Los Angeles outranks New York, London, Seattle, Chicago, Berlin and most other big cities in an extensive new report on the world’s top 20 startup ecosystems compiled by researchers at Startup Genome. Only Silicon Valley and Tel Aviv rate higher when it comes to optimum characteristics for launching a business (access to capital, talent pool, market size, work ethic, etc.). L.A. has been a launchpad in recent years for successful upstarts like Hulu, eHarmony, Maker Studios, LegalZoom, ShoeDazzle, BeachMint, Cornerstone OnDemand and more. Why is Los Angeles so hot for startups right now? Here are six reasons:
Startup companies are booming in Los Angeles
1. The Megaphone
Startup success is all about getting your big ideas seen, heard and into the right hands, and the Hollywood model does that better than virtually any other. Music, movies, TV, video, web, media distribution — it’s all part of the Los Angeles DNA. Access to entertainment players, studios, production teams, equipment and distribution companies means it’s easier to get business idea up and out to consumers faster.
Machinima CEO Allen DeBevoise
Success story:Machinima. An entertainment channel aimed at guys 18-34. In other words, the key Hollywood demo. And with nearly 200 million gamers viewing more than 1.75 billion videos, it’s got the numbers an old-school studio mogul would kill for.
2. The Famous Faces
Whether it’s Jessica Alba’s Honest Co. or Kim Kardashian’sShoeDazzle, Los Angeles has the TMZ-worthy names to boost new biz. And let’s be honest: as cool as it is to have a team of Stanford engineers or a PayPal billionaire on your start-up board, having Ashton Kutcher or Justin Timberlake at the table can deliver a lot more hits.
Success story: ShoeDazzle: Founded in Santa Monica with backers like O.J. trial attorney Robert Shapiro and “chief fashion stylist” Kim Kardashian, the subscription-based online commerce site brings the Beverly Hills pampered shopper experience to the sweatpants’d masses.
3. The Money People
Los Angeles angel investors like former Myspace CEO Mike Jones at Science, Chris Sacca at Lowercase capital and individual investors like Lady Gaga’s manager, Troy Carter, have deep pockets and an eye for audacious talent. Attorney turned entrepreneur Brian Lee helps new companies cash up to bridge the divide between Hollywood and Silicon Valley.
Success story: Former Google CIO Douglas Merrill, a Princeton PhD, relocated to L.A. and raised $73 million from investors like L.A.-based GRP partners and others for his startup, ZestCash, as Business Insider reports in a piece on LA.’s startup power players.
4. The Incubators
Bill Gross’s Idealab in Pasadena has been nurturing startup ideas since 1996 but there’s just as much activity lately at L.A.’s MuckerLab, Amplify and Launchpad when it comes to helping new companies find their footing.
Success story: AtMuckerLab, entrepreneurs participate in a three-to-six month program that includes up to $21k in funding, offices, face-to-face time with bigwig mentors and investors, and hands-on product, marketing, legal and fundraising support. Results: Companies like comedy startup Laffster and Wallaby financial.
5. The Team Spirit
USC, UCLA, Caltech and JPL are geek-rich feeding ponds for tomorrow’s big-fish startups. Kevin Winston’s Digital LA is the largest networking organization for the digital entertainment industry. Add in coworking spaces, hackerspaces, consulting firms, startup capital events and monthly breakfast lecture series and Los Angeles is an interactive idea hive of startup juju. Take a look at this visualization map of L.A.’s startup scene to see all the connections.
6. The Weather
A view from the Winklevoss’s LA pad
Face it. No matter when you’re reading this, it’s probably 72 degrees and sunny right now in L.A. Why would you want to work anywhere else, really? Consider the famous Winklevoss twins. What did they do with their Facebook settlement millions? They bought a Hollywood hills bachelor pad, of course