“I think today, we’re still in a world where we have brands telling us what we neeed to know about a brand’s individual products,” she said at the Glimpse social discovery conference in San Francisco on Wednesday. “But that’s not always the truth about the product, nor is it what’s interesting to you about that product. So the future will be reversed, where it’s just about the information that’s relevent to you.”

Wanelo is a small but immensely popular social shopping site where users post, like, collect and re-post images of items that are all for sale — the entire value proposition of the site is that you can click through to purchase any of the items. While the site only had 8 million users in May, Varshavskaya said 70 percent of them are coming back to the site every month, and they’re spending an average of 50 minutes a day on Wanelo. And because all of the items posted to Wanelo are selected by its users to be liked and purchased by others, it creates an interesting discovery engine for goods.

As I’ve written before, it’s actually quite a challenge to define what social shopping is. Does it mean tweeting out your purchase after you buy something? Does it mean adding Facebook Connect on a brand’s site to see which of your friends like it too? Does it mean browsing items on Pinterest posted by your friends, or reading reviews from strangers on a site? Or texting photos of a dress to your friends when you’re in a brick and mortar store?

The definition changes depending who you talk to and what kind of shopping experience you’re talking about. (And can be hard for big brands like Zappos to harness, when often people just want fast shipping and a wealth of products.)

“No one really wants to follow other Zappos users,” said Will Young, director of Zappos Labs.

AngelList founder Naval Ravikant, who is an investor in Wanelo and also spoke at Glimpse, pointed out that social validation around products comes in two broad categories: the power of the crowd to surface the best products (think Amazon reviews or topics upvoted on Reddit), versus the power of your friends to influence your tastes and opinions (think Facebook or Twitter friends).

“If I’m buying a stereo or digital camera, I don’t really care what my friends thought. What the qualitified group thinks is good enough,” he said. “But if I’m buying a piece of clothing, sometihng with taste, maybe I do care. The term social almost changes in meaning depending on the situation.”

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In case you haven’t seen the documentary, which came out in 2011, Jiro is an octogenarian sushi master who has perfected the art of making sushi at his Michelin three-star restaurant in the Ginza subway in Tokyo. He’s spent decades perfecting simple tasks like selecting, cutting, and preparing the best fish. “Jiro embodies craftsmanship and detail,” said Gebbia, explaining:

One of the responsibilities of designers is to seek out and find the details. If we don’t who else will?

Gebbia, who graduated from the Rhode Island School of Design, says he took his entire product team to Jiro Dreams of Sushi. “At Airbnb we’re trying to build a culture that supports details, celebrates them, and gives our teams creative license to pursue them,” said Gebbia. I’m not interested in the debate about what comes first engineering or design, said Gebbia, “the important thing is designing the farm,” or the environment for these things to thrive.

For example, Gebbia cited a small detail that Airbnb built into its host messaging system. When a host is replying to a guest, the email can be repopulated with a message that the host sent to a former guest, but with the name changed for the current guest. The idea is that a host will commonly be emailing the same things to multiple guests, and the auto population can save them significant time. One host was so happy with the time-saver that they sent a gushing email to the team.

Airbnb might be a $2.5 billion-plus valued company now, but of course it wasn’t always so. Gebbia — who says his first entrepreneurial venture was selling drawings of Teenage Mutant Ninja Turtles to classmates in grade school — remembers the times of rejection quite clearly. Around 2008 we were “staring in the face of rejection,” after attempting to raise funding from venture capitalists in Silicon Valley. “We got 20 email intros to investors, 10 emailed us back, 5 took coffee meetings with us, and zero invested in us,” recalls Gebbia.

Some of the best advice Gebbia says he got in 2009 from Paul Graham, the head of Y Combinator, who accepted the Airbnb founders into his accelerator. Graham gave the company permission to solve problems that wouldn’t scale, said Gebbia, explaining that Graham told his team to “go out and meet your customers.”

The early team started staying in the Airbnb rooms in New York and realized the hosts needed much better photography to show off their housing assets. After spending a weekend renting a camera, photographing host accommodations and publishing them on the site, bookings started growing immediately. The team returned to the Bay Area and reported their findings back to Graham. Graham’s immediate response was: “what are you doing here? Get back to New York.”

Sushi master Jiro is just one newer influence on the design of Airbnb. Gebbia, who studied industrial design at RISD, says his early influences also include Charles and Ray Eames, the furniture and product designer team who are widely cited as helping democratize design. In terms of company culture, the early Airbnb team visited Zappos a few years ago to learn about how to create and maintain a fun company.

