Delivering happy endings: Is the latest disruptive startup working out of Tony Hsieh’s Downtown Project… an escort service?

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Update: InternD founder now says escort service is “not a real site.” See below.

I’ve written before about my disappointment at Tony Hsieh’s Downtown Project in Las Vegas.

In particular I’ve criticised Hsieh [a Pando investor] for his TED Talk-friendly soundbites about “spontaneous collisions,” reinventing education, and “delivering happiness,” which bear precious little relation to the real experience of living and working in Downtown Vegas.

Well, it seems I spoke too soon.

Yesterday, a tipster sent me a link to one of the latest companies to make the Downtown Project its home. One look at its website shows that it checks every box for the kind of company Hsieh says he wants to attract to his project:

Encouraging spontaneous collisions? Check!

Reinventing education? Check!

Delivering happiness! Oh yes! Oh yes! Check!

The company is called InternD and it describes itself as follows…

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Malcolm Gladwell On What Really Makes People Disruptive

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When people talk about what it takes to transform a field or a world, they leave out one crucial component, best-selling author Malcolm Gladwell told the audience at the World Business Forum. “What’s really behind it?” he said. “What are the preconditions that make that kind of change possible?”

Over on Inc., Jill Krasny explored what makes that kind of change possible. Too often, he said, the list of explanations is short. “We talk about the importance of technology and knowledge and resources, having the kind of money to make it happen,” he said, “but we don’t talk about frame of mind–attitude. The kinds of attitudes that lie behind provocateurs.”

Using the powerful story of shipping magnate Malcolm McLean, Gladwell revealed how having the right attitude is critical to effecting great change. As Gladwell explained, McLean was the sort of guy who didn’t show many emotions. He grew up in poverty during the Great Depression and dropped out of school at age 16. But when he went to work at a gas station and learned he could earn $ 5 a week just for shipping in oil from far away, he volunteered to help his boss, and this changed the course of history.

McLean’s fuel-trucking gig led him to become something of a leader in the trucking space. He was the first guy to suggest using diesel fuel and the first guy to find the most efficient driving routes. He was also the first guy to spend 20 years thinking of ways to make shipping more efficient.

Here was the problem: Shipping took forever, and so did loading and unloading the cargo. In fact, it cost so much to ship that many multinational companies that could have gotten rich from expansion didn’t even bother with it, said Gladwell. On top of that, docks were often controlled by organized crime or run through unions, and there were problems of theft to contend with.

By the mid-1950s, when McLean was already a household name among American truckers, he decided to switch industries. He sold off his trucking business, and after a few false starts came up with the idea of making the back of a trailer retractable so the cargo could easily load on and off a ship. In April 1956, the plan worked, and the free and inexpensive movement of freight from one country to the next was born.

So what made McLean such a rousing success? He certainly wasn’t educated, and he knew next to nothing about shipping. McLean had a background in trucking, which was considered a whole separate field in those days. But McLean did have three things going for him, Gladwell said, something Steve Jobs and other visionaries had in spades.

The Beauty of Being Disagreeable

Everyone thought McLean was crazy. He sold off a successful business, and the idea of using containers in shipping wasn’t new–people had been experimenting with them for 30 years and failed miserably. Containers were so heavy they drove up costs, plus they were cumbersome to load. Longshoremen hated the very idea of them. It didn’t help matters that McLean had “mortgaged himself to the hilt,” Gladwell said, or that shipping was a capital-intensive business, which trucking was not.

But McLean, like most underdogs, could not have cared less. He was “completely indifferent to what people said about him,” Gladwell said, which is “the first and foundational fact to understand these disrupters. They are what psychologists call disagreeable–they do not require the approval of their peers in order to do what they think is correct.”

Reframing the Problem

Everyone also thought McLean wasn’t seeing the whole picture. People who worked in trucking, railways, and docks had all kinds of ideas on how to solve the problem. Trouble was, they were the ones who could not see the whole picture. They thought of solutions in terms of how it would make their jobs easier, only reframing individual components. Conversely, McLean wanted to reframe it all. As Gladwell explained, people said he couldn’t design containers that were too heavy, so he redesigned the connection between the trucks and the box. People said he needed a crane to lift the containers onto the dock, so he thought of a railway line to help the cranes move up and down the ship.

“Successful disrupters are people who are capable of an active imagination,” said Gladwell. “They begin reimagining their world by reframing the problem in a way no one had framed it before.”

Removing Constraints

When longshoremen saw what was happening, they went on strike. McLean was fine with that. He figured he could use the time to retrofit his ships and bring in larger containers. However, if he wanted to use heavier containers, he was going to need a stronger crane. So he went to a nearby crane company and asked for one that could carry about 35,000 pounds–also, he would need it in 90 days. The company flat-out told him no.

Undeterred, McLean got to thinking. What if a lumber company’s crane maker could help? After all, they used cranes and carried large loads all the time. It seemed like a good idea, so McLean flew to Washington State to find out. “Can you build me a crane?” he asked the crane maker. “Sure,” they said. “And can I have it in 90 days?” The crane maker told him he wouldn’t even have to wait–they would send one right over that afternoon. “You could see by reframing the problem, that frees him up,” said Gladwell. But why insist on getting the crane in 90 days?

Well, that reason is simple. Like a certain entrepreneur who had just seen the graphical user interface at Xerox Parc and wanted to build one of his own, McLean wanted to get it done, now. It had nothing to do with his vision or insight. Not even his brains or resources, said Gladwell.

Like Steve Jobs, McLean believed in his vision. What set him apart was not what was in his head or his pocket–“it was in his heart,” said Gladwell.

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