Silicon Beach emerges as a tech hotbed

PLAYA DEL REY, Calif. -- You can excuse Brett O'Brien for feeling giddy.

His start-up Viddy, launched in early 2011, created a smartphone app that allows people to capture, enhance and share video and already has 40 million registered users. He's raised more than $38 million in funding. And more would-be investors are circling, wondering if Viddy could be the next Instagram, the photo app that earlier this year sold to Facebook for $1 billion.

But Viddy isn't based in the technology hotbeds of Silicon Valley and San Francisco. "It would have been a lot more challenging to create a business like this up there," O'Brien says. Instead, Silicon Beach, a roughly 3-mile stretch of sand from Venice to Santa Monica, is home to Viddy and a host of other young tech companies with an entertainment, celebrity or mobile edge.

After years of the San Francisco Bay Area dominating the tech start-up scene, with huge smashes such as Facebook, Google and Twitter, entrepreneurs are finding they can go elsewhere to grow and prosper. One of those places is the city of dreams itself, where thousands still flock every year to seek fame and fortune, and where young pioneers such as Charles Chaplin, Walt Disney and the Warner brothers (Jack and Sam) used the technology of visuals and, later, sound to create the motion-picture industry.

Cheaper rents than the Bay Area, better weather and proximity to the beach (most of the start-ups are within two blocks of the ocean) make Silicon Beach an attractive place to be.

More than 500 tech start-ups have sprouted in sprawling Los Angeles and its environs, according to members of the L.A. tech scene who have compiled the list online as RepresentLA.com. But most of the action is at the beach.

"There's a creative energy to Venice," says James Citron, CEO of Venice-based Mogreet, a mobile entertainment marketing company. "A better quality of life. You can go surfing in the morning, code by day … and the weather's better than Palo Alto."

Some of the early buzz-getters in the burgeoning Silicon Beach movement include Viddy, Mogreet, new retail-meets-celebrity sites BeachMint (Ashley and Mary-Kate Olsen, Jessica Simpson) and ShoeDazzle (Kim Kardashian) and e-card pioneer JibJab. There's also eHow parent Demand Media, streaming video site Hulu, car-shopping site TrueCar and one dominant player from Silicon Valley: Google.

There aren't any Silicon Beach start-ups that have hit the really big time yet, such as San Francisco-based Instagram, where staffers became instant millionaires. "But there will be," Citron says.

Veteran investor Timothy Draper says venture-capital firms are taking notice of Silicon Beach. "The Hollywood creativity has finally caught the technology wave," says Draper, managing director of Draper Fisher Jurvetson, which invested in early start-ups such as video-chat company Skype and electric-vehicle maker Tesla Motors. "It takes awhile for the financial people to catch up with the entrepreneurs."

"There's been way more interest from up north about what's happening here in the last 12 months," agrees Michael Yanover, head of business development for Creative Artists Agency. "L.A. has been under the radar, and it's finally elevating itself."

Even Google has taken notice of Silicon Beach's growing allure. The search giant recently took over the prominent Binoculars building, designed by famed architect Frank Gehry, in Venice.