Geoff Lewis on Disrupting Silicon Valley

Austin's Rising Prominence and a Venture Capitalist's Shift

Austin has garnered significant attention recently, marked by Oracle’s relocation of its headquarters to the city. Furthermore, Tesla is currently constructing a massive gigafactory within the Texas capital. This influx of development coincides with a substantial migration of individuals, predominantly tech professionals, leaving the Bay Area to establish themselves in Austin, consequently impacting local housing costs.

Beyond Tech: Venture Capital's Embrace of Austin

The appeal of Austin extends beyond tech employees. A growing number of venture capitalists are establishing a presence in the city. Among them are Jim Breyer of Breyer Capital and Joe Lonsdale, co-founder of Palantir, who announced last year his firm, 8VC, would be relocating from Silicon Valley.

The latest venture capital leader to choose Austin is Geoff Lewis, founder & managing partner of Bedrock Capital. This early-stage venture capital firm, established four years ago, currently manages $1 billion in assets. Lewis began his investment career at Founders Fund, serving as a partner for several years. He currently holds or has previously held board positions at companies including Lyft, Nubank, Vercel, and Workrise.

Early Investments and a Defining Philosophy

Lewis spearheaded initial investments in companies such as Wish, Upstart, Tilray, Canva, Rippling, ClearCo, and Flock Safety – many of which have achieved unicorn status. He is widely recognized for popularizing the term “narrative violation” to characterize promising companies that are often overlooked due to their divergence from prevailing industry narratives.

Disillusionment with Silicon Valley and a Search for Authenticity

The investor explained that his decision to move to Austin stemmed from a growing dissatisfaction with Silicon Valley and its perceived lack of focus on addressing tangible, real-world challenges. In a recent Medium post, Lewis recounted his initial exposure to Austin through his investment in Workrise (formerly RigUp), a marketplace connecting skilled trade workers. He was, in fact, the company’s inaugural seed investor eight years ago, and has since participated in eight subsequent investment rounds. Workrise is currently valued at approximately $3 billion.

Lewis expressed his attraction to the company not solely due to its potential for growth, but also because of its commitment to “real people and real places,” a contrast to what he described as the prevailing ethos of Silicon Valley’s larger corporations.

“Simply put, it represents a more humane technology company,” Lewis writes. “And it is my pursuit of this more humane form of technological innovation that led me to Texas. While I have lived on both coasts and built a career as a technology entrepreneur and investor in Silicon Valley, I have never felt as connected to either coast or as an insider within Silicon Valley – I did not attend Stanford nor was raised with significant wealth.”

A Conversation with Geoff Lewis on the Move to Austin

TechCrunch interviewed Lewis to gain further insight into his decision to relocate his firm to Austin, explore his perspectives on the perceived “bubble” of Silicon Valley, and understand his plans for investing in Texas’ burgeoning startup ecosystem. This interview has been edited for conciseness and clarity.

Early Career and Investment Philosophy

TC: Could you share how you initially became involved in the tech industry, given your upbringing in Canada?

Lewis: I began as an entrepreneur myself, developing a SaaS company in the travel sector [Topguest]. I launched this business in New York City and relocated my team to San Francisco in 2009. I spent the majority of my career between 2009 and 2021 navigating between New York and San Francisco. We sold the company in 2011, achieving a satisfactory outcome. I joined Founders Fund in 2012, where I discovered a passion for investing. I experienced a unique trajectory there, and 2012 proved to be an advantageous time to be a young VC in San Francisco and Silicon Valley. I specialized in marketplaces, both consumer and enterprise, providing early backing to companies like Lyft and Canva. I also made the firm’s first fintech investment in Latin America, supporting Nubank, which now boasts a $30 billion valuation.

Having grown up with limited financial resources, by 2017, I felt I had achieved sufficient success as a VC and should pursue my entrepreneurial aspirations. Consequently, we established Bedrock in late 2017. We are currently on Fund III, and our investment philosophy remains consistent with my previous approach – identifying what we term “narrative violations,” or companies that are overlooked or underestimated. We were early investors in Cameo, which has since become a well-known business.

The Initial Choice of New York

TC: Why did you initially choose to base Bedrock in New York?

Lewis: While at Founders Fund, I maintained residences in both San Francisco and New York City. As someone who grew up in Calgary, Canada, I desired to live on the coasts and be at the center of innovation. However, we decided to headquarter Bedrock in New York in 2017, believing that Silicon Valley was becoming increasingly self-referential and wanting to operate outside of the prevailing noise. New York offers a more diverse landscape, so we chose to base the firm there, while continuing to invest across the country and internationally. We invested in Workrise early on, and more recently in Argyle and Lambda School.

