In response to the high costs and competition for talent and space in Silicon Valley, some tech companies are setting up in Southern California instead, which they’ve dubbed “Silicon Beach.”
Exactly where Silicon Beach is located is hard to say. Some people say it’s just the Orange County region, while others (including the official SiliconBeachLA website, which also has a Twitter feed and a Facebook page) include the greater Los Angeles region as well.
Traditionally associated with industries ranging from entertainment and fashion to aerospace, the Southern California development community started out focused on that area, but has expanded into more fields, such as the nascent virtual reality industry. This is especially true with colleges in the region such as CalTech, UCLA and USC churning out developers and other technical professionals who like the region and the fact that they can surf at lunchtime without a wetsuit.
“Though the local aerospace industry has shrunk considerably since the Cold War ended three decades ago, much remains, buoyed by a fast-increasing number of startups,” particularly in the area of satellites and drones, writes Sandy Mazza in the Daily Breeze. “Cities like El Segundo welcome the newcomers with open arms, hoping they will fill in revenue streams that went dry with the transforming economy. The city began an initiative last year to bring 100 new businesses to town by 2017 and, as a historic home to the country’s leading aerospace and defense corporations, has actively sought to be on the cutting edge of modern technology in those fields.”
Nearby, Mayor Robert Garcia has announced an initiative to transform Long Beach into a tech hub. “When I talk about the Silicon Valley concept, it’s kind of a state of mind,” he tells the Los Angeles Times. “It means Long Beach 3.0. It means being a city that embraces open data and embraces innovation.” As part of that effort, he has created a Technology and Innovation Commission (i-team).
One of the big Silicon Beach success stories is Snapchat. Stanford dropout Evan Spiegel couldn’t afford to stay in the Bay Area, and instead moved in with his dad in LA, writes Ben Bergman for NPR’s All Things Considered. There, he started a mobile messaging service now valued at $16 billion. Before that, it was difficult to get engineers to move to LA. “People thought it was career suicide,” venture capitalist Adam Lilling told Bergman. “Nobody—not one person—would move down—no matter what the offer was.”
Now, though, engineers clamor to move to Southern California for the lifestyle, including surfing. Here, surfing isn’t just an expression, but is actually used as a network for innovation. A group of surfers who work in the tech industry, the Silicon Beach Surfers, has more than 500 members, writes Scott Gummer in Fortune. “Golf was forever the ultimate business networking activity. It is losing favor, most notably among millennials, because golf takes too long,” he writes. “That is especially true as more people will hit a shot, send a text, hit a shot, check email, hit a shot, then pick up the ball without finishing the hole so they can take a call.”
In contrast, surfing requires people to disconnect, Gummer continues. “Being forced to unplug completely—even if just long enough to ride one wave—fairly guarantees a fresh perspective, which is when the big ideas hit,” he notes.
But growth does come at a cost—literally. Real estate prices are going up, both commercial and residential, and some long-time businesses have found themselves evicted in favor of space-hungry tech companies that can pay higher rents, as well as the sorts of businesses that cater to them.
Residential development in the Silicon Beach region is also increasing, and with much more expensive, higher-end houses. “It’s not like it used to be, when you could attract talent to Los Angeles and then expect them to drive an hour to work,” real estate agent Lee Johnson tells the Hollywood Reporter. “These are people who want to live near work, so they can bike there or walk or whatever.”
In response, unlike El Segundo, some communities are calling for limits on growth. For example, Santa Monica has limited both residential and commercial development. This has dismayed the tech industry that was setting up shop there—ironically, because Santa Monica had worked so hard to create its own high-end municipal broadband network, writes Jason Islas in SantaMonicaNext.
This doesn’t stop the growth in general, though—it just moves it down the road. For example, when Santa Monica set up growth limits, vendors migrated to Venice. “For decades, Venice has been the epicenter of weird, a beachy paradise with a gothic twist, where carnival freaks, homeless hippies, yoga instructors and fanny-packed tourists blend into a milieu as colorful as its famous three-story murals,” writes Rob Kuznia in the Washington Post. “Now, thanks to real estate speculators and a tech boom featuring the likes of Google and Snapchat, Venice’s mellow charm is under siege.”
Even downtown LA, which is admittedly quite far from the beach, is getting into the act, because some developers are finding Silicon Beach itself too pricey. Organizations like Grid110—named after LA’s first freeway, Highway 110—are setting up to help support the startup community in downtown LA, including providing incubator space and access to resources.
Absent some natural disaster, Silicon Beach isn’t likely to displace Silicon Valley altogether. But it does give companies, as well as their employees, more options. As well as better surfing.
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