Tech startup emerged from Los Angeles

January 11, 2012 0 comments

Los Angeles is a unique technology market but is not and will never be Silicon Valley and here is why this is happening.

Many of Los Angeles based companies quietly and reliably turned out growing revenues and profits

Los Angeles entrepreneurs are not particularly worried or fixated on emulating or eclipsing the Valley.

L.A. is riding this same wave of startup creation. The startup scene here is vibrant and growing. We’ve had a number of success stories over the years (Overture, CitySearch, LowerMyBills, eHarmony) and there many up-and-coming startups being built right now (see James Hritz’s answer for a great list). L.A. has a developing network of startup funding (super angels like Paige Craig, angel groups like Tech Coast Angels, VCs like GRP and Rustic Canyon). We have conferences and networking events (Twiistup, Startups Uncensored, Los Angeles Venture Assoc.), mentorship programs (Launchpad LA), and top-notch universities (CalTech, UCLA, USC). We also have the second largest metro area in the country, providing access to a large market, labor force, and office space.

LA infrastructure is developing nicely to support a healthy technology ecosystem. Expect more and more startup successes to sprout out of SoCal over just a few years to come.

Advertising Networks. I would say [ex Google] SoCal is dominant. Socal has Specific Media, Adconion, Rubicon, Adly, Reach Local, Valueclick / Fastclick

Long tail content. Again LA is a solid player. Demand Media stands out. But LegalZoom, DocStoc are doing great in niches. We don't have Yelp, of course.

Ecommerce. Was a major force circa 2005 with Pricegrabber, Shopzilla, etc... Now showing force with Hautelook, Shoedazzle. No Gilt Groupe or Groupon, but more of a force than the Bay Area.

Gaming. We don't have Zynga, but we have EA and Activision. And now, Playdom.

Social. Let's not forget MySpace was king up until 2 years ago.

Los Angeles has a highest concentration of small businesses and entrepreneurs in comparison with any other city in US. There are real businesses who will pay you for automating their business processes, and you can create a hybrid startups with no need of investment money. I believe the reason why it is so hard to find technical talent to hire because Los Angeles environment attracts tech people with entrepreneurial spirit who does not want to work for a large company or startup where the obligations to stockholders exist. If they are not in charge, then what the point to make successful business for someone else when they can create a nice lifestyle business that pays much better and where they can have their clients as prospective strategic partners if they decide to grow it on another level.

Los Angeles talent successfully dwells in cash-driven economy, not equity-driven economy.

There is another reason. It's hard to get talented tech people to your startup when you can't pay enough for them to afford the lifestyle. I believe that people in Los Angeles has much higher standards of living then in North California.

I believe that Los Angeles entrepreneurs will outsmart Silicon valley and it is not a matter of when this happens, not if this happens.

The LA business community not as close knit and is very well networked within itself, but is not as open to new people as the SF community.

LA technology companies seem to be clustered around the less profitable consumer internet and entertainment space than Silicon Valley and that may explain why there is less early angel activity in LA.

To me, personally it is much better to do business in Los Angeles. You do not need investment to start your tech company and you can eventually build your own products having consumer market ready to tell their stories about their needs and wants. I think Silicon Valley is good for kids form college that they can work for real startup and learn how to do their own business and build reputation, or if you can partner with some rock-star developer who just made a name and there are a line of investors waiting to invest. I think many people does not appreciate and see opportunities what Los Angeles offers.

Posted by Lisa
Categories: Business Entrepreneurship