural center, an exhibition and concert space, as well as a new, private charter schools and educational facilities with the most cutting-edge teaching resources.

The parks are starting to bloom and restaurants are popping up. And the message is starting to get out that Downtown is a place for entrepreneurs to start and grow their companies. Companies such as Zirtual and Tech Cocktail have launched from Downtown while the Chinese business OrderwithMe, that originally wanted to locate in Silicon Valley, changed their minds after two days with Hsieh. Today, The Downtown Project’s VegasTechFund has invested in 42 startups that have come to Vegas. Eventually, they want to attract 100,000 people to Downtown.

In this optimistic commitment to economic growth, Downtown faces the same issues that San Francisco and many of the other cities around the world that are racing to become tech and creative hubs. One side of the story highlights how cities have benefitted from success, creativity, and urban regeneration, but this obscures another narrative. In the Bay Area, the stories of rapidly rising rents, evictions, and protests against Google buses have become international news. Beyond the headlines, San Francisco, which Mayor Lee promotes as the innovation capital of the world, is also, not coincidentally, the inequality capital of the U.S. It now has the fastest-growing wealth gap in the U.S. and the highest housing cost.

These figures put into perspective the promises of the creative classes heralded by Richard Florida in his The Rise of the Creative Class that has informed so much urban policy in the decade since it was published. Florida, himself, was forced to examine the stark evidence of the impact of the last decade of gentrification under the guise of regeneration and hip urbanism. And he has had to admit that the creative class is actually part of the problem:

On close inspection, talent clustering provides little in the way of trickle-down benefits. Its benefits flow disproportionately to more highly skilled knowledge, professional and creative workers whose higher wages and salaries are more than sufficient to cover more expensive housing in these locations.

As a result, the entry of highly mobile creative workers in neighborhoods almost always comes at the expense of the existing communities. By locating his campus inside the city rather than at the fringes, Hsieh was hoping to get a double whammy of innovation and creativity that comes from combining Silicon Valley work style with open urbanism. However, in Downtown Las Vegas, it appears that, in order to build the new center, the old community had to be “disappeared.”

The Los Angeles Times reported that local opposition to changes has mostly been ignored. For the poorer residents who lived there, this has resulted in rising real estate prices and the closure of local stores. As shopkeeper Hassan Massoumi exclaimed after he lost his store when the lease was not renewed, “My wife and I came here when no one else would. For 10 years, we worked seven days a week — not one day of vacation. Then one day, Tony Hsieh’s people tell us to get out of there.”

And for those that remain: Does everyone have to buy their daily food from the Downtown 3rd Farmers’ Market? Much has been made of the private schools and nurseries such as the 9th that use revolutionary educational techniques, but these cost up to $12,000 a year. It is telling that little is said about the parents who can’t afford these rates. Despite the marketing, this is the opposite of a diverse neighborhood in the making. Like so many examples of gentrification, these are the subtle mechanisms that sort out the unwanted from the desirable.

Another example of this dark side of Startup Urbanism can be found in London’s Tech City, which shows that governments make the same mistakes as private corporations. Launched in November 2010 by Prime Minister David Cameron in the Shoreditch district, Tech City was heralded as the European hub for tech innovation. The neighborhood was already popular among artists, designers, and startups — attracted by low rent and proximity to the City — but it was hoped that this initiative would make it a world-class business district.

However, in the years since the launch, Tech City has produced the opposite of what it hoped. “Silicon Roundabout” has now become popular among big corporations: Google, Cisco, McKinsey, and Intel have all invested here. As a result, it has become increasingly difficult for a hungry, new startup to get desk space (nevermind artists). Tech City is driving out the very lifeblood that makes it an interesting and creative place. And, as a recent piece in Wired UK declared, it is also driving inequality.

These stories of “regeneration” — Las Vegas, San Francisco, and London — raise a number of questions about what, and who, the city is for. Like Tech City, the Downtown Project promises to be world class: the “Coworking Capital of the World.” It is keen to present itself as more than a one-industry town. The investment fund is meant to attract fashion, tech, education, music studios, food, and drink. These different groups will hopefully come together and feed off the atmosphere of creativity.

This is where the idea of “collisionability” is so potent. Hsieh’s algorithm is, of course, poppycock. The relationship between the development of good ideas and urban density is not a simple equation. But something else is being sold to us. While Silicon Valley urbanism turns the office into the city (Google’s Googleplex), in Las Vegas, Hsieh’s Start-up Urbanism turns the whole city into an office. Here, everyone is allowed to bump into each other (now that the old community has gone), but only the right kind of collisions are encouraged — the ones that promise profit. According to the Downtown story, every serendipitous “collision” has an underlying business purpose. A new company, a great app, a revolutionary marketing plan can emerge from every jump to the sidewalk.

It is clear that this is a community defined, and dominated, by work. When the office has no walls, work creeps into every corner of the city, and the mantra of “collisionability” seeks to exploit the business potential of every urban nook. There is no place where one is allowed to be unproductive. “Coworking” is, therefore, one of those words that needs to be approached with caution. Dismantling the walls of the traditional office space can be liberating and highly creative, but it can also deliver insecurity, division, and constant work. As community and business collapse into each other, does this leave any space in the city outside the marketplace? Is there anything except work, customer service, and the rules of 24/7 Capitalism?

The city is not a company; community is not a brand; citizenship cannot be mistaken for consumption. While Zappos claims that it can deliver happiness when they deliver shoes to your door, the same philosophy cannot — and should not — necessarily be translated to the city. This kind of thinking reduces the city to an algorithm, or customer service mantra, that is expected to produce the same predictable output repeatedly. It is just this kind of urbanism that we should be critical of when we think about the future of cities. A sharing city is one that is open to all, not the few. This can be achieved by working together, not coworking. The city is more than just office space, but a place to discover and nurture the values that make it more than the sum of its parts.”

1 Comment The anticipated failure of startup urbanism

  1. AvatarMartin Stewart-Weeks

    Great piece, very much in the mould of Evgeny Morozov’s anit-solutionism writing.

    So the question is whether it is possible to blend the best that co-working, start-up urbanism offers with a policy framework that also constrains into the picture a proper regard for access, equality and real inclusion?

    I am loathe to write off the opportunities for regeneration, growth and inclusion which is genuinely on offer from these initiatives; but the risks of naive solutionism in this space clearly is high.

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