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Category: Silicon Beach

Santa Monica embraces Silicon Beach -- don’t call it Tech Coast

Silicon Beach

Silicon Beach, the burgeoning tech start-up scene that’s taken root in Santa Monica and the surrounding area, continues to gain traction.

On Thursday, the city devoted much of its annual State of the City address to promoting the tech community, with Mayor Richard Bloom declaring: "Today we are not just Santa Monica, but Silicon Beach and the Tech Coast." (In an unofficial vote later, hundreds in attendance overwhelmingly threw their support to the Silicon Beach name.)

"Our technology-qualified workforce, creative workplaces and leading broadband infrastructure will keep our economy well-positioned for future growth," Bloom said. 

After the mayor's address and a short video touting the rise of tech companies in Santa Monica, Jason Nazar, who is chief executive and co-founder of local start-up Docstoc.com and has become one of the main boosters of Silicon Beach, moderated a panel of people connected to the tech scene.

The group -- Paige Craig, CEO of start-up BetterWorks; David Travers of venture capital firm Rustic Canyon Partners; Chui Tsang, president of Santa Monica College and Keith Klein of law firm Bryan Cave -– discussed the region's success so far and what needs to happen here in order for the tech community to thrive, such as partnerships with local schools, financial resources and other incentives.

Travers said the "critical issue" was getting a future tech powerhouse to stay put in Santa Monica and “be the tent pole around which many other companies will blossom."

"The next Facebook or Amazon or Google or what have you -- the next multibillion-dollar great company needs to not only come out of here but needs to be able to stay here," he said. "Once a company starts getting big it needs a larger campus, you have a lot of MBAs sitting around thinking about how to optimize tax policy…. Santa Monica needs to be ready for when one of these companies takes off."

Tsang said he hoped tech employers would be "a little more active, a little more pushy with us in letting us know what it is they’re looking for" so the college can make sure its curriculum is relevant.

And despite the Silicon Beach name, the region needs to develop its own tech identity, Travers said. 

"We compare ourselves a lot to Silicon Valley. I think we have to stop obsessively benchmarking ourselves against that," he said. "We need to stop acting like the little brother who’s always comparing themselves and just be ourselves."

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Photo: (Left to right) David Travers, Paige Craig, Chui Tsang, Keith Klein and Jason Nazar discuss Santa Monica's tech start-up scene during a panel discussion. Credit: Andrea Chang / Los Angeles Times

Start-up spotlight: LuxeYard brings social aspect to flash sales

LuxeYard

LuxeYard, a luxury home furnishings and decor flash sale site, officially launched on Tuesday with the aim of making e-commerce more social.

The Marina del Rey start-up (which will soon move to Culver City) is the latest newcomer to the rapidly growing flash sale marketplace, which includes One Kings Lane, Fab.com, Gilt and Rue La La. The site offers two new approaches to the usual for-members-only, limited-time sales: concierge buying and group buying.

With concierge buying, LuxeYard members can request items they'd like to purchase at a discounted price. The most popular product will be voted up and LuxeYard will then source either the exact product "or one known to be comparable or even higher quality," the company said. 

Group Buy allows members to push prices down on certain items by using social media and networks to encourage others to purchase that product. The price is driven down if the product receives enough buzz. Everyone who purchases the Group Buy item will pay the final lowest price. 

Chief Executive Braden Richter said the company was evolving the concept of flash sales by putting the sourcing and pricing of goods in the hands of consumers.

Flash sales were "originally designed to liquidate inventory; it was sort of born out of 2009," he said at a launch party Tuesday night at the Roosevelt Hotel in Hollywood. "I think a lot of the current flash sale companies are now trying to figure out what to do. We've come into it at a perfect time to create this next generation."

Like other flash sale sites, LuxeYard features a community of design professionals and stylists, dubbed trendsetters, who offer product recommendations and other advice. Trendsetters include Nicky Hilton; Daniella Clarke, founder of Frankie B Jeans; and designer Faye Resnick.

The site is free to join and launched with $3.5 million in financing from private investors; about 185,000 people had already signed up during the site's pre-launch beta phase. On Tuesday, LuxeYard averaged about five new members a minute, Richter said.

The company has about 30 employees and offers luxury home furnishings -- including furniture, textiles, cookware and lamps -- at 70% off retail. LuxeYard doesn't hold inventory or operate warehouses; instead, manufacturers ship products directly to consumers. 

