The LA Tech Scene is Booming: Is It Different This Time?

Los Angeles, long known for its entertainment industry, is experiencing a renaissance in its tech scene, attracting attention from investors and entrepreneurs alike. The article dives deep into the data and trends that reveal the rapid growth of the LA tech market, exploring what's fueling this movement and why it might be different from previous surges.

• The article highlights that LA is the third largest technology startup ecosystem in the US and the fastest growing tech startup region by the number of companies being started.
• The influx of venture capital into LA tech startups is substantial, with LA attracting $1.5 billion in 2013 alone, a figure expected to be shattered in 2014.
• The article analyzes the factors driving LA's tech boom, suggesting it goes beyond a mere national tech boom.

The Roots of LA's Tech Renaissance

The article traces the origins of LA's tech scene, highlighting the city's role in pioneering online monetization techniques. From Overture's "cost per click" model to Applied Semantics's AdSense, LA was a birthplace of key innovations that now power the internet's revenue streams.

• Bill Gross, founder of GoTo.com (later renamed Overture), demonstrated his revolutionary "cost per click" concept, which was initially met with skepticism but later became the foundation for Google Ad Words.
• Gil Elbaz and his team at Applied Semantics in LA developed AdSense, a key monetization method that Google acquired for $102 million.
• The article underscores the role of entrepreneurs like Richard Rosenblatt in building the LA tech ecosystem, citing his ventures like iMall, MySpace, and Demand Media.
• The success of these early companies has created a foundation of experienced operators and "recycled capital" fueling the next generation of LA tech startups.

The Rise of LA's Tech Ecosystem

The article examines the evolution of the LA tech scene, emphasizing the shift from infrastructure to applications. This shift has been fueled by a confluence of factors, including the city's position as a center of commerce, creativity, and engineering talent.

• The article highlights the role of "deflationary economics" in favoring consumer applications, citing examples like Honest Company and JustFab.
• LA's dominance in retail, apparel, and entertainment industries provides a fertile ground for commerce and content-driven tech startups.
• The article categorizes LA's tech landscape under the "three C's": content, commerce, and communications, emphasizing their prominence in the city's startup ecosystem.
• Examples of successful LA tech startups across these categories include Maker Studios, Fullscreen, AwesomenessTV, Tradesy, DailyLook, NastyGal, Honest Co, JustFab, SnapChat, Tinder, Whisper, and TextPlus.

LA: A Tech Talent Hub

The article dispels common misconceptions about LA's tech talent pool, showcasing the city's prowess in engineering and its ability to attract top talent from across the country, including Silicon Valley.

• LA graduates more engineers than any other city in the US and has a significant number of top 25 engineering programs.
• The article highlights the "SnapChat Effect," where companies like SnapChat are successfully attracting top engineering talent from Silicon Valley.
• The article emphasizes the city's growing pool of experienced engineers with video and hardware expertise, which are key for the future of the internet.

LA Tech Scene: A Promising Future

The article concludes with a positive outlook for the LA tech scene, emphasizing the factors that will propel its continued growth. It highlights the emergence of tentpole companies, the availability of capital, and the city's attractive environment for startups.

• The article argues that LA's tech scene is poised for continued success due to its strong foundation of entrepreneurs, investors, and talent.
• The article predicts that LA will see further growth in areas like content, commerce, and communications, driven by the city's unique strengths.

The Takeaway

The LA tech scene is experiencing a significant shift, moving beyond its historical focus on entertainment to embrace a thriving tech ecosystem. The article highlights the key factors driving this transformation, from the city's entrepreneurial spirit to its wealth of talent and resources. The future of LA tech appears bright, with the city poised to become a major player in the global tech market.