This year was filled with pivots, pauses and restarts for L.A.'s tech and startup world. In our first year of chronicling it (we officially launched January27th), our most-read stories reflect the strangeness of 2020, and go some way in predicting some big questions for 2021. From gaming to biotech, movies to music, and transportation to education, the shifts have been dramatic. Where will we be when the dust settles from this year? As we head into our second year, we'll keep a close eye on the trends that have transformed some of L.A.'s core industries.
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#1: Bird's Botched Layoffs
The early days of the pandemic, as companies scrambled to shore up cash and preserve their business, provided a number of examples of how to handle a crisis. L.A.-based scooter unicorn Bird, sadly, provided the world a lesson in how not to do it, calling over 400 employees into a glitchy virtual chat and summarily dismissing them all in a two-minute, no-question call that left employees feeling baffled, humiliated and betrayed. In a post that went viral, dot.LA spoke with employees and obtained a recording of the call.
#2: Ageism and Women in the Workplace
"When you're older you get discredited and when you're younger you get discredited." Our virtual discussion on how ageism affects women in the workplace struck a nerve with readers. Inclusology founder Cheryl Ingram, PhD and Cue Career founder Heather Wetzler discussed strategies for women to employ at every stage of their careers, and tools that companies can use to combat workplace discrimination.
#3. The Twentysomething Who Built LA's COVID Testing Response
Interest in our profile on Fred Turner, the 25-year-old college dropout who founded of Curative Inc., gathered over the course of the year, as more people became personally familiar with the testing system he helped deploy at Dodger Stadium and throughout the city (and, eventually, the country). "We are a strange company because our goal is to essentially put ourselves out of business," Turner told dot.LA at the time. Sadly, his startup has only grown since we published the story.
#4. The Rise and Collapse of LA's $164M Cannabis Startup
The killing of a well-connected Russian investor and the missteps of the twenty-something U.S. executives he hired to run his $164 million cannabis empire made for one of the most compelling stories we published this year. dot.LA spoke to dozens of former employees, as well as state and national law enforcement, to bring readers this 5-part series on the collapse of the Genius Fund.
#5. The Tech Startups Poised to Reshape How Music is Made
#6. Where Celebrities Meet the Gig Economy
Cameo CEO Steven GalanisIn 2020, CEO Steven Galanis moved from Chicago to L.A. with a number of his Cameo cohorts. The app has increasingly found itself at the intersection of two mega-trends: the growth of gig work and the rise of the influencer economy. Social media stars have been leveraging their massive audiences and forcing the advertising industry — so often fixated on TV, film and sports celebrities — to take notice. Our profile of Galanis and his company revealed a world of celebrities eager to take hold of their audiences — and monetize them.
#7. The Investors Who Remained Unfazed
When the pandemic brought the economy to a standstill in March, many L.A. entrepreneurs found themselves staring down a frightening future. But investors were still spending. Inspired by a LinkedIn post from Luma Launch partner Laurent Grill, dot.LA published a list of local investors still looking to fund great ideas. The resulting post took off and so did the dealmaking.
#8. FAANG Reimagines LA Real Estate
Among the trends that have reshaped L.A. during the pandemic has been the rapid rise of streaming services and the equally stunning shift in audience habits for movies and TV. As the world emerges from the pandemic in 2021, it will find Netflix, Google and other FAANG companies have gobbled up real estate — especially on the Westside, where Netflix alone is poised to occupy 10% of commercial real estate by 2023.
#9. Sketchy's Product Plans and Edutainment's Rapid Rise
In 2020, Sketchy Medical grew from a cult startup that helped medical students efficiently memorize clusters of information into an edtech darling, with big raises, a new CEO lured from Disney and plans to leverage its foothold in education technology into a full-blown media empire that aims to make remote learning more effective and far more entertaining. Its story parallels the incredible disruption taking place in schools and homes globally, as parents, teachers and school districts confront the pandemic and rethink how education can happen.