Gebbia spoke at our soldout RoadMap 2012 event, which focused on design in the age of connectivity. RoadMap 2013 will take place this coming November and tickets will go on sale shortly. To be the first to know when tickets will go on sale, sign up here.

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Sound ambitious? That’s because it is. Members of Hsieh’s Downtown Project are being asked to get rid of their personal cars and start using the Project 100 transportation mobility system app when it becomes available later this year or next. They’re starting an invite-only beta program in the coming months, and when the transportation system is fully deployed it’s supposed to hit all those 100 numbers.

Here’s how it works. A Project 100 member opens the mobile app and is offered a number of choices based on their location and the location of the nearest transportation option. A member could see:

• 1). An on-demand Tesla Model S that can be driven to you and pick you up. Like an Uber but with a subscription and a Model S.
• 2). A bike parked near you that you can unlock and pedal to an appointment that’s several blocks away.
• 3). A bus shuttle stop near you for longer trips.
• 4). A neighborhood (slow and low range) electric vehicle that you can unlock and drive and park at your desired location.

Details are scarce about how much this would cost to build or how much the monthly subscription would cost users. The customer pricing will be based on zones in Vegas and tiered plans.

The Downtown Project calls its plan “the ultimate in collaborative consumption,” and the FAQ says that the team looked at currently available options like Uber, Zipcar, and public transportation, but wanted to build an entirely new option. That’s in keeping with the spirit of the Downtown Project, which is using the clean slate of downtown Vegas to create a new type of community and urban living system.

Project 100 is working with a startup called Local Motion, which is out of Stanford and is building the software and hardware to share the bikes and cars and manage the reservation system. Local Motion is also working with Google for fleet sharing on its campus. Originally Local Motion was developing the electric vehicles that fleets would share (in addition to the software) but it looks like the company has moved more away from that model.

Isolated and defined communities are the optimal places to try new, outside-the-box, and just plain wacky new forms of urban transportation. San Francisco has actually been a pretty good place to launch an alternative transportation startup in recent years, due to the city’s early adopters and lack of parking and good public transportation. Scoot Networks has been building an electric scooter sharing network here, and Ridepal has been developing Google-style commuter buses for companies (both Greenstart companies).

Better Place has focused on Israel for its electric car sharing and battery swapping network, and found mixed success (to put it politely). Masdar City has built electric public transportation pods, though I’ve also heard that not many people use these. New transportation doesn’t always catch on. Downtown Vegas and Project 100 could be an interesting option, though success will be based on how attractive the service is for the customers and how much the network ultimately costs.

Check out our coverage of the tech revitalization of downtown Vegas:

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Deepfield, which offers services to build, manage and optimize network infrastructure, studied online shopping infrastructure by sampling internet backbone traffic across a “large cross section of North America and multiple collaborating infrastructure and internet providers.” The goal: To estimate how many users hit these sites daily and determine market share of the sites based on those numbers.

According to Deepfield’s results:

“What is truly impressive is how much larger Amazon shopping is compared to any other online site. Amazon is almost double the next largest shopping competitor, eBay, which enjoys 8.8% of daily Internet users.”

With Amazon, Deepfield includes a raft of smaller Amazon-owned sub-sites like MyHabit, although Zappos, which Amazon bought two years ago, was counted separately.

Deepfield included e-commerce hosting sites — including Shopify — to show how vibrant this market is. Shopify, which offers a web storefront that is used by more than 30,000 sites, garnered 5.4 percent market share among daily users. Quidsi, the company behind diapers.com, soap.com and other sites, also got a healthy 3.1 percent of daily visitors, and was also bought by Amazon in 2010.

Update: (12:45 p.m. PST) The results are summarized in the updated Deepfield chart below:

Feature photo courtesy of Flickr user Shlomi Fish

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Bloomberg reports:

Zappos users were 13 times more likely to share a purchase on Pinterest than on Twitter and 8 times more likely to share on Facebook than Twitter, [Zappos Labs director Will] Young said. Even so, posts on Twitter brought in the most revenue — an average of $33.66 an order — while Facebook posts garnered $2.08 per order and sales from Pinterest were 75 cents on average, he said.

If you liked this dress, you’ll love…this tie?

PinPointing aims to convert Pinterest posts into sales. Type in a Pinterest username (it can be yours or someone else’s) and the site pulls up Zappos items recommendations based on the account.

The feature doesn’t work very well yet. Here are a few examples:

The feature works better if you’ve pinned something from a brand that Zappos already sells. For example, I’d pinned a pair of Superga sneakers and PinPointing pulled up four other pairs by the same brand. The hard part is pulling up brands I wouldn’t have discovered on my own, but that I’d like — and PinPointing isn’t doing that yet. If I’ve pinned a colorblock dress, for instance, Zappos should pull up similar-looking dresses, not clunky shoes. And I don’t see the connection between a garbage can and a tie-dyed backpack.

