The ultimate start-ups: the tech bros founding their own mini-states their own mini-nations

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COMMENTSSilicon Valley’s libertarian elite have long wanted their own state, and as taxes rise the dream is gaining momentum. In September, Praxis, the “world’s first digital nation”, announced that it had picked a spot in Uruguay for its “city of the future”.

Praxis, which brands itself as a venture-backed “heroic society”, was founded in 2019 by Dryden Brown, a 30-year-old competitive surfer, along with former hedge-fund analyst Charlie Callinan. Their “high testosterone futuristic vision”, says Brown, is to rescue the “wasteland” that is Western civilisation. While he once described Praxis as “reminiscent of Rome, Athens, and Sparta, but with spacefaring ambitions”, he has since changed his tune. The rather more ordinary plan now is to build homes, set up a resort, have “awesome yoga” and good DJs.

In what is reported to be a “largely non-binding” partnership with Argentine developer Eduardo Bastitta, Praxis plans to take a district inside +Colonia, his planned 515-hectare waterfront development beside Colonia del Sacramento. The Uruguayan site sits just across the river from Buenos Aires. Citizenship needs approval by the site’s “wizard AI bot”.

The project gained media attention largely due to Brown’s eccentric track record, including his attempts to buy Greenland, create the “Dubai of Africa”, and start a defence-tech startup city called Atlas. In October 2024, a crypto firm called GEM Digital pledged to provide up to $500 million in conditional lumps as Praxis hit certain milestones. Between 2021 and 2023, Brown raised a little under $20 million, mostly from a crypto firm, but the rest from funds backed by the likes of Peter Thiel, Joe Lonsdale, Sam Altman and Marc Andreessen. These heavy-hitting names have never spoken about Brown’s plan publicly — but their willingness to fund crypto-based New Worlds runs much deeper than Praxis.

Much of their shared fantasy, like Brown’s, stems from Ayn Rand’s novel Atlas Shrugged. Met with negative reviews when published in 1957, Rand’s magnum opus depicts a world in which industrialists are oppressed by a tax-hungry state, leading them to withdraw to their own hidden valley community. When the old country collapses, they are then begged to return and rebuild society from the ashes, only now on their own terms.

Thiel has stressed the need “to escape not via politics but beyond it” because “there are no truly free places left”. In 2008 he put $500,000 into ocean platforms — artificial islands in international waters — with their own laws. When the scheme failed, he moved his money into Pronomos, the investment fund that wrote Praxis its first cheque. Elon Musk has also recommended Atlas Shrugged and even cast himself as its hero. But Musk has not founded a network state, looking instead to Mars as the clean slate upon which to build his new civilisation.

A nation, on this account, is a start-up that acquires sovereignty last

As more people complain of rising taxes and poor government choices, they turn to fantasies of escape. Balaji Srinivasan, author of The Network State, is something of a Silicon Valley guru. After completing an engineering PhD at Stanford, Srinivasan co-founded a genetics testing company that sold for $375 million, and in 2017 was considered to run the US’s Food and Drug Administration (FDA). The Network State argues that a country no longer has to begin with land. It can begin as an online group with a founder, a shared moral idea, and a digital currency. Raising funds among themselves, the members buy a number of small plots around the world — a bit like Soho House — that act as their territory. Once the group can prove they have a population, an income, and a footprint, they can ask the government of the country where their plot(s) sits for diplomatic recognition. A nation, on this account, is a start-up that acquires sovereignty last.

Srinivasan’s theories have significant traction in Silicon Valley, and in 2024 he started his very own “Network School” in Malaysia, where founders and digital nomads could live, work and learn how to build these nations. The enterprise was shut down after the local council found it had operated outside its licence. Srinivasan has since signed a note of intent with the deputy prime minister of Kazakhstan to build a new campus there.

For a few years it looked like the idea would work, but in 2022 things took a bad turn

The start-up state closest to being given self-sovereignty is Próspera, a small jurisdiction on a Honduran island. Founded by Venezuelan-born entrepreneur Erick Brimen, the arrangement is that criminal law stays within the state while the private jurisdiction runs the rest. About 255 residents live there, with another 1,722 signed up online. There is a school with 53 pupils, but no hospital. For a few years it looked like the idea would work, but in 2022 things took a bad turn after a change of government had Congress repeal the law that allowed the zone. Refusing to leave, Próspera sued Honduras for about $10.8 billion. Nothing has yet been settled, and people are still living and working there.

That is the snag in all of these projects. A new country needs an old one to tolerate it, and the old one can change its mind. Malaysia shut the school, Denmark wouldn’t sell Greenland, +Colonia — if the deal ever binds — will still be Uruguay. Yet, however far-fetched it may all sound, it is indicative of a real problem: so long as national unity feels thin, and the brain drain continues from capitals like London, we will see many more attempts to come. One in five UK founders told the Entrepreneurs Network they expect to leave within a year. Perhaps we should incentivise our innovators to stay and build a brighter future for Britain, before they decide the future is somewhere else.