Silicon Valley

Silicon Valley discovers secession, decides it's supercool

April 4, 2014: 7:00 AM ET

Separatist movements used to be wacky and fringe, and they have a lousy track record. But don't tell that to venture capitalist Tim Draper.

By Tory Newmyer, writer

Draper Fisher Jurvetson founding partner Tim Draper. Photo courtesy of DFJ

Draper Fisher Jurvetson founding partner Tim Draper. Photo courtesy of DFJ

FORTUNE -- To believe the headlines, one of the hottest ideas to come out of Silicon Valley in the last year is the notion of self-government. Specifically, that the tech capital of the world should split off from California and launch itself as a sovereign startup free of the legacy burdens of its mothership.

The argument for secession has been advanced with all the overheated bombast you'd expect from entrepreneurs convinced they'd be living in a utopia of their own making if they could simply opt out of the country. But redrawing the California map has taken a (slightly) less fanciful turn with the push by investor Tim Draper to divide it into six separate states. Draper late last year quit his day job as an investment partner at Draper Fisher Jurvetson, the firm he co-founded in 1985, to focus on the project -- along with an entrepreneurship education program. Draper's goal is to force a referendum onto the November ballot, and he tells Fortune the effort is "almost on track" to collect the necessary 800,000 signatures by the mid-July deadline.

Don't throw out your 50-star flag just yet. If the referendum qualifies, and voters approve the change (a pair of big ifs), the California legislature would then need to bless the plan. Then to pass Constitutional muster, it would need to win Congressional approval, since the partition would mean sending an extra 10 senators to Washington.

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"This is a gift to California," Draper says. "If they want to do this, they'll vote it in. We're getting a lot of interesting support from different regions that feel they're not getting the services they deserve, and they're right."

Considering the hurdles, it's no wonder secessionist movements historically have a lousy record. There is precedent for a new state forming, Eve-like, from the rib of an existing one. That's how we got Maine (from Massachusetts), West Virginia (from Virginia), Kentucky (Virginia), and Vermont (New York and New Hampshire). But then the newest among those, West Virginia, was formed in 1863. Both before and since, scores more failed attempts have bubbled up whenever an aggrieved minority felt it could better preserve its interests by striking out on its own.

But the past several years have seen an unusual number, a result, perhaps, of the antigovernment animus fueling the rise of the Tea Party. Or take an even bigger step back and blame an already sinking respect for government that's now circling the drain and a prevailing sense that our political poles have never been further apart with no means to bridge them.

In that spirit, Rick Perry, the Texas governor and Tea Party tribune, made waves for publicly musing about whether his entire state should secede from the union and reestablish itself as an independent nation rather than knuckle under to new Washington diktats. And there have been many other more earnest if lower-profile attempts to fracture the existing map. Last November, a Tea Party-driven effort to split a northern Colorado county off from the rest of the state fizzled when only 42% of voters backed the move. Florida legislators lately have considered whether the state wouldn't be better off severing its Southern-inflected upper half from the snowbird-dominated tip, with commentators on both sides of the divide measuring the merits. In other states, regions feeling dispossessed by the incumbent regime in the state capital want out -- with campaigns in western Maryland, southern Arizona, and Michigan's Upper Peninsula all agitating for a breakaway.

While secessionists are frequently Tea Party-affiliated, Draper says his effort is apolitical. The investor says he's sworn off any partisan attachments himself -- after identifying as a Republican, then a Democrat -- out of frustration with what he calls extremism on both sides. Indeed, as the Washington Post notes, the newly formed state of Silicon Valley would be the most heavily Democratic of the six, made up entirely of counties President Obama carried on his way to reelection in 2012.

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Draper claims a more practical motivation. Six Californias, he says, is about restoring more local control to the state's 38 million residents since Sacramento has proven it can't do the job. California has the country's highest poverty rate in the country, and 8% of its population is unemployed. Draper ticks off other metrics where he says the state has slid: recidivism, infrastructure spending, education. Yet California Gov. Jerry Brown, a Democrat, is riding high in the polls as he seeks a fourth term, touting a "California Comeback" story. It's tied to his success transforming a $25 billion budget deficit into a nearly $5 billion surplus in part through higher taxes on the wealthy and positive momentum in the jobs column.

Never mind that. Asked how six states would succeed where one failed, Draper inverts the question: "What makes you think that the status quo is going to get us any better results than they have over the last 40 years?" And he waves off concerns over transition costs -- consider what it would mean alone to break down the state's university system and then reconstitute it -- as "a short-term blip for a long-term gain."

But without a dedicated budget, or an apparent game plan for pursuing the campaign beyond referendum signature gathering, it's tough to see Draper's bid as more than a quixotic thought experiment. Draper says at some point soon, popular interest will need to drive it forward. "I can be the impetus, but it's really got to be a grassroots effort for this to work," he says. More likely, it joins a pile of upstart secessionist movements in history's dustbin.

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