Better known for its palm trees and celebrities, Los Angeles is also emerging as a tech hub, with its so-called Silicon Beach area offering a sun-kissed alternative to Silicon Valley. In recent years tech companies large and small, including Facebook, Google and Snapchat, have opened offices in Santa Monica, Venice or Marina del Rey â€” better known for shirtless surfers than web geeks.
They are joined by hundreds of cutting-edge startups and tech incubators like GumGum that are gobbling up space along Southern Californiaâ€™s Pacific coast. At DogVacay in Santa Monica, a sort of Airbnb for pets that impressed actor Will Smith so much that he invested in it, co-founder Aaron Hirschhorn says he has never looked back on his decision to set up shop downstream from San Francisco.
â€œHere I am a bigger fish in a smaller pond,â€ said the 37-year-old, as about a dozen pooches owned or being cared for by employees lounged on cushions or strutted about in the sprawling open office space.
â€œIâ€™m not competing with Facebook or Google to recruit engineers. Itâ€™s a very close-knit community of techies and the networking is great.â€ Skyrocketing commercial prices in the San Francisco area, historically considered the center of gravity for tech companies, is a key reason many start-ups have been relocating to Los Angeles.
â€œIt is so expensive for a company to expand in San Francisco,â€ said Michael Schneider, 35, founder of Service, an outsourced customer service center that seeks to resolve disputes between customers and businesses. â€œYou have to raise at least 50 percent more for the same thing,â€ he added, while acknowledging that San Francisco was unlikely to lose its title as â€œthe tech epicenter of the world.â€
Another draw to the Los Angeles area for techies is the quality of life, said Schneider, whose startup â€” his fifth since high school â€” has raised $3 million since he founded it nine months ago.
â€œYou have the weather, a change of pace and you get away from a very endogenous environment in the Bay Area (of San Francisco) where everybody only talks about tech,â€ he said.
The tech boom in Los Angeles has been fed by a number of local success stories in the last five years, including Snapchat, now valued at $16 billion, the streaming service Hulu, valued at $10 billion, or the dating app Tinder ($3 billion).