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As much as the LA tech community tries to deny it, the shadow of Silicon Valley is always present. We’re sitting next to our successful older brother at the dinner table and no matter how much we boast and interject, the conversation always reverts back to him.
In the rankings of the top tech ecosystems in the world, Silicon Valley unsurprisingly took the top spot, but LA was close behind in third place. However, as Professor Patrick Henry of the USC Marshall School of Business argues, Silicon Valley should have also been numbers two, three, four, five and six.
“There is Silicon Valley and everybody else. It’s a unique ecosystem that can never be replicated. It happened on its own and suddenly hit critical mass and became what it is now.”
In physics, when an object is too close to a central mass, it is gravitationally pulled in and absorbed. So how has LA been able to thrive in recent years despite being just 400 miles from the Bay Area and drawing from the same talent pool within the California school system?
The simple answer is this — the amount of talent in California universities is unbelievable. Especially in Los Angeles.
In Business Insider’s rankings of the Top 50 computer science and engineering schools in the country, 11 of the schools reside in California and CalTech (#2), UCLA (#23), and USC (#28) made Los Angeles the most prevalent city on the list.
In a similar study, NetworkWorld listed the Top 20 colleges for computer science majors, based on earning potential, and California universities held six of the top 10 spots. But is all of that Los Angeles talent funneling into Silicon Valley? Professor Henry believes so, but his counterpart, Professor Ashish Soni of the Viterbi School of Engineering has seen a different trend.
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“The initial concern has always been that talent will drift off, but I know that it's changing. I think the retention levels have improved 10-15 percent over the past five years. There is the gravitational pull of being in the Mecca of downtown San Francisco because you want to be part of a community, not just a single startup. But now there are more meaningful companies in LA, like Snapchat, and they’re raising larger amounts of funding and are doing more sophisticated engineering work.”
“One of the things I’ve always said is that in LA engineers are like backup singers but in Silicon Valley, engineers are the stars. But that’s changing in LA. There are a lot of companies where cultures are changing and the best founders are seeing the value of engineering.”
The general consensus for entrepreneurs in California is that starting a tech company in LA versus Silicon Valley will inherently be cheaper and it's generally easier to find tech talent in the less competitive market. When RadPad CEO Jonathan Eppers announced he was offering $10,000 for an engineer referral, it highlighted how competitive and self-sustaining the LA market has become.
“As they are in other competitive hiring markets, most startup engineering teams in Los Angeles are built through internal referrals,” said Eppers. “One person will join the team and their connections that are interested in potentially joining the next rocket-ship will come along for the ride as well.”
As the LA tech community grows, so will its allure to local students. Professor Henry’s entrepreneurial students may continue to flock to the Valley to find engineers (because, according to Henry, “that’s where the real brain sucking is”) but with a growing number of college-run incubators and internship programs, Professor Soni’s engineering and computer science students are finding LA to be an increasingly enticing place to start their careers or their own business.
Professor Patrick Henry is the Assistant Professor of Clinical Entrepreneurship at the USC Marshall School of Business. He received Marshall's Golden Apple Award in 2006 and 2012. Professor Henry was a member of the Board of Directors of the Association for Corporate Growth, Los Angeles Chapter, and the President's Circle in the Town Hall of Los Angeles.
Professor Ashish Soni is the Founding Director of the Viterbi Student Institute for Innovation (VSi2) within the USC Viterbi School of Engineering. He teaches courses related to high tech entrepreneurship, user experience design and innovation and recently launched one of the nation’s first educational programs in Digital Entrepreneurship in collaboration with the business school at USC.
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