Joe Lonsdale Wants to Build a new Tech City Near Austin and a Tunnel Transportation System to Develop an Even Bigger Tech Hub

Joe Lonsdale, courtesy photo

An experimental Beta City on the outskirts of Austin with transportation tunnels, autonomous vehicles, robots, flying drones, smart buildings, and all the latest technology applications.

That’s the vision of Joe Lonsdale, an entrepreneur, investor, and philanthropist, who recently moved 8VC, an investment firm, and The Cicero Institute, a public policy think tank, to Austin. He sees the region developing into an even bigger technology hub.

“It’s a big hub,” Lonsdale said. “I think there’s going to be a lot of really cool suburbs. One of my favorite ideas, which I don’t have time to do right now, but I’d love to work on, is to build a new city somewhere around here, nearby, in the next few years. Buy a bunch of land and dig tunnels connecting it to these places.”

There are all sorts of designs he has sketched up with really cool ideas, Lonsdale said. He made the remarks on the Ideas to Invoices podcast.

In the coming years, Central Texas is going to evolve into a major hub and it’s going to have a lot more people and a lot more companies in it, Lonsdale said. The challenge is to keep building, create transportation tunnels and make it easy for people to commute from less expensive areas into Austin, he said.

“It’s going to be a lot of fun,” Lonsdale said.

The Beta City project would rival Neom, the revolutionary $500 billion new city that Saudi Arabian Crown Prince Mohammed bin Salman is building in the desert bordering the Red Sea. That project is slated to be complete by 2025 and will include drones, robots, artificial rain, holographic teachers, and more, according to plans obtained and reported on by the Wall Street Journal.

Lonsdale, the co-founder of Palantir, Addepar, OpenGov, Affinity, Esper, is also on the board of The Boring Company, founded by Elon Musk. The Boring Company recently bought a building in Pflugerville, according to the Austin American Statesman. Lonsdale plans to help solve Austin’s transportation problems using technology and tunnels built by The Boring Company.

‘We’re going to dig some tunnels and make sure we fix any kind of traffic problems,” Lonsdale said.

“It’s one of these things that is great for economic inequality as well,” Lonsdale said.

It raises equality and economic access for people if it’s done right, he said. People can live in cheaper areas outside of the city’s core and easily commute to their jobs, he said.

Lonsdale plans to do that project and the Beta City with a little help from his friends, which include Musk, who recently moved to Texas. Musk is staying at the home of one of Lonsdale’s friends. And Lonsdale recently hosted a dinner with Musk and Michael Dell in which they talked about solving big, tough engineering problems with technology.

This year Lonsdale moved his family to Austin and announced that 8VC would relocate its headquarters to Austin. He also wrote an Op-Ed in the WSJ “California, Love It or Leave It” on bad policy decisions that have made the state “unlivable.”

Restrictions on businesses during the COVID-19 Pandemic, in particular, frustrated Lonsdale. His biotech ventures were not able to operate and he wasn’t able to get through to city and state officials to get clearance. Musk also publicly voiced frustrations with restrictions placed on Tesla plants. Last summer, Musk announced he would be building the next Gigafactory to make Tesla trucks in Austin.

Another big investment of Lonsdale’s is in Palantir, a software company that provides intelligence insights to customers. It recently relocated its headquarters out of the Bay area and to Denver, Colorado. Palantir has advanced enterprise software that supports important workflows worldwide, and half of its business is working for government agencies and the military.

The Bay area has become a lot more expensive to do business, Lonsdale said. And it’s become very competitive for getting the best talent, he said. The culture of the best engineers of the Bay area has become somewhat “poisonous,” Lonsdale said. They are not loyal to their employer and some don’t want to work on government and defense contracts, he said.

In the podcast, Lonsdale talks about Wish, the e-commerce app, that just recently went public and that has provided 8VC with its largest return to date – more than 500 times its investment.

“Wish has been a very good investment. There is a very strong team there. And they really proved what you can do in mobile commerce,” Lonsdale said. “The best venture investments are proving something newly possible in the world.”

Wish has become one of the top e-commerce companies in the world, Lonsdale said. The Wish app connects about 100 million consumers in the U.S. and Europe to about 600,000 merchants selling low-priced goods. There are about 100 million possible items you can buy, and they have really learned how to gamify mobile commerce, Lonsdale said.

“They are really good at guessing the items you want to buy,” Lonsdale said. The Wish app also partners with mom and pop businesses to send goods to their store and allowing people to pick them up there. That drives foot traffic to the mom-and-pop stores, Lonsdale said.  

Austin could be the site of the next Wish or Palantir or big breakout technology startup, according to Lonsdale. Already, six of 8VC’s portfolio companies have relocated from Silicon Valley to Austin.

“Austin is seeing a lot of really strong startups,” Lonsdale said.

Among them, Lonsdale’s younger brother, Jonis a co-founder of Austin-based Ender, a property management software startup founded in 2019, which has raised $7 million in funding. Ender moved to Austin about a year ago.

Lonsdale expects the trend to continue. He knows many people who have recently relocated from California to the Austin area, including his dad who had lived in California for 40 years.

Lonsdale thinks Austin is a great place to raise his family. He and his wife, Tayler, have three young daughters. They like the Austin community and its schools and great quality of life. Lonsdale is also a huge patriot who believes in free speech and the right to bear arms. He likes Texas’ ethos of self-reliance and rugged individualism. He recently received his conceal carry permit. He hasn’t bought a ranch yet, but he did buy a cowboy hat and boots and has two forty-foot flagpoles in front of this house flying giant Texas and American flags – something he says his neighbors in California would have objected to. He’s bullish on Texas and Central Texas, in particular, attracting more technology talent, companies, and founders. And the key is to success is to address traffic, homelessness, inequality, and other issues right away with sound policy decisions to prevent problems that have plagued San Francisco in recent years, Lonsdale said.

For more, listen to the entire podcast, pasted below, or wherever you get your podcasts – available on Google play store, Apple iTunes, Spotify, PlayerFM, Libsyn, and more.