For many years, venture capitalist Tim Draper considered California and the Bay Area some of the best places for entrepreneurs.
However, as California declines in rankings of education and places to do business, he sees cities like Austin emerging as burgeoning destinations for entrepreneurs, leading him to consider moving Draper University from downtown San Mateo to the Texas state capital.
“I am looking at Austin, Texas, as a place to operate the school,” Draper said.
Draper founded Draper University in 2012 as a for-profit at the former Benjamin Franklin Hotel in San Mateo, offering entrepreneurship programs to students to develop startup skills.
Draper said city overregulation is pushing him to consider moving the school. The San Mateo Planning Commission in January did not approve a glass elevator and staircase at the back of the Draper University building, citing the need to protect the aesthetic of the historic downtown building. Draper said the decision was a blow to him and the university.
“Pushing us out of San Mateo was a bad idea,” Draper said.
The tech startup investor has already started a Draper Startup House in Austin, a coworking space, and he has plans for more investment in the area. Draper has not established a timeline for a potential move, and the school will continue to run its online program as it considers where to run its classes and its entrepreneurship program, called Hero Training. Draper said the school would run a session in July, with the future uncertain about the location of classes.
“That might be Austin, Texas, in the future. But it may be a while before we board up the building,” Draper said.
Draper spent part of his childhood on the Peninsula and wants to continue operating in San Mateo, citing Redwood City as an example of a Peninsula city helping businesses. He believes the glass elevator is a fun project San Mateo residents would enjoy if the city were willing.
“I would love if they came back and said you could do your elevator. We want you to be here. That would be fantastic. If they don’t want fun stuff, then we are not going to be attracting entrepreneurs,” Draper said.
Draper said the success California and the Bay Area has always had is not guaranteed, as other states continue to foster creative environments for startups and entrepreneurs. He cited a conversation he had with some of the students at Draper University, where he asked how many would be willing to move to Texas to start a business, and every hand went up.
“I am always thinking 15 years in the future. California doesn’t look as good as Texas and Florida or states that are encouraging new things,” Draper said.
Draper said California is at the edge of innovation because it’s state of the art and has new technology, but other places like Texas are more business-friendly and are better positioned to help, citing a recent trip to Texas.
“I see 3D-printed homes and new ways for people to operate, where they are experimenting, and they are allowed to experiment,” Draper said.
To help entrepreneurs at the university and in other places identify the best areas for businesses, the Draper Hero Institute earlier this year launched the Draper Innovation Index, or DII, to figure out the state of entrepreneur activity, environment and drivers in countries. The DII includes information on the best places to start a business, where entrepreneurs and startups have the best chance at success, why some areas do better and where entrepreneurs should consider locating their tech startups.
“We wanted people to realize there are a lot of options if you want to start a business, and we want governments to have to improve,” Draper said.
Dr. Wallace Walrod, who has a Ph.D. in regional economics from the University of California, Irvine and is the DHI’s chief economic advisor, said the index used data from Bloomberg Data; the Milken Institute, an independent economic think tank; and other data metrics. The DII plans to launch a section devoted to states in the future. Walrod said California is still number one in the tech innovation environment, but Washington, Texas and Florida are catching up quickly.
However, California is falling behind in the regulatory and tax environment areas. Draper said the decline in education for California would also hurt jobs and the Bay Area in the long run.
“If we are not doing everything we can for students, we are not carrying the ball here. There has never been more support for school choice than today,” Draper said.
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