Something’s gone wrong in the way we structure governance; so wrong that it’s now normalized for elected leaders to turn to govern through coercion rather than consensus
So wrong that the people who actually build and sustain the economy (workers, founders, educators, families) are often the last ones consulted about how that economy is governed.
And that’s why I want to explore something with you, as you might be thinking, “what does this have to do with startups?” When policymakers refuse to work together, we all suffer. Entrepreneurs, you, perhaps, can help bring about change.
If you’re watching the events unfold in Texas, you’re watching the canary in the coal mine of American regional governance.
In July and August 2025, Austin’s city council (where I live) unveiled what’s being called a “nuclear option” to force passage of a tax rate increase: a plan to cut every general fund department equally if voters say no in November. Police, fire, EMS (critical services) threatened not for budgetary necessity, but to create pressure. Meanwhile, Texas state legislators, faced with a redistricting proposal likely to entrench one-party control for the next decade, once again fled the Capitol stalling the legislative session and igniting the same constitutional chaos we’ve seen before.
You’ll notice, please, I’m not picking on a party in name, and I won’t have that discussion with you; if you know what’s going on, appreciate that my goal here is for us to consider the implications of the actions of policy makers, and collectively encourage solutions.
That’s not just dysfunction. That’s evidence that the structures we’ve inherited no longer serve the ecosystems in which we’re operating. And that’s precisely why I do the work I do.
Article Highlights
- These Aren’t Isolated Incidents, They’re Symptoms
- The Real Policy Failure: Civic Fragmentation
- Cities Aren’t Sovereign, They’re System Nodes
- What Ecosystem Work Really Means
- The Solution: Ecosystem-Level Governance, Outside the System
- Why This Must Be Built
- What Redistricting Teaches Us About Ecosystem Control
- Supporting Better Governance
These Aren’t Isolated Incidents, They’re Symptoms
Just as I’ve recently explored how venture capital is a symptom, not a cause, public policy is important in innovation and entrepreneurship because lawmakers’ actions result in consequences. We all experience symptoms of their decisions.
It’s tempting to read Austin’s budget standoff or the Texas redistricting standoff in the Capitol as isolated dramas. They aren’t. They are exactly what you get when governance is built around jurisdictional control instead of ecosystem function. As you’re reading with me, in whatever city or country you find yourself, consider how what’s going on here are examples of and lessons for what might be happening in your part of the world. The redistricting fight isn’t just about party power, it’s about whose voices are counted, which communities are fractured, and what regions get locked out of influence for another generation. And when elected leaders abandon the Capitol to prevent a vote, they are signaling that the system has no legitimate resolution mechanism. That, too, is a structural flaw.
These systems no longer reflect how people live, work, move, or build. And the consequences aren’t theoretical; they’re in your tax bill, your broadband connection, your grants, your commute, and your civic resources.
The Real Policy Failure: Civic Fragmentation
What we’re seeing in Texas is what happens when cities grow more influential than the regional structures surrounding them (and when state legislatures become more performative than functional). Redistricting, like taxation, is now a performance art. We see this playing out on social media not just in Texas, but with California, Florida, and Federally; theatrics win elections, not governance. And the side effect is that the very people who power our economy (founders, employers, educators, families) have no consistent platform to align their regional interests.
Regional interest being of particular note, again in our case here, because economic development functions regionally, not locally, and entrepreneurship thrives well beyond the borders of a city. Without consistency in our platforms for conversation, connection, and decision making, we waffle and under-perform in driving the economy.
This is what civic fragmentation looks like in practice: a city punishes residents with flatline cuts to critical services while its neighbors watch helplessly; a legislature redraws districts to nullify influence while the representatives of those areas flee the state to protect some semblance of democratic integrity.
No amount of political will can fix that. You have to restructure how decisions get made.
Cities Aren’t Sovereign, They’re System Nodes
Ecosystems aren’t defined by zip codes. They are shaped by supply chains, school districts, commuting corridors, and capital flows. They exist in the real lives of the people who move between Pflugerville and Austin, between Bastrop and Buda, between South Dallas and downtown Fort Worth, every single day. But our governance models are still organized around arbitrary boundaries, where one side of the road might be represented, and the other cut out entirely.
