Could Facebook City Become the Next State Capital?

With high hopes of unparalleled innovation, some companies are looking to remove themselves from larger society.

Jan 1, 2014 at 9:28AM

On June 22, 1633, Galileo Galilei was found guilty by the Roman Inquisition of promoting heliocentric heresy -- the belief that the earth revolved around the sun. All his books were banned and he remained under house arrest until the day he died. It wasn't until later that the world discovered he had actually been right.

Without question, there are instances in history in which progress has been held back by society at large. To throw off this restraint, some big name tech companies -- like Google (NASDAQ:GOOGL) -- are looking to remove themselves from society so innovations can flourish. What exactly are we talking about and what does this look like in real life?

Freedom fosters an innovative environment
Facebook (NASDAQ:FB) is partnering with a housing developer to construct a $120 million complex just down the road from the office. Calling it "Facebook City" is an exaggeration since it's neither a city nor is Facebook employment required. But this building is located 1.5 miles from the Facebook West Campus and is the brain-child of surveys to discover the average Facebook employee needs. These needs include things like a bike repair shop, a dog-sitting service, and a yoga studio. The facility is expected to open in 2016.

With a considerate perk like this, you'd expect Facebook to be one of the most satisfying companies to work for, and in fact -- according to -- it's the best public company in Silicon Valley. The Menlo Park complex is just another corporate attempt to meet employee needs in hopes that they in turn become more productive. 

But more than this pampering, perhaps the most effective perk Facebook gives its people is freedom. The company proudly states "We don't have rules. We have values." By freeing employees to try new things, Facebook is fostering a corporate culture that breeds innovation. In the words of electronic mail pioneer Shiva Ayyadurai: "Innovation demands freedom."

Out of this world
Taking this "freedom feeling" to its ultimate extreme, Google CEO Larry Page would love to see the creation of an isolated tech nation free of the laws that inhibit the rest of planet. In talking about the technology sector, Page said "We're changing quickly, but some of our institutions, like some laws, aren't changing with that. The law can't be right if it's 50 years old — that's before the Internet."

There's some truth to what Page is saying. Consider that (NASDAQ:AMZN) went online in 1995, but nearly 20 years later it is still battling the issue of state sales tax. Recently New York decided that the company is required to collect the Empire State's tax, despite the fact Amazon has no physical presence there -- a decision the U.S. Supreme Court let stand. While this 20-year ongoing debate isn't inhibiting technology, it does illustrate that sometimes the legal system can't keep up with technology advances.

Page went on to say that "many exciting things" could be done if they weren't illegal. This vague declaration leads some to fear his vision will allow things like microchip implants and Dr. Jekyll's formula. But the legal issues he's referring to are likely less sinister.

Google is working overtime to get driverless cars on the road, but there are many legal hurdles. For example, most state driving laws assume the driver is a human being. Specifically, New York requires drivers to have at least one hand, something that computer autopilot software obviously doesn't have. This human driver assumption -- as indicated by Page -- is an outdated assumption. 

Prime Air


Similarly, there's the issue of Prime Air -- Amazon's delivery service made possible by octocopter drones. The company would like to roll this delivery service out, but the Federal Aviation Administration has a problem with it. Under current law, this kind of drone is only allowed on a case-by-case basis, requires one pilot per drone, and cannot be flown into an urban area. 

In a newly created tech nation -- though far-fetched -- these issues could be resolved quickly. But there may be a more practical solution yet.

Down to earth
Page's vision is extreme, but tech investor Tim Draper is suggesting a more practical approach. According to TechCrunch, his idea is called "Six Californias," which calls for the current Golden State to be divided into six new states, including the state of Silicon Valley. Among other motivations, Draper is looking for more accurate representation in Washington, D.C.

If the United States federal government had the representation of the tech giants of Silicon Valley, then maybe laws could keep better pace with exponential changes in technology. Additionally, a Silicon Valley state could legislate things on a state level that no other state would consider. 

A closing dose of reality
While creating new states and nations that grow at the pace of technology sounds exciting, don't expect this to happen anytime soon. It's quite a process for Six Californias to even get on California's ballot, let alone achieve Congressional approval. Also there's no internationally accepted step-by-step procedure to create an isolationist tech country. In short, tech companies will have to keep playing by the rules of whatever country or state they're in for the foreseeable future.

Silicon Valley isn't likely to become the 51st state, but we can take away a business principle. Freedom breeds innovation, and a corporate culture -- like Facebook's -- that accomplishes this is often worth following.

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Jon Quast has no position in any stocks mentioned. The Motley Fool recommends, Facebook, and Google. The Motley Fool owns shares of, Facebook, and Google. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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