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The tech elite are abandoning Silicon Valley in droves because of ‘monoculture’ and high taxes — here’s where they’re headed

Summary List PlacementThe tech diaspora is spreading. For the better part of a decade, tech founders and investors who earned their fortunes in San Francisco and the peninsula to the south have been decamping for more politically diverse and affordable areas. The migration has accelerated as the COVID-19 pandemic has closed tech...

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Summary List Placement

The tech diaspora is spreading.

For the better part of a decade, tech founders and investors who earned their fortunes in San Francisco and the peninsula to the south have been decamping for more politically diverse and affordable areas.

The migration has accelerated as the COVID-19 pandemic has closed tech offices, canceled in-person meetings, and otherwise scratched the value of living in a tech hub that happens to have among the highest taxes in the nation.

Peter Thiel’s flight from the Bay Area may have inspired others in his orbit to follow suit. Joe Lonsdale, who got his start as a finance intern at PayPal, said recently he’s moving his venture investment firm, 8VC, from the Valley to Austin.

Palantir, the big data company founded by Thiel and Lonsdale, relocated its headquarters to Denver in order to escape the “monoculture of Silicon Valley,” its CEO Alex Karp said. (Although Palantir still has its Palo Alto office).

And now Keith Rabois, a prolific startup investor and a managing partner in Thiel’s Founder Fund, is leaving for Miami — enticed by “warmer weather and water,” he told Fortune, not to mention no state income tax.

These are some of the high-profile defectors who have left Silicon Valley in recent years — and where they’re headed.

SEE ALSO: A Black founder used this unusual pitch deck to raise $17 million from Ashton Kutcher, Sean ‘Diddy’ Combs, and the CEO of Qualtrics

Peter Thiel became a social outcast in Silicon Valley after the libertarian billionaire-investor supported President Donald Trump’s run for office in 2016.

Source: Los Angeles Times

Two years later, Thiel said he was leaving the Bay Area for his home in Hollywood. One of his venture capital firms, Thiel Capital, and his foundation also set up headquarters in Los Angeles.

Source: Los Angeles Times

Thiel has said groupthink in tech can be dangerous. “Network effects are very positive things, but there’s a tipping point where they fall over into the madness of crowds,” Thiel told The New York Times in 2018.

Source: New York Times

Thiel also has the option of moving to New Zealand, where he has dual citizenship. He owns a mansion in Queenstown and land on the shores of Lake Wanaka.

Sources: Business Insider and New Zealand Herald

This year, the big data software company Thiel cofounded, Palantir, moved its formal headquarters to Denver.

Source: Denver Business Journal

In a letter to investors, Palantir CEO Alex Karp railed against “the engineering elite” of Silicon Valley, saying they don’t know “how society should be organized.”

“Our company was founded in Silicon Valley. But we seem to share fewer and fewer of the technology sector’s values and commitments,” Karp wrote in the company’s IPO paperwork.

Source: CNBC

Karp has been working out of a barn in New Hampshire during the pandemic, he told Axios in May.

Source: Axios

Joe Lonsdale, another cofounder of Palantir, said he’s moving his investment firm, 8VC, to Austin, in part because it’s “more tolerant of ideological diversity.”

Source: CNBC

Lonsdale, who has described himself as a contrarian and appears to hold libertarian views, disagrees with the way the government is run in California.

Source: Business Insider

“Austin is *far* more tolerant of ideological diversity than SF,” Lonsdale tweeted. “It’s generally a good idea to have awesome left hippies around for great culture / music / food etc … just rather they don’t all run the state.”

Source: Twitter

After many years in Silicon Valley as an entrepreneur and investor, Tim Ferriss decided that Silicon Valley had changed for the worse and moved to Austin in 2017.

Ferriss, who considers himself “very socially liberal,” told us “if you don’t conform to what Silicon Valley views as the established set of credos and beliefs for a hyperliberal, you do get attacked.”

