Watch: Is South LA the Next Tech Hub?

Rachel Uranga

Rachel Uranga is dot.LA's Managing Editor, News. She is a former Mexico-based market correspondent at Reuters and has worked for several Southern California news outlets, including the Los Angeles Business Journal and the Los Angeles Daily News. She has covered everything from IPOs to immigration. Uranga is a graduate of the Columbia School of Journalism and California State University Northridge. A Los Angeles native, she lives with her husband, son and their felines.

Watch: Is South LA the Next Tech Hub?

South L.A. has long produced arts and cultural icons and influencers — from actress and producer Issa Rae to two-time NBA All Star Baron Davis. It's now also home to an emerging network of founders and a recent wave of investment. But is it Los Angeles' next tech hub? Much will depend on access to capital, infrastructure and a shift in how it's perceived. That's the takeaway from Wednesday's dot.LA's strategy session, "Is South LA the next tech hub?" with Mirror Digital CEO Shelia Marmon, PLLAY Labs, Inc. CEO & co-founder Shawn Gunn and America on Tech founder and CEO Jessica Santana.


"We have to have a place to tell our own stories and define our own narratives, and that is so important," said Marmon, who grew up in South LA and was at the early network meetups in Leimert Park where the seed for Plug In South L.A. were sown. The group provides a network for founders.

Building those networks are key for Black and Latino entrepreneurs who have historically been excluded from the largely white, male tech and venture capital circles, making it more difficult to raise money and get ideas off the ground.

Just 1% of venture-backed founders were Black in 2018, according to a study led by Silicon Valley Bank. Another survey by the National Venture Capital Association and Deloitte found on 3% of investment partners are Latino and another 3% Black.

South Los Angeles is largely Black and Latino and has a long history of segregation and poverty. The South LA region spans 28 communities and 50 square miles, bordered by the Alameda Corridor, Imperial Highway, Baldwin Hills and Interstate 10.

"It's easy to tell a young person, 'Oh, just go to Santa Monica and go to this conference or, you know, go somewhere like that.'" said Gunn, who has founded several companies and recently raised $3 million for PLLAY, a game wagering platform. "You're not always felt welcome there, right? Or you have all your defenses up. So when you see people, men and women that kind of look like you, and are potentially going down a path that you want to go down...That means a lot."

Like a lot of founders of color, Gunn said, the task felt nearly impossible and he looked outside traditional venture capital firms for funds. In Los Angeles, where Hollywood, sports and tech collide, there's opportunity.

"There are high-net worth individuals that are starting to open up to the concept of becoming early-stage investors," he said.

To his point, Rae and Davis are both investors. The slain rapper Nipsey Hussle was also working on real estate investments in the region when he was killed. Gunn said there's also crowdsourcing and accelerators.

Grid110, a nonprofit that runs an accelerator focused on minority founders, this year created its first South LA cohort.

Jessica Santana, who trains youth in South Los Angeles schools, said that these options help but the narrative must also be changed.

"Generational poverty has obviously taken a toll on the way that (the youth) seek opportunities in their own communities," she said. "What we do is helping young people reimagine the way that they see technology in the first place, so that they can see themselves as creators of it and not just the ones who, you know, are on the platform."

Now she said, she'd like to see more people opening the doors to hiring and writing checks.

For more, watch the video.

This event is in partnership with Plug In South LA & Urban Tech Connect // Forward 2020.


Strategy Session: Is South L.A. the Next Tech Hub?www.youtube.com

Speakers

Sheila Marmon, Founder & CEO of Mirror Digital

Sheila Marmon, Founder & CEO of Mirror Digital 

Sheila Marmon has a passion for the launch and operation of new businesses in the digital media industry and has created innovative platforms for over 20 years. As founder + CEO of Mirror Digital, an interactive media and advertising company, she helps Fortune 500 brands tap into the fastest growing U.S. consumer base - the multicultural market. Sheila has executed over 450 digital campaigns in this space for clients including AT&T, Clinique, Disney, Ford, General Motors, Intel, Macy's, Netflix, Procter & Gamble, Universal Pictures and other leading brands and advertising agencies.

Sheila has been featured in leading publications including the Financial Times, and Media Post; she was also profiled in a cover story for Minority Business Entrepreneur Magazine. She serves on the Boards of The American Advertising Federation, A Better Chance, and Cate School and she is also a founding member of the Council of Urban Professionals. Sheila has received The Network Journal "Forty Under 40" Outstanding Achievement Award, the Code Breaker Award from Digital Diversity Network, and has been named a Catalyst in Media & Entertainment by the Council of Urban Professionals.

Shawn Gunn, CEO & Co-Founder at PLLAY Labs, Inc.

Shawn Gunn, CEO & Co-Founder at PLLAY Labs, Inc.

