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Interview: Rohit Shukla, Larta

Rohit Shukla is the CEO of Larta (www.larta.org), which holding its 10th annual Venture Forum today in Beverly Hills. I thought it would be appropriate to get Rohit's perspective on the industry, as he's been following the technology industry in the area for years.

BK: You've got a great perspective on the ebb and flow of capital into Los Angeles. What's your opinion on where we are today and the state of investment in this area?

RS: The figures are in for the last quarter of 2003. We've just completed our analysis- the Sand Dollar Report - which is packaged with PwC's Money Tree Survey, and its clear that 2003 saw a recovery of sorts. Venture investing in the area started a recovery in 2002, and continues to show improvement from the collapse of 2000-2001. That said, early stage investing is still anemic, reflective of collective anxiety on the part of venture firms. Expansion-stage capital increased, and we should be seeing this trend continue.

BK: Which industries are you seeing the most activity from nowadays?

RS: There is a tremendous amount of interest in the biosciences, of course, although there is some evidence (even in San Diego) of a potential bubble effect. Communications (wireless communications, both broad platforms and specific solutions), enterprise software and monitoring, biometric and identity solutions, disaster recovery platforms, security applications, all are relevant.

BK: You've seen LA grow from a strongly defense-based technology center, to a center of the dot com goldrush--where do you see our future?

RS: L.A. peaked early in the dot-com "goldrush" as you put it, when everyone assumed there to be a natural alignment of content and technology. We had spectacular failures early on, too, and after that it continued to lag the Bay Area, while San Diego started an impressive rise based on wireless and biosciences capabilities. It has been pointed out consistently by many people (including you and me) that L.A. is geographically and sectorally dispersed, and that its considerable intellectual assets did not easily translate into growing, venture-backed businesses during the last boom. It wasn't the leader in enterprise software or biotech. Having said that, however, the increase in interest in seucrity and anti-terror applications in a new world post 9/11 make it a world center for the next phase of the digital economy. A whole host of technology areas from Sensors for chemical and other detection and RFID to new digital battlefield platforms and services will come out of the L.A. area, supported by a steady supply of brainpower and expertise that has been resident in the region for decades. Invision and Cyrano were in the news recently; both were acquired by larger companies, but whereas in times past, they may have been squirreled away to other locations, that is unlikely this time - the assets are here, and are anchored by world-class continuing research supported by DHS (Homeland Security), DoD and DARPA (Defense) and others: USC, Caltech, JPL etc. L.A. is now videogame central, as the industry has grown or moved here to be closer to the studios. And Hollywood, increasingly beset by digital troubles, is likely to be witness to new kinds of digital media companies. Add in the other things: distribution, retail, energy, consumer electronics. Its hard to ignore the size and diversity, and its easy to imagine a lot of the innovations and companies in those areas growing here, with or without venture financing.

BK: What do you think the threats are for Southern California's technology industry, and what should we be doing about it?

RS: Infrastructure - both physical and soft (traffic and roads, although I am somewhat contrarian on this score; there isn't a place that matches our size that doesn't have urban issues along these lines); soft - we need to continue the nurturing of the eco-system - linking innovators, ideas and management talent through a robust but widespread network of entrepreneurs, service professionals, investors, digerati and educators. The so-called global threat is actually an asset for So Cal, the most globalized economy in the country. But local governments are under siege; in L.A. we have many of them, which means many more issues. Their revenue options are foreclosed, they're beset by NIMBY-ists of every stripe, they suffer from the pompous perceptions of others. We've got to stop looking for dysfunction around every corner, and describe a future of the possible and likely, one that could best leverage the resources of the area and not just point to its severe abnormalities.

BK: Finally, it seems like the economic climate seems to be recovering somewhat. Do you think this is a real recovery?

RS: It is a recovery in that there is a return to a sense of normalcy, after an uncertain innings. We've got a fresh start, and we can pick up where we left off before the madness began(in this case the time before valuations became inversely proportional to the youth of the entrepreneur, before being an investor meant having an MBA degree and the energy to make it through a raft of parties while talking up a storm, before the time when people struck "deals" whose only clarity was to bring eyeballs to the game through catchy phrases and giveaways from heaven). Even e-commerce is back, chastened and more realistic. Can anyone else be far behind?

BK: Thanks!


 

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