Source: Business Insider  

In Austin, the famed podcaster found a “very young community and a medley of feature film, music — certainly tech if I need to scratch that itch.” But, he also says his new home has “more perspectives that I could borrow from and learn from.”

Elon Musk runs a gamut of startups from Los Angeles to Silicon Valley, but he makes LA his home. At one time he owned five mansions in the Bel Air neighborhood.

Source: Los Angeles Times and Variety

Musk has said when he told his friends he was leaving Palo Alto for LA, “they all thought I was crazy.”

Source: Los Angeles Times

“People in the Bay Area have forgotten that there’s been a huge concentration of aerospace engineering talent here, for more than a century,” Musk said.

Source: Los Angeles Times

Prolific investor Keith Rabois came to the Bay Area to attend Stanford, played an important early role at PayPal, and jumped from one tech giant to the next over his long career.

Now, he said, “San Francisco is just so massively improperly run and managed” that “it’s impossible to stay here.” He’s moving “imminently” to Miami.

Source: Fortune

The Florida city has “all the things you wish you had” living in the Bay Area, Rabois said. “I’m a fan of warmer weather and water, so it feels like I’m going on vacation.” He added that no income tax is a bonus.

Dave Asprey’s career went from cloud computing to biohacking in Silicon Valley. He’s built an empire around his DIY approach to human enhancement, including books, supplements, and coffee infused with butter.

Read more: How the CEO of Bulletproof Coffee turned buttered coffee into a multimillion-dollar empire

Nearly a decade ago, Asprey moved to an organic farm on Vancouver Island in Canada.

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Source: Business Insider

“The people here are friendly and polite, they seem to actually like each other,” Asprey wrote on Facebook. He added that the winter weather “sucks” but at least “healthcare is free.”

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Source: Facebook

Preethi Kasireddy left a budding career in venture capital to try her hand at software engineering. In 2017, Kasireddy ditched the Bay for Los Angeles, where she remains.

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In her travels abroad, Kasireddy saw that “Silicon Valley wasn’t the only place where world-changing engineering, technology, and innovation was happening,” she wrote of her decision to move.

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Source: Medium

Los Angeles caught her interest because of its proximity to San Francisco, its booming tech sector, and the diversity of interests among residents, she wrote. Today, she is a startup founder and CEO.

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Source: Medium

Cybersecurity exec Robert Wood, who now runs the security team at software company SourceClear, said he was living paycheck to paycheck in San Francisco.

Source: Tech.co

“We ended up only staying in San Francisco for a year and a half but we blew through all of our savings and racked up some credit card debt just trying to keep up,” Wood told Tech.co.

Source: Tech.co

He escaped to a Bay Area suburb for a year before a move to DC. Wood said his mortgage costs “just a bit over half” of his downtown San Francisco rent.

Source: Tech.co

This trend isn’t new. Some of the most influential people in tech left the Bay Area decades ago.

Netscape cofounder Jim Clark was one of the first tech visionaries to pursue life outside of Silicon Valley. He decamped for Florida in 1999 during the dot-com era.

Source: New York Times

“One pays a lot to live in the great climate and intellectual environment of Silicon Valley,” he has said. “Everything is too expensive and taxes are ridiculous.”

Source: The Mercury News

Clark has said he saved $150 million by moving to Florida and avoiding California income taxes.

Source: The Mercury News and Mansion Global

AOL cofounder Steve Case has lived in Washington, DC, for more than 25 years. The entrepreneur runs an investment firm, Revolution, out of the nation’s capital.

The firm’s website describes its mission as establishing Revolution as “the premier firm outside of Silicon Valley.” Case has pledged to invest mostly in startups outside the Bay Area.

Sources: Revolution and CNBC

Internet entrepreneurship is being “both regionalized and globalized,” he previously told CNBC. “I think we’ve probably hit peak Silicon Valley.”

Source: CNBC

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