#10. Karma's IPO Push and Electric Cars' Banner Year
dot.LA got the scoop on luxury electric car company Karma's moves to go public via SPAC, but it was far from the only SoCal electric vehicle startup to do so. In the wake of Tesla's turbocharged stock market rise, Canoo, Fisker, Xos, Envoy and many others sought their own IPOs or raised massive rounds. It's a trend we'll be watching closely as California ramps up its plans to go fossil fuel free by 2035.
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FaZe Clan CEO Lee Trink would probably tell you the Hollywood-based outfit is all of that, and then some. During a bombastic showing at NASDAQ headquarters where FaZe Clan rang the opening bell to mark its first day of trading as a public company, Trink proclaimed “now is the time for Gen Z to lead” the culture – while holding hands with FaZe content creators, of course.
Despite worming its way into the public consciousness relatively recently, FaZe Clan has been around for over a decade. Here’s a brief recap of the company’s origins, and their ambitions going forward as a publicly-traded gaming firm.
“The Voice of Youth Culture”
FaZe Clan’s start was simple enough – in 2010 three talented “Call of Duty: Modern Warfare 2” players linked up after meeting on Xbox Live to start a YouTube channel documenting their trickshots and antics in-game. Their first series was called “Illcams” and caught the attention of many teenage boys who wanted to both beat—and be—the players. Within two years the channel had a million subscribers and FaZe was competing in esports tournaments, laying the groundwork for what would become over 35 esports championship wins to date.
In 2014, FaZe bought a mini-mansion in New York and became one of the earlier entrants into the YouTube influencer house scene – though it has since upgraded to swankier digs in Los Angeles. Since then, the brand has grown its following to 500 million followers across social media, with 80% of that audience aged 13-34.
CEO Trink (a former Brooklyn Assistant District Attorney-turned-music executive who managed artists including Kid Rock) started leading the company in 2018. He oversees about 35 content creators and 15 pro esports players, plus the other 40-plus people on FaZe’s business side.
Lately, FaZe has expanded more into merchandising in an attempt to turn a profit. It recently sold $1 million worth of mouse pads designed by Japanese artist Takashi Murakami in one day and in recent months opened several pop-up shops.
“FaZe Clan will fund investments and we will create the product and we’ll own a bigger piece of the upside. That’s the future of the creator economy,” Trink told CNBC.
FaZe Clan CEO Lee TrinkCourtesy of Lee Trink
The Money Problem
Trink and the Clan clearly seem confident in FaZe’s potential. Wall Street doesn’t seem convinced just yet.
FaZe first announced plans to go public last year and said the deal could be worth $1 billion. But it's actually a $725 million SPAC merger, and the new entity FaZe Holdings Inc. was created by merging with a blank-check company set up by wealth management firm B. Riley.
It’s been a tough year for SPAC deals so far and most companies that sought a SPAC merger deal lost nearly half their value or more in the first six months of 2022 as investors wouldn’t stop selling. FaZe could rise above this trend, or become the latest to see its stock sink to new lows.
In its first day of trading, FaZe’s stock dipped 30%, trading at about $9 per share.
There’s clearly valuable brand potential in FaZe; Forbes estimated the outfit’s worth at $400 million. But it isn’t profitable just yet. In a 2021 report FaZe noted more than half its revenue came from sponsorships. and it made roughly $53 million last year – compared to $28.7 million in overall losses.
It remains to be seen whether FaZe Clan’s stock will sink or swim. After all, it’s unlikely most of the core Gen Z audience is trading its stock.
The cash from the IPO deal could allow FaZe to invest more into content and direct-to-consumer merch, adding value and boosting its bottom line. FaZe will also look to buy out smaller firms in the future; Lee Trink told dot.LA last October that he is targeting acquisitions of content companies that could help FaZe break into streaming services like Netflix and HBO.