The data and algorithms to deliver better recommendations are already out there. In building this feature, Zappos should use them.

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Now another big company is going one step further and chucking out the concept of the individual desk entirely. Forbes reports that massive pharmaceutical company GlaxoSmithKline is going deskless at its Philadelphia office, entirely eliminating anything resembling a private office or cubicle for the 1,300 employees based there. It already has one such deskless office in Bogota, Colombia. Forbes explains:

GlaxoSmithKline, the global pharmaceutical giant, thinks it has found the cure for the drab, inefficient office: fluid spaces where you do what the moment requires, alone or in groups, moving throughout the day. Each employee has a laptop with a built-in “soft phone,” a locker for personal possessions, and maybe one file drawer. That’s it. Even U.S. head Deirdre Connelly doesn’t have an office….

Why do it? “We found that only 35% of work activity took place in offices and cubes, yet we were dedicating 85% of our space to those,” says Edward Danyo, manager of workplace strategy. “It’s about creating environments so people can do their best work, and we’ve seen a 45% increase in the speed of decision making. But our biggest surprise is that within two weeks most folks say they wouldn’t go back to cellular space.” Bonus: The design saves money by saving space.

Check out the complete article for a visual explaining exactly how these innovative offices are laid out. GlaxoSmithKline is certainly not the only company trying a fairly radical re-thinking of the office. Zappos, for example, has even gone so far as to try to re-imagine the relationship between corporate campus and surrounding city, blurring the line between work and home life in their new downtown Las Vegas space.

Play office futurist – what do you foresee for the office space of the future? 

Image courtesy of Flickr user mark sebastian. 

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That’s what coworking is betting on, as the movement sells itself as providing ideal environments for serendipity, relationship building and nurturing the creative spark. But it’s not just spaces for entrepreneurs and independent pros that are adopting these ideals. “The future, I believe, is that corporate offices are going to become coworking offices,” Harvard-trained designer and ParallelCities.com founder Sidi Gomes told GigaOM in the run up to this year’s Global Coworking Unconference (GCUC).

Zappos for one is already embodying this change. The company’s new downtown Las Vegas base is “a great extension of coworking ideals,” another GCUC participant, architect Jerome Chang, told GigaOM. “Zappos is looking to build a whole mini-city community by having encouraged a lot more people to live, work and play all in the same area as their office. The surrounding community becomes the campus itself,” he explained.

But don’t take Chang’s word for it. Recently, Zappos CEO Tony Hsieh laid out his own thinking about his company’s $350 million investment in Las Vegas at Venture for America‘s Summer Celebration, giving a presentation explaining just what the company is up to in the city. The plan includes $50 million for local small businesses, $50 million for technology startups, $50 million for education and $200 million in real estate. Business Insider has posted the entire 60-slide presentation.

Or for the short and sweet round-up of Hsieh’s thinking look to Las Vegas Weekly, whose reporter J. Patrick Coolican met with Hsieh recently and was converted from his previous skepticism about Zappos’ plans. “Is he building a Burning Man encampment Downtown?!” Coolican wondered, but after speaking to the Zappos boss, he understands there are pragmatic business reasons for the company’s hefty investment in Las Vegas as well as philosophical ones. Coolican writes:

Zappos considered building a new suburban mega-campus, like Apple or Google. These campuses have creature comforts to induce workers to never leave, and/but they can be very isolating.

Hsieh had a radically different idea: Downtown, because he believes, he knows, that workers in cities are more productive. He thinks Zappos will be more profitable Downtown.

Here he leans on the work of Harvard economist Edward Glaeser, who notes that per-capita productivity increases by 4 percent as population density rises by 50 percent.

It’s not entirely clear why this is true, but Glaeser calls cities “machines for learning.” Humans have succeeded because of our ability to collaborate, and cities are the best geographical mechanism for doing so. Hsieh refers to “serendipity,” the chance encounters between technologist, thinker, social entrepreneur, artist and venture capitalist to create the new.

More human interaction means more serendipity and happiness, which therefore means higher productivity and profits.

Does this equation seem sensible to you? 

Image courtesy of Flickr user Moyan_Brenn_I’M BACK NOW. 

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Unemployment currently resides at 12.7 percent. If you’ve asked me how I like it here, I’ve probably replied that, for myriad reasons, I don’t all that much. But maybe there’s hope on the horizon thanks to, of all things, online shoe retailer Zappos.