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Image: Screen shot of LuxeYard's home page. Credit: LuxeYard 

Start-up spotlight: Capsule aims to be group events' one-stop app

Capsule
Capsule, an event-based sharing platform, launched out of private beta with a website and free iPhone and Android apps this week.

The Manhattan Beach start-up provides a suite of tools to help users capture the "entire life-cycle of group events," including invites and RSVPs, group texting, instant photo-sharing in real time and archiving. 

During a demo for The Times, co-founders Cyrus Farudi, who is chief executive, and Omri Cohen, who is chief technology officer, said they were trying to create a central location for events that would enable participants to better plan and share their experiences together. Before Capsule, they said, the process was much more disjointed -- for instance, receiving an invite through Evite, texting friends individually before and tweeting during the event, and checking each participant's individual Facebook accounts afterward to see photos. 

"No one has that complete solution over the marketplace, and I think that's one thing that sets us apart," said Farudi, formerly of Flipswap. Capsule "solves the event life-cycle management problem."

Farudi, 31, and Cohen, 29, said they came up with the idea after having to attend 14 weddings and nine bachelor parties in one year. Founded less than a year ago, the start-up is angel-funded and joins a fast-growing group of emerging tech companies in the Los Angeles area, which some people have dubbed Silicon Beach.

On Friday, a day after Capsule was released to the public, Farudi declined to say how many people had joined but said the launch was "going really well." Capsule can be found at www.trycapsule.com.

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Image: Screen shot of Capsule's home page. Credit: Capsule

HauteLook spins off shoe club Sole Society

The Sole Society shoe club has been spun off from HauteLook.

Sole Society is ready to stand on its own two feet.

The for-members-only shoe club has been spun off from Nordstrom-owned HauteLook as a separate company, company officials said.

Based in Los Angeles, Sole Society was launched in March as a sister brand to HauteLook, a rapidly growing "flash fashion" sale site that sells designer goods at deep discounts for a limited time. Nordstrom acquired HauteLook in March for up to $270 million in stock.

Sole Society members register for free on the e-commerce site and fill out a "style bio" questionnaire to determine their style. They then receive a personalized selection of six "designer-quality, on-trend" shoes to choose from each month and receive the pair of their choice, typically for $49.95. Sole Society has nearly 500,000 members.

"We're an early-stage business and we need 100% focus," said Andy Solomon, chief operating officer of Sole Society. As a standalone business, Sole Society can "really be nurtured and the right decisions can be given to it."

For shoppers worried about committing to a pair of heels without first trying them on or seeing them in person, Sole Society provides a free return shipping label with every shipment. And members are allowed to opt out if they don't feel like receiving a new pair of shoes that month. 

"Everyone has very busy lives these days and they don't always have time to get to the mall," Solomon said. "One of the great trends with online shopping is personalization and curated commerce."

Company officials declined to disclose the financial terms of the spin-off or provide sales figures for the 9-month-old brand.

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Image: Screen shot of Sole Society's website.

L.A. startup looks for the most interesting engineers in the world

Scopley

One L.A. startup is looking for the most interesting engineers in the world.

It has launched a spirited recruiting campaign that spoofs the Dos Equis beer advertising campaign featuring the most interesting man in the world ("At museums, he's allowed to touch the art," "He once had an awkward moment, just to see how it feels," "The police often question him, just because they find him interesting").

Scopely offers new recruits (or the folks who refer them) all the manly accoutrements that just such an engineer whose reputation is expanding faster than the universe might need: a briefcase filled with $11,000 in bacon-wrapped cash, a year's supply of Dos Equis, a custom-made tuxedo, cigars, sex panther cologne, a spear gun, beard-grooming oil and an oil painting of himself (or, of course, herself) "because Picasso needs a REAL model."

And, because competition for top technical talent has gotten as intense as cliff-diving in Acapulco (or other interesting man exploits), Scopely has turned its website into a digital "we're hiring" billboard that flashes questions such as "Did God use your wireframes to create the Himalayas?" or "Were you able to handle 100,000 requests/second at your high school prom?" next to a photograph of its chief technology officer Ankur Bulsara, who is so interesting that "Web technologies have meetups to discuss him."

