Startup Businesses Booming On Silicon Beach

Venice Beach

Venice Beach

From Neon Tommy, by Kaitlyn Mullin, May 18, 2014:

There is a stretch of beach along the Santa Monica and Venice coast lined by unassuming concrete buildings and hotels and jam-packed on any given day with towheaded surfers, sunburned tourists, bathing-suit clad beachgoers and tech-savvy professionals sporting laptops and chatting animatedly with each other about their latest product development or marketing plan.  

The latter may seem out of place, but this is Silicon Beach.

Nicknamed for the growing number of technology-based startups that are setting up shop in the area, Silicon Beach is the third best ecosystem in the world for business startups, according to a study by Startup Genome.

The report analyzed funding levels, startup numbers, company performance and entrepreneur demographics, among other factors, to determine the quality of the business “ecosystem,” and found that Los Angeles can be beaten only by Silicon Valley and Tel Aviv. 

And Silicon Beach appears to be catching up to these startup hubs quickly.

In a six-month period last year, 94 new startups opened and Los Angeles startups like JustFab and Snapchat raised more than one billion dollars in funding, according to a report by startup website Built in LA. Silicon Beach is home to 35 percent of these Los Angeles startups and 15 percent of the startup incubators, more than any other sector of Los Angeles, according to a report by startup incubator Be Great Partners.  

“People’s awareness is what’s really growing,” said entrepreneur Matthew Goldman, founder of credit card consolidator Wallaby Card, in the report. “Los Angeles may be 30 years behind Silicon Valley, but it’s going to catch up over time.”

The technology startup industry is dependent on being at the forefront of innovation, and with technology constantly evolving and developing new trends—like the relatively recent proliferation of social media—it is important not to fall behind the competition. Technology, including digital media, IT and consumer products, is the fastest-growing industry sector for startups, accounting for 68 percent of Los Angeles investments.

Start up experts agree that Silicon Beach’s history and atmosphere make it ideally suited for technology startups.

“[Silicon Beach is] really ambitious, but really creative,” said Kerry Bennett, spokesperson at the Santa Monica startup DogVacay. “You have so many different companies leveraging talent, technology and creativity all with this sort of California flair.”

DogVacay, an online interface that connects dog owners with dog sitters to avoid the expense and crowds of larger kennel experience, typifies the Silicon Beach tech startup story.

It began as a small business run via Craigslist, out of CEO Aaron Hirschorn’s house. In the two years since then, it has blossomed into a multi-million dollar network with over 10,000 hosts countrywide, 36 employees and anywhere from six to 18 dogs, working out of their headquarters just two blocks from the beach. 

The company’s decision to set up headquarters in Silicon Beach was “organic,” according to Bennett. 

“I think the Westside just has everything startups need to really get going,” said Bennett. “There’s office space, there’s great mentors, there’s great advisors, there’s great investors and there’s great talent.”

William Tsu, founder of Santa Monica startup incubator Muckerlab, who spent 10 years in the San Francisco area attending Stanford and working as a Silicon Valley entrepreneur, said Los Angeles is a great environment for startups.

“Why not LA? It’s got great weather, it’s got great food and it’s got a lot more diversity,” Tsu said. “I enjoy explaining to people what I do and working in an industry that’s not as dominant as it is in the Bay Area.”

Technology-based intellectual pursuits like these startups and incubators have a historical basis in Silicon Beach, according to Los Angeles-based historian Kevin Starr. 

“Abbot Kinney founded the nearby Venice at the turn of the century precisely as a cultural and intellectual center,” he said, “From the beginning then, Santa Monica and its adjacent townships, fronting the great Santa Monica Bay, bespoke cultural and scientific ambition.”

This rich history is one of the reasons that some startup entrepreneurs say they chose Silicon Beach as their base of operations.

Tastemade is an interactive online cooking community where viewers can not only view original digital media created by Tastemade chefs, but also create their own original content with the mobile application. Co-founder Steven Kydd said that he and his partners chose to build their studio in Santa Monica because they wanted to take advantage of the city’s unique atmosphere and history.

“MTV had a studio here and entrepreneurial pursuits like the RAND Corporation think tank started here,” Kydd said. “Santa Monica has a really unique history of Hollywood media and entrepreneurship coming together.”

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