Over the last few years, there have some been astronomical shifts in near-on all industries, thanks to the dramatic rise of investment in the tech world. From 10,000 person multi-national corporations to a 1-person outfit working out of one of the global WeWorks, it usually comes down to one simple question — “how do we innovate?” Challenging the old ways, disrupting traditional industries, how do we make life easier, faster, shinier; the mindset behind any tech startup is the same.
Whilst not a new name in the tech world (home to the likes of Snap, Hulu etc. for year), there is nowhere else that defines the concept of innovation in tech quite like Los Angeles right now. Not only do most Tech businesses in the US look to have a hub here, companies from all over the world are clamouring to open offices in sunny Socal. Everybody wants a piece of the action. Whilst this was initially limited to a small handful of big names (Google, Buzzfeed, Facebook etc.) the recent snowballing of subsequent new businesses and unparalleled waves of investment to hit the city over the last 18 months represent the really dramatic change. This has created a palpable buzz in the air for the world of tech, stretching beyond Silicon Beach to locations further down the coast such as Marina/Playa del Rey, El Segundo and all the way to the OC. As a consequence, LA’s GDP saw a sharp increase between 2016 and 2017, placing the state’s overall economy in fifth place worldwide.
So what is it about LA’s historical and cultural context that has enabled such substantial growth and increasing attention, to make the city so hot right now?
For starters, its proximity to Latin America and easy access to both the US and the Asian-Pacific make LA ideally placed in terms of location. Its’ demographically-mixed population of local Angelians and the steady but dynamic influx of international visitors, also make it rich in both its diversity and consumerism potential. Add to that the powerful presence of Hollywood and the overall injection of creativity and artistic flair that appears to exist at its very heart, and it’s clear to see how Los Angeles is a key cultural hub and a pretty cool city.
Meanwhile, San Francisco, the longstanding and centre-point within the industry, seems to have fallen prey to an overwhelming saturation of tech people, tech companies and, some might argue, a tendency towards safer, more traditional tech business models. The region as a result is said to lack any real nuance or diversity and is no longer the creative city it was previously known for. Put simply, compared to LA, SF appears to have lost its soul. Hollywood’s powerful influence means that there will always be competitive industries, no matter how big the tech scene gets. There’s nothing like healthy competition to force companies to be constantly challenging and evolving, back to innovation again.
One thing’s for sure, LA has a certain energy about it; an identity shaped by a strong sense of hope and optimism; an openness and acceptance to difference and individuality. Perhaps these very LA vibes might at least in part explain the increasing number of UK-based companies to make the move to California to bask in the rays of sunshine and positivity that everybody wallows in here. Does this optimism of the sunny state allows a greater sense of confidence than might be afforded in on the East coast and Europe? Do people take more risks in business because of this Californian optimism? No doubt we look at these examples through rose-tinted spectacles when the risks in business pay off.
Whether or not this is true, LA certainly offers new businesses opportunities to test out new ideas, along with invaluable access to a wealth of diverse and accessible consumers, happy to try out anything that is easier, faster, shinier. The Bird electric scooters, which began appearing on the Westside streets towards the end of 2017 are a perfect example of this. Pure chutzpah saw the founders not asking the city of Santa Monica’s permission, but rather going ahead and doing it anyway. Millions of Bird rides later, the company is reportedly heading for a $2bn valuation (https://techcrunch.com/2018/06/12/scooter-startup-bird-is-reportedly-about-to-hit-a-2b-valuation/). SoCal optimism at work perhaps?
Ok, so SF will never be toppled as the tech capital; but LA is certainly hot on its heels. And what’s more, the costs associated with living and setting up new business there, together with the huge competition for talent means that the industry can only diversify across the US. LA certainly seems to be proof of this with its influx of investment, and wider pool of engineers graduating each year from its’ schools. That’s not to say LA doesn’t come without its own challenges. Living costs and competition for talent here are also on the increase. But at the moment, LA is the place to be in the US, the current buzz suggests that anything is possible — it couldn’t be a more exciting time for businesses to start up, or start over.