Shawn Gunn has successfully exited from five technologies companies during his career as an executive, investor and entrepreneur. Today, he is co-founder and CEO of PLLAY Labs, an artificial intelligence-driven behavioral data and wagering platform focused on the broader video gaming industry, and former founder and CEO of Persona, a personal data security and monetization platform.

Jessica Santana, Founder & CEO of America on Tech

Jessica Santana, Founder & CEO of America on Tech

In 2014, Jessica co-founded America On Tech (AOT) which is an organization that creates pathways for students into degrees and careers in tech. Their work has been featured in major media outlets such as Forbes, CNN, Wells Fargo, Sirius XM Radio, Huffington Post, TechCrunch, BET, Black Enterprise, AlleyWatch and The Network Journal. AOT has offices in NY and L.A.

She has presented and spoken to over 100+ different audiences that include SXSW Edu, TechCrunch, Google for Entrepreneurs, White House, Thomson Reuters and Bloomberg. Her commitment to philanthropy and community engagement is evidenced by her world travels and work in parts of Europe, China and South America to work with nonprofits, private companies and social enterprises that better local communities and economies. She is a board member or PowerMyLearning and the Office of Multicultural Advancement at Syracuse University. She graduated with undergraduate and graduate degrees in accounting and information technology from Syracuse University.

Rachel Uranga, Reporter at dot.LA

Rachel Uranga, Reporter at dot.LA

Rachel Uranga covers the intersection of business, technology and culture. She is a former Mexico-based market correspondent at Reuters and has worked for several Southern California news outlets, including the Los Angeles Business Journal and the Los Angeles Daily News. She has covered everything from IPOs to immigration. Uranga is a graduate of the Columbia School of Journalism and California State University Northridge. A Los Angeles native, she lives with her husband, son and their felines.

https://twitter.com/racheluranga
rachel@dot.la

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Genies Wants To Help Creators Build ‘Avatar Ecosystems’

Christian Hetrick

Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.

Genies Wants To Help Creators Build ‘Avatar Ecosystems’

When avatar startup Genies raised $150 million in April, the company released an unusual message to the public: “Farewell.”

The Marina del Rey-based unicorn, which makes cartoon-like avatars for celebrities and aims to “build an avatar for every single person on Earth,” didn’t go under. Rather, Genies announced it would stay quiet for a while to focus on building avatar-creation products.

Genies representatives told dot.LA that the firm is now seeking more creators to try its creation tools for 3D avatars, digital fashion items and virtual experiences. On Thursday, the startup launched a three-week program called DIY Collective, which will mentor and financially support up-and-coming creatives.

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‘Crypto Winter’ and the Future of Sports Sponsorships

Steve Huff
Steve Huff is an Editor and Reporter at dot.LA. Steve was previously managing editor for The Metaverse Post and before that deputy digital editor for Maxim magazine. He has written for Inside Hook, Observer and New York Mag. Steve is the author of two official tie-ins books for AMC’s hit “Breaking Bad” prequel, “Better Call Saul.” He’s also a classically-trained tenor and has performed with opera companies and orchestras all over the Eastern U.S. He lives in the greater Boston metro area with his wife, educator Dr. Dana Huff.
silver and gold round coins
Photo by Art Rachen on Unsplash

Between 2020 and 2021, a cryptocurrency boom led several crypto-oriented companies to ink deals with athletic organizations like the NBA and UFC. One of the bigger deals was blockchain giant Crypto.com signing a $700 million deal with the Staples Center—one of the world's largest sports and entertainment venues—in Los Angeles. The Singapore-based company also signed agreements with the UFC and Formula 1 for promotion at various sports venues and on athletic equipment.

Crypto.com wasn't the only crypto company to extend its reach into sports or entertainment. In exchange for naming rights to the Miami Heat's arena for 19 years, FTX, a cryptocurrency derivatives exchange, paid $135 million. And in an exclusive deal, Coinbase became the exclusive cryptocurrency exchange for the WNBA, NBA, and NBA G League.

Rolling into 2022, there was little warning that crypto winter was coming.

Winter Is Here

In May, the major stablecoin TerraUSD lost its peg to the US dollar. In one day alone, TerraUSD lost $60 billion in value. After that, major crypto lender Celsius suspended withdrawals, citing liquidity problems. The company followed up by filing for bankruptcy.

They were just among the first dominos to topple in the crypto world, and many others soon fell. As a National Research Group (NRG) report about the state of the cryptocurrency industry noted, the market has gone "down over 70% from the highs it reached towards the end of 2021, and many of the most popular coins are trading at less than half of where they were at the beginning of the year."

As the NRG report also notes, the crypto market has undergone "dramatic" corrections before. Is the current crypto winter that different? And more importantly, will crypto winter freeze the budding love affair between entertainment, pro sports, and cryptocurrency?

