Why @805startups get the best of LA, without being in LA.

Conejo_View_805_StartupsThe following article is an article that I wrote that was just published in the winter edition of the Conejo View.  Check it out and please share!

We live in a time, where geographic location means less and less to a business owner, especially in tech.  You can easily run an online, international business out of your house.  But even so, the perception is that if you aren’t launching your tech startup out of one of the worlds top tech hubs, it’s going to be an uphill battle, and you’re not going to be as successful.  Hiring engineers, designers, salespeople and other talent that have a core understanding of the industry will be tough.  Investors will be harder to come by, and getting the attention of a non-local investor will be difficult.

That might be the common perception, but it is very far from the truth.

There are advantages and disadvantages to both sides of this premise, and I could easily argue both of them, but there’s no need to, because we win no matter what.  Why?  Because we live in the 805.  We get the best of both worlds.

For the second year in a row, the tech community in Los Angeles, or Silicon Beach as they like to call it, has been ranked the third best startup ecosystem in the world.  The rankings are based on various criteria like access to capital, talent and of course, performance.  LA was only beat out by Silicon Valley and Tel Aviv.

One of my biggest pet peeves used to be when a great company from our area got lumped in as an LA based company.  It happens all the time.  For example, when Lynda.com recently sold to LinkedIn for $1.5 Billion Dollars, many reported it as “Los Angeles based Lynda.com sells…”  Not really that huge of a deal, but I find myself constantly defending this area to folks who feel they don’t have a choice but to relocate.  Most don’t even realize that many great startups call this area home, and many great success stories they have heard about were from this area.  Did you realize Lynda.com came out of Ojai and Carpinteria?  Did you realize that Estify based in Agoura Hills, Clutter whose founder is based in Westlake Village and Trackr from Santa Barbara are just 3 of many local up-and-coming companies that have raised millions of dollars from some of LA, Silicon Valley and New York’s most prominent Venture Capitalists?  They’re here, they’re kicking butt, and you can too.

We recently held an event with some of the area’s most well connected, well respected and most successful investors.  They collectively represented funds or groups worth hundreds of millions of dollars.  We talked about our local tech community and realized that our biggest problems are the same problems facing any startup community.  Then we discussed how to address them.  Talent was top of everyone’s list.  If we can’t hire engineers, we can’t scale or grow our tech companies.  We talked about (the lack of) engineering schools in the area, we talked about how we’re just not cool enough to attract the younger crowd and we also discussed the size of the talent pool.  But the truth is, the places that have the most engineers, also have the most demand for engineers and also have the most employee churn or turnover.  It’s why you see billboards in San Francisco advertising open positions at big companies.  We may not have as large a pool, but we also don’t need as many engineers, they cost less to hire (from a recruitment standpoint) and they stick with your company longer.  We also learned at the event that around half of the 250 folks in attendance were engineers that don’t commute, work at large organizations and that they were older on average than most expected.

What I learned from that event is not that we are lacking the talent or that engineering schools are a problem (although they could be an asset and I would love to see one at CLU and/or CSUCI), it’s that we need to build a culture around startups and build an awareness around the local startup community.  The engineers were already at the event, so they understand the potential for exponential growth that comes with startup success, but what they need to know is that if they quit their cushy job at a local large organization to join a startup, if it fails, there will be another one waiting for them around the bend.

Does it matter that we’re not in LA?  Not to outsiders who think we are in LA.  Does it matter to us?  Yes!  We get a better quality of life, more bang for our buck when it comes to real estate (for the most part) and a usable school system for our children.

The truth is, this conversation effects every one of our businesses.  The lines are blurred and some of the biggest “tech” startups are not what you would traditionally label tech.  They’re not all Pinterest or Facebook or Instagram.  They’re subscription razor blades, car services and fashion startups.  But to scale and grow your company in this day and age, you need to do it online.  805 Startups is the place to meet the folks who are doing it, and could help you do it too.

If you own a company, want to start a company, are a techie, have a child who’s a techie, want to meet a techie or are interested in the nerdy stuff we talk about at our events, come join us at 805STARTUPS.COM.

2 Replies to “Why @805startups get the best of LA, without being in LA.”

  1. That’s a great article Alon. I moved from the 805, but still have some roots there. The company I helped start and is still in it’s early stages years later, due to a lack of funding and the ability to maintain that 51% ownership is going strong in the 805. The funny thing is that both of my counterparts for that business worked as mechinacial and electrical engineers in the 805. The company we started is way to hard for me to really be part of from a distance, but has done well in the international area, with the first product being shipped to the South Pacific due to the close proximity of the major ports. I’m across the US now, but have high hopes to start another company and also to move back to the area I call home.

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