Live long and Próspera

How alignment with the biotech sector is enabling this startup city to find "product-market fit."

Last week, I finally traveled to the Honduran island of Roatán to learn more about Próspera, a business-friendly startup city that wants to be the Hong Kong of the Caribbean. Across five days, I met world-class economists, micro-factory experts, and leading regenerative medicine providers while we engaged in a series of talks, tours, & workshops about building startup cities. I also spoke with a few Hondurans about how they felt about a company (flushed with foreign funding) building a city in their backyard.

I first learned about Próspera two years ago, when the project was just emerging into the public eye. Chief Development Officer, Gabriel Delgado, joined my podcast in the summer of 2022 to share more about the project’s philosophical roots. Próspera’s growth plan relies on a unique legal framework designed to attract entrepreneurs and investment from industries facing challenges from overregulation.

(A full Próspera 101 overview can be found a half page below).

Over the past 24 months, Próspera has attracted hundreds of ambitious entrepreneurs to the island and achieved meaningful progress in growing a startup city. In two years, the project has:

1. Increased its land holdings to more than 800 acres (up from 58 acres when we last chatted), with options to buy even more land.

2. Completed assembly of an on-site construction factory, which is fully operational, actively supporting further development on the island, and is training local Hondurans.

3. Financed and built the first of three 82-unit multi-use residential towers with ample office space and a cafe to boot.

4. Bought a massive and fully-developed beachside resort, complete with two restaurants, a scuba shop, pools, a spa, and a complex of villas set on rolling hills.

5. Partnered with a regenerative medicine clinic and attracted a handful of notable biotech startups through a fruitful partnership with Vitalia - a community dedicated to accelerating longevity technologies.

In startup land, new products first need to find “product-market fit” before they can grow to significant scale. New ventures don’t go from 0 straight to 100 - they go from 0 to 1, then 1 to 10, then 10 to 100, and so on.

With biotech and Vitalia, Próspera has found the first signs of people willing to relocate to its tropical startup city. This is evidence that Próspera is starting to find a market. If the project can similarly encourage other industries to start growing a presence on the island, then there could very well be a new urban hub just a two hour flight away from the United States.

Through this lens, I will explore why I’m excited about Próspera, what my greatest concerns about the project are, and what a possible path forward might be.

Próspera Primer

(skip this if you think you already know most of the foundational details about Próspera)

Before diving into my weekend on the island, let me provide a brief Próspera 101 overview. For those who would like a more in-depth rundown, I strongly recommend Scott Alexander’s prospectus. It’s relatively old (2021), but still nails many of the foundational details.

The English-speaking island has a population of 75,000 and welcomes over a million visitors a year.

Próspera is a startup city (sometimes called a charter city) on the island of Roatán. Roatán is a beautiful Honduran island in the Caribbean Sea on top of the second-largest barrier reef in the world. I actually visited when I was a kid living in nearby Guatemala - it’s the first place I ever snorkeled!

There are several non-contiguous components to Próspera’s land holdings. Over time, Próspera’s urban planning team would want them to all be connected, but for now they exist as separate parcels:

• The Beta District: A 58-acre oceanside plot of land on Roatán. This was the first parcel in Próspera’s portfolio. The only buildings here are ones that Próspera has built. They include a construction factory, a large coworking and office headquarters, and the first of three large multi-use residential towers.

• Pristine Bay: A 360-acre beachside resort about a half mile east of The Beta District. This is where 30 others and I stayed across various kinds of lodging.

• Port of Satuyé: 396 acres on the coast of La Ceiba. This is NOT located on Roatán but rather on mainland Honduras 40 miles away. Over time, Próspera’s developers intend the site to become a manufacturing sister hub to Próspera Roatán.

  

  The ferry from Roatan to La Ceiba takes about 90 minutes to travel 40 miles

• There are a few other plots on Roatan that Próspera has not developed yet. The project also desires to buy the land between the Beta District and Pristine Bay so that residents can easily traverse between the two sites.

Even though its territories are within a sovereign nation’s borders, Próspera enjoys a high degree of legal autonomy in Honduras. Residents enjoy extremely low taxes and businesses benefit from a flexible regulatory framework that accelerates their ability to innovate and test new products. Próspera aspires to drive economic growth to the region by creating conditions that correlate with increased GDP per capita. These are:

1. Rules for living and working together

2. Justice and peaceful resolution of disputes

3. Security and reliable law enforcement services.

All of Próspera’s progress, which we’ll discuss below, is made possible by a 2013 constitutional amendment in Honduras that called for the creation of ZEDEs (a Spanish acronym that translates to Zones for Employment and Economic Development). Próspera is one of several ZEDEs throughout Honduras, but is the only one with a presence on Roatán, which is much safer than the mainland. As a part of the ZEDE framework, Próspera agrees that 90 percent of its employees are Hondurans and maintains a minimum wage 10-25 percent higher than the rest of the country.

