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Texas, the Land of Evolving Opportunity
January 26, 2021
Two weeks ago, Joe Lonsdale, general partner of 8VC, wrote an op-ed in the Wall Street Journal explaining why he and dozens of his colleagues in the tech and venture capital industries are leaving California and setting up shop in Texas, citing Texas’ pro-business and limited government philosophy.
Lonsdale and his techie friends are not alone. The Dallas Morning News recently published statistics gathered by Yardi Systems – their report claims that “1,545 people per day settled in Texas last year, with Harris County seeing the greatest influx from out of state than any other region.”
Let me be the first to say: Welcome to Texas Y’all!
With reasonable home prices, a low cost-of-living, and no state income tax, most out-of-staters enjoy a sizable “pay increase” when they move to Texas from states like California or New York. But local businesses and corporations are arguably the bigger beneficiaries when talented minds move to the Lone Star State.
Venture capitalists, techies, and frankly, entrepreneurial free spirits can offer a new perspective to an old problem. Known as the Energy Capital of the World, Texas – and more specifically, Houston – has a public image crisis on its hands. The growing disdain for “dirty oil” and its volatile pricing has many green-leaning folks imagining a world without petroleum products. It did not help that in the final presidential debate, now President-Elect Joe Biden claimed he would phase out all oil by 2050. (One cannot help but wonder what part that statement may have played in keeping Texas red on November 3.)
While the exhausting debate over crude oil’s pros and cons is unlikely to be resolved soon, what is happening in Texas, and across the oil and gas industry, is decidedly positive. There is an intentional collaboration happening between old and new industries as technology now plays a prominent role in the energy sector. And while the California market may be oversaturated, venture capital money is still welcomed here – for startups seeking to bring their technology to the forefront, accessible capital is exciting news.
Each time the price of oil has crashed in the last 15 years, (2008, 2014 and again in 2020), brilliant minds have come together to find ways to make money at $50 a barrel of oil or less. And while it takes time for companies to adapt to a new way of working, it can be done with the right team working to solve a problem.
Consider that five years ago, NOV introduced its robotics and big data to drilling rigs. As a result, engineers can now communicate over headsets or resolve problems via zoom, using real-time data to advise workers on rigs all over the world. Fewer people on a rig and faster drilling translates to safer operations and cheaper gas at the pump for end users.
Skip ahead to 2020. Today, artificial intelligence companies, like Ambyint, a start up out of Calgary that is now based in Houston, have the ability to improve flow rates at the well and get the most oil out of the ground for the operator. Moreover, thousands of wells can be monitored and optimized in real-time by a single engineer sitting on his couch during a pandemic.
While only a few examples, these savvy collaborators aren’t just impacting the way oil comes out of the ground. They’re attacking the problem at all ends of the value chain, to make a safer, cleaner and more affordable petroleum product for all of us.
While political pundits and social analysts suggest that Americans are more deeply divided than at any point in recent history, Texas residents – old and new alike – can all agree that our state needs a strong and healthy energy industry. That means an industry that is aggressively innovating and continuously improving all aspects of its operations, and technology will continue to play a critical role in that equation. So let’s show our new neighbors some true Texas hospitality – there’s plenty of room and lots to do here, so again, welcome y’all.