Redistricting matters because of that. When legislative districts are gerrymandered to the point where functional ecosystems are divided by political borders, representation becomes a farce. That’s not democracy. It’s a denial of the ecosystem logic that actually underpins modern regions.
What Ecosystem Work Really Means
In my work, we don’t really advocate for cities though we’ll work with them. I don’t even advocate for startups in isolation. I advocate for ecosystems, the integrated platforms of talent, capital, policy, infrastructure, and culture that drive long-term prosperity. That requires recognizing one fundamental truth:
Cities are not self-contained. They’re operating systems embedded within larger systems.
And yet, we keep treating them like they’re kings of their own castle. As if decisions made inside city hall (or inside the Capitol) don’t ripple through every other town and industry nearby.
That’s why regional power structures need to evolve.
The Solution: Ecosystem-Level Governance, Outside the System
What needs to happen now isn’t another coalition or chamber task force. It’s the establishment of external civic operating systems, built not to win elections or chase incentives but to align the forces that actually move a region.
In many respects, this is already familiar, because we’re talking about something similar to Economic Development Zones or how Trade Associations address considerations regionally, beyond districts or city borders. How it might work:
- A multi-city civic platform of electeds, employers, educators, and organizers who operate outside of any single city’s jurisdiction but within the functional region it influences.
- A mechanism for shared fiscal influence, so that if a city threatens to cut services, the surrounding cities funding its talent, housing its workers, and educating its kids have a say in what gets cut and what doesn’t.
- A regional narrative infrastructure that challenges the manipulative storylines that fuel tax increases, political walkouts, and performative posturing.
- A policy leverage machine, not to lobby but to coordinate; ensuring that regional economic development, workforce, and innovation aren’t held hostage by dysfunctional politics.
Why This Must Be Built
Because if you don’t build it, this is what keeps happening:
- City councils threaten vital services not because they’re broke but because they lack the civic architecture to prioritize.
- Legislators redraw maps with surgical precision to eliminate accountability, and when challenged, the procedural response available is to leave the session.
- Tax hikes are floated while essential reforms (like franchise tax restructuring or land value shifts) go ignored because they don’t fit the campaign season.
And the startups you’re backing? The workforce you’re educating? The capital you’re deploying? All of it gets diluted by governance systems that are too fractured to function.
What Redistricting Teaches Us About Ecosystem Control
Let’s not kid ourselves: redistricting isn’t about geometry; it’s a shift of power. And when that power is abused, it shows how much of our civic infrastructure is built to suppress ecosystem function in favor of institutional control.
When lawmakers flee to prevent quorum, it isn’t just a political maneuver, it reveals a structural flaw that should concern everyone: when the procedural defense is to leave the room, the process of service and compromise-based governance is broken.
That’s not a solution. That’s a sign the system is breaking down.
Supporting Better Governance
If you’re working in economic development, venture capital, or civic leadership, stop playing defense. You cannot keep trying to fix cities from within the systems that are designed to exclude, fragment, and isolate. You must build around them.
And starting is simple, we don’t need to have everything solved; start with these questions:
Who are the five people, outside your city, who influence what happens inside it? Who’s organizing them?
If the answer is “no one,” your region is running without an operating system. And what we’re seeing in Austin, in the Texas Capitol, and across the state right now is exactly what happens when systems stall.
Governance today isn’t just a political issue, it’s an ecosystem imperative. If we’re not solving for that, we’re not solving anything.
If I am being completely candid, fixing the systemic issue of governance without having some sort of fitness test for individual governance capability is a lost cause. Not only do many of the representatives lack the emotional IQ to contribute in a meaningful way, they also see the hob as a way to enrich themselves personally, with tools and access that we commoners do not have.
We have so normalized grift in politics that we look and feel like a third world country.
Maybe off topic, but certainly adjacent.
Patrick Gaughan Absolutely not off topic, it’s deeply adjacent. In fact, I’d argue that what you’ve raised is one of the key symptoms of the structural failure we’re talking about.