The Migration to Austin: A Turning Point

TC: Can you describe the decision to move to Austin? What specifically drew you to the city?

Lewis: My first visit was in 2012 when I invested in Workrise, leading to quarterly board meetings in Austin for years. A family member then accepted a position at UT (University of Texas), further increasing my interest in spending more time there. The pivotal moment, however, occurred during the pandemic. In February, my partner Eric [Stromberg] and I recognized the significant impact COVID-19 would have on New York City. We anticipated this and decided to leave New York. Initially, I moved to Hawaii, but found it too isolated for year-round living. I then sought a location that combined access to nature with a vibrant community of intelligent individuals, while also offering convenient travel to both coasts. Austin emerged as the obvious choice. Numerous friends from the Bay Area were relocating there, consistently expressing their positive experiences. By January 2021, we had committed to moving our firm to Austin.

I don’t advocate for everyone to move to Austin; it’s not the right fit for everyone, but it is the right fit for us.

Similarities to the Bay Area and Cultural Shifts

TC: Having experienced both the Bay Area and Austin, I observe growing similarities between the two. Do you share this perspective? Do you believe the culture is also beginning to permeate Austin?

Lewis: I have friends who are long-time Austin residents, some having lived here for generations, and others since childhood. They are understandably concerned about the changes occurring in the city, particularly the housing crisis, which is especially acute near the city center. They are also adjusting to the influx of transplants from California and New York. This is a legitimate concern, as the city lacks the infrastructure – in terms of housing and transportation – to adequately support the rapid growth. It’s not a healthy dynamic when long-term residents resent newcomers. This is a significant problem, and I’m unsure of the solution.

However, I believe wealth inequality is considerably less pronounced here than in the Bay Area. That, to me, is the most significant improvement Austin offers. While homelessness and financial struggles exist, we are nowhere near the level of wealth disparity found in the Bay Area, which is arguably the most unequal place in the country from a wealth perspective.

People can still manage to live comfortably here. Furthermore, the fact that Austin is a blue city within a red state is important. I am generally apolitical and not deeply involved in American politics, but I believe the diversity of viewpoints and opinions creates a natural tension that fosters more balanced policies over time, something less common in San Francisco.

Investing in Texas and Beyond

TC: I understand you plan to increase investments in Austin and Texas, but not exclusively, correct?

Lewis: Yes, we will invest anywhere and everywhere, but we already have four investments in companies we met here in Austin, three of which we’ve made since April. One is Leadr, a Dallas-based company that has developed a leadership development platform for enterprises. Another is a stealth company based here in Austin, and we’ve also invested in a cryptocurrency analytics company that isn’t technically based here but maintains an office in Austin.

I anticipate making more investments in Texas now that we are physically present here.

Real Problems vs. Abstractions: A Contrasting View

TC: In your blog post, you stated that “innovators in Texas seem to care about real people and real problems more than the abstractions from reality that animate too much of Silicon Valley.” This is a provocative statement. Could you elaborate?

Lewis: I believe there’s a cultural dynamic where individuals often reside within echo chambers. When you’re in the technology industry in San Francisco, or the entertainment industry in Los Angeles, people tend to interact solely with others in their field, leading to an insular worldview. A place less dominated by technology fosters a different environment. Texas, as a state, is significantly diverse, and while tech is a major employer in Austin, it doesn’t dominate the state’s economy. This naturally leads to broader social circles and a greater focus on practical issues.

I’m excited about Solugen, a Houston-based company innovating chemical manufacturing in more sustainable and cost-effective ways – a very real-world problem. Similarly, Leadr, which provides leadership development for churches and faith organizations, is a concept that likely wouldn’t originate in San Francisco, where religious affiliation is less common. I believe this difference in perspective is healthier, and I’m focused on investing in solutions that will genuinely impact the world.

Addressing Potential Backlash

TC: Your comments may be unpopular with some and provoke defensiveness. What would you say to those who disagree?

Lewis: It’s not a zero-sum game. I believe the atmosphere here is healthier for me, but I recognize it’s not for everyone. Silicon Valley has undoubtedly produced many companies that have significantly improved the world, while others may have had a net negative impact. These are always open to debate. Whether something is good or bad for the world is fundamentally subjective. At the very least, Texas offers a greater freedom to debate these opinions.