Venice's laid-back vibes still draw startups to the beach | Crain's Los Angeles

Venice's laid-back vibes still draw startups to the beach

  • The space for startup accelerator, Amplify used to be where boats plied the canals in the early 20th Century. | Photo courtesy of Amplify.la.

    The space for startup accelerator, Amplify used to be where boats plied the canals in the early 20th Century. | Photo courtesy of Amplify.la.

  • LA entrepreneur Oded Noy. | Photo courtesy of Amplify.la.

    LA entrepreneur Oded Noy. | Photo courtesy of Amplify.la.

  • Amplify.la's venice property is near Windward Circle. | Photo courtesy of Amplify.la.

    Amplify.la's venice property is near Windward Circle. | Photo courtesy of Amplify.la.

  • Ariel Kaye, founder of Parachute Home. | Photo courtesy of Nicki Sebastian.

    Ariel Kaye, founder of Parachute Home. | Photo courtesy of Nicki Sebastian.

  • Todd Dipaola, CEO of inMarket. | Photo courtesy of inMarket.

    Todd Dipaola, CEO of inMarket. | Photo courtesy of inMarket.

  • CEO of inMarket, built and successfully exited his first company, Vantage Media, in Venice in the early 2000s. inMarket is now in the same building. | Photo courtesy of inMarket.

    CEO of inMarket, built and successfully exited his first company, Vantage Media, in Venice in the early 2000s. inMarket is now in the same building. | Photo courtesy of inMarket.

LA entrepreneur Oded Noy knew he and Paul Bricault had found the space for their startup accelerator, Amplify, when they heard the back story of the Venice property near Windward Circle, where boats plied the canals in the early 20th Century.

“At some point they paved the canals and there was an amusement park,” Noy said, pointing to Venice founder Abbot Kinney’s vision for a resort. “The building where we are now is where you boarded the roller coaster then. It was so perfect. You think about what we do—and turning around a boat and boarding a roller coaster—and it’s perfect.”

It wasn’t exactly intuitive. Venice in 2011 was known more for skateboards and drifters than startups and Snapchat. But, that year, Google leased 100,000 square feet of space in Venice to relocate from Santa Monica. Dollar Shave Club would soon begin shipping razors from a Venice garage. Hip retail and restaurants like Gjelina had already made Abbot Kinney Boulevard a destination.

None of that was on Noy’s mind six years ago. He and Bricault had roots in Venice; Noy had rented his first apartment there when he immigrated from Israel in the early 1990s. He moved to west LA, co-founding TrueCar in Santa Monica, ground zero for southern California’s startup ecosystem. But when it came time to lease space for Amplify, “no question: Venice,” said Noy, who also serves as CTO of Zefr and CTO of TargetClose.

“A lot of it has to do with the color of Venice,” Noy said. “You see a lot of cultures in Venice, and in cultures is creativity. Venice exemplifies the multicultural aspect of LA in a beautiful way.”

Rents were lower then, before Venice native Snap grew up and gobbled up space after going public. But the success of Snap and other Venice startups has catapulted Venice’s startup community to the international stage, while stretching the boundaries of Silicon Beach. Venice isn't a distinct city, and startups tend to move across LA and the Westside as they outgrow the available space. That makes it tricky to pinpoint how many startups are operating there at a given time, but Crunchbase lists over 200.

Todd Dipaola, CEO of inMarket, built and successfully exited his first company, Vantage Media, in Venice in the early 2000s, when “Venice was famous for being where art meets crime,” he said.

“Now with inMarket, we moved back into that exact same building on Abbot Kinney and the luck has rubbed off,” said Dipaola, an EY Entrepreneur of the Year Award finalist for Los Angeles. “Venice brought us The Doors in the ’60s, and in the early 1900s Venice was like Disneyland. It’s always been a place for new things, entrepreneurs who are pushing forward, rulebreakers rather than rule followers. That’s always attracted me to Venice.”

