See why more startups than ever are setting up shop on the beach in Los Angeles
The neighboring beachfront communities of Venice and Santa Monica have long been a haven for edgy, artistic types. In the 1970s, the "Dogtown" section of Venice was the site of a renaissance in skating culture, chronicled in a 2001 documentary called "Dogtown and Z-Boys" and later in the film "Lords of Dogtown."
Much of the tourist action is centered on the Venice boardwalk, where signs advertising incense and henna tattoos signify the area's lasting hippie roots.
But if you walk just a bit farther down the block, you'll notice the fortress-like headquarters for secret-sharing app Whisper. The startup moved into the house last spring, leasing it from an unnamed owner who purchased it from actress Anjelica Huston for $11 million.
Los Angeles doesn't have the massive, perk-packed campuses that are so common to Silicon Valley. Huston's former home is a wide-open space big enough for Whisper employees to spread out. "We’re fortunate to have a great space where employees feel creative. It has a positive impact on their morale and work output," Whisper cofounder and CEO Michael Heyward said to Business Insider.
There are signs of that creative spirit everywhere, from the art outside the buildings to the people that work inside them.
Though young startups certainly have their heads down working on their latest product, those blue skies and sunshine are definitely a perk. Greg Cohn, cofounder and CEO of Silver Lake-based privacy app Burner, joked, "When I worked for Yahoo and my colleagues and I would visit the Sunnyvale HQ, people often made the comment that you could always pick out the Southern Californians because they were always healthy-looking and dressed better than Silicon Valley engineers. There may be some truth to this."
A bit farther down the Venice boardwalk, photo-and-video-sharing app Mobli works out of a bright blue beach house that was once home to Snapchat. They've installed a music studio in the space, making the house a destination for concerts, comedy shows, and music videos.
Snapchat moved out of the beach house and into new offices on nearby Market Street in October 2013.
Source: Los Angeles Business Journal
But the photo-messaging app quickly outgrew the 6,000-square-foot space and signed on for an additional 3,940 square feet in the building next door. We also noticed a building across the street had the app's trademark ghost symbol on it.
Source: Hollywood Reporter
Shortly after Snapchat's move, Bobby Murphy, one of the company's cofounders, purchased a modern two-bedroom home just a few blocks away. He reportedly paid $2.1 million for the home, slightly more than the area's median price of $1.35 million.
Source: Los Angeles Times, Zillow
Venice home prices have risen sharply in recent years. Realtor Tami Pardee told the Los Angeles Times in 2013 that tech workers from startups as well as from bigger companies like Google and Facebook have contributed to that trend. "They have the money to buy," she said. "We're excited but cautious."
Source: Los Angeles Times
"Everyone wants to buy here because this is the hot, cool space," realtor Brian Maser told the Los Angeles Times. And it's not all about the beach — on Venice Beach's Abbot Kinney Boulevard, hip restaurants and boutiques draw tourists and locals alike.
Source: Los Angeles Times
You'll see artsy stores selling books, clothing, and knick-knacks for the home. "There are so many talented and passionate artists and designers here, not to mention musicians, writers, filmmakers, and so on," Cohn said. "It lends a creative energy and it also means there's a great community of freelancers on deck for startups."
Abbot Kinney is a huge destination among the foodie set. Diners rave about the pizzas at Gjelina — options include a gruyere version served with caramelized onion, fromage blanc, and arugula, as well as one that comes with house-made chorizo, tomato, cream, fennel, and basil. Though tech workers say they enjoy Gjelina for a power lunch, it's a popular spot for people in lots of different L.A. industries. In 2011, Gjelina opened a take-away option, which diners can enjoy in this lush courtyard.