You’re right: if the system rewards self-interest, emotional detachment, or performative leadership, then improving governance requires more than new policy tools, it requires a change in who is drawn to serve and how accountability is enforced. But I’m cautious about framing it as a people problem. Bad systems can make good people ineffective. And in some cases, they can even turn well-meaning representatives into self-preserving actors because that’s what the structure incentivizes.
That’s why I keep returning to the idea of external civic operating systems; if we want better behavior, we need better architecture. Systems that decentralize influence, increase transparency, and make grift less viable simply by shifting where decisions happen and how.
Paul O’Brien I like the concept you are proposing, but can’t help feeling that every hyper successful organization that I have worked with for or consulted with had people that were committed to each other, and the greater good of the collective mission. Where ego reigns supreme, the org. Seems destined to fail…….i am sure there are exceptions, just never seen it personally. Keep pushing the concepts Paul, because something needs to change.
Have you seen https://free-cities.org/ ?
The founder wrote an interesting book https://titusgebel.com/book/
Brilliant. I have explored quite a few scenarios over the years, but no, haven’t heard of Titus Gebel or his book. On my reading list!
Well put Paul. What’s happening in both Texas and Austin proper lately has been eatin’ at my guts and been driving some extra-curricular thinking, cause I’ve got the time these days.
We met some time ago when I was at GM. I’m still in Austin if you’d like to get together for coffee and talk about this sometime.
Chris Linder Appreciate that, and I know exactly what you mean.
What’s happening here hits deeper than policy; it affects how people think about staying involved, building here, or even staying here. I’m glad you’ve been chewing on it, this kind of “extra-curricular thinking” is exactly what we need more of right now.
Over the years, I’ve met a handful of people working in hashtag#government innovation or hashtag#PoliticalTech hashtag#CivicTech. Might be time for Texas to explore that again and put together a Venture Studio or something to spin out meaningful change to how things can work.
And yes, I remember. Would really enjoy reconnecting. Let’s find a time for that coffee and dive in. I’ll message you.
The underlying problem with elected officials and the crazy Austin City Council is voter awareness and turnout.
Austin went from an at-large system to a “10-1” syststem — 10 districts and an at-large mayor — in 2012 with the first election held under this system in Nov 2014,
I would opine it was a bad move as it entrenched the crazies district by district rather than being able to harness the entire electorate to get rid of the dopes.
Every indumbent wins in Austin.
Austin voters never get to the bottom of the issues, don’t do the work to understand them, and fail to turn out. It’s a bloody mess.
The Austin City Council since my first dealings with them back in the 1970s has been a tax and spend bunch of dopes and continues to fail to solve problems and prioritize programs based on citizen needs.
JLM
Jeffrey L Minch You’ve been in this longer than most of us have been paying attention, and I respect the perspective. The move to 10-1 was supposed to decentralize power and increase representation, but you’re right, it’s only as effective as the civic culture that underpins it. Without informed turnout, representation becomes fragmentation.
What I’d add, and what I’ve been trying to explore, is that structural dysfunction like this doesn’t just live at the ballot box. It shows up in how we govern regionally, how influence is concentrated or distributed, and how public incentives are misaligned with economic or civic outcomes. Austin’s not alone in this, and that’s what makes it such a revealing case study.
The question I have now is, if city-level governance is locked in a feedback loop, how do we build around it, not just with better candidates or turnout, but with better systems?
Read the article, all true. One reason we don’t live with the Austin city limits. The suburbs tend to be more practical and less screaming all around.
The Texas legislature is a different thing also. Lots of screaming on the national level, but disingenuous. By example, Illinois, where many ran to hide out, has a 53% registered Democrat base roughly but their representatives in Washington are 14 D to 3 R due to how they have their voting districts. To say nothing of counting illegal immigrants in the allocations. Let’s just agree this has been going on for a long time and the ones screaming have been doing it pretty effectively for years.
Thomas Acker a lot of this has been building for decades across the country. The patterns aren’t new, but the consequences are getting harder to ignore. Whether it’s how cities handle budgets or how districts are drawn, what we’re really looking at is a structural breakdown: governance designed for a different era trying to manage modern, interconnected ecosystems.
