Invest Like the Best with Patrick O'Shaughnessy
Devon Zuegel: How To Create A New Town - [Invest Like the Best, EP.413]
Tue, 04 Mar 2025
Devon Zuegel: How To Create A New Town - [Invest Like the Best, EP.413] My guest today is Devon Zuegel. Devon is the founder and president of the Esmerelda Institute, and she is creating a new town called Esmerelda in California wine country. Learning of Devon and her plan, I couldn’t help but wonder why there aren’t more people building new towns. She shares the origin story of her project Esmeralda, a modern reinvention of the Chautauqua community she cherished growing up, and we explore her fascinating work building communities and reimaging how we live together. We discuss how environments fundamentally shape human behavior, how cost of space impacts creativity, the financial challenges of town-building despite their potential for strong returns, and the plans in place for Esmerelda. Please enjoy this fascinating conversation with Devon Zuegel. Subscribe to Colossus Review. For the full show notes, transcript, and links to mentioned content, check out the episode page here. ----- This episode is brought to you by Ramp. Ramp’s mission is to help companies manage their spend in a way that reduces expenses and frees up time for teams to work on more valuable projects. Ramp is the fastest-growing FinTech company in history, and it’s backed by more of my favorite past guests (at least 16 of them!) than probably any other company I’m aware of. Go to Ramp.com/invest to sign up for free and get a $250 welcome bonus. – This episode is brought to you by Ridgeline. Ridgeline has built a complete, real-time, modern operating system for investment managers. It handles trading, portfolio management, compliance, customer reporting, and much more through an all-in-one real-time cloud platform. I think this platform will become the standard for investment managers, and if you run an investing firm, I highly recommend you find time to speak with them. Head to ridgelineapps.com to learn more about the platform. – This episode is brought to you by AlphaSense. AlphaSense has completely transformed the research process with cutting-edge AI technology and a vast collection of top-tier, reliable business content. Imagine completing your research five to ten times faster with search that delivers the most relevant results, helping you make high-conviction decisions with confidence. Invest Like the Best listeners can get a free trial now at Alpha-Sense.com/Invest and experience firsthand how AlphaSense and Tegus help you make smarter decisions faster. ----- Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com). Show Notes: (00:00:00) Learn About Ramp, Ridgeline, & Alphasense (00:06:00) The Origin of Devon's Obsession with Places (00:08:07) Proximity and Cost of Space (00:10:02) The Chautauqua Inspiration (00:11:31) Building a New Town: Esmeralda (00:13:23) Urban Design and Street Importance (00:15:44) Community Values and Peer-to-Peer Learning (00:18:15) Edge Esmeralda: A Prototype Community (00:21:38) Challenges and Trust Building in Development (00:26:45) The Role of Cars in Urban Planning (00:31:10) Mortgages and Taxes: Shaping Communities (00:42:11) Devon's Journey: From Stanford Review to Esmeralda (00:43:41) Tools for Thought and Feedback Loops (00:46:33) Urban Design and Pop-Up Villages (00:50:06) Exploring Las Catalinas and Car-Free Living (00:52:31) Placemaking and Organic City Development (00:56:25) Frontier Camp and Creating Collaborative Spaces (01:02:39) Building New Towns: Financial and Infrastructure Challenges (01:12:05) The Kindest Thing Anyone Has Done For Devon
Chapter 1: What inspired Devon Zuegel to create a new town?
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Chapter 2: How does proximity and cost of space affect community building?
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Chapter 3: What is the role of urban design in town planning?
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My guest today is Devin Zugel. Devin is the founder and president of the Esmeralda Institute, and she is creating a new town called Esmeralda in California wine country. Learning of Devin and her plan, I couldn't help but wonder why there are more people building new towns.
She shares the origin story of her project, a modern reinvention of the Chautauqua community she cherished growing up, and we explore her fascinating work building communities and reimagining how we live together.
We discuss how environments fundamentally shape human behavior, how cost of space impacts creativity, the financial challenges of town building despite their potential for strong returns, and the plans in place for Esmeralda. Please enjoy this fascinating conversation with Devin Zugel. Devin, I have to start by asking where your obsession with places came from.
What are the ingredients of this deep interest of yours?
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Chapter 4: What challenges does Devon face in building Esmeralda?
And I realized that it's way easier to make better decisions if your environment supports and enables it. And so I've gotten really interested in the question of how do I shape my environment so that it shapes me in the ways that I want.
