OPINION  COMMENTARY (The Wall Street Journal)
California, Love It and Leave It
Bad policy has made the state unlivable, so I moved my family and my venture-capital firm to Texas.
By Joe Lonsdale
Nov. 15, 2020 3:37 pm ET

I love California, but I had to leave. I grew up in Fremont, attended Stanford, and have spent most of my adult life in the San Francisco Bay Area, founding technology companies like Palantir and Addepar and investing in many others. In 2011 I founded 8VC, a venture-capital firm that today manages more than $3.6 billion in committed capital. Few top venture capitalists consider living anywhere other than California and a handful of global financial centers, but I am moving myself and dozens of my 8VC colleagues to a new land of opportunity: Texas.

The harsh truth is that California has fallen into disrepair. Bad policies discourage business and innovation, stifle opportunity and make life in major cities ugly and unpleasant.

Forty years ago my parents came to California because you could accomplish anything in the Golden State. Government policy facilitated the entrepreneurial spirit. Dreamers and doers could thrive. The burst of activity in tech, finance, medicine, energy and many other industries lasted for decades. But now a state like Texas provides these opportunities without the problems and baggage California has accumulated. Let me mention a few personal examples:

• Public safety. Ill-conceived criminal-justice reforms and radical district attorneys are taking a toll on urban life. Three of my colleagues’ wives have been harassed and chased by derelicts in San Francisco’s streets, which are littered with needles and human waste. My wife is afraid to walk around the city with our young daughters. Police often don’t even respond to harassment and property crime, which has surged; San Francisco’s property-crime rate is now the nation’s highest.

• Electricity. The wildfire smoke that has blanketed California cities is one thing. But power outages, which left us stressed about spoiling breast milk for our daughter, are the direct result of California government incompetence. Last year the state had 25,000 blackouts, and this year has been even worse. The electricity turns on and off, as in Third World countries. Meanwhile, Texas has its own energy grid, with a plentiful and diverse supply. It’s nice to turn on the lights whenever we want.

• Responsiveness. In the early days of the pandemic in March, 8VC entreated the mayor of San Francisco and city staff to clarify rules to allow our critical employees to work on accelerating Covid-19 testing and the development of therapeutics. The city didn’t deign to respond. Government officials in Texas, by contrast, care about business. They return calls.

• Housing. California’s restrictive zoning laws make it nearly impossible for many essential low- and middle-income workers to live anywhere near major cities. In Texas, permissive zoning allows every member of our staff to live close to work and spend time with friends and family instead of enduring grueling commutes.

That’s not all. The California government is beholden to public-employee unions and spending is out of control. A broken environmental review process means it takes a decade of paying lawyers to build anything. Legislation makes it impossible for businesses to hire contractors without an exemption—granted by friends in the legislature, as with the music industry, or won by spending hundreds of millions on a referendum, as gig-economy companies with drivers just did. This isn’t how business is done in developed countries.

Politics in the state is in many ways closed off to different ideas. We grew weary of California’s intolerant far left, which would rather demonize opponents than discuss honest differences of opinion.

I will continue investing in Silicon Valley startups and fighting to help the state. I’m optimistic that over the long run, California can return to the values that once made it the dynamic center of global technology entrepreneurship. But until priorities change, the state will keep losing its top builders and creators.

In 2000 or 2010, it made sense to build in San Francisco. That’s where all the talent was, but not anymore. Except for a few concentrated parts of advanced biotech and software infrastructure technology, talented people are building top technology firms all over the country. This disaggregation of talent will spread prosperity across the U.S. Some of my most prolific entrepreneurial friends from California have moved with us here to Texas. Others have left for Miami, Nashville, Las Vegas and other great American cities. Six of our portfolio companies are already based in Austin and employ hundreds of people.

Our investments follow the talent. We’re betting that the future of America is going to be built in the middle of the country, in places with good government and a reasonable cost of living. In other words, places like Texas.

My firm has a motto: “The world is broken, let’s fix it.” We invest in technologies and people who will transform major industries and improve the lives of millions. It’s tragic that California is no longer hospitable to that mission, but beautiful that Texas is. Our job as entrepreneurs and investors is to build the future, and I know of no better place to do so than Texas.

Mr. Lonsdale is a general partner at the venture-capital firm 8VC.