I came away from the conference with 4 key observations about what LA start-ups are experiencing:
- L.A. startups are growing up and maturing – Based on the panel topics, comments and questions among panelists, and from my conversations with attendees, it is readily apparent that the key focus for many Silicon Beach startups are shifting. Whereas in previous years, when the focus was on engineering & design, product development, and go-to-market strategies, this year seemed different. Entrepreneurs were turning their attention to marketing, revenue & profit growth, and retaining talent - a great sign that businesses are gaining traction and maturing. This, in turn, helps the broader tech & startup ecosystem to solidify and grow.
- Venture capital is expanding but still under-represented in LA – Although the venture funding environment is healthy right now, with over 200 funded deals totaling over $3B in 2015, access to venture capital for LA start-up still more than likely requires the founders and management to take a plane ride. This is especially true for later stage investment rounds, when many investors are coming from the Bay Area, New York and elsewhere. There are no doubt some strong LA-based VC firms that are supportive and well-known in the community (Upfront, Greycroft, Mucker, Crosscut, etc), but many other established firms are still reluctant to set up offices in SoCal. Angel investors and firms focused on early funding continue to be most prevalent. Experts at the conference don’t see this dynamic changing anytime soon.
- Drones, VR, and social influencers were hot topics of discussion – There was an entire VR lounge on display; The Huffington Post covered the conferences “future of VR” track; Prominent experts in drone technology predicted “Billions of Flights from Millions of drones” within 5 years’ time. The advances in drone technology as a business – as well as new FAA regulations - is of special interest to the L.A. tech community, given its roots in aerospace & defense (JPL, Lockheed, McDonnell Douglas, etc.). Similarly, virtual reality sits at the intersection of technology, media and entertainment so it makes sense that I would be actively pursued by a number of SBF participants. And of course, LA’s fixation on beauty and celebrity means that the rise of social media and influencers’ impact on marketing in some industries – social commerce and related marketing models – was of keen interest.
- Silicon Beach continues to build momentum. LA entrepreneurs and their companies continue to gain experience, garner attention, attract capital, and see positive results. High-profile companies - and successful exits – include Snap, Inc., Oculus, Maker Studios, Dollar Shave Club, and The Honest Company, with several others on the horizon. This brings more credibility to the community and confidence to its participants – that was certainly reflected at this year’s Silicon Beach Fest. LA continues to have a great setup for fostering start-ups: strong research universities, a diverse pool of business talent (attracted to a nice setting), support from the city, and an industrial heritage in entertainment, media, consumer businesses, and aerospace. The pieces continue to fall into place to make “Silicon Beach” (a moniker disliked by many here) a key ecosystem for new business creation, innovation, and economic growth. At last count, there were 1,113 start-ups on the startup map of the LA area, triple the number observed on the map just 4 years ago.
I look forward to continuing to observe (and contribute to) the advancement of the L.A. tech scene. Hopefully the success of L.A.’s start-ups – and its business conferences like Silicon Beach Fest - will generate even more confidence, and bring a larger spotlight on our market. This will, in-turn, attract talent, capital, and more entrepreneurial ideas that can be developed here and enjoyed around the world.
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