Los Angeles-based founders are demonstrating that producing locally is not only possible, but advantageous to their business. And by driving manufacturing locally, they have the potential to drive manufacturing and address income inequality for all Angelenos.
Last year, nearly 100 founders and CEO participated in our Catalyst Program, which supported a diverse community of creators that want to scale their manufacturing in LA. Its mission was to connect participants to factories, resources, and each other so they could grow their businesses and create jobs.
For the last 18 months, this invitation-only community shared peer learning and resources, and they sparked a growing and vibrant ecosystem we believe will lead to more growth and innovation across industries as diverse as apparel, food and beverage, hardware, consumer goods, and aerospace.
Today we are announcing the impressive results of our Catalyst community. According to the survey, our community had a big year in 2018, and has big plans for 2019!
Catalyst members:
- Launched at least 19 products
- Hired 62 new employees
- Expect to hire another 85 employees in 2019
- Created or retained approximately 382 local jobs in 2018
- Connected with 51 local factories (17 of you are now working with local suppliers)
- Invested $6.7M in local manufacturing contracts and plan to spend another $8.6M in 2019
The success of this program demonstrates the large potential of building community bridging the entrepreneurial and manufacturing sectors. We’re excited for the growth within the startups themselves, but also the large multiplier effect through the local factories and other companies that serve them. Unlike “tech” companies, these startups can spur economic growth across all socio-economic sectors.
Poverty and income inequality has become a dire issue, driven by a shift to service jobs. 3.2 million Southern Californians live below the poverty line, and the three fastest-growing job categories (service jobs) pay on average $20,000 annually. This trend affects people of color the most; in Los Angeles since 1980, the median wage of white workers has climbed to $30 per hour, while people of color’s median wage has dropped to $18 per hour. Furthermore, this striking disparity is more than twice that of the nation as a whole.
Manufacturing remains one of the most viable pathways for middle class careers, with average wages in Los Angeles 50% higher than the fastest-growing service jobs. But the sector is at risk, needing help to reach customers. Our program aimed to put the creative community at the center of a manufacturing renaissance.
Catalyst community members were selected by their potential to succeed and make an impact through their growth and their fit with the program. They had access to 18 custom-designed tours and workshops through the duration of the program. In addition, they received benefits such as a Catalyst Legal Kit from LegalZoom, discounts at the LADWP Advanced Prototyping Center, free financial counseling and help accessing capital from Opportunity Fund, complimentary access to services such as LegalZoom’s Business Legal Plan and DuroLab’s SaaS hardware management product, and access to a special Slack workspace.
Sixteen of the Catalyst members were selected as “Fellows,” who we felt had the most potential to change the face of manufacturing in LA, and whom we felt we could help the most. They received extra hands-on help from our Catalyst advisors. We are especially grateful for our Catalyst Advisors, who contributed more than 2,700 hours of pro-bono work to our community. They hosted 150 one-on-one meetings with Catalyst Fellows.
Six of our Catalyst members are showcasing their new products at the private MakerWalk Afterparty today.
The Catalyst program was funded in part by an AHEAD grant from the Federal Home Loan Bank of San Francisco, and we successfully wrapped up the program in March. Although the AHEAD grant is over, we’re excited to have received a grant from LA2050 to make our efforts more self-sustaining.
- We’ve learned from our experience to identify the information that is most needed by growing founders.
- We have revamped our website, with evergreen resources to help manufacturers to thrive locally and founders launch and scale their businesses.
- We are hosting our second MakerWalk LA and have made the event replicable, so it’ll live on for years to come in partnership with COMNUITYmade, who will take on the event in future years in the Arts District.
- We hired a PR firm to use Catalyst and MakerWalk as a news hook to advance a narrative about manufacturing in LA and have begun to receive some good coverage.
- Two of our Catalyst members are exploring the feasibility of starting a mastermind peer group with other interested members.
- We are planning a handful of CEO dinners in the coming year.
We believe the next step would be for different industry evangelists to focus similar community-building efforts in those industry segments uniquely strong in LA, such as apparel, food and fashion, aerospace, and consumer packaged goods, and to continue the cross-pollination between them. We’d be eager to share our lessons learned and welcome anyone to carry the mission forward.