Engineers have clearly taken the recruiting ploy seriously. Scopely has netted 1,000 resumes and two hires in the last four months. The oil painting of the first hire the company, ahem, speared, Mike Thomas, a senior software engineer, hangs prominently in the company's West Hollywood lobby.

"We had been using recruiters to help us find talent. It was fairly expensive and you don't always find the best people in the world. So we decided to create something a bit different and more fun than the standard cash bonus award," said Eytan Elbaz, the co-founder of Scopely who's most interesting achievement has been to help create Google AdSense. (Elbaz co-founded Applied Semantics, which sold to Google for $100 million in 2003 and became Google AdSense. He worked at Google until 2007.)

Now Elbaz modestly says he's running L.A.'s hottest (and clearly gunning for most interesting) consumer Internet startup with a team of 17 staffers from Playdom, MindJolt, Warner Bros. and Saatchi and Saatchi.

He won't say exactly what they are doing ("we're working on interesting stuff"), just that Scopely will disrupt the social web, or how much cash they've raised ("we will release it at some point") but investors include Terry Semel's Windsor Media.

That has been a serious enough proposition to lure three staffers from Silicon Valley. But for those engineers determined to remain in that technological hotbed, Scopely provides a helpful link to their pals' recruiting campaign in San Francisco. 

Hipster, which has backing from Google Ventures, Charles River Ventures and Kapor Capital, has come up with a similar pitch: It's offering a year's supply of Pabst Blue Ribbon, $10,000 in cash, a fixed gear bicycle, authentic skinny jeans, Buddy Holly glasses, worn brown boots, 'stache grooming and bang trimming.

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Photo: Mike Thomas, a senior software engineer at Scopley, wears a custom-made tuxedo and holds a spear gun while posing with the rest of his haul: a briefcase filled with $11,000 in bacon-wrapped cash, Dos Equis beer, sex panther cologne, cigars, beard-grooming oil, an oil painting of himself and more. Credit: Scopley

BeachMint's ShoeMint is a 'sell out' over Black Friday, Cyber Monday

ShoeMint.com

This post has been corrected. Please see note below for details.

Black Friday and Cyber Monday delivered for major retailers, as expected. But the holiday shopping weekend generated unexpectedly high sales for Santa Monica start-up BeachMint too.

BeachMint, which operates e-commerce websites with products designed by celebrities, launched its fourth site -- ShoeMint.com -- on Friday. By Monday evening, the site had sold its entire inventory of women's shoes.

"We sold thousands of shoes, and honestly, we underestimated the demand a bit," said Josh Berman, BeachMint's chief executive. "The one mistake we made is we didn't order enough shoes, and it'll take about a week to get more shoes made and delivered to us, but it's a good problem to have."

ShoeMint sells women's shoes, for an average of about $80 a pair, that were designed by actress Rachel Bilson and Hollywood stylist Nicole Chavez, and manufactured by Steve Madden, whose eponymous brand has been a major shoe seller for more than a decade.

"We sold through just about everything we had by Cyber Monday, and we had to go into our warehouse and find a few pairs that weren't even in our inventory system to meet demand," said Diego Berdakin, BeachMint's president. "We're still trying to piece it all together. The traffic was incredible."

The pairing of a brand with celebrity designers and stylists is a model used in each of BeachMint's sites so far: JewelMint.com, which sells jewelry designed by actress Kate Bosworth and her stylist, Cher Coulter; StyleMint.com, which sells T-shirts designed by actresses Mary-Kate and Ashley Olsen; and BeautyMint.com, which sells skin-care products designed by Jessica Simpson and skin-care guru Nerida Joy.

"Our model, and you can see it with everybody that we've picked, is to find the authentic experts in that category and to work with them," Berman said. "These aren't just endorsement deals. We're relying on Kate Bosworth, Rachel Bilson, Nicole Chavez, Mary-Kate and Ashley Olsen, Jessica Simpson to identify quality products that we can sell using our technology. Diego and I aren't experts on women's shoes, but we see the opportunity and demand there, so we find the people who are experts and we work with them to deliver the right products."

So far, ShoeMint is BeachMint's fastest-growing site, Berman said, noting that it passed BeautyMint's company record of 500,000 visitors in the first 24 hours of operation.

More than 10,000 people are on waiting lists to buy shoes, and about 80,000 consumers registered to buy goods over a four-day period before the site's official launch, Berdakin said.

