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Note: this post kicks off a NEW series we are running here at Foundersuite called “Startup Ecosystem" which will profile up-and-coming and/or interesting startup scenes outside the typical locations like Silicon Valley. Is there a place you’d like to see profiled? Or, are you a member of an emerging startup ecosystem? If so we’d love to hear from you:

Within the past few years the LA tech scene has transformed. On a recent visit to LA I met with Scott Perry the founder of LA Tech Digest. Scott started the site to chronicle LA's long-overlooked, growing tech scene and to better connect to the area's top doers in local government, VC, and startup space.


In addition to running the Digest, Scott's firm Sperry Media handles integrated marketing for clients such as BBC, CBS, Discovery, Fox, Hasbro, MTV, Viacom, Sony, and Universal. Scott and I sat down in Venice to discuss the growing tech scene in LA and his insight in to developments for 2016.

What are the defining characteristics of the LA start up scene, how is it different?

I moved down here from San Francisco (post-bubble) in 2001, so everything that I went through is completely different than what's going on here now. LA has taken some time to find its place in the tech landscape; in the past five years the tech scene started gaining traction, and because of that, I felt it was worthy of my attention to build LA Tech Digest where I'm focusing on what's happening in LA's tech scene.

We have a huge engineering student population, most notably Harvey Mudd, Cal Tech, USC, and UCLA. Bouyed by an influx of local seed capital plus being inspired by the homegrown success of the likes of Snapchat, a lot more students are staying here to build their own companies in Los Angeles, rather than taking jobs up in San Francisco. San Francisco has gotten prohibitively expensive for even full-time working people; in LA you can have a really good life and a backyard, for the same amount of money as something significantly smaller in San Francisco.

What is the fundraising scene like, is it harder to raise capital here?

No, it's gotten a lot easier, we have had a huge influx of venture capital. Firms like Upfront, Wavemaker, Lowercase, and Greycroft have all raised good-sized funds, and folks like the Pritzkers and Bessemer are doubling down in LA. The VCs down here are cautiously savvy in their process with their money, and they put money behind good teams, but because of their relative size, they don't go chasing unicorns or do a lot of late stage investing that causes the outsize evaluations. And because there is a shorter runway, there is a bit more of an emphasis on making money, and if you’re not making money, then at least have a significant impact on the industry you're trying to disrupt or get into.

What are some of the break out start ups in LA?
A lot of companies who have been bubbling under for the past couple years, and are starting to put LA on the map when you put them all together. Obviously the most popular is Snapchat -- they're still the big dog in town when it comes to private valuations. Tinder just went public as part of the Match IPO. Flipagram raised $70 million and is making inroads in the social space -- I'd like to see more people pick up on Flipagram because it is a really fun tool. Dollar Shave Club is taking a huge chunk of Gillette's personal care business, and Honest will likely go public in 2016.

LA has come to own up to its role in content, with studios like Amazon, Netflix, and YouTube fueling the next generation of video and video-related services from the likes of Maker, Machinima, Fullscreen, Big Frame, Endemol, Jukin, Epoxy, Collective Digital Studios, and tons more. Seeing significant traffic and revenue in the VR space is a ways off, but we have a ton of studios devoted to developing content for Oculus and other devices. SpaceX has billions in future contracts, and we have two firms devoted to building the Hyperloop.

What are some of the top accelerators?
LA has a lot of smart, experienced mentors that are helping take good ideas to market, whether they are built internally or brought in as part of a larger investment. Paul Bricault and his team at Amplify are building a lot of great companies, from StackCommerce and The Bouqs to RadPad and Hello TechScience, Mucker, and Idealab are taking a more studio approach by fostering companies from within. Tech Stars has come to town to help local businesses like Disney and Cedars Sinai leverage their strengths to build startups, and Dodgers Accelerator partnered with R/GA to develop a roster of companies who will eventually branch far beyond their sports/ events roots.

What do you see happening in 2016
I see a lot of cautious optimism -- there's always some VC crisis every 6 months (The Series A Crunch, IPO Down Rounds & Deflating Unicorns, etc.), but because LA's VC space has grown at a steady pace, the area is fairly well buffered should we face any macroeconomic headwinds. We have a Mayor and administration that is actively courting tech and diversity in order to establish LA as a major player in the world space.

LA's tech space could always use a lot more experienced talent, but we're starting to grow our own, or pick off top talent from other parts of the world -- the weather, the quality of life, and the lower cost of living are all serious pulls from cities like SF & NYC. LA has always been more than just tech -- LA is a major hub for entertainment, manufacturing, shipping, and so many other industries -- so having a more diverse workforce means having neighbors that do more than work in tech, which can make for much more interesting dinner conversations.

Thanks to Scott for the great insight. For more information on the LA startup scene, check out this slide show below.


Topics: #feature, Startup Ecosystem

Pip Brangam

Written by Pip Brangam

Passionate about writing, Pip heads up the blog and marketing copy. She loves to surf and hosting dinner parties for friends.

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