Simply the fact that the internet exists and effectively didn’t only 30 years ago: immediate news, direct communication, community, coalition building, influence… all completely different than was possible before.
I try to avoid getting too caught up in the red vs. blue narrative, not because it’s unimportant, but because it often distracts from the shared civic and economic impacts that affect everyone, no matter where they live. What I’m hoping to highlight is that we can (and should) build new systems around the dysfunction, regional platforms, civic coalitions, shared fiscal influence, because waiting for internal reform just hasn’t worked.
Glad we’re aligned on the need to think differently. That’s the starting point.
I find the regional perspective intriguing. Can you give some specific examples of groups who exist outside a city and have a positive influence on the functions inside the city?
Great question. One example is the North Texas Commission, which coordinates between cities to influence regional economic policy in Dallas-Fort Worth.
The common thread is coalition-building that transcends municipal boundaries; giving surrounding communities leverage to affect the core city’s decisions without undermining its governance.
I didn’t cover coalition building in the article but loosely touched on the idea in pointing to how Economic Development Zones are an influence layer that sits above everything else.
What contributions do you envision start ups making to regional policies? Do you think that current startups play a role or do you see this as a space for new innovation?
Startups are the engine of disruption and change; when regional systems fail, entrepreneurs build what’s missing. I’ve seen brilliant GovTech through Founder Institute; the ideas are there. What’s needed now is for policymakers to embrace innovation, not obstruct it.
Similar thoughts. While focused on federal & state level ppl failed to show up to local elections. “Non partisan” elected officials slide into seats that hold power, that they either don’t realize, or pretend to not know. They rely on vendors & those with financial interest give them the info, they base decisions on. State leans on local as being the decision makers, yet local pushes for state to make the decisions, adding to statutes, & leaving tax payers with no one to hold accountable locally or statewide.
Exactly. We’ve created a loop of deflection -> local points to state, state points to local; and in the gap, vendors and special interests become the de facto policymakers. Accountability breaks down, and voters are left with noise instead of clarity. That’s a structural flaw we have to fix.
What’s the best way for policy makers to do that? I observe that they like to throw money at solutions. My gut says that removing regulations or building in cost-neutral incentives would produce better outcomes.
You’re spot on; throwing money without changing incentives just reinforces the status quo. The best way policymakers can help is threefold:
1 Remove outdated regulations that block new models.
2 Open procurement to early-stage solutions (even pilots).
3 Align incentives to outcomes, not incumbents.
Startups don’t need handouts and entrepreneurs don’t want them, they need access. Let them compete. Let them prove it.
This alignment to outcomes is where I’m pushing cities to rethink their investment in startup development organizations. Most “Accelerators” are just flashy startup hubs that look good for publicity. We need policy makers aligned to expecting outcomes (results) that are rightly expected of the solution.
Exactly but even those verses in lege who recognize this have no solution. It’s a massive problem, yet where does one even start? Non enforcing state agencies? Public education? Healthcare? I’m a newbie in understanding the inner workings, but it’s hard to see it as someone who has 0 ability or power to fix it. I can yell the train is on the tracks, but I can’t move the car or person off the track alone
What I’m chatting about with Jen in a separate thread is part of it. Greater influence. I work in Public Affairs (which communication and goverment relations) and what overcomes power or money is influence. Influence comes from audiences, coalition building, and outcry from voters to change.
Your feeling is more common, and more valid, than most admit. But you’re not powerless. Real change starts where coordination breaks down: at the regional level. We can’t fix everything at once, but we can build new structures outside the gridlock. Regional coalitions, civic platforms (tech), public-private pilots; those are things we can move. It just takes a few people willing to start pushing together. You’re not yelling into the void, you’re spotting the signals most ignore.
