Even though Los Angeles has finally arrived as the entrepreneurship hub it has long promised to become, you can't go to a startup conference here without hearing the same refrain: what more does the city need to be a thriving startup ecosystem?
At the LA Tech Summit in Santa Monica on Tuesday, three different investors who took the stage over the course of the morning were asked precisely that question.
You might expect three different answers. Instead, they each articulated nearly the same advice: L.A. startups should stick to what L.A. does best.
Sarah Tavel, a VC with Greylock Partners and a former product manager for Pinterest, advised entrepreneurs to "figure out [L.A.'s] domains of expertise." Since L.A. is the entertainment capital, of course, Tavel surmised that with virtual reality technologies, "L.A. is just going to crush it."
Similarly, Mamoon Hamid, a parter at Social Capital, said the key is to "develop centers of excellence around specific areas" that L.A. already dominates.
And Aydin Senkut, a former Googler who founded Felicis Ventures and invested in both Fitbit and Rovio (the maker of Angry Birds), chimed in with a similar prescription, with a mobile twist. "Whatever the local asset is... translate it into a mobile advantage for the cloud age," he said.
"Stick to what you know" isn't exactly unfamiliar advice in entrepreneurial circles, but is it what L.A. most needs to hear right now?
At the lunch break, I caught up with Adam Miller, founder and CEO of Cornerstone OnDemand, which makes cloud-based workforce management software (and hosts the conference every year). He's a good one to weigh in on the topic because he's been around the L.A. startup scene since before it was cool. Miller started Cornerstone in 1999 from his one-bedroom apartment. The company, which wound up on Inc.'s annual list of fastest-growing private companies in the U.S. five times, went public in 2011.
Miller's take on the day's advice was quite different. "I don't believe that," he said. "Did you happen to notice that all of those speakers were from the Valley? 'Stick to what you know' is a good thing to say when you don't want competition."
He went on to explain that he thinks L.A.'s biggest need has nothing to do with honing industry expertise. Now that the city is being taken seriously by investors, the media, and entrepreneurs themselves, it's time for L.A. to mature. Yes, the city could use more financing, service providers, and talent, he said. But what would really help the ecosystem scale is... patience. The city needs more founders who are willing to hold out and not exit too early.
"The first post-bubble generation sold out relatively early--they either relocated to the Valley or just sold. Now you're starting to see a lot more companies that are willing to stay in the game," Miller said. In his view, Maker Studios, which Disney picked up for $500 million in May 2014, arguably could have kept going.
Miller mentioned Snapchat as one of the most prominent examples. (Remember that reported $3 billion acquisition offer it rejected from Facebook? The startup is now supposedly valued at three times that.) The closely held location data startup Factual, which has been operating rather quietly since 2008, is another.
"We have enough at-bats now. The next phase is for these companies to really scale," Miller said.
In other words, keep your head down and keep working.