The ZEDE model, which was developed alongside Nobel-winning economist Paul Romer, was meant to help Honduras address its extremely high poverty rate (73 percent), murder rates (the fourth highest in the world), and the country’s endemic corruption. While this amendment originally passed with 78 percent support in Honduran Congress, the country’s current government is not a fan. They passed legislation to prevent future ZEDEs from forming and have tried to limit pre-existing ZEDEs like Próspera. This has prompted Próspera to file a $11 billion lawsuit against the incumbent government.

Próspera’s ongoing legal status will likely take 1-2 years to resolve, maybe longer. Until then, I imagine further foreign investment might remain sidelined because of lingering uncertainty.

Meanwhile, the project has raised more than $110 million and is actively focused on growing its operations in the areas where it has captured some encouraging momentum. The entrepreneurs who have moved to the island and the folks on the Próspera team are serious about building a city of the future - a “Snowcrash in tropical paradise.”

Why I’m Excited

There are dozens of reasons I’m excited about Próspera. Here are five,

1. Próspera has found its first clear example of product-market fit with the biotech/longevity sector.
   The entrepreneurs that Próspera is most likely to attract are those in industries that face heavy regulation. Its competitive advantage (compared to other jurisdictions) is its flexible regulatory framework that allows companies to choose which other country’s regulatory rules that they would like to use.
   
   This has immediate appeal to folks trying to help humans live longer. While all the scientists I encountered on the island share a commitment to developing safe treatments, many are frustrated by the slow speed of product development and testing in the United States/Europe. Próspera offers the opportunity to bring products to market much faster because they can use more streamlined regulatory guidelines or even simply benefit from a faster approval process.
   
   With the help of Vitalia - a community that accelerates life extension technology, hundreds of builders have descended on Roatán. Some come for an occasional long weekend, others stayed for a six-week pop-up program this spring, and a few have moved there full time. Vitalia creates highly-curated regular programming to engage its members in the evenings and on the weekends. This spawns group chats, group adventures, and a layer of social identity to folks new to the island.

   Many Vitalia founders are working on varying kinds of regenerative medicine, which includes gene therapies, cell therapies, and tissue engineering. The Global Alliance for Regenerative Medicine (GARM) Clinic has worked with platform providers to build an entire treatment ecosystem on the island. Therapies can be developed on-site, tested with well-educated patients through the guidance of an independent IRB, and deployed at a “We-Treat Clinic” - kind of like a WeWork for fractional clinicians.
   
   It’s been awhile since my college genomics classes so I don’t pretend to be an expert on any of the science/efficacy. There are others doing that kind of citizen research. But what I can attest to is the clear momentum and excitement that these builders have. It feels like a playground for science pros who don’t have time to navigate bureaucracy.
   
   Customers are coming, too. I ran into the lead physician for a major US sports team. He flew to the island to test a protein therapy on himself before he considers recommending it to the players on his team. This seems smart by regenerative medicine folks - pro athletes are an attainable early market while prices for the therapies are still high. As therapy costs decrease, there will eventually be a massive opportunity to serve every day people willing to drink from fountains of youth. This go-to-market strategy could mirror the success that Tesla had at its beginning when they focused on luxury customers before going mass-market.
   
   All of this biotech-related activity among patients and Vitalia founders has led to job growth and an active sub-community on the island. Próspera needs many more versions of this (more on that below), but it’s a good start.

2. The project is managed by authentic leaders who genuinely believe in the mission to maximize human prosperity.
   As you’ll see in my “concerns” section below, Próspera attracts a fair amount of controversy, particularly within mainland Honduras. Some other articles on Próspera are quick to criticize the project’s billionaire backers or label such a nuanced venture to a “libertarian utopia.” This is reductive - good governance is of paramount importance to the team.
   
   The executive team on the ground in Próspera is a well-meaning, ambitious, thoughtful group. I spent substantial one-on-one time with several of the project’s leaders, including CEO Erick Brimen. They genuinely believe that by committing to the philosophical principles underpinning the project and building thoughtful infrastructure, they can demonstrate a new model for Latin America - a region plagued by corruption and poverty.
   