A view of the soon-to-be Zappos headquarters from Hsieh's 25th-floor apartment.

You might have read one of the handful of stories that have been written about Zappos CEO Tony Hsieh’s Downtown Project, but it’s hard to do his $350 million investment justice if you haven’t been here and don’t know the hurdles he’s facing. The abandoned city hall that Zappos is slated to move into is hardly the Googleplex cozied away in Mountain View. In fact, it’s even miles away from the glitz and glamor of the Strip. And in a city full of transients, where concrete-block walls surround nearly every house, there isn’t much sense of community to speak of.

When it comes to the technology startups that Hsieh wants to bring here to help spur innovation and diversify the gaming-centric economy, well, Las Vegas is not Palo Alto. UNLV is a fine school, but it’s not Stanford. But Hsieh has a plan.

Building a tech scene, one dollar at a time

When you talk to anybody involved with the burgeoning technology scene in Las Vegas, a recurring comment is that companies have been around for awhile, scattered throughout the expansive city, but they existed in silos. None really knew the others existed. This is where Hsieh and the Downtown Project come into play.

Wanting to give Zappos employees a true and affordable live-work-play area in a city dominated by suburbs and strip malls, and inspired by Edward Glaeser’s book Triumph of the City, Hsieh and his team set out to fill the Fremont Street District, largely devoid of good restaurants, shops, recreation (non-gaming) and housing with just those things. Anyone who cares to contribute an idea can weigh in on what downtown Las Vegas needs.

If they’re particularly ambitious, perhaps they’ll ask for a piece of the $50 million Hsieh has set aside to fund small businesses in order to make their business a reality. Zach Ware, a Zappos employee tasked with developing its new campus, and Hsieh’s righthand man on the Downtown Project, said about 15 to 20 businesses have already received funding. Now, when Hsieh pitches Las Vegas to out-of-town companies and influential community members, he can legitimately point to the promise of a real community where innovators can live, work and play among each other and live in a diverse population of downtown residents.

A view of the future co-working space (center, mid-rise) from Hsieh's apartment.

Some parts of Hsieh’s plan are coming together faster than others. He’s already helped establish a technology library called usr/lib that houses a growing number of books on all things tech and that currently serves as a co-working space of sorts for tech-minded folks. The Downtown Project just signed a lease on an old mid-rise building that will soon provide 21,000 square feet of legitimate co-working space. In the meantime, a handful of Hsieh-funded startups live and work out of the apartments Hsieh has provided for them in a downtown condominium complex.

Zappos has also sponsored two Startup Weekends in Las Vegas, and Hsieh’s team is a big supporter of other startup gatherings around the city. One weekly event, called the Jelly, happens every Thursday night and sometimes features presentations on everything from coding to how to sign a term sheet. Other things are happening, too, including a handful of Ignite events and a hacker space where hardware hackers can get together and mess around with machines. There’s even a web site, VegasTech.com, that keeps track of everything that’s going on.

I’d be remiss to give Hsieh and his Downtown Project all the credit, though. Although its epicenter is about a mile and a half from the Fremont Street District, Las Vegas does have a growing arts district that played a pivotal role in helping build a sense of community around Fremont Street. Amid the decades-old casinos, no-tell motels and abandoned buildings sits a block of hip bars, a coffee shop and an art gallery that one might expect to see in the arts district. The latter two actually share the same building, and the technology-focused usr/lib has its space on the second floor.

At any given time, walking into the coffee shop, called The Beat, is like walking into a who’s who of the Las Vegas art and tech scene. The Ogden, where Hsieh, many Zappos employees and some of his funded companies call home, sits right across the alley and towers above the two-story building.

The Emergency Arts building houses The Beat and usr/lib. The Ogden towers in the background.

Who calls Vegas home (and how to get Hsieh’s money)

However, as Zappos’ Ware pointed out, Hsieh wanted to build an organic tech hub, which means that people — not places — come first. That explains the funding process, which is far from the formal venture capital experience. Typically, companies will come to town and visit, staying in one of the condominiums Hsieh owns inside the Ogden — he bought the top three floors and all other open units. They learn about what’s going on here, attend a Jelly and meet the rest of the startup community, maybe even presenting on their business.

If they’re willing to commit to being part of that community and helping it grow, Ware said, promising startups can get a piece of the $50 million Hsieh has earmarked just for building startups. Hsieh’s team thought about doing an incubator, he added, “but we’d rather build a city that is an incubator.”

Romo, Romotive's $99 phone-powered robot.

