Why tech picked Texas
Image: Megan Markham / Protocol
Good morning! This Wednesday, Margaret O'Mara explains tech's love for Austin, the Bay Area grapples with what's left behind, even venture capital is starting to move and Pete Buttigieg is getting a big new job.
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Anna Kramer writes: Everyone in tech seems to be moving to Austin. It's become so much of a trend that a lot of people in my inbox have just accepted that Austin will be the next Silicon Valley. But … why? Austin's not some podunk town with cheap real estate, it's a bustling city that a lot of residents would say is already too crowded and expensive.
What about Austin actually makes it special enough that it could compete with the tech capital of the world? Margaret O'Mara has some answers. She's an academic who studies the history of Silicon Valley, and came onto the Source Code podcast to talk about what we can learn from that history. She gave us the best explanation of Austin's appeal we've heard yet.
Put that all together, and "big, second-tier places like Austin are going to be thriving, particularly in this new era when geography is becoming much more flexible," O'Mara told us.
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More from Anna: Tech workers leaving the Bay Area will cause an eventual decline in tax revenue for local governments and for the state. While we can't know for sure how much of a dent that will put on budgets in the long-term — it's hard to know who will move back and who will stay away — even the early data is eyebrow-raising.
San Francisco is expecting to collect at least $98 million less in business taxes than planned for this fiscal year, according to a November budget report, a large part of which is because many local workers were remote. And that's just the beginning.
The total budget shortfall could be much worse. When the SF controller's office releases its next set of projections, it will for the first time assume some level of permanent work-from-home, Michelle Allersma, the director of the budget and analysis division, told me. Even a small portion of relocated workers or permanent work-from-homers likely means the city's coffers will be missing millions of dollars.
No group of people has more control over the heat-center of the tech industry than the venture capitalists. Founders will always go where the financiers are, right? And the financiers have been some of the hardest to remove from Silicon Valley. But even that's starting to shift.
Fewer deals will be signed in the Bay Area, Pitchbook predicted. It believes the area will account for less than 20% of all VC deals next year by number, which would be the lowest proportion ever.
As for where VC themselves are going? Brad Feld picked three states: Florida, Texas and Washington. (Sound familiar?) "The more adventurous will move to Alaska, Nevada, South Dakota and Wyoming," he said. What do they all have in common? No state income tax.
Salesforce, the global leader in CRM, and Gavi, the Vaccine Alliance, announced today that they will collaborate to help Gavi manage critical information to equitably distribute approximately two billion COVID-19 vaccines to 190 countries by the end of 2021. Fair, rapid and equitable access to vaccines is critical to ending the global pandemic.
Airbnb is staying put, Brian Chesky said:
So you think Zoox's car looks a little silly? Fine by Zoox CTO Jesse Levinson:
MacKenzie Scott has developed a playbook for giving away billions in record time:
The Periscope team offered a surprisingly honest answer for why the app is shutting down:
You know who's excited about Signal's new encrypted group video calls? Ed Snowden:
Pete Buttigieg will be Joe Biden's Transportation secretary. He's an outspoken proponent of AB 5 in California, and will have a key role in determining the country's self-driving policies going forward.
Airtable overhauled its executive team. Peter Deng is the company's new chief product officer, joining from Uber. Ambereen Toubassy is its new CFO after a stint at Quibi(!) and Seth Shaw is the new chief revenue officer after running sales at Invision.
Twitter picked AWS as its strategic partner for delivering users' timelines. Who doesn't love a sexy cloud deal?
Wish priced its IPO at $24 a share, at the top of its proposed range. Presumably this number will double or triple before its stock actually goes on sale.
Our holiday recipe takeover continues! Want in on the action? Send yours to firstname.lastname@example.org, or just reply to this email.
Today, it's Dell's public policy director, John Howard: "For me, the holidays are usually all about sweets, thanks to my family's baking skills. Each Christmas, we'd help my mom bake thousands of amazing Christmas cookies of all sorts and hand deliver them to our friends and neighbors. My most treasured Christmas cookies are peanut blossom cookies, thanks to that delicious combination of peanut butter and chocolate. This recipe makes about three dozen cookies. Hope you enjoy and that this recipe inspires you to start similar traditions with your family this holiday season!"
You can find Howard's peanut butter and chocolate cookie recipe right here, if you'd like to try them yourself.
Read more about Salesforce's collaboration with Gavi, the Vaccine Alliance to use Salesforce technology to manage critical information to equitably distribute approximately two billion COVID-19 vaccines to 190 countries by the end of 2021.
Today's Source Code was written by David Pierce, with help from Anna Kramer and Shakeel Hashim. Thoughts, questions, tips? Send them to email@example.com, or our tips line, firstname.lastname@example.org. Enjoy your day; see you tomorrow.