Why LA?
Los Angeles; the city of angels, entertainment, and … startups?
Having lived in Los Angeles my entire life, I’ve grown used to the celebrity packed cafes and sold out Lakers games that go hand in hand with amazing weather and heavy traffic. Passing Miley Cyrus on the way to the gym? No big deal. An hour-long backup on the 405? Happy Friday. Hearing about Honey — an LA-based startup — and their acquisition by PayPal? Kind of a big deal.
LA’s rising startup scene has earned the title “Silicon Beach,” a SoCal twist on the Bay Area’s Silicon Valley. But why is Santa Monica’s booming tech market gaining so much attention? I had left for college and come back to an emerging startup and venture capital scene that took even me, an LA native, by surprise.
To get a better understanding of why Los Angeles is attracting such significant startup talent, I reached out to the founders and CEOs of LA’s tech standouts.
Here’s what I learned.
When it comes to the Silicon Beach vs Silicon Valley debate, Ben Mones, founder and CEO of Fama, has worked in both locations. Faced with the question of which he prefers, Ben would pick “SoCal 10 times out of 10.” While he admits SF is the intellectual and financial mecca of the tech industry, it “is expensive, lacks diversity, and is plagued by group think.” The lifestyle in Los Angeles isn’t bad either. Ben adds that LA has “the Dodgers, a great food scene, and access to the mountains, beach and desert.” There are worse climates to spend winters in than sixty degrees and sunny.
Everyone knows LA’s all-star lineup of sports teams — but they aren’t the only standouts in town. With LA-based clients including the Lakers, Dollar Shave Club, and Jam City, Mike Whitmire, CEO and co-founder of FloQast, is no stranger to the legends of Los Angeles. FloQast has raised nearly $100 million in investment and represents just one of the thousands of companies transforming the Los Angeles tech ecosystem.
But what sets LA’s tech ecosystem apart from that of Silicon Valley? The Bay Area has Google, Facebook, and Apple; not a particularly weak hand of tech giants. Mike argues it’s LA’s ability to digitally transform traditionally “boring” markets. While he doesn’t think LA is surpassing Silicon Valley anytime soon, Mike describes LA’s startup scene as “low key nerdy. Some of our biggest companies that anchor our tech community build what most people would consider some pretty boring stuff.” He uses Cornerstone OnDemand as an example, citing it as “the anchor SaaS company in LA, and they build talent management software.”
Yet where Los Angeles truly excels is its diversity. Growing up around the abundance of cultures and concepts that LA offers, I can testify to the advantages that diversity brings to any table. Mike agrees that “with 4 million people, we obviously have a large talent pool and a very diverse group of people to hire.” This talent pool extends beyond engineering graduates and business majors to those pursuing careers in the entertainment industry; Mike notes that “people trying to ‘make it’ can be great salespeople.”
Jesse Genet, founder and CEO of Lumi, also spoke of the benefits that LA’s variety of industries provide. She says, “when you’re in LA you can use world class creative talent, access manufacturing easily, and access expertise from other industries like media production.” This seamless connection among diverse industries offers another key advantage to Silicon Beach.
Another impressive aspect of LA tech is accountability, something I have witnessed firsthand this summer as an intern at PledgeLA. PledgeLA is a collective of LA-based tech companies and venture capital firms working to create measurable change. Created by the Annenberg Foundation in partnership with the LA Mayor’s Office, over 200 firms have signed the pledge demonstrating LA’s commitment to better reflect and support its community.
Los Angeles may still be known as an entertainment hub first, but the city’s growing tech scene is hard to ignore. Jesse loves the hustle that exists in the City of Angels, exemplified by how “LA entrepreneurs are working to prove their ideas to customers and the world, not just to investors.” Mike agrees that tech’s emerging role in the LA economy is driving the entire region forward. With incredible culture, diversity and accountability, it appears the sky is the limit for LA’s startup scene. I for one am incredibly excited to see the heights it will reach.
