Surfing Silicon Beach

West L.A.’s swelling tech scene has made it an alluring home base for new startups

 

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This past June,Los Angeles had its first annual Silicon Beach Fest. The event, which drew 2,000 people and occupied multiple venues over three days, was a celebration of the thriving entrepreneurial network that is claiming the Westside of Los Angeles. Shortly afterwards, the community reached another major milestone: Los Angeles Mayor Antonio Villaraigosa announced that he'd joined with entrepreneurs, venture capitalists and business leaders to form the Los Angeles Mayor's Council on Innovation and Industry (LAMCII). To support L.A.-based innovators, the council will aim to beef up governmental collaboration, pull in more venture capital and better tap the strength of the universities in the area. Both the festival and the council's efforts are an attempt to make official what Santa Monica, Venice and Westwood-based entrepreneurs have noticed recently: The west side of L.A. is a serious tech contender.

It's an important sea change for Southern California, which has long been a destination for business education, but hasn't always been able to keep its graduates local. Young founders have tended to head north to Silicon Valley or east to New York City's Silicon Alley in search of more established tech communities. For a city so dense with creative talent - and one with so much skill packed into three highly regarded universities - L.A. had been shedding an awful lot of innovators.

But things began to change a few years ago. Bob Foster ('65, 100 Inspirational Alumni), who teaches High Technology Management at UCLA Anderson, explains that smart phones and tablet computers were partly responsible for changing the tide. "There is a clear shift in displaying content on smaller screens," he says. "Hollywood is the place where that content is created. It isn't in Silicon Valley." It makes sense for app-creators to cozy up to the source of their content.

There was also a pool of experienced business talent that had been turned out from Beverly Hills-based MySpace when the former social networking giant was forced to downsize. Many of those people had started small companies, but there was little formal structure for helping them connect, support each other and find reasons to keep their businesses headquartered here.

Veteran tech entrepreneurs decided to set up support systems for new companies, recognizing that an investment in the startup scene could yield great social, economic and cultural dividends for the city. In 2011, over a dozen programs popped up. Some approached the task as incubators, providing space, tools, and resources to fledgling companies; others came at it as accelerators, making funds and advising available for promising ideas. All of them function as unifying hubs for a previously scattered community.

Jeff Scheinrock, a partner at the part-incubator, part-accelerator and part-venture capital firm Originate, believe's L.A. is an ideal place for seeing new tech businesses. Although Originate's home office is in San Francisco, when the company brought on Scheinrock in 2010, he insisted that the company needed an office in Westwood. "L.A. does not have a lot of early-stage investments, and all the venture capitalists saw that there was a need." Each month, 200 startups apply for Originate's support. Those that win admission are supplied with solid software developers in exchange for cash and equity. Since Originate's Southern California arm opened, Scheinrock, who is also an entrepreneurship lecturer at UCLA Anderson, has tapped several of the school's grads to help fortify Originate's ranks.

"The accelerators are really open-door friendly," says Ryan Cummins ('11), co-founder of a startup called Omaze. Although he didn't take his company through an accelerator, Cummins says he benefited from them. "In an upstart industry, you find more collaboration and cooperation," says Cummins. "The community here is still small enough that if you put in the effort to get out there and get to know people, you get a real sense of who the active participants are." For that reason and others, he firmly believes that Silicon Beach has been the best place for him to grow his business.

Omaze raises money for charity via a lottery-like system for "once-in-a-lifetime" experiences. (The opportunity to sit in on Moby's private recording session is one current offer.) "There are ripe opportunities because the entertainment industry mixes well with the technology industry," he explains. Proximity to the celebrities that Cummins works with through charity partnerships is important for these memorable experiences, but so are the opportunities that Silicon Beach has been able to offer entrepreneurs.

Santa Monica's Coloft was particularly important to Omaze's development. Coloft is primarily a coworking space that also hosts classes and throws hackathons. Cummins and his business partner attended one such startup event at Coloft. "We went on a total lark. We pitched our idea, very quickly formed a team of ten people and then spent the next 24 hours building a basic site. Within a four-hour period, we hit our revenue goals and proved out the model." They pulled in nearly $1 million in funding for Omaze shortly after.

Kenny Berlin ('11), runs his business 12Twenty from Coloft's shared office space. 12Twenty's suite of apps provides universities with data on their students' employment status while offering students fine-tuned information about their job prospects. Berlin chose to plant his seven-person team at Coloft over a private office because the entrepreneurial community is so strong.

At one time, Berlin thought about moving back to Washington, D.C., where he was located before starting at UCLA Anderson, but ultimately he decided against it for the company's sake, and also for his own. "We talked about going back to the east coast, but here you've got talent and investors - and you can go surfing."

Don't underestimate the role that the beach played in the decision. According to Bob Foster, the ocean is a big draw for hardworking entrepreneurs. "We have beaches and smart young people that enjoy surfing and the funky Santa Monica atmosphere," he explains. The money has followed entrepreneurs to the water. According to Foster, nearly 12 percent of the country's second quarter investments were sent down to Los Angeles and San Diego counties. With this impressive gesture of support, L.A.-grown tech talent gained another very compelling reason to lay down a towel at Silicon Beach.

map quest See Southern California's innovation geography

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