> There are three related problems that make California economically tenuous, and a fourth that makes the situation worse: It’s no longer the best place in the

> There are three related problems that make California economically tenuous, and a fourth that makes the situation worse: It’s no longer the best place in the world to start a startup. The gains from the existing tech industry increasingly accrue to a) passive investors, and b) lucky landlords. The state government is a levered bet on tech compensation. These three problems, which are interrelated, won’t show visible symptoms until well after they’re terminally un-fixable. California made a lot of money for a long time based on a technology ecosystem that requires big exits to make angels and VCs. That ecosystem is being strangled by the ever rising rents which mean VC funding accrues to landlords and you can’t keep your startup running unless you’re a success. No long hard slots of slow growth. This is part of why YC thinks 10% month on month growth is necessary. The disappearance of this possibility will make the tech ecosystem stagnate.