By DAVID BRINDLEY
Staff Reporter
There is a new kind of up and comer in the business world very bright, very ambitious and eager to use his or her information-based knowledge to make a fortune.
And L.A. is loaded with them.
“If you think of the people who grow up in Southern California, many dream of working for themselves,” said Michael Duffy, vice dean of graduate programs at USC’s Marshall School of Business.
That’s been true for decades, of course, but the energy to become entrepreneurs and to make millions of bucks in the process is fueled by several recent developments, most notably L.A.’s growing reliance on small- to medium-sized businesses.
For young workers not prepared to strike out on their own, there are lots of immediate opportunities for employers, far too many. If you’re young, creative and comfortable behind a computer keyboard, it’s strictly a seller’s market.
And even if a company manages to snag some of these 20-something knowledge workers, it will be at a considerable price both in terms of pay and perks.
They have been pegged “gold-collar workers,” and despite their sometimes unorthodox demands, there aren’t nearly enough of them to go around.
Heather Robinson-Greene, herself just 31 and vice president of interactive markets at Union Bank of California, says she often can’t afford the job applicants seeking work as programming specialists.
“It’s a younger base of people,” said Robinson-Greene, and “they quickly become too expensive.”
“It’s hard enough down here to attract talent, but it is even harder up in Northern California,” added David Bohnett, who in 1994 founded GeoCities, a Santa Monica company that provides various Internet services.
Not that GeoCities is any high-tech shrinking violet. Bohnett has 105 employees and has attracted $41 million in venture money. In January, Yahoo bought a $5 million stake in the company.
“I think that this will be the year that we launch our IPO,” said Bohnett, who himself stands to do quite well if the launch succeeds.
The prospect of riches is indeed real, and there appears to be plenty of capital looking to back ambitious young people with big ideas.
Take Jon Faiz Kayyem. The 34-year-old molecular biologist from Cal Tech started up Clinical Micro Systems in his garage to develop a DNA testing device. Three years later, he has attracted $8.5 million in capital from investors and government grants and occupies 10,000 square feet of industrial office space.
Toby Lenk, 34, left his vice president’s position at Walt Disney Co. because he “wanted the excitement of the small-business environment.” Last fall he started up his own Internet toy retailing company, and quickly exceeded projected sales by 80 percent. He has since attracted millions of dollars in funding from venture capitalists.
The L.A. region, through a combination of factors, is especially conducive to this sort of young entrepreneur.
“If you think about the structures of business in Southern California,” said Duffy, “we are not dominated by large, old bureaucratic corporations. We are not dominated by Fortune 500 companies. We are not a massive corporate headquarters. We are home to innovative companies, energetic companies, biotech, medical services, software. And the entertainment industry is largely populated by small companies that are quite entrepreneurial.”
One more thing: There’s plenty of money to go around.
“It’s a wealthy area; if someone has a good idea, the capital is available here,” said John E. Anderson, president of the Los Angeles-based investment company Topa Equities Ltd., and namesake of the Anderson School at UCLA.
Lloyd Greif, the 42-year-old chief executive of Greif & Co., a Los Angeles investment bank, believes that L.A. is the “entrepreneurial capital of the world.” As if to press the point, he recently pledged $5 million to USC to establish the Lloyd Greif Center for Entrepreneurial Studies.
“If you are willing to bust your tail, L.A.’s a good place to do it because you will reap the rewards of your diligent effort,” he said.
At the same time, the prospect of reaping those rewards has changed the way people in their 20s and 30s perceive employment, according to Andy Knox, managing director of Korn/Ferry International, the Los Angeles-based executive search firm.
Instead of going to large companies and staying there for much of their professional careers, younger workers are adopting a kind of free-market mentality, often switching from one company to another. Increasingly, they aren’t even full-time employees, but work as contractors.
Much of this is driven, Knox says, by the booming stock market and a strong IPO market, which, in turn, is fueling small business opportunities. People are seeing their friends make huge amounts of money in their ventures and are willing to take the chance to hit paydirt themselves.
So how do businesses cope and thrive in this kind of environment?
One way is to offer more incentives. And in high-tech, that means giving folks a piece of the action.
“Stock options are what keep all of us in the game here,” said Bohnett of GeoCities.
It also takes good working conditions to keep everyone happy. Bohnett “created an environment that we hope people like: we’re at the beach, we have a sundeck and pool table, the typical casual environment in this industry.”
Beyond that, experts say that companies must not only attract talent from the outside but spend more energy developing in-house talent.
That means “retooling skills of employees with potential,” said Caroline Nahaus, managing director for Southern California at Korn/Ferry International. Many companies are doing that by sending their promising employees to top business schools in the country.
Even though the economy is still booming and is likely to keep up, gradually the shortage of highly skilled workers “should level off as employers catch up with the demand,” said Nahaus.
And that can’t happen any time too soon.
Staff reporters Sara Fisher and Elizabeth Hayes contributed to this story.
