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Draper Shocked That Silicon Valley Opposes His "Six Californias" Plan

The venture capitalist defends his plan to split up the Golden State.

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In Michelle Richmond’s new novel, “Golden State,” a Silicon Valley entrepreneur helps push a measure onto the California ballot that would allow its frustrated citizens to secede from the nation.

On Tuesday night, during a gathering in the Lower Pacific Heights neighborhood of San Francisco, she felt compelled to point out that she began her research years ago. That’s because sitting immediately to her right was life imitating art in the form of Tim Draper. The Silicon Valley venture capitalist is pushing his own ballot measure that would allow California to at least secede from itself, dividing the Golden State into six smaller ones.

The discussion between the pair — perhaps both authors of California fantasies — was moderated by Economist editor Matthew Bishop and hosted by Susan MacTavish Best, the well-known publicist and founder of Best Public Relations.

Draper unveiled his plan in December, got sign-off to collect signatures for a ballot measure in February and said last night that he’s close to gathering the more than 800,000 needed to place the proposal before voters.

He also revealed that they’ve begun polling Californians on the idea. He declined to share specifies, but said results show support in northern rural counties and the Central Valley. The area least likely to vote for the plan, however, is his own backyard of Silicon Valley.

“Which is bizarre to me because you’d think Silicon Valley would benefit from this,” he said. “I think they will.”

Some of the tech, media and business types in the room didn’t seem so shocked, at least based on the skeptical tone of many of the questions and points raised. One guy came right out and called Draper an elitist. And he was the president of a public relations firm.

Apparently Draper is serious — even though political analysts say he’s got just about zero chance of succeeding. Should the measure somehow pass in California, members of Congress would have to sign off on a plan that would add 10 senators, effectively choosing to dilute their own power — which, you know, happens a lot in D.C.

So why is he spending his time and money on a seemingly doomed quest?

Draper’s argument is that California has become ungovernable, with deadlocked state legislators too far removed from the competing interests of some 38 million residents. The state is also underrepresented at the national level, where it only gets a pair of senators to advocate for its interests — the same as Wyoming with its not quite 600,000 people.

He said creating six new states — Jefferson, North California, Silicon Valley, West California, Central California and South California — would provide new opportunities to set up governments tailored to local needs and elect leaders responsive to them. And it would create new competition among the states by allowing citizens to freely choose the one that serves them best.

“How do you challenge the status quo?” he said on Tuesday evening. “It comes from starting fresh. … We’re a democracy and we need to take back our democracy.”

It’s hard to argue with Draper’s articulation of these challenges, at least up to this point.

But it get easier when he strives to portray California as being on the edge of economic ruin, all but shoving businesses into other states with its obstructionist government, high taxes and complicated regulations. I’ve heard this argument for well over a decade as a business reporter in California and, well, anybody checked out Bay Area job growth numbers lately?

Some have picked up a distinct libertarian whiff in the plan, seeing it as an opportunity to form a Silicon Valley government for Silicon Valley, without any of the pesky regulations that get in the way of collecting personal data innovating.

As Valleywag’s Sam Biddle memorably put it: “The Sean Parkers and Peter Thiels of our nation would finally get their enclave, an anti-regulatory Xanadu comprised not of noble yeoman, toilers, artists, or thinkers, but app-hucksters and Tesla-driving engineers.”

I asked Draper if this manner of gerrymandering was among his motivations.

“Not really,” he responded, adding he doesn’t believe any political party represents his interests. “So I don’t know why I’d do any gerrymandering.”

He added that the map lines today are somewhat arbitrary, and that counties themselves could ultimately decide which state to join.

“I’m just putting it out there,” he said.

Still, Draper glosses over some practical complications that arise from the plan, notably including reopening water rights conflicts that have spanned decades and creating vast interstate economic disparities.

An analysis by California’s Legislative Analyst’s Office found the proposal would create both the richest and poorest states in the nation:

Wealth in today’s California, however, is disproportionately concentrated among households in the San Francisco Bay Area, including Silicon Valley, which benefits from a concentration of technology firms. For this reason, if California is split into six states as proposed by this measure, two of the six states (Silicon Valley and North California) would have [per capita personal income] above that of today’s California, while the other four states would have lower PCPI based on 2012 data.

Silicon Valley’s PCPI — $63,288 — currently would rank as the highest among U.S. states … Central California’s PCPI would rank last among all U.S. states (about $150 below Mississippi).

Taxes on those incomes go into California’s General Fund to pay for public schools, universities, health programs, social services and prisons. Right now, money from the richer Bay Area spreads throughout the state, helping poorer areas pay for these public services.

Were it to become a separate state, “Silicon Valley” would keep all that cash for its own schools, parks, police and more, leaving poorer areas to fend for themselves. To precisely no one’s surprise, schools in poorer districts produce students less prepared for careers, and those disadvantages tend to accrue, threatening to widen the economic divide between states over time.

Nevertheless, Draper said several times on Tuesday night that all six states will eventually come out ahead.

“I’m going to do everything I can to get this on the ballot,” he said. “At that point it’s really in the hands of Californians. But I think they’re all going to be better off by having a sort of refresh.”

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