So far, he’s lured in a couple of impressive startups in the  form of Habit Labs and Romotive. The personal-health-focused Habit Labs came from Silicon Valley, where it was a Y Combinator graduate and raised an angel round from Dave McClure, Founders Co-Op, Rick Webb and Apricot Capital. Romotive, a TechStars alum that builds mobile-phone-powered robots, came from Seattle. After raising $115,000 via Kickstarter, Romotive just closed a $1.5 million round that included investment from Hsieh, as well as, according to CNET, “the Stanford University endowment, Lerer Ventures, David Cohen of TechStars, and a number of prominent angel investors.”

Hsieh, along with several other Zappos executives and a local gaming executive, also poured $500,000 into Rumgr, a mobile app for buying and selling used goods that was founded by three former Zappos employees.

Other startups in Las Vegas include Walls360 (which counts Guy Kawasaki among its investors), Ayloo.net, Tracky and GarageGames. Counterless, a brand-new startup that grew out of the last Startup Weekend in November and includes members of the Ayloo team among its eight founders, has a particularly innovative iPhone app that lets bar, coffee shop and nightclub patrons order and pay for fare from their phones without waiting in line.

Indeed, something is brewing in Las Vegas, and it’s just getting started. It has everything to do with Hsieh’s vision and, as we’ll see, a lot to do with the fact that — for better or for worse — Las Vegas is not Silicon Valley.

Up next: Why startups are moving to Las Vegas, why they love it and how they plan to overcome the city’s technological shortcomings.

All photos by Derrick Harris.

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In a complaint filed in Boston federal court, a group of customers claim Amazon is responsible for the hacking and that the company should pay an unspecified amount of damages for negligence, breach of contract and invasion of privacy.

The incident took place on January 16 and resulted in hackers obtaining the customers’ names, phone numbers, emails and encrypted passwords. Zappos responded by sending out a mass email warning that a breach had taken place and suggesting that customers change their password for Zappos and on other sites as well.

The lawsuit claims that Zappos has failed to pay for credit monitoring and other expenses that customers may have incurred in responding to the security breach. It quotes remarks by Senator Richard Blumenthal (D-Ct) that the company is obliged to do so:

enterprising criminals can leverage information like names, addresses, email addresses, and other breached information to gain access to consumers’ accounts and commit identity theft and fraud. Therefore, I request that Zappos provide its customers with the option of receiving two years of credit monitoring and a credit freeze, as well as any costs resulting from the security breach, to be paid for by Zappos.

The lawsuit is the second to be filed and raises the question of whether companies should be liable for hacking incidents in which customers suffer no direct financial loss. In this case, Amazon had prepared for a cyber-attack by keeping certain critical data in a separate server (that was not breached) and by having a plan to rapidly notify customers.

This is different from the infamous Sony (NYSE: SNE) incident last year in which the electronics giant took days to notify their customers that hackers had stolen credit card information. The company is facing class actions over the incident based on state consumer protection laws.

At the national level, courts have ruled that customers must show actual harm in order to successfully sue a company over a data breach. So far, courts have typically found that a loss of personal information does not result in any harm.

But Greg Blankinship, an attorney in the Zappos case, believes this is changing. He points to a recent decision involving the Hannaford grocery chain in which an appeals court found that consumers had suffered harm because they had to pay to obtain new credit cards and identity theft insurance.

Zappos Class Action
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On Monday, the Amazon-owned shoe company sent a mass email stating that 24 million customer accounts had been breached. The incident resulted in hackers obtaining names, phone numbers, emails, encrypted passwords and the last four numbers of customer credit cards.

The lawsuit claims Amazon (NSDQ: AMZN) violated a part of the Fair Credit Reporting Act by failing to properly encrypt and secure customer information, and seeks unspecified damages for 24 million customers.

The lead plaintiff in the case is a Texas woman but the suit was filed in federal court in Louisville, Kentucky on the grounds that Amazon has servers located in that state.

As these type of hacking incidents have become more common, so too have related lawsuits. So far, though, few of these lawsuits been successful because customers have been unable to show that they have been harmed by the data breaches.

The Kentucky lawsuit appears based in part on a novel legal theory that customers will now be more susceptible to phishing and other online scams because hackers have their email. It also alleges the plaintiffs suffered emotional distress. Other high-profile data breach cases such as one involving Sony’s Play Station have been based in part on state consumer laws.

Although courts have been reluctant to find that customers have been harmed by data breaches, there is evidence this may be changing. A security publication recently reported
that an appeals court allowed customers to claim they suffered harm in the form of having to buy insurance for identity theft.

Some media publications this week praised Zappos’ for having a pre-arranged plan to respond to the data theft. The company claims that its customer credit cards remained secure because they were stored in a separate server.

Zappos class action
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