Give us a sense or a flavor of some of the things in the environment that shape you or the way that you think that might surprise us.
So here's a silly one, but it's so true is if I have my phone next to me as it is right now versus behind my computer screen where I can't see it, I will not use my phone if it's behind the screen and I'll just forget that it even exists versus if it's next to me, I'll check it every few minutes and see if I have notifications. And so actually I'm going to hide it behind my screen right now.
And at a more macro scale, I think how close you live near a friend makes a huge difference in how likely it is that you'll see them and the context in which you see them. So if you live on the same block, you might go just knock on their door and say, hey, what are you up to this Saturday? Let's go do something. But if you live a 10 minute walk away, you might text them before you go.
Chapter 5: How does Devon build trust with local communities?
And if you live 20 minutes away, you're going to probably plan ahead and you're going to say, let's meet at this time on Friday night. And so just realizing how much we are shaped by the distance of different things in our environments has been a huge unlock for me.
And so I've tried shaping my own life such that the people that I want to spend the most time with are ideally as close to me as possible and the types of food that I want to eat and the types of activities I want to do. And I think it really makes a huge difference.
So proximity is one key variable or dimension of your setup in life. What are the other key variables that interest you most?
I think another really interesting one is cost of space. And you see this play out in just the way the restaurant might treat you. If you're in a restaurant in Manhattan, you can tell that the restaurant wants you to eat your food, get out, pay the check so that they can turn over the tables because that seat is expensive for them.
Versus if you're in a lower cost city where the real estate isn't so expensive, there's often a little bit more of a, it's okay if you sit there for three hours and chit chat with your friends or at coffee shops in Manhattan. I think they often will glare at you if you have your computer out because they know that you're going to be sitting there forever.
Whereas if you're in a diner in the middle of Nebraska, they're probably going to let you sit there for a while longer. So I think cost is really interesting. And it also shapes the types of activities that people do. One theory that I've heard, I don't know, it's hard to test this.
One theory I've heard for why startups have taken root in California, especially the apocryphal startup garages for all the early companies, was because in California, there are these garages that are warm enough most of the year that you can actually work in them. And there's sort of this extra cheap space that is attached to a lot of people's homes.
And so they turned into the workshops of various inventors and people who created things. Whereas on the East Coast, your garage is freezing cold half the year.
So I think when you end up being able to treat space as something that's cheap and something that you don't necessarily have to pay for, you end up getting a different type of creativity coming out of it and more things that take a lot of physical space.
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Chapter 6: What financial strategies are being used for Esmeralda?
On a degree of difficulty scale, how hard is it to build an entirely new town? It seems so much like America is what it is. You don't hear about whole new towns anymore. You hear about very fancy high-end discovery land properties or something like that that are designed from scratch, but usually not just a normal town. Why doesn't that happen very often anymore? Why doesn't it seem to?
On some level, it shouldn't be that hard because we know how to build buildings. We know how to build roads. This is not rocket science. We're not making a technical breakthrough. But you are empirically correct that when you look around, there aren't a lot of new towns being built up. I think part of it is that...
There's sort of this sense that the frontier is closed in the United States, and I feel like it's more than just the physical frontier. I think that a lot of people in a lot of industries feel like we're at the end of history, and it's almost a more philosophical reason. I could answer this question in a lot of ways. I think on one hand, I could answer this philosophical level.
There's also a lot of technical reasons, but... I think the biggest answer is just it's not in the space of things that people think are normal to do. But if you think about it, every town that exists had to be started at some point. Someone was the first person to move in. Somebody built that infrastructure. And I think it's just something that we've done less and less of.
And as that frontier has closed, the physical frontier, more and more of that space has been taken up. And a lot of the really good locations for towns and especially for big cities is probably also taken.
Maybe you could walk us through the most inspirational places that you've been, in addition to Chautauqua, that form some of the ideas for what will be, I think you call it the hardware of Esmeralda, your new town. What are those elements? Where did they come from? I'm so curious how you decided what matters and gets to go into the project.
But way before I started working on this project, I've been really obsessed with urban design and in particular street design, because I actually think that streets are the single most important building block in a city. The way that the streets interact and how they interface with buildings and other public spaces is really the thing that defines the feeling of a city, in my opinion.
And I've been studying and writing about it and befriending architects and developers for the last 10 years. And really, my poor husband, every time we travel somewhere, it's really an architecture tour where I talk to him all the time. Like, oh, did you see the setbacks of this building from the street? Like, oh, it's interesting that they're mandating a 20-foot setback here.
