Our growth plan for The Junto Institute has always included regional expansion upon proving our model in Chicago. So today, with four cohorts under our belt and a fifth underway, encouraging customer feedback, and 20 graduate companies whose revenues are growing 90% on average per year since enrollment, I'm pleased to announce that we're expanding to Los Angeles this fall.
For the past 16 months, we've been visiting LA and meeting with a variety of people, researching its economy and startup ecosystem, and testing its market viability. Most recently, we began recruiting for a part-time Managing Director and started a series of monthly events, which kicked off two weeks ago with a workshop on Vision, Mission & Values.
So why Los Angeles? Three main reasons: serendipity, humanity, and market fit.
In November 2015, I wrote a blog post about a former student of mine, Brian, whose fast-growth startup was based in LA where he was experiencing "lonely at the top" syndrome. During a visit back to Chicago, Brian asked me when we were planning to expand to LA. He was serious. Yet as inspired as I felt, I was mostly amused for a week.
That was when I had a meeting with a friend and JuntoMentor, Evan Gobdel, who had expressed an interest in working with Junto for the benefit of his portfolio companies. Evan is a co-founder of Woodlawn Partners, a unique private equity firm with a focus on people, leadership, and culture - just like Junto - but with established companies in more traditional sectors like manufacturing, distribution, and services.
At that meeting, Evan and I discussed a few ideas of programs we could develop to help Woodlawn's companies. In passing, I mentioned my lunch with Brian and his desire to see Junto in LA. That drew Evan's attention.
In addition to being a graduate of Pomona College (located east of Los Angeles), Evan said that Woodlawn just purchased a company in LA and they would be closing on the deal in the coming weeks. Since he would have to visit the business every month, he'd be willing to piggyback on his trips to help us explore the market and meet with people.
That moment of serendipity sparked the LA pursuit.
Evan and I have a number of contacts in the area who have been generous with their time and have made introductions. We've been able to get meetings with most of those new connections, continue to receive positive feedback on Junto's program, and are building a wide network of entrepreneurs, investors, trusted advisors, incubators/accelerators, and others in the business community. From all these established and emerging relationships, we've experienced a different type of humanity and one that fits well with Junto's vision, mission, and values.
First, we've been pleasantly surprised by the humility and open-mindedness across the board, and especially in the startup ecosystem. We haven't come across the ego-driven and hubris-fueled sensibility that seems to be increasingly common among entrepreneurs, although that could be self-selection as a result of our relationships and resulting introductions. The region's stereotype of being fake or flaky is largely a "Hollywood" and "SoCal" thing, and is something we haven't encountered. In the business community, the people we've met have been down-to-earth, ambitious yet humble, and seemingly lifelong learners.
Second, there is a heightened appetite and appreciation for personal growth and self-improvement. Although it amused me the first few times, I've consistently heard that "everyone in LA has a therapist" or "everyone in LA is trying to get in touch with themselves." Indeed, many of the people I've met have shown comfort and initiative talking about how lonely entrepreneurship is, the reconciliation of business and the self, and other topics that aren't common in first-time conversations. Overall, people are more of an "open book" which bodes well with Junto's programs.
Finally, I've experienced a higher level of optimism, trust, enthusiasm, and authenticity among the people I've encountered...not in an idealistic way (many are, in fact, highly successful professionals) but seemingly at their core. Despite our work ethic and values, we Midwesterners are a bit more reserved and cautious, sometimes at risk of being skeptical and close-to-the-vest.
In LA, there is an energy of openness that is refreshing and inspiring. People seem to be more comfortable being their true selves, which is not surprising given the density of LA's creative class. And finally, my experience has been that people generally have a sunny disposition and positive outlook which aligns very well with Junto's personality and emphasis on growth and improvement.
Perhaps most importantly, we've concluded that there are favorable similarities for Junto between the Chicago and Los Angeles markets. This has always been important since it could theoretically allow us to replicate strategies and tactics that have worked in Chicago. A few of the more important examples are the following.
- LA has a highly diversified economy with far more than just television and film. In addition to traditional sectors like food, logistics, manufacturing and services, LA is home to a growing number of tech-based startups in gaming, e-commerce, online media, social media, virtual reality, and life sciences. This is attractive to us since Junto has drawn from a wide array of industry sectors representing Chicago's economy.
- It has an emerging startup ecosystem seemingly following Chicago's evolution, with respect to incubators and accelerators (rapid growth then contraction), the investment community (increasing angel investors and seed-stage venture capital), a growing number of exits (Dollar Shave Club and Snap), and a geographic concentration of tech startups (Silicon Beach).
- There is a gap in the growth-stage market for structured support and training. In addition to non-tech sectors that are underserved because of the attention paid to digital startups, many tech companies that make it past the early-stage don't have anywhere else to go. This has been validated by both entrepreneurs and investors I've met who talk about the need for leadership development and structured mentorship.
All in all, we're excited about this next step in Junto's evolution. Our target market will still be companies with $1 million-$10 million in revenue, 10-100 employees, and a heightened level of self-awareness and humility. We hope to attract companies from LA's diverse geography and economy to create a robust learning experience for everyone. And we're eager to welcome dozens of new Apprentices, Mentors, and Partners into the growing JuntoTribe.
We know there is a long, winding path ahead of us and that we can see around some of the corners but not all of them. We're deeply grateful to our Chicago Tribe for their continued introductions and support. And we appreciate our many new friends in LA - like Cooley LLP, Full Stack Finance, JJA Venture Search, MSK, and ScaleLA - whose support and advocacy has been inspiring, and will be instrumental to our efforts.
My business partner, Catherine Jelinek, is going to be in LA at various times this year to get our program launched, and I will continue to travel there on a regular basis, especially during certain months of the year.
Yes, I suppose that's a fourth reason for "Why LA?"
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