According to NRG, "crypto winter" has affected the public view of cryptocurrency in various ways.

For example, NRG reports that "70% of consumers feel they have at least a 'moderate' understanding of cryptocurrencies." If accurate, that’s a notable change from a YouGov survey conducted in June 2021 which found that 69% of Americans agreed with the statement, “I don’t really understand cryptocurrency.”

On the other hand, at least 61% of people surveyed said they were aware of the "crypto crash" or "crypto winter." It seems the heavy and negative news coverage of crypto winter over the last three months has considerably boosted consumer awareness—of the crashing market.

NRG notes, "This isn't a technological novelty anymore; increasingly, having some knowledge of crypto and how it works is seen as an element of baseline financial literacy."

Even though consumers have been exposed to a large number of crypto news stories, however, NRG reports that few bother to do deeper research. Bitcoin remains the most well-known name, and consumer awareness of other coins like ETH, Dogecoin, or even popular meme coin Shiba Inu hasn't increased much since the beginning of 2022. Even with the media's attention to TerraUSD de-pegging from the dollar (arguably one of crypto's most significant events in recent memory), only 7% of consumers are familiar with the term "stablecoin."

Crypto sponsorships continue…mostly

Crypto.com’s Al D’Agostino gave a succinct response to dot.LA when we reached out for further comment on the company's association with the Staples Center: "Crypto.com remains fully committed to its sports sponsorships. We are well financed and these are multiyear contracts, which will continue to play a crucial role in our mission to accelerate the world's transition to cryptocurrency."

While the New York Post reported in late June that FTX had backed out of sponsorship negotiations with the Los Angeles Angels, the crypto exchange has taken on new sponsorship obligations with a $210 million naming deal for pro esports team TSM, aka Team SoloMid.

But as recently as August 2, the Voyager cryptocurrency exchange backed out of a multi-year sponsorship deal with the US National Women's Soccer League (NWSL). In addition, the exchange is facing bankruptcy after its CEO made millions at the 2021 peak of the cryptocurrency boom.

In comments accompanying its crypto winter report, NRG's Global Head of Insights, Marlon Cumberbatch, said "that the crypto crash hasn't done much to dampen Americans' enthusiasm toward cryptocurrencies – for investors, the recent crash is just the latest in a long series of ups and downs, rather than the start of a terminal decline."

Cumberbatch also offered advice on how companies as big as pro sports teams and small as local businesses might strategize to survive crypto winter. "Start engaging openly and constructively with policymakers," Cumberbatch said, "continue to invest in educating consumers about the technology and promote practical use cases for crypto…"

Cumberbatch also encouraged better cryptocurrency education for everyone. From the C-suite to the penny crypto investor in the street, people need to understand better what they're getting into. "Recent media coverage has done a lot to increase consumer awareness of crypto," he said, "it's not the same as increasing understanding. It's critical that consumers know enough about the technology to be able to make informed decisions and protect themselves from unnecessary risk."

Cumberbatch did not respond immediately after dot.LA reached out for specific comments about crypto company sponsorships such as the Crypto.com and Staples Center deal.

Where do we go from here?

The NRG report on the general state of crypto did not predict doom and gloom but noted that the crypto landscape "is vast, complex, and constantly in flux."

"More than anything else," the report continued, "recent events in the crypto market have made it clear that there's a need to educate potential investors. Before they buy-in, it's vital that consumers understand the technology on more than just a surface level—and that they know enough about crypto to be able to make informed decisions and protect themselves from unnecessary risk. And today's leading crypto firms will have a pivotal role to play in facilitating that educational journey."

Cryptocurrency exchanges have benefited more from their sponsorships than the sponsored organizations, and at minimum, crypto winter has put a dent in more multimillion-dollar deals for now. But if the National Research Group's report proves prescient, this may be a temporary lull in cryptocurrency-oriented companies paying big money for widespread name recognition. Crypto.com arena is here to stay…for now. If crypto winter gives way to a crypto spring, we could see more Coinbase stadiums and Bored Ape Yacht Club restaurants soon.

steve@dot.la

Here's What To Expect At LA Tech Week

Christian Hetrick

Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.

Here's What To Expect At LA Tech Week

LA Tech Week—a weeklong showcase of the region’s growing startup ecosystem—is coming this August.

The seven-day series of events, from Aug. 15 through Aug. 21, is a chance for the Los Angeles startup community to network, share insights and pitch themselves to investors. It comes a year after hundreds of people gathered for a similar event that allowed the L.A. tech community—often in the shadow of Silicon Valley—to flex its muscles.

From fireside chats with prominent founders to a panel on aerospace, here are some highlights from the roughly 30 events happening during LA Tech Week, including one hosted by dot.LA.

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