Roe reversal weighs heavily on emerging tech cities in red states

On June 24, Khadijah Robinson planned to offer a woman a job.

As founder of the Atlanta-based tech startup Nile, she spent three years scaling the platform, which connects consumers to Black online businesses. That Friday, she was thrilled to finally find someone willing to relocate from California to Georgia to help grow the company.

By early afternoon, the offer was on hold. The U.S. Supreme Court had overturned Roe v. Wade just a few hours before and that worried Robinson. Although Atlanta is a blue tech city — meaning its politics skew liberal — it sits within the overall more conservative red state of Georgia, whose governor is already making plans to implement abortion restrictions in the state. Robinson spent the rest of the day reassessing her new reality.

“As a founder and CEO, I now have to think long and hard about asking women to relocate to a state that will likely legislate against them very soon,” she tweeted. “I’m so tired.”

TechCrunch conducted a vibe check with founders like Robinson who are based in blue emerging tech cities situated within red states. Historically, technology hubs leaned liberal and were nested in reliably blue states like California or New York. That started to change these past five years, which saw places like Austin, Miami and Atlanta become hot spots for tech talent — a trend that only accelerated as remote work swept the nation.

The recent increase in conservative legislation and political division could again affect the landscape, deterring skilled workers from migrating to these hubs and causing an exodus of talent from red states. In particular, the reluctance of women to relocate to blue cities within red states could contribute to a reversal in overall diversity within certain sectors.

The new reality has caused founders like Robinson to rethink how to attract and retain talent. Some business owners are further embracing remote work, while others want to implement policies for hybrid employees. Overall, many entrepreneurs are on edge, cautiously preparing for what the November midterm elections could bring.

“This has put our decision to build the company in Atlanta in a different light,” Robinson said. “We’ve already seen in Georgia where decisions that are regressive impact the business community. It’s going to be hard to ask women to come to a place where they might very well be risking their lives.”

Uncertainty in Blue City, Red State

Southern cities saw historic migration during the pandemic as techies left Silicon Valley and New York City for Florida sunshine and Texas barbecue. Soon, Miami became a crypto hub, while places like Atlanta and Austin arose as emerging tech cities, where startup founders could work remotely and tap into previously untouched talent in the areas.

Tech employees tend to skew liberal and were often previously encapsulated in blue cities within blue states, providing a double layer of protection for their beliefs and a sense of safety for some workers relocating within those blue bubbles.

But the pandemic-induced tech migration saw founders, VCs and enthusiasts move into blue cities within red states, all amid a time of heightened political tension. The double-layer blue protection no longer exists for some who moved, if any safeguard remains at all.

Against all the tech weeks and NFT parties, Florida legislators swept the state with the “Don’t Say Gay” bill and a limitation on how citizens can discuss race in schools and at private companies. Texas also placed restrictions on how current events and racism are taught in schools while passing laws allowing Texans to carry handguns without a license and a bill that penalizes cities that cut police budgets. While it seemed the tech community and increasingly conservative state leanings would remain separate, the reversal of Roe v. Wade turned everything on its head.

“You can be conservative, you can be liberal, you can have those and live your life through those politics,” entrepreneur Devin Patel told TechCrunch. “But when you make decisions that impact people’s personal decisions and infringe on the rights they have, it’s not going to be a positive thing for hiring talent in a market.”

Patel moved to Miami from Charlotte in 2020, looking to take advantage of the sunny weather, laid-back lifestyle and bubbling tech ecosystem as he builds his stealth startup. Florida implemented a 15-week abortion ban after the Supreme Court decision was released, and Patel said his team is already seeing early signals of potential hires dodging Miami.

“America is becoming very policy-driven on the state level,” he said. “I’m hoping [these decisions] are not going to cascade because it’s going to compound in a negative way.”

For the time being, Patel said his startup will use remote work to let people stay where they feel comfortable, especially if that means remaining in areas where state laws allow them to have full control over health care decisions.

Over in Austin, Brittany Walla, the founder of the SaaS company Voxable, said she’s started having serious conversations with her team about moving the company’s base operations to Pennsylvania, where her co-founders relocated during the pandemic.

“Austin is booming as far as tech talent, which is why I decided to stay here, because if you have a presence here, it’s a lot easier to meet people in the community and attract that talent,” Walla told TechCrunch. “But Pennsylvania [legislation] is more reflective of our ongoing values as a company.”

Abortion remains legal in Pennsylvania until 24 weeks, while the Texas Supreme Court recently ruled the state was allowed to reimpose its total abortion ban from 1925.

Remote workaround

Back in Atlanta, Robinson spoke to her potential hire a few days after the Roe reversal and decided to remove the stipulation in the offer that required the woman to relocate to Georgia. The option to work remotely or on a hybrid schedule is now discussed on an ad hoc basis for potential hires as she figures out what to do next.

“Political beliefs affect culture,” Walla said, adding that her company will also emphasize remote work further. “As leaders in tech, we can make choices that support our employees where maybe the government is failing.”

But it’s too soon to say what will happen next as Southern cities face an increased political squeeze.

Walla spoke of the potential additional health care costs for startups in implementing policies prioritizing employees’ well-being. At the same time, Robinson noted how costly a pivot could be for a small company without deep pockets.

“It’s up in the air if you think about what we can afford and what makes sense for us at this stage,” she said. “That’s very different from what large corporations with resources can do.”

Erika Lucas, the founder of the Oklahoma-based VEST, a network of women executives with a venture fund, said that remote work isn’t enough to support employees and offering to cover abortion services could lead to criminal charges. Oklahoma is trying to pass the nation’s strictest abortion ban, prohibiting the procedure at conception and allowing anyone to sue those who aid or abet a patient.

She said offering different health benefits for employees in certain regions could open founders up to liability lawsuits. “You can still hire a distributed workforce, but you will have to implement many more procedures and policies to make sure you are providing those benefits,” she told TechCrunch.

Lucas has spent years trying to rebuild Oklahoma’s startup scene. The state was once the home of Black Wall Street, which, based in Tulsa, was an epicenter of Black wealth until it was bombed and set aflame by white supremacists a century ago. Lucas said it was hard to attract and retain diverse talent in the state even before the ruling — now, it will be next to impossible.

“All [people] hear is the state-level noise and legislation that puts us in a situation that says we are not inclusive,” she said. “This isn’t just an economic issue, but there is a business case for the cost that these policies have.”

Ed Zimmerman, a founding partner of First Close Partners and partner at the law firm Lowenstein Sandler, is also hearing concerns from his network and agreed that companies willingly providing access to these services for employees in states where it is banned are technically committing civil disobedience.

One founder living in a red state told him that although they would vote in the state to swing it blue, they will not incorporate their fund there and will instead set up its headquarters across state lines so a liberal state can collect the tax money, he said. Zimmerman also heard of another company planning to shut down one of its offices in a state that’s passed an abortion ban so that it can’t collect their tax money.

“There are companies that take a lot of pride in being outside of traditional tech hubs,” Zimmerman told TechCrunch. “How does that work when that community is screwed from a political perspective and a health and access perspective?”

Lucas said the best way for the venture community to work together is to stop supporting local legislators that back regressive measures. Meanwhile, Patel said he’s already looking to start a coalition with local CEOs and leaders to meet with regional politicians about ways to foster “the best environment for talent” in Miami.

Robinson pointed out that local organizers have been preparing for this decision for some time.

“It’s essential that any employer who cares about the health, security and freedom of all their employees, especially those who can give birth, work with local organizers and groups fighting to ensure equity for all,” Robinson said. “Work with the groups that are fighting for those things.”