Silicon Valley Watcher - at the intersection of technology and media

I caught up with Kieran Hannon the other day. He was in the Bay Area for a meeting with the Irish prime minister (he's on the board of Enterprise Ireland) and I realized it had been a good few years since I had last seen him.

He used to be co-managing director of Grey Advertising, then had gone off to Texas to work as VP of Marketing for Radio Shack, and then moved to Santa Monica, in Southern California. He's now working as COO at a promising startup called Sidebar, which has an interesting mobile technology that recommends content based on what people like, very useful for online retailers and others.

Kieran and his family had spent 18 years living in San Francisco, and I was curious what life in Southern California (SoCal) was like.

He said life was good, and that the startup scene was healthy and that there are a lot of media/technology centers there. I often write about how Silicon Valley has become Media Valley, because of all the media companies here (Google, Facebook, Yahoo, Twitter, etc) so it makes sense that SoCal, with its rich media history, would be a fertile breeding ground for media technology startups.

Earlier this week, Mark Suster, a VC based in SoCal, wrote an excellent post about startups in LA. Want to Start a Technology Company in LA?

He makes some great points:

...LA [is] the second largest city in the country with a population if 16 million. We have universities like Caltech, UCLA, USC and many more. We have many seasoned entrepreneurs who have built successful companies here and made a lot of money for investors and themselves. But LA is not Silicon Valley and we don't need to aspire to be so. We will never be Silicon Valley in the way that Toronto will never be Hollywood. But we have a great city for building technology companies.

He goes into details about how LA is not like Silicon Valley.

- Funding is different, there are smaller "A" rounds of around $3m rather than $10m here.

- Recruiting is different. There aren't huge pools of engineers, but it is possible to build 100+ sized teams.

- Commuting isn't as bad as people think it is, most people live close to where they work. And hey, commuting isn't that easy here.

- Lots of content creation skills. This is an interesting point to make because software engineers can be found almost anywhere in the world today, but content creation skills are very culture specific, you can't outsource this work.

- There are now larger numbers of successful entrepreneurs, many are on the their second and third successful company.

Here are a few success stories:

There is a lot of innovation happening in LA from places like Eqal, Deca.TV, DemandMedia's studios, Clicker, Filmaka and other initiatives.
. . .
The whole category of "sponsored search" came from a successful LA company, Overture. (my firm, GRP Partners, was an investor). LA produced Applied Semantics that created AdSense and was bought by Google. We were also an investor in the early local listing company, CitySearch - an LA company. LA was a leader in lead generation (LowerMyBills), comparison shopping (PriceGrabber, Shopzilla), social networking (MySpace ... I know, I know - Facebook won - but it was still a big business). If we extend a bit North up the coast line we have many affiliate marketing innovators including ValueClick, Commission Junction and FastClick. They also produced GoToMeeting and CallWave.
. . .
A great team from MySpace has created Gravity. Gil Elbaz from Applied Semantics has now created Factual. Zorik Gordon is tearing it up at ReachLocal. TechCoast Angels backed GreenDot should be a major IPO this year. Frank Addante has created Rubicon Project. Douglas Merrill, the former CIO of Google, is building his next company in LA. Scott Painter, founder of CarsDirect has created two new generation LA startups (Zag and TrueCar, both backed by GRP Partners). Brett Brewer (ex MySpace) has AdKnowledge, there is Adconian, Legal Zoom and many more. Hautelook, Gogii, Magento - all very high potential companies building in LA.

Mr Suster is one of the organizers of Launchpad LA V2, which was announced today. This is a project aimed at helping first-time entrepreneurs and helping to educate them and guide them in building successful companies.

We will be selecting 10 startup companies to participate. There is no cost but you must physically be based in or move to Los Angeles for the 6 months of the program. Applications are due April 6th, 2010, the form is on the website and the Twitter address is@launchpadlad

A West Coast corridor of innovation...

It won't be long before we have a West Coast corridor of innovation stretching from Silicon Valley to Southern California, and beyond.

