TechCruch has reported that BetterWorks, a startup based in the Silicon Beach area has shut its doors at the end of May. This is a giant blow to the Silicon Beach startup movement in Los Angeles. Silicon Beach needs a startup that can stand the test of time and be a big hit in order to start competing with other tech hotbed areas in the country.
PMI has edgy creative buildings with a lot of startups as tenants. These startups are attracted to PMI’s creative spaces in smaller buildings. We emphasize great architecture and build communities for the tenants to interact with each other. Many of our tenants over the years have been acquired as a method of their exit: Applied Semantics, AZ Razorfish, Guardian Edge, Apture, Playdom, Techcrunch, and Doubleclick to name a few.
Once these firms are acquired, the corporations want the firm to integrate into the ‘mothership’. They will either wait for the new acquisition’s lease to expire, try to sublease the space, or offer a buyout option. These large corporations have facility managers who also demand a different set of services. They want a state of the art security service and will sacrifice the edgy aesthetics to achieve it. Sometimes the acquired company fights for their independence within the corporate structure. These companies want to keep an identity and culture separate from the acquirer. Zappos is a classic case of such a company. They stayed true to their culture when they were acquired by Amazon. In fact, Amazon actually strongly encouraged Zappos to stay true to their roots– it was part of what made them so unique and special in today’s Internet marketplace.
Another example is that in PMI’s buildings, Techcrunch renewed their lease versus moving into an AOL facility. Keeping their old digs was one way for Techcrunch to retain their independence from AOL and maintain a separate culture at the same time.
Overall, corporations keep their goal of wanting to move the new startup acquisition to a space that falls more in line with the main, home office of the corporation. This occurs at the same time as having the startup stay true to their founding identity and what made them so attractive to acquire in the first place. A balance between the two needs to be maintained and sometimes it is a fine line to reach.