California Dreamin’
College students are familiar with the legend of the college dropout: the tech geek at a distinguished school who rejects institutionalized education to pursue a risky business venture from his home garage. Mark Zuckerberg, founder of Facebook, once preached to an interviewee “Why would you be studying it if you could be doing it?” Zuckerberg joins the ranks of other dropouts, the founders of Apple, Microsoft, Dell, Twitter, even WikiLeaks iconoclast Julian Assange.
The rise of these figures to celebrity has lent mysticism and allure to entrepreneurship and the technology community. Entrepreneurship education is on the rise and America’s higher institutions. Be it because of the programming success stories or because of the ever-presence of gadgets in the hands of millennial generation college students, universities are supporting entrepreneurship. In 1985, college campuses offered a total of 250 courses in entrepreneurship. By 2008, the number of entrepreneurship courses had risen to 5,000. More than 500 majors, minors and certificates in entrepreneurship were offered in 2006, and in 2016, institutions like Princeton University continuing to establish new programs. In 2013, eighteen universities required students to take a course on the basic principles of entrepreneurship.
With this increasingly entrepreneurship focused academic landscape, Silicon Valley, home to the headquarters of Alphabet Inc., Intel, Oracle, attracts international attention – drawing human and financial capital: Silicon Valley hosts the most prestigious internships and receives 46% of American venture investment. But as job growth outpaces that of housing and commercial space, rent increases—pushing prices outside of the range of recent entrepreneurs. Others posit that the region has reached carrying capacity for technology companies.
Enter Santa Monica, California, wittily nicknamed “Silicon Beach,” grouped with nearby Playa Vista, Westchester, Venice, and other municipalities. Santa Monica is a beachfront city west of Los Angeles that has recently taken the spotlight for its own technology start-up friendliness. Santa Monica laid the foundation for Silicon Beach in the 1920s, when a culture of amateur aviation and group of powerful Southern California elite looking to foster economic growth supported the beginnings of an aviation industry. Local military demand fueled manufacturing, and aircraft needs in World War II pushed the industry to capacity, with employment in aviation increasing from 15,000 in 1939 to 190,700 in 1943. Electronics ballooned with aeronautical engineering, and, supported by training of advanced skilled workers at Caltech’s Jet Propulsion Laboratory and UCLA’s College of Engineering, the sectors grew through mid-century.
But in the late 1980s and early 1990s, Department of Defense expenditures declined with the end of the Cold War, and rising foreign competition from Europe and Japan contributed to the shrinking of industry, which left unemployed skilled workers and warehouse space in its wake. Together, labor and space in Santa Monica supported the shift of capital from Silicon Valley to Southern California. Large computing-based companies including Google and Yahoo have opened Silicon Beach offices and media companies at the intersection of technology and entertainment are often headquartered in the region. Southern California’s draw also stems from a culture reminiscent of that in Hollywood in the 1920s. The region, with the advent of the YouTube generation, is imbued with an idealistic sense of opportunity not unlike that present when aspiring talents loitered at the intersection of Hollywood and Vine Avenues in downtown Los Angeles. Because today a charismatic persona can become YouTube-famous with nothing but a smart phone, and a fashion-conscious student can garner millions of followers with a camera and Instagram account. The can-do spirit of the entertainment industry carries over to the technology industry, where similarly a homegrown computer programmer can use self-taught skills to launch the next entrepreneurial billion-dollar scheme.
Venture capital firms acknowledge these unique opportunities afforded in Santa Monica and other Silicon Beach cities, and incubators like technology-focused MuckerLab and Capital Partners have recently invested hundreds of millions in enterprise-software companies, consumer service technology companies, and other business enterprises.
The Los Angeles area was ranked the world’s third best startup ecosystem in a Startup Genome report in 2012, just behind Silicon Valley and Tel Aviv. But Silicon Beach offers what the other areas cannot: cheaper capital and Southern California culture that will continue to allure top tech talent, including college dropouts.