Berman and Berdakin declined to say how many shoes ShoeMint has sold so far, but they did say that they had originally planned for their inventory to last them through the end of the year.

Berdakin also said that more than half of the site's pre-launch registrations came from referrals made on Facebook, Twitter and other social networks. And the bulk of those referrals were made by people who had purchased items from BeachMint sites.

The company produces shoes in limited numbers, so the next shoes that will arrive will be designs originally planned for January.

"We're already looking at expanding the size of the shoe line in April, May, June because of the demand we're seeing" Berdakin said. "But we have the benefit of working with someone like Steve Madden, who has made hundreds of millions of shoes in their life, and he's definitely ready to ramp up production with us. And Steve, Rachel and Nicole are making sure what we come out with each month will be what's on trend, what's fashionable."

While ShoeMint's success is just a few days old, Berman said the company is confident that it has a hit on its hands. The firm, which has about 85 employees and was founded in July 2010 by Berdakin and Berman (who is a MySpace co-founder) has raised more than $43 million in funding to date and is looking to continue to expand.

"This year our tongues are wagging, we're pretty tired," Berman said. "But we are planning some new Mints for next year, and we're going to keep expanding the model. We're focused on expanding the right way and with the right partners, and we're seeing a lot of pent-up demand outside of the U.S., so we may launch internationally next year as well. But, at this point, we're just looking to get the word out about the Mints we have running, and we need to get more shoes in."

[For the record, 8:17 p.m. Nov. 30: An earlier version of this post said BeachMint had raised about $23 million in funding to date, that about 20,000 people pre-registered on ShoeMint before its official launch and that Steve Madden was among ShoeMint's designers. The company has actually raised more than $43 million in capital so far, more than 80,000 people pre-registered for ShoeMint, and Madden is manufacturing, not designing, ShoeMint's shoes, Berdakin said.]

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Image: A screen shot of ShoeMint.com. Credit: BeachMint

Former Myspace CEO Mike Jones launches tech studio in Santa Monica

Former Myspace Chief Executive Mike Jones on Wednesday launched Science Inc., a Santa Monica tech studio that aims to develop, provide guidance for and fund start-up companies.

Mike jonesIn an interview, Jones said he thought there was "an efficiency to be gained" in how emerging tech companies are created and built, and noted that Los Angeles has a less mature and established angel market, which can often hamper companies with fresh ideas.

"Access to early capital and mentorship and advice and strategic development is very much limited in L.A. compared to Silicon Valley," he said. "We felt we saw really interesting talent in L.A. that was having a hard time getting through the formative stages in the business."

Science will take an approach practiced by movie studios, conceiving and building its own companies in-house as well as helping already-established companies. It plans to shepherd entrepreneurs through product design, business strategy, marketing and business development. Jones added that unlike other tech studios, Science would work with the companies "for the entire life cycle of the business."

"We look at this as a long-term portfolio, not a term-based business," he said.

Science is backed by investors including Rustic Canyon, White Star Capital, the Social+Capital Partnership and Tomorrow Ventures.

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Photo: Mike Jones, former chief executive of social network Myspace, is the founder of Science. Credit: Science

L.A.-based KarmaGoat lets consumers sell their goods for charity

Karmagoat

Many companies donate a small percentage of their revenue to charities during the holidays. One Los Angeles start-up, KarmaGoat, has built its entire business model around the idea of giving back.

Launched in May, the Westwood company is similar conceptually to Craigslist but combines transactions in secondhand goods, donations to charity and social fund-raising.

Here's how it works:

-- A seller posts an unwanted item -- say, a handbag -- on KarmaGoat for $50.

-- A buyer in the market for a new purse sees it and, using Facebook to log in, makes the purchase through the site.

-- The money from the sale will go to a charity of the seller's choice, such as Red Cross or United Way.

-- The seller and buyer arrange a time and place to make the exchange.

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Photo: KarmaGoat's website. Credit: KarmaGoat

Mark Cuban invests $250,000 in L.A. social gaming company

Mark cuban - mary altaffer ap

Mark Cuban, the billionaire entrepreneur and owner of the Dallas Mavericks, has invested $250,000 in Los Angeles social gaming company Mention Mobile.