   They’re also experienced with building cities. We heard from Tom Murcott, who helped build a charter city in South Korea that now has over 100,000 residents.
   
   Realizing Próspera’s ambitions will be difficult, but if its leadership is 10 percent as successful as they aspire to be, they will have created net good. And speaking of creating net good…

3. Hondurans are getting good jobs.
   Próspera purportedly has “created more than a thousand jobs.” I don’t have any direct access to job reports but I’m certain that the company’s greatest expense is its people. I saw staff everywhere. Próspera employs folks across hospitality, construction, gardens, corporate functions and more.
   
   Per the constitutional amendment that created ZEDEs, Próspera must pay 10 to 25 percent above the Honduran minimum wage. The construction projects have created jobs for locals from the nearby town of Crawfish Rock. The circular factory was made with built-in apprenticeship programs to train a Honduran labor force. Without Próspera, these specific manufacturing jobs wouldn’t exist. More families are able to lift themselves out of poverty and grow because of it.

4. Despite an ongoing lawsuit, Próspera has managed to build.
   When Próspera first bought land, it remained to be seen if the project could create structures with its own building code and supply chain.

   

   The first of three 82 unit towers in the Beta District. This one is 11 stories and includes office space and a cafe on the 4th floor wraparound deck

   The answer is a resounding yes! The speed of building is impressive too. This above tower (“Duna”) was built in less than two years, and would have been completed in half of that, had it not been for a one-time requirement to revamp the utility and electricity infrastructure within the Beta District parcel. In most cities within the United States, the permitting process alone for a building of this size would likely still be ongoing.

   

   The Circular Factory is staffed by metallurgy and carpentry pros

   Próspera’s onsite factory has accelerated their construction efforts. If the construction staff ever need an emergency part, the factory can create one on the spot because it’s well-equipped and staffed by engineering experts. The transportation time for a freshly-made part from the factory to construction sites is approximately three minutes. Not too shabby!

5. There is enthusiasm for and momentum towards walkable urbanism!
   Próspera is building with density in mind, Hallelujah! They have done a lot of work with a Brazilian urbanism firm that designs urban environments for pedestrians and cyclists. Making cities for people is always a good idea.

   I attended an urban design workshop where we discussed how parking might work on Próspera in 10 years. We came up with a design for garages near the road that house all cars. Gondolas can carry folks to the city center, where a network of bikes, scooters, and water taxis can help them get around the rest of the property.
   
   Making cities for people is a GREAT choice and makes me extra bullish for what Próspera could become - a safe and walkable hub for builders in paradise.

Areas of Concerns

There are three principal concerns I have about Próspera’s ability to meet its goals.

1. The current Honduran government’s intervention and Próspera’s ongoing lawsuit have cast an air of uncertainty over the project and slowed its development.
   This has discouraged further investment and business while third parties weigh any uncertainty. But it is possible that a new government will be elected soon and render lingering concerns moot. United States Senators have written letters to US Secretary of State Antony Blinken expressing support both for and against the project continuing. The next Honduran presidential election is in 2025.

2. Local Hondurans I spoke with have mixed reviews about the project.
   Opposition to the project seems strongest on the mainland. Residents of Roatán, on the other hand, seemed to fall into one of three buckets.

   1. Some are excited by the jobs the project has brought and could create.

   2. Others are worried that Próspera plans to take their land (I have not seen or heard any evidence of this from any conversation with Próspera leaders).

   3. Many aren’t aware of it, or don’t feel educated enough on the issue to provide an opinion one way or the other. The footprint of the project is still relatively small in comparison to the large tourism industry the island already boasts.
      

   (I wish I had done more statistically-significant polling of local sentiment, but my time was limited. I only have anecdotal evidence of how opinion varies!).
   
   I hope that some of Próspera’s early successes help to sway public opinion to be more pro-Próspera, and I hope Próspera continues to act in a way that benefits Hondurans, not the other way around.

3. Community is still slim.
   While Vitalia has brought both temporary and permanent residents to Roatán, it’s still really early in the community-development phase. Social butterflies from big cities, or singles looking to date may struggle to find a large number of new humans to connect with. The original Próspera timeline (pre-lawsuit) hoped to have 10,000 residents by the end of 2025, and I doubt that number is met by the end of next year. Folks moving to Próspera right now will have to accept that the ramp-up of new people will be a bit slower for the time being.
   
   With time, more infrastructure will be built, which will convince more people to come, and convince others to stay longer. As long as Próspera can keep pumping money into improving its land, the value proposition becomes more attractive to different kinds of communities and people.

