My phone kept buzzing with the same story all morning. Another California tech company cutting another few thousand jobs, another headline about the talent giving up on this state. I was reading it on the floor of the California State Senate, standing between a woman who 3D-prints houses with robots and a woman who makes protein out of thin air.

Ten of us were there to be recognized as some of California’s most extraordinary founders. When most people hear the word entrepreneur, they still picture a guy in a hoodie. I wish they could have seen who I was standing next to. One of these women is a Stanford chemist whose fertilizer pulls carbon out of the sky. One built the country's largest AI-powered platform for hiring nurses. Another left oil and gas to turn food waste into ingredients. This is what an entrepreneur looks like, and it is what the next California economy is being built out of.

But story on my phone was not wrong about the numbers. California’s unemployment rate sat at 5.1% in July , more than a full point above the national rate and among the highest of any state. The information sector that includes tech has shed about 20,000 jobs over the past year . Laura Ullrich, director of economic research at Indeed, explained to CNN that companies adopting AI "don't need to hire as many software developers or data analysts," and UCLA economist Ben Hyman notes that jobless claims are rising fastest among advanced-degree workers in the Bay Area who once held the most AI-exposed roles. Layer on the 229,000 residents who left for other states last year , the sixth straight year of net out-migration, and the narrative writes itself: the golden state is dimming.

That narrative is easy to write clickbait articles around, but its not the full story.

Periods of economic disruption can also be moments of extraordinary innovation. When California’s most talented women have access to capital, networks and opportunity, they don’t just build companies, they help build the next chapter of our economy. First Partner Jennifer Siebel Newsom

What Happens To A Brilliant Engineer When The Job Disappears?

Look at what the women beside me did before. The one printing houses trained in space physics. The one making protein is a physicist. A decade ago, minds like theirs would have been optimizing ad auctions or shipping another software feature, because that is where the money pulled them. The layoffs did not erase that training. They freed it.

Robin McIntosh, who built the neurodiversity care company Avela Health, told me her own background is in design and technology. "The central challenge in healthcare is not a shortage of spending or research, but a dearth of delivery systems that turn what we know into care that works," she said. "California has an extraordinary concentration of technical talent, capital and research institutions, and the opportunity is to direct those capabilities at the hardest problems in health." A displaced engineer is not someone whose skills expired. She is someone whose skills are suddenly available to the sectors that have been starved of them.

Why Are The Best New Companies Starting In The Hardest Sectors?

For twenty years, Silicon Valley bent nearly all of that talent toward screens, because the returns came fastest there. AI is now doing to routine software work what software once did to other trades, and the result is a generation of deeply capable people shaken loose from the monitor. Where they land is the whole question.

The founders honored in Sacramento point at the answer: the richest ground in 2026 is the physical, stubborn sectors a consumer app never touched. Construction productivity has barely moved in decades. Water systems, domestic manufacturing, elder care and agriculture are all enormous, under-digitized, and short on people who can build. Beatriz Acevedo, co-founder of the fintech SUMA Wealth, told me the reason she builds here runs deeper than code. "California's greatest advantage has never been technology alone; it is the mix of cultures, lived experiences and ambition behind that technology," she said. "This is where founders turn problems once dismissed as niche into companies that serve the new American mainstream."

Can Anyone Do This, Or Just The Physicists?

The honest objection is that these are exceptional people, Stanford chemists and PhDs, not the median engineer clearing out a desk this month. Fair. Not every laid-off worker becomes a deep-tech founder, and I won’t pretend otherwise.

But the direction is the point, and the on-ramps are wider than they look. When I raised my own first round years ago, I pitched close to 400 investors before I heard enough yeses to matter, with almost no one who looked like me on the other side of the table. Founders today have something I did not: a support system for female founders being built on purpose.

Sharon Healy, CEO of Sightglass Coffee, told me California now pairs its appetite for what founders make with "mentorship programs, networking opportunities and overall support that give us the space to build something that matters." Pick a problem you can care about for ten years, find a co-founder who has lived inside that industry, and use the scaffolding. That is a path far more people can walk than the layoff headlines suggest.

Is California's Future A Company, Or A Founder?

Here is the reframe I keep coming back to. We have spent years measuring California’s health by the headcount of a few giant employers. When they hire, the state wins; when they cut, it loses. That scoreboard is now misleading, because the same AI wave letting those companies shed jobs is handing thousands of capable people the time and the reason to build something of their own. It is already turning, quietly: the state's jobless rate has fallen from 5.5% a year ago , and California still added roughly 112,700 jobs over the same span.

The future of this state was never one more trillion-dollar employer growing forever. It is tens of thousands of founders across the real economy, and a striking share of the boldest are women. Nearly 40% of California businesses are already women-owned , generating roughly $580 billion in revenue between 2019 and 2023, according to the California Chamber of Commerce, and yet women still receive a fraction of venture funding.

Among all of the women angels I know, the sharpest conversation is about closing that gap from the inside: women becoming the investors who write the checks, not only the founders who wait for them. Kelly Kimball, co-founder and board chair of F5 Collective, which organized the Sacramento recognition, sees the stakes clearly. "The people who choose to stay and build in California are the future not only of our state but of the world," he told me. “Women founders in particular are thriving as the newest wave of creative, innovative thinkers.”

So watch the door people are walking in, not the one they are leaving. Every gifted technologist who stays and builds is a company, a payroll and a solved problem that no other state gets to claim, which is why the money now has to move toward them, from institutions, from investors, and from the women inheriting a historic share of the country’s wealth. These California entrepreneurs are thriving, and making our golden state continue to shine.