Zach Coelius Profile picture
May 5, 2023 20 tweets 4 min read Read on X
As I have traveled around the world over the last year a lot of folks from other countries have been asking me what the hell went wrong in San Francisco.

The city so many called their favorite city in the US has become obviously broken.

Here is what I have been telling them:
SF & California is a case study in the danger of a single political party in control.

The loudest voices at the extremes invariably win arguments as their supporters are the most motivated, insane policies are enacted without push back.

Those policies have broken SF.
First and foremost is the push to reform the justice system. The US clearly has an unfair and broken justice system badly in need of reform.

SF & CA have enthusiastically rushed into changing the way we enforce crimes and how policing works.
Sadly, instead of thinking systematically they decided to simply stop enforcing “small” crimes. For instance shoplifting is decriminalized.

This had led to an incredible explosion of property crime and escalating criminality across the city. Everyone in the city is victimized.
These small crimes have not only made the daily environment miserable, but they are quickly escalating.

Professional criminal gangs now operate with impunity and guns have become very common.

Stores are closing across the city unable to afford loses.
Drugs. SF decided to simply stop enforcing the law. As super powerful new synthetic drugs are raging, SF has the cheapest and easiest drugs in the country. Coupled with generous handouts, and the ability to take freely from stores, addicts across the country gravitate here.
In Portugal they coupled decriminalization with a robust treatment program and a system where those whose addiction causes them to damage their community could choose treatment or jail.

SF (and the rest of the west coast) chose not to do that and the destruction is immense.
Mental health.

Our streets are full of untreated mentally ill.

We don’t have a system for forcing people whose illness causes them to damage their community into confined care. We simply let them to terrorize others and trash public spaces.

Horrible for them and us.
Housing.

SF has going through an incredible tech boom for 20 years. Innumerable new jobs led to a huge influx.

SF leaders decided they wanted to keep the city a museum and simply refused to build enough housing. Obviously costs exploded and so many folks were priced out.
A broken political system.

Instead of having a mayor who can be held accountable, here committees run everything.

The board of supervisors runs the city and independent committees of appointed cronies run each department.

Inevitable dysfunction has resulted.
This disfunction has led to out of control spending and a focus on political signaling for these cronies to exhibit their idealogical bonafides to position themselves for their next appointment.

Corruption and ineptitude is rampant.
Now, SF is in an inevitable doom loop. The tourists have stopped coming for fear of being robbed, the offices are empty as everyone would rather work from home and stores are closing with no customers and daily looting. Those who can leave are leaving.
Moreover the downtown of SF is a huge source of tax revenue and it is simply empty as many do not want to commuted every day through the crime and filth.

This huge hole in the budget is going to lead to more taxes and decreased services
The progressives who run the city are in a state of denial and are simply ideologically incapable of making the changes to reverse course. Moreover, because of the highly distributed nature of power in SF it will take years to push them out and replace them with rational actors.
I have found reading about urban decline in the 70’s and 80s has been very helpful. It is amazing how much history rhymes in this case. I also recommend the book Dreamland to understand the danger of this new class of drugs and San Fransicko for a polemic on the broken policies.
SF has incredible geography, amazing smart people, world class food, a very real new AI boom happening and an extraordinarily spirit.

This city will rebound and emerge stronger. How long that will take and what will happen in the interim remains a very open question.
I plan to stay and fight for the city I have called home for nearly 20 years.

But I as you can see I think it is going to be a very bumpy ride for the next few years.
Some folks have DMed asking if I know of a single high impact fix.

While I don't think there is a magic bullet, I do think the commission system where unelected political cronies run each department is a disaster. It needs to be abolished and the power returned to the Mayor.
If you are looking for an example of the toxic impediments the commissions constantly throw in the way of having effective departments this is a good example.

missionlocal.org/2023/05/police…
The incredible bias of the journalist is a nice bonus exhibit.

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More from @zachcoelius

Aug 20, 2023
Anyone who has spent time in SF recently is shocked to see thousands of addicts strewn across the streets slowly rotting.

Every day two more die and we pick up the bodies off the concrete.

My friends who visit always ask how it go this way.

An attempted explanation Image
TLDR: The boomers who vote and run the west coast incompetently instituted their drug legalization fantasy at the same moment a new class of 10x more powerful synthetic drugs hit the market.

Unmitigated disaster has unfolded.
In the 60s and 70s, our current generation of leaders were coming of age in an explosion of joyous creativity, rebellion and drugs.

Their much more conservative parents reacted by attempting to squash everything and criminalized possession and consumption.
Read 29 tweets
Aug 6, 2023
The best short of the AI trend are all these private equity owned software companies.

Obviously hard to short private companies but they are going to get slaughtered.

Couple a disincentivized product & eng team with underinvestment in r&d and they are struggling to keep up
AI is clearly a platform shift that dramatically improves the customer outcomes, but that requires a lot more product iteration and development than these companies are prepared to fund as they are operated like cash cows.
The biggest tech companies know exactly what is happening and they are leading the wave.

The paranoia around platform shifts runs deep in their culture and they have seen this movie before.
Read 4 tweets
Mar 15, 2022
7 years ago I syndicated my first deal on @AngelList. Since then there have been 90 more syndicates, $30m deployed into 55 companies, 4k LPs, 50% IRR, 10 exits, ~$15m distributed and over $100m in current positions in awesome high growth companies. What a ride.

Some lessons.
By far the most powerful part of @AngelList is the LP community. My 4,000 backers are founders, vc's, execs at every major company, finance pros, doctors, lawyers, engineers and every other role you can imagine. Together they are a superpower. I have 4000 people on my team
Every day they send me deals, help with diligence and point out when I am being stupid (they are really good at that...)

They are also a super power for our companies. In any deal up to 250 of them can join and become huge advocates for the company with real skin in the game.
Read 12 tweets
Nov 29, 2021
A thread on the spooky similarities (and differences) between the Dotcom bubble and Crypto ("web3").
They both started with a big true idea. If we connect computers in a network it will be super duper powerful. If we make money digital and programable it will be awesome. Both true and huge.
The folks who got in early on both ideas saw tremendous gains, which led to more folks joining, which led to more gains, etc. Because both ideas are huge, folks were comfortable becoming untethered from traditional value metrics and rode hype to massive markups
Read 19 tweets
Oct 25, 2021
There is a huge amount of chatter about the insanity of the venture market. Lots of folks throwing around words like "froth" and "bubble". It is full crazy. It is also working. Amongst my companies we just crossed $500m in revenues. A thread on why its working...
TLDR: We have moved from the early adopter stage to the mainstream in b2b software. Investors are recognizing this and shit is getting crazy.
1. The market is in full wild mode. I am seeing things I never would have dreamed of. At the seed stage rounds are getting done in days. Prices are 2-4x what they were a couple years ago. Marginal and some very weak companies are getting funded. Later stage multiple are sky high.
Read 15 tweets
Sep 29, 2021
The Zoomification of fundraising is a game changer. Lessons from raising my newest early stage fund in 30 days, in August, entirely over Zoom. <Thread>
In the bad old days LPs insisted on in person meetings. Given their global distribution that meant a ton of time on airplanes, prioritization of big and high probability check writers and a super duper slow process. Zoom changes this.
1. You can now massively expanded upper funnel. In the old days you were lucky to do 1 or 2 meetings a day. That meant to talk to enough LPs you had spend months in conversations. Now you can easily have 5-10 meetings a day.
Read 12 tweets

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