Founded in 2010, Mention Mobile is a development company that specializes in integrated social gaming apps for use on mobile devices. Apps include trivia, arcade-style and word games and are available in the Apple App Store; upcoming apps will also be available for Android devices. 

Cuban's investment will fund the development of Mention Mobile's new single title apps that utilize Facebook's public information to customize games and create personalized content based on a user's friends, preferences and interests. The company estimated that eight to 10 new apps would be created with the investment. 

Cuban said in a statement that he was excited to be part of the company's "creativity, fun factor and advanced Facebook integrations skills." He will be given a minority stake in Mention Mobile.

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Elevator Labs: an L.A. start-up building L.A. start-ups

Hello Music

Elevator Labs is one of a growing numbers of start-ups in Los Angeles hoping to raise the profile of L.A.'s tech scene.

But this start-up isn't making any one specific product. Rather, Elevator Labs is in business of building start-ups.

With $20 million in funding to feed Elevator Labs, the new firm is an incubator looking to start L.A. companies based off of ideas thought up by its founders, two former Virgin Digital executives, Zack Zalon and Brendon Cassidy.

The first idea to make it to market and available to the public is Hello Music, an online marketplace that offers musicians discounts on recording and performance gear and studio time.

Hello Music's discounts are offered directly from manufacturers and studio owners and on a limited basis. It's not an online storefront that regularly stocks anything, but rather a deals site aimed at unsigned artists who'd normally be left out of such discounts, Zalon said.

For more than a decade, Zalon and Cassidy have been working together, first at Virgin Digital for more than seven years and for the last five years, running a company of their own called Wilshire Media Group that focuses on product design and development for the entertainment industry.

Elevator Labs, unlike Wilshire, is focused on bringing the ideas Zalon and Cassidy come up with to life.

"What Virgin, and Richard Branson in particular, is incredibly good at is taking ideas that other people have and executing them very well," Zalon said. "Ideas are really great but it's execution that really makes the difference. That's the big thing we learned while working at Virgin and we've been primarily doing the same thing with Wilshire Media Group.

"Now, we're investing in ourselves. Hello music is the first but we have other projects coming and we're working to build, incubate, fund and execute and launch L.A. companies."

Although the ideas behind the companies will originate from Zalon and Cassidy, the two entrepreneurs won't be running every company that comes out of Elevator Labs.

"We literately are starting the companies from nothing but an idea, putting the right people in place and we're hands-on effectively operating the companies until they are ready to go and be launched to the public," he said. "Ultimately, we have a team of entrepreneurs that we're working with to hand the company over to so they can operate the company on their own. And if a company can't run on its own, we won't launch it."

Zalon said entrepreneurs looking for a Y Combinator-like experience of mentorship or a start-up school won't find what they're looking for at Elevator Labs.

Instead, he pointed to Bill Gross' Idealab in Pasadena and Applied Minds in Glendale as examples of companies that create companies in-house, outside of a more traditional incubator model that welcomes and educates a rotating cast of entrepreneurs.

"If an L.A. entrepreneur sent me an email I'd definitely want to find a good place to point them," Zalon said. "But we're not a venture capital firm and we're not a start-up accelerator.

"Elevator Labs likely won't even impact a lot of consumers, but what were hoping we can do is impact the community of entrepreneurs here in L.A. by working on our ideas and making them successful here in L.A. and contributing to the success of L.A. as a city where innovation takes place. The success that we have will hopefully attract more funds, more entrepreneurs to Los Angeles."

The next business Elevator Labs hopes to launch is FatCloud, which Zalon calls a "supercharger for Microsoft.net," a set of software tools that is looking to simplify creating and managing applications built by developers using PCs.

A start-up factory isn't a new idea, but that's not the point, he said.

"Really, what makes Elevator Labs different is Los Angeles itself," Zalon said. "I believe there is a culture in Los Angeles that gets embedded in the products that are developed in Los Angeles. If we don't show off the talent that is here in L.A., the creativity, the entrepreneurs here, they're going to keep taking off to the Bay Area or New York to start their companies.

"And while there is a huge amount of creative activity around technology, interactive, et cetera in Los Angeles, most of that action is taking place in the traditional space of film and entertainment. We want to be one of the companies that shows that L.A. can also be innovative in the other sides of the tech industry."

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Image: Screen shot of Hello Music, a deals site for musicians. Credit: Hello Music/Elevator Labs

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