In fact, if you fly from San Diego heading north along the coast you pass over tons of innovation centers:

- The communications and biotech industries of San Diego;

- The electronics industries of Orange County;

- The media centers of Hollywood and Santa Monica;

- Then you reach San Francisco/Silicon Valley with its electronics, software, media tech, biotech, cleantech industries;

- Then Portland with its thriving startup scene plus Intel's big presence there;

- Seattle with a thriving tech scene mostly spun out of Microsoft, and Amazon;

- Vancouver and its software industry.

Wow. 1400 miles of innovation. There's no other region like it, hundreds of miles of world-class, industry leading, innovation and creativity.

Interestingly, it's all built on top of one of the most unstable fault lines in the world. A disruptive reality. Is there a connection?

I've always said that innovation has to be disruptive otherwise it's not innovation.

I was at Chris Brogan's Inbound Marketing Summit on Wednesday, speaking on a panel moderated by Paul Gillin, on the subject of "Media in Transition: The Future of News in a Democratized World." My old friend Dean Takahashi from VentureBeat (formerly with Wall Street Journal, Red Herring, San Jose Mercury) was also on the panel, along with Ken Doctor, analyst with Outsell.

Media in transition is a fascinating subject, I can talk for days, for weeks on this subject.

Between the four of us on the panel, we probably have nearly a century of experience with news media. We now find ourselves taking part in an incredible transition within our industry of a like we will never see again in our lifetime.

And few people realize that Silicon Valley is the main instigator of the disruption happening in the media industry. It is Silicon Valley technologies and companies that are at the forefront of developing the new landscape of the media industry, and also transforming SIlicon Valley into a "media valley."

Take a look at some of our largest companies, such as Google, Yahoo, Ebay. These are media companies. These are not tech companies, you can't buy any tech from them, these are technology-enabled media companies.

They publish pages of content with advertising. What's not a media company about that?

Facebook, Twitter, Craigslist -- are all media companies, they publish pages of content and advertising. And so are most Web 2.0 companies.

Take a look at the Internet, it is a media technology. It allows you to distribute and publish web pages, data, to any computer screen, any computer platform. Now, in this second phase of the Internet, anything with a computer screen can publish back -- it's now two-way, it's read/write, we now use both sides of the glass screen.

It is Internet technologies and services, it is online companies such as Google, Craigslist, etc, that are helping to disrupt the media industry. Or more accurately, disrupt the business model.

When we talk about the death of newspapers, what we really mean is the death of traditional media business models.

On Silicon Valley Watcher, I often use the tag line: "reporting on innovation at the intersection of technology and media." Because that's what's happening, that's what I see, a tremendous intersection of technology and media. It's like tectonic plates coming together and crumpling the landscape into a new mountain range.

And mountain range is a suitable metaphor because there are always two sides to a mountain range, one side is dry and the other is wet and fertile. For example, the Andes protect and enable the massive, wet, fertile Amazon rainforest with its incredible diversity of life, while the west side of the Andes is dry and relatively barren.

The mountain range being created by the intersection of technology and media is a barrier to the traditional media companies, most don't seem to be able to climb and transition to the other side; most won't make it.

But, I'm confident we will have a new type of Amazon rainforest emerging in the media industry, we will see an amazing diversity of media companies and services. You can already see the tremendous amount of innovation emerging and we've only just started.

For example, Facebook and Twitter are very new, even to us in Silicon Valley, and they are spanking brand new for the majority of people today. What other new forms of media will we have a year from now?

We can create incredible mashups of media technologies and media formats that have never been seen before. How will we use them? How will we deal with the loss of traditional media? How will our society handle the transition? How will we pay for journalists and the vital Fourth Estate service that they provide? How do we sell products and services? How do we find trusted sources of information?

There are tons of questions waiting to be answered. And that's what's so wonderful about all of this, we are directly involved in figuring out those important answers. We, the people working in media, in communications, in marketing, in startups, we get a chance to help create and define the future.

This is why I love my job, writing Silicon Valley Watcher, and reporting on innovation at the intersection of technology and media.