The Path Forward

To achieve its wildest ambitions, Próspera needs to identify the next 10 Vitalias to develop on the island. The biotech sector alone will not convince 10,000 people to move to Roatán in the next few years.

What do I mean by “the next 10 Vitalias?”

Vitalia has been an effective community layer on top of the Próspera city infrastructure. Like I mentioned above, Vitalia is a dynamic sub-community that leverages Próspera’s real estate and resources to accelerate longevity techonolgies.

But cities need many sub-communities. One alone can’t get the job done.

Here is how one might build a sub-community model on Próspera:

Próspera needs more sectors to create parallel communities on top of its existing infrastructure. Próspera may also want to consider a separate horizontal community building function.

To build the kind of abundance that Próspera aspires to have, its leadership would be wise to attract entrepreneurs focusing on scaled iteration and deployment of more productive solutions in major sectors of GDP. These are healthcare, housing, energy, transportation, infrastructure, and agriculture. Próspera will likely achieve the best results by attracting people who work in work on solutions struggling with regulatory bottlenecks.

Here are a few applications for fun. Let me know if you have any other ideas in the comments!

• Alternate housing: Building new kinds of development in the United States is slow and often involves jumping through multiple hoops to try novel concepts. A US developer could instead test out new housing models on Próspera so that they could then deploy the ones that work at scale back in the States.

• Drug research: CRISPR technology is already at a point where we know enough theory to test and produce cures for 400 million people suffering from genetic diseases. However, each CRISPR-derived therapy has to repeat an expensive and lengthy FDA framework in the US, even when a therapy is extremely similar to one that has already been approved. Próspera offers the chance for a new regulatory framework to scale the testing and deployment of novel treatments.

• Drone delivery: What if there was DoorDash with free five minute delivery via drone? At Próspera, you could easily build a minimally viable version of this by bringing food from the resort restaurant to the roof of the Duna building in the Beta District.

Próspera may also want to build its own startup studio and/or technology transfer office. Because of the project’s unique regulatory framework, Próspera is well positioned to help certain technologies find outsized commercial success.

What else can Próspera do to attract more people to the island?

Beyond using its favorable regulatory framework to draw in impatient entrepreneurs, there a few things that Próspera could do to attract more folks to the island.

1. Engineer a Blue Zone lifestyle.
   Blue Zones are regions in the world where people live long, healthy lives. They are characterized by local whole-foods diets, rich social interactions, and high physical activity. Residents of Blue Zones also report a strong sense of purpose.

   

   Notice how these Blue Zones across the world are mostly on Honduras’ latitude.

   To help engineer such a lifestyle, Próspera should start growing its own healthy food and investing further in its wellness and fitness infrastructure. The venture could also implement its plans for Próspera to be pedestrian-friendly so that people move as they go about their days. Developing focused sub-communities will also help create social connection and sense of purpose.

2. Appeal to recent college grads and college seniors.
   Many of the units of housing in Duna are dorm-style and cheap. Recent college grads are hungry for community and to choose a home. It might be productive for Próspera to send a well-spoken representative to top colleges across the world and make a direct appeal to folks about what kind of environment they could join on the ground floor. Unlike digital nomads (a common visitor to Próspera), recent college grads might be more willing to commit to a new area.

3. Keep building. If you build it, they will come.
   The infrastructure still needs some work to feel less like a Caribbean resort and more like a solarpunk town. Here are a few things I know my non-biotech friends would like to see before they would consider a full-time move.

   • A grocery store. Right now, you have to travel off the property to get groceries, which requires a car.

   • A fitness class studio. There’s already a good gym, but it would be great to have a venue capable of hosting fitness classes - these enable more social cohesion while working out.

   • A live music venue. I heard several acoustic guitarists while I was in Próspera, but they were just playing by the pool. Imagine if touring artists (even small ones) could visit and properly erform. People travel anywhere to see their favorite artist and headliners transform whole economies.

   • A few bikeshare stations. There are already tons of paths because of a golf course on the property.

   • More school infrastructure. There’s already a Montessori school on the property with 50 students enrolled. Próspera has already upgraded the school three times because it keeps growing in size. Keep doing that!

   • A road to connect the Beta District and Pristine Bay. If I lived on Próspera, it would be nice to travel between these two districts without having to go on the main highway.

In closing

I’m excited for Próspera. I arrived with a lot of skepticism and I left with a lot of hope. If you build a city of the future, the people building the future will come. I imagine I’ll be back soon and can’t wait to see the progress.