Josh Payne, founder and CEO of StackCommerce and another EY entrepreneur award finalist, commenced operations in Venice in 2012 after a residency at Amplify.

“They were kicking us out after 3 to 6 months, and a lot of startups wanted to stay in the area because of the network and the creative atmosphere,” Payne said.

For him, the history of gangs and drugs was a concern.

“A lot of startups have cleaned up their own area, taking care of their front porch, so to speak. So gentrification has its upsides and downsides, but the upside is people feel safer and the work environments are more visually appealing," Payne said.

One constant: The boardwalk and beach access, which, in addition to lower costs, had helped establish Santa Monica as a Silicon Valley alternative.

“You’ve got a technology community of folks who are younger workers always looking for an interesting and cool place to live,” said Jacob Bobek, a commercial real estate broker and principal at Avison Young. “Santa Monica is nice, but Venice [is] this counterculture to Santa Monica, edgy and different.”

The contrast is even more striking with other startup capitals. Ariel Kaye, founder of bedding company Parachute Home, grew up by the beach in LA and returned to Venice to launch Parachute after living in New York for 10 years.

“The relaxed, laid-back vibe and sense of community in Venice Beach are integral to both Parachute’s brand aesthetic and work culture, and Venice celebrates health and wellness in a way that I appreciate,” Kaye said, citing several yoga studios, fitness centers and juice bars within walking or biking distance of Parachute’s headquarters.

Revamped Venice buildings now house hundreds of companies, many of which tailor amenities to Venice’s identity, such as showers for workers who arrive straight from surfing or inMarket’s bike share program for two-wheel commuters—improbable elsewhere in LA.

“If you’re an engineer you can’t surf if your office is in Hollywood,” Bobek said. “For tech companies coming up it’s about attracting and retaining employees.”

There’s no shortage of talent to be wooed, said Max Saia, senior research analyst for CBRE Group.

“We have a world-class university system in this region—USC, UCLA, Cal Tech, UC Irvine—just a massive system,” Saia said. Hollywood provides a surfeit of content creatives for startups too.

But, about those downsides to Venice’s startup success: From the time Payne signed his first lease in 2012, rents have doubled, from about $3 per square foot to $6 or $7, he said.

Snap’s hunger and budget for more space almost forced Amplify from its building; the two companies arrived at a compromise to split the space, according to Noy.

Rents could moderate with reports of Snap acquiring space in Santa Monica near the airport. If Snap reduces its footprint in Venice, that could free up supply. Otherwise, startups will continue the diaspora, said real estate broker David Toomey, principal at Cresa. Today, Culver City, Playa Vista and Marina del Rey are luring tech companies.

“Fast forward five years from now, it’s going to be all of the Westside down to El Segundo, into Culver City all the way downtown to the Arts District, through Hollywood, Beverly Hills potentially, and Westwood,” Toomey said.

They all have their charms, Noy said, but none can replicate Venice.

“With southern California now being considered one of the top two or three innovation centers in the world, no one is thinking of just Santa Monica anymore,” Noy said. “Venice is what caused that. A lot of other cultures that have high performance tend to be sharp elbowed, and when you think of Hollywood, you also think of sharp elbows. But the ecosystem we established in Venice is collaborative in nature. People help people here.”

But it wasn’t why Noy moved to Venice originally.

He was partly inspired by the story of Kinney, who bid on land no one wanted and reinvented it. Noy later was struck by a Louis L’Amour book about early settlers in Los Angeles, “The Lonesome Gods.” Noy remembers L’Amour describing the arrival of the hero, who reinvents himself.

“He’s a guy who gets off his horse and says, ‘This is who I am,’ and there is no way of checking out his story. And that’s what he became,” Noy said. “It’s one of those Wild West stories, but it’s like the heart of Venice. You come to Venice and say who you want to be, and that’s who you become.”

 

July 21, 2017 - 1:28pm