Rise of the Rest cities have seen 1,400 new regional venture firms start up. The amount of venture capital dollars going to these cities has increased. During the Pandemic, investors began to open their minds to the idea that there could be someone somewhere else in the country who has a similar idea. More coastal venture capital is paying attention to what is happening in other cities. Provisions to fund more investment in regional hubs were included in the inflation reduction act signed by the president. In those cities, it's still hard for entrepreneurs to raise capital, it's hard for them to attract talent, and it's hard for them to get media attention.

The idea of moving to a bright red state is not something that the left of the political divide would approve of.

A lot of people consider a lot of things when moving to a city. There are some social issues that will be important. There is a risk that may slow, but the momentum is strong for many of these places. Other people may be drawn to tax incentives, the lower cost of living, or a desire to raise their family in their hometown. With the Rise of the Rest, we will have a more evenly dispersed innovation economy, where the majority of successful companies will come from outside of Silicon Valley. Maybe it will help unite a country that is very divided.

Outside of Silicon Valley, New York, and Boston, Seattle and Austin are the largest tech clusters. You claim that both appeared because of the rise of a mega company. What are the companies that will make the city better?

A recent example is ExactTarget in Indianapolis, which was purchased bySalesforce. Outside of San Francisco, it is the second- largest office. One of the co-conspirators, Scott Dorsey, started a venture company and 100 people who were atExactTarget became entrepreneurs. You had the exit of MailChimp for $12 billion. Detroit is an example of a success story. Successful tentpole companies inspire people to believe that they can do it, and they also lead experienced people to move to or invest in smaller companies in the region.

Will the rise of the rest be affected by the tech investment downturn?

It's not surprising it's slow. There was a time when the diligence process for making investments was shortened because evaluations were getting too much. FOMO drove investors more than realistic assessments of potential return.