I absolutely agree. I’m just outside of Austin. The largest obstacle in our area is when we speak up, we face retaliation, or judicial harassment, many don’t want to be tied in court 2yrs bc someone wanted to silence them & violate their first amendment. It’s hard to hold ppl, agencies, or elected officials accountable when you can face 100s of thousands in legal fees bc you dared to ask a question, speak up, attempt to run for an isd seat etc. it’s terrifying how brutal it is locally for those who try. Granted I instead channeled things to fix what allowed for the actions to occur. Hb4623 started for me with Schwertner’s office March 2023, nothing, chasing & finding directors an continually reaching out, 0 experience, 0 funding, networking with ppl, reading A LOOOT of statute, & trying to balance being a mom & fix things. I was beyond grateful to see Rep Little see the value in removing immunities for ISDs, I was thankful to find others who also saw it, organically & beautifully something I heard was IMPOSSIBLE, never ever would happen, did. I’m always willing to network & meet people who are willing, & able to have uncomfortable convos & hear perspectives.
proof that even in the most entrenched systems, determined, informed citizens can move the needle.
This highlights why so many people don’t speak up: the personal and financial costs are often weaponized to keep the status quo intact.
Your work on HB4623 is exactly the kind of targeted, structural change I’m advocating for; fixing the framework so individuals aren’t punished for engaging. Those “impossible” wins are the blueprint.
If I’m not mistaken, it didn’t pass, right? @realmitchlittle cc @RepHaroldDutton @TerriLeoWilson
I’d value continuing the conversation and seeing how your experience could inform broader regional approaches. The more we connect people willing to have those uncomfortable conversations, the stronger the network for change becomes.
It’s important to point out that politics and governance do not mean the same thing. Our elected officials are participating in politics NOT governance.
The definition of politics is “the activities associated with the governance of a country or other area, especially the debate or conflict among individuals or parties having or hoping to achieve power.” What city council of Austin is threatening reflects this definition perfectly. Same goes for those actors who fled the state.
When things don’t make sense, we need to go further left in the equation, typically this means we need to better define things like how you’re spelling it out here. I’m in total agreement with you on this one Paul.
Nicholas Alter politics is the process we use to build consensus and compete for ideas, governance is the work of turning those ideas into effective action. What we’re seeing in both the city and the state right now are political maneuvers taking the lead over governance, which is why the outcomes feel disconnected from real needs.
That’s also why I keep coming back to structure; if the system makes it easier to focus on the contest than on implementation, we need to rebalance the incentives. Your point about “going further left in the equation;” without redefining the terms and expectations, we’ll keep diagnosing symptoms instead of fixing causes.
It seems like some of what you’re describing as a regional perspective on governance is already handled to varying degrees of success at the Council of Governments level. NCTCOG while focusing heavily on transportation, is one of the better models. The challenge here is that when a regional governance model is comprised of autonomous entities, it can become a localized UN. That is to say, lofty goals and poor/no actual execution among member entities. It can become all talk and no action.
I wonder if the answer includes returning to civil discourse and walking back from scorched earth politics? A respect for the other side of the aisle and the willingness to build a consensus is one hallmark of good governance. Screwing your opponent is small minded and short sighted. Eventually the tables turn and you’re left playing the had you’ve dealt the other side.
My point here is that the solution to the problems you’ve present aren’t systematic, they are individual.
When you begin to ensure that your opponent has no chance of survival or relevance, you’ve bought into the hubris that your side has all the best answers to the worst problems.
Tribalism is the antithesis of community, and the shortest road to stupidity.
COGs like NCTCOG are one of the closer models we have, and transportation planning is a good example of where regional coordination has shown real value. The “localized UN” challenge you describe is exactly why I think execution mechanisms matter as much as the forums themselves; without teeth, even the best-structured bodies risk becoming all talk.
I also agree that the cultural dimension (civil discourse, respect across the aisle) but I don’t see how we get back there so I wonder if we don’t need to turn to the entrepreneurs and innovators to figure out how to get us on track despite that. Structure can’t fix everything, but it can create conditions where collaboration is rewarded or even necessary, instead of the exception. It is both though: the individual willingness to engage constructively and the systemic design that rewards follow-through and shared outcomes.
Tribalism is the antithesis of community, as you put it, and designing governance so it incentivizes cooperation rather than zero-sum wins is where those two perspectives meet.
Paul O’Brien makes sense. I do think entrepreneurs and investors play a big role in turning this around. In Texas, they’ve been a large part of the problem. Thanks for the dialogue.