And so really the biggest answer I would say is from my travels and just taking really detailed notes and making a lot of observations about the choices that are made in different cities and what works and what doesn't. And it's actually not a binary thing either. It depends on what your goals are. Is this community trying to be an industrial hub where a lot of big manufacturing happens?
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Chapter 7: What community values does Esmeralda aim to foster?
I would stay with my grandmother and we'd have three and sometimes even four generations all in the same home. And I think I'd like them to describe it as a place where their kids have a lot of independence. Their kids can get around on foot rather than having to ask to be driven everywhere. A place where there's a really high level of trust within the community.
And when you walk outside, you are very likely to meet people who share your values and those values specifically being a level of learning and creation that but also of invention and building new things. I love the values that Chautauqua has. I think we would build on that, but I'll also point out two major values differences.
I think on one hand, Chautauqua is much more about lifelong learning than it is about building. I think it's more of a place where you absorb a lot of information and experts come and talk. I don't want to downplay the cool things that Chautauquans are doing either, but it's much more emphasis on reading and consuming and learning.
But I think I want to take that and build on it and also create more of a sense of action and people building businesses, creating pieces of art, doing research, that kind of thing. So that's one difference. And then related to that is having it be a sense of more like peer to peer. So in Chautauqua, there's more of this sense that Jane Goodall will come and she'll talk
to you about chimpanzees and she presents on her experiences and people talk about it for a little while, but then it moves on versus Jane Goodall herself being part of the community and then hosting an expedition with the kids in the community to go meet some chimpanzees.
And having it be more of a peer to peer where it's not sage on the stage, but rather the people around you are experts in their field. But you are also an expert in your field and creating that network. So I think those are the key values and experiences that I would love for people to have in this community.
What things will you put there that make it easier or more fun to create and innovate together? How do you actually promote that in a town setting?
You alluded to the hardware and software before. And so while we're currently building the hardware, which is functionally real estate development, I mean, at the end of the day, we're putting in infrastructure and we're building buildings. And that is what real estate development is. That's the hardware side.
And that has a very important role to play in this, where, as we were talking about before, environments really shape the behavior that we do. And so on that side, we are building infrastructure and public spaces and event spaces where people can have these types of events.
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Chapter 8: How do taxes and mortgages shape community development?
I think a lot of real estate development these days has become something that's imposed from above, like someone with external capital has decided this is going to happen and then they're pushing it through. and just trying to get it done. And people are more likely to react to that.
One of the opportunities that we had last year at Edge was I invited the city managers of both Cloverdale and of Healdsburg, and I hosted them on a panel where they got to discuss their experience in local government. And that served a bunch of purposes. On one hand, it gave them an opportunity to talk about what they care about and got to highlight them.
Also, the people in the Edge Esmeralda community who are interested in moving into the community we're building give them a little more of a sense of the local region and the challenges and opportunities that exist. And afterwards, everyone chatted for a while. They got to ask a bunch of questions. And truly, I see this as a very long term trust building exercise.
And I think it's more like tending a garden than it is like anything else. You're sort of planting the seeds and it takes time for them to grow. You can't expect people to immediately trust you on day one. You need to show up and earn their trust.
It reminds me a little bit about the story in Wynwood in Miami, where the cops and the graffiti artists, once enemies, became collaborators and friends. And this crazy thing has come into existence out of that respect and reframing of a relationship. It's so cool.
Totally. That reminds me of one of my favorite experiences last year when we announced that we were going to host Edge Esmeralda in Healdsburg. A local who is now a really close friend of mine, he came to a city council meeting and he said that he was going to make a custom sign that said, don't colonize Healdsburg. Not quite the message we were trying to get across.
We're actually trying to build this really strong community. But then he decided, actually, I'm going to give him a chance. I'll show up to their first event and see what happens. And he ended up loving it so much that he ended up attending more sessions than anybody else the entire month of the pop-up. And by the end of the month, he was helping us out.
He asked if he could run errands, go to the print shop for us and ended up connecting us with a lot of people and just thought that what we were doing was super cool. And I found that really satisfying because it shows that just because someone might first seem like an enemy or something, they're coming out and attacking what you're trying to do.
It's usually just because they may not understand what it is you're trying to do. And it's an opportunity to talk to them about it. And those starting points can be scary or intimidating at first. I wasn't thrilled when I heard about the sign that he was making, but it is an opportunity to jump in and say, Hey, I actually think that we might have more similar goals than you realize.
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