Omaze, a startup that raffles off once-in-a-lifetime experiences — having John Legend perform at your wedding, for example — works out of a bungalow-like office not far from Abbot Kinney. For each raffle, Omaze donates 80% of its proceeds to charity. "L.A. has provided us with plenty of other advantages unique to this city," CEO Matt Pohlson said. "Our company works at the intersection of entertainment and philanthropy, and we would never have been able to maximize the opportunities presented by the entertainment sector had we not been located here."
Omaze has received investments from Los Angeles-based angels Paige Craig and Adam Press, as well as from Crosscut Ventures, Saturn Partners, Warby Parker's Dave Gilboa, and event producer Kevin Wall. "Many L.A. companies have done a tremendous job integrating the entertainment and creative industries in ways that have fast-tracked success, and in so doing drawn growing attention from Silicon Valley," Pohlson said.
Source: Business Insider, Crunchbase
Pohlson says the team likes to frequent Gjusta, a bakery in the Gjelina family, and Blue Bottle, the coffee chain that has captured the heart of tech workers both here and in the Bay Area.
Abbot Kinney eatery Kreation Kafe is another favorite, with a menu that skews toward Middle Eastern and organic ingredients. They're also known for their fresh-pressed juices, with five juiceries and a juice truck in addition to their two brick-and-mortar cafés.
Many of the companies based in Los Angeles operate on the sustainable, healthy living model. In Santa Monica, Jessica Alba and ShoeDazzle founder Brian Lee lead the Honest Company, which uses only nontoxic, environmentally friendly ingredients to make baby and household products.
In 2014, the Honest Company announced it had raised $70 million in Series C funding at a nearly $1 billion valuation. An IPO is reportedly in the works.
Also in Santa Monica, angel investor and former Myspace CEO Mike Jones runs Science Inc., a technology studio that has already launched more than 25 startups, including dog-sitting startup DogVacay and e-commerce company Dollar Shave Club.
Managing director Jason Rapp and CRO David Fink enjoy the weather in an impromptu meeting.
HelloSociety is one of Science Inc.'s latest successes. The company works with more than 300 of the most influential users on Pinterest, pairing them with brands like Madewell, J.Crew, and Buick to create marketing campaigns.
As far as popular Santa Monica hangouts go, Siegel joked to us that "Sugarfish on 2nd should be called the Silicon Beach cafeteria." HelloSociety founder Kyla Brennan agreed, saying that she always sees VCs and other founders when she visits the noted sushi restaurant. "I like it because people talk about more than just tech," Brennan said. "While there's plenty of drive, creativity and competition in the L.A. scene, for me it's a nicer balance of work and life."
In fact, many say that not being Silicon Valley ends up being a major advantage. "It's probably a little easier to stand out in L.A than it is in the Valley, since the scene is much smaller here," Brennan said. "There's also a little less competition when it comes to recruitment ... you aren't just one of 8 billion tech startups trying to get talent."
There’s obviously less density of top engineering talent than Silicon Valley, but this is a major advantage for a successful company in L.A.," Heyward said. "Bigger fish, smaller pond means recruiting is actually a lot easier.
Some bigger tech companies have opened offices in the area in recent years. In Santa Monica, Hulu employees take advantage of a 90,000-square-foot space packed with game rooms, funny portraits, and adjustable standing desks.
Google has leased more than 100,000 square feet at the Frank Gehry-designed Binoculars Building since 2011. More than 500 employees on projects like Google+, Chrome, and Search are based here.
Source: Google, Los Angeles Times
Farther east, in Playa Vista, YouTube has a studio where top creators can use top-notch camera and production equipment free. The hangar has become a gathering place for other tech companies based in Playa Vista, including Facebook, Microsoft, and Yahoo. Google recently paid nearly $120 million for a 12-acre campus nearby.
Los Angeles-based founders unanimously tout the high quality of life here. "I love being based in L.A.," Aaron Hirschhorn, cofounder and CEO of DogVacay said. "It's a great lifestyle, in terms of the beach and restaurants and everything else."
Now learn about a tech hub on the opposite coast.
Advertisement