It’s smart to start a startup in… Los Angeles (Part 2)

In my last blog post, I discussed some of the main reasons why the greater Los Angeles area has become a great place for startups, many of which were based off of Laura Rich of Fast Company’s article on the subject. Rich also makes some interesting points about what is driving the startup community in LA, including the fact that more second and third-time entrepreneurs are in LA now than ever before.

 

One major benefit of being located in LA, and something that I noticed when recruiting for one of OpenView’s portfolio companies (Central Desktop) in Pasadena, is that there is less competition for employees than in Silicon Valley. Although it can be more difficult to find employees with a specific skillset since many professionals in LA are focused on the entertainment industry, when you do find a candidate, there is less of a chance that that person is interviewing with other startups, which could give you the leg up on top talent in the area. Less competition amongst startups in the area also means that there is a lower turnover rate of staff in LA than in the Bay Area.

Another interesting point that Rich makes is that although she feels there is a huge amount of engineering talent in the LA area, once a company is past the expansion stage and is looking for, say 500 or a thousand engineers, the company may want to consider a move to the Bay Area. Jolie O’Dell’s article on ReadWriteWeb, titled Open Thread: When Is The Valley Worth Moving To? discusses this very topic, and Ben Parr of Mashable poses a bigger question when he asks readers, Web Entrepreneurship: Does the City You Live in Matter?

What do you think… How does the city where you start your business affect you when you are looking for investors and employees?