L.A.’s Downside

sean laurie percival los angelesSean and Laurie Percival, documentarians of the L.A. scene

The L.A. scene’s small and close-knit community is a blessing, but local entrepreneurs know it needs to grow. Craig says, “We know we need to attract more startups and we work hard to welcome and help every startup that takes the jump into Silicon Beach.”

But one glaring (and baffling) problem is the relative lack of engineering and development talent. That’s the downside of the lack of competition for talent cited by Calacanis: If the pool of tech companies is relatively small, so is the pool of qualified candidates.

“Engineers have flocked to San Francisco/Silicon Valley historically,” says Craig, “and there is a density of engineering talent up there. But the flip side is that these folks get recruited in a second.”

Daniel Dato co-founded local startup accelerator Upstart.LA. He says, “The challenge here is that, as traditional companies become more technology-oriented, startups are competing against some very mainstream alternatives for technical talent. [Tech companies competing with non-tech ones] wasn’t exactly the case in Silicon Valley or Boulder, but it’s common in larger metro areas like L.A. and New York.”

Still, Dato points out that the wealth of L.A.-area universities is fertile ground for new hires and he remains enthusiastic about LA’s potential. Citing the newest crop of startup-focused attorneys, coworking spaces and investors, he says, “The most significant drawback of the LA market was the relative youth of the startup culture, which meant that it took a little more effort to get your startup going. But that’s changing very quickly.”

Micki Krimmel founded NeighboorGoods, a startup that lets users loan and borrow rather than sell and buy their excess items. She says, “I have to admit, it would be a lot easier to build a startup in San Francisco… It’s where the talent is. It’s where the money is. It’s where the community is.” As a result, Krimmel says she finds herself making frequent trips to the Bay Area out of necessity alone.