Panel
Building an Entrepreneurial Ecosystem: Why L.A. Is Working
Milken InstituteSteve Drobny, Julie Gerberdinger, Kara, Walter, Scott, Eric Schmidt, Steve Groveyard
- Startup launch capital requirements are predicted to shift from historical figures of $30 million and $5 million Series A to approximately $500,000, significantly increasing the volume of seed-level companies.
- TrueCar is expected to grow at a rate of over 50% annually for the next decade, aiming to reach $1 billion in revenue by 2018 or 2019 from a current $200 million baseline.
- Los Angeles is forecasted to evolve into a rising tech star with a maturing ecosystem, characterized by a shift from restrictive term sheets to founder-friendly Silicon Valley standards and the emergence of a hardcore aerospace and engineering base.
- The automotive market is projected to see a consumer preference shift toward SUVs, luxury cars, and trucks, driven by increased affordability, ease of purchase, and low, stable gas prices that may boost vehicle ownership despite sharing economy trends.
- Self-driving technology is anticipated to reach an event horizon 10 to 15 years away, at which point it may impact industry growth while simultaneously reducing accidents and negative side effects of ownership.
- The "Maker" acquisition by Disney is viewed as a significant anchor for the local ecosystem, potentially helping Los Angeles gain institutional respect alongside future "real big exits."
- Liquidity events and market conditions in Los Angeles are expected to normalize over time to a "market clearing level" as demand creates interest and the market matures.
- Storytelling is identified as a universal requirement for brands, with YouTube creators predicted to become the highest-performing acquisition channels as companies recognize their value.
- Future entrepreneurial success is advised to depend on deep technical skills in mobile environments like Swift, addressing global challenges such as water or food supply, and surrounding oneself with diverse teams.
- Risk mitigation strategies include focusing on control, governance, and revisiting historical business ideas that nearly succeeded to navigate rapid model changes.
- Generational trends suggest young people will increasingly adopt vehicle sharing as a natural choice, though current adoption remains nascent compared to established sharing economy sectors.
- Market risks include the potential for a plateau in company growth which could result in leadership changes, as well as the possibility that Los Angeles will not achieve full institutional respect without major valuation rounds.