4 Hot Los Angeles Retail Startups to Watch

Photo courtesy of The Academy Denim & Tailoring
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West Coast editor. Frequently covers celebrities, future tech, social media, startups, gadgets and apps.

Los Angeles may be the entertainment capital of the world, but it's also the world's largest manufacturing center, and it's not just factory workers who build the products pouring out of the sprawling Southern California metropolis.

There, in the shadows of the L.A.'s factories -- with 58 percent of them failing to operate at full capacity in the wake of overseas manufacturing -- is a growing army of small-business owners pushing the local retail startup economy forward.

"Small businesses don't just play a role in our manufacturing economy -- they are its most powerful driving force," Los Angeles Mayor Eric Garcetti tells Entrepreneur. Not only do local entrepreneurs and small businesses fuel the growth of larger manufacturers in the area, he says, "they are also the ones experimenting, innovating and driving the industry forward."

Related: Lori Greiner's 4 Questions to Know Whether Your Idea Is a Hero or a Zero

To support the nation's second most populated city's manufacturing ecosystem, and to inspire Angeleno entrepreneurs to "turn their passions into real products in L.A.," Garcetti recently launched Make It In L.A. The goal of the regional initiative is to bring together the country's biggest community of makers. As part of that effort, I recently moderated a panel titled "Locally Made: From Idea to Successful Retail Brand." You can watch the panel highlights here.

The afternoon event, held at a downtown highrise coworking space called Maker City LA,  highlighted four of Greater Los Angeles's hottest retail startups. For an inside look at what it takes to make it in L.A.'s burgeoning small-business retail ecosystem, I asked the founders of each startup what inspired them to take the entrepreneurial leap, what challenges they've overcome and what they've learned along the way.

Here's what they had to say. Their responses were edited for length and clarity.
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Photo courtesy of Lumi, Stephan Ango

1. Lumi: solving packaging problems, inside of the box

Founder:
Jesse Genet

Year founded:
2015

Location:
Los Angeles

What does your business do and what problem does it solve?
"
Lumi makes packaging and fulfillment supplies for entrepreneurs. The packaging industry is built to give the best pricing to only large companies. Lumi aims to solve that problem by bringing quality packaging to entrepreneurs through a convenient interface online."

What inspired you to start your company?
"I started my first business when I was 16, printing T-shirts in my parents' basement. I learned that the best way to make a mark with a business is to try things that no one else is trying. I started experimenting with other ways to print T-shirts other than screen printing and it lead to the start of my first business adventure, inventing Inkodye, a fabric dye that develops its color in the sunlight.

"I invented it and turned it into a Kickstarter success, making over $250,000. Then I took it to retail to stores, like Urban Outfitters and Jo-Ann Fabric & Craft stores. From growing my own product-based business, I learned firsthand how difficult it is to brand and package a product when you are just starting out. My goal with my current venture, Lumi.com, is to take everything I've learned about manufacturing and packaging and make it accessible to other entrepreneurs who are just starting out."

What is the key to succeeding in the retail industry?
"Building on the knowledge I acquired. No one is born knowing how to launch a product or make it a success, every product that succeeds is supported by a community of people who believe in it, and finding that community is the greatest challenge.

"Who are you uniquely able to speak to? Who do you understand more than the competition? Ultimately, it is the early supporters and the group of people who you speak to that will help make your business a success. It's important when you're just starting to have a voice, to not shy away from having opinions."

What's is the biggest mistake you've made -- and what did you learn from it?
"Succumbing to the peer pressure associated with doing things a certain way. There is a mantra in business and in life that is very dangerous. It's 'people just don't do that,' and you'll find it rear it's head at every pivotal moment in your business career.

"The problem is that every entrepreneurial story is filled with moments where the leader in the company has to make non-obvious decisions, decisions that other people might not have been willing to make or seem weird. Going with the flow will never build an important company and it's all too common for entrepreneurs to worry about what people think about stuff that doesn't matter in the long term, like office space, specific hires, office squabbles, etc."

What are some common pitfalls to avoid when starting up in the retail space?
"Inventory. I learned the hard way that cash-planning and running a business based on holding inventory is very complicated. It's best to be good at math and have a strong stomach for risk if you are going to build up inventory and sell to retailers!"

What's your best advice to entrepreneurs looking to break into retail?
"The best piece of advice I can give to other entrepreneurs is to get started on their venture right away and not give too much credence to any negative feedback. The biggest mistake people make is taking far too long to just give their ideas a shot."

What surprises you the most on your entrepreneurial journey?
"Being an entrepreneur is a way of life. It's a risky way to live. There is no paycheck, no guarantees, no safety net.

"The positive is that you are blazing your own path. I've never had a job and I don't know any other life. It's taught me that you absolutely must enjoy the journey. Nothing is ever done, your business will never be big enough or successful enough, and I don't mean that in a discouraging way. What I mean is that you must appreciate the moment you're in now, the struggle you're having now, or you will miss out on the best part of being an entrepreneur."

Why did you choose to base your company out of Los Angeles?
"I chose L.A. because I love the energy and diversity of things going on in L.A. I grew up in Detroit and L.A. seemed like an incredibly positive and creative place to me when I landed here. L.A. has an unparalleled community of creative people, manufacturing facilities and industry to support a whole host of endeavors. L.A. is a place to boldly blaze your own path and entrepreneurs who choose to settle here should be able to explain why L.A. is the best home for their venture."

Related: 25 Businesses That Make Life Simpler for Other Businesses

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Photo courtesy of The Academy Denim & Tailoring, Juka Samreth

2. The Academy Denim & Tailoring: Sewing handmade fair-trade fashion

Founders:
Vizal "Sam" Samreth and Bonal Samreth

Year founded:
2011

Location:
Long Beach, Calif.

What does your business do and what problem does it solve?
"The Academy Denim & Tailoring is an apparel company specializing in custom activewear. We are renowned for locally-made, quality garments. We created a destination for customers who are mindful of tailored-fit clothing, human rights and those concerned with where and how their clothes are made."

What inspired you to start your company?
"Participating in Phnom Penh's inaugural 2011 fashion show was a defining moment for us. While it gave us the opportunity to introduce our custom denim, pants and button-ups, we also witnessed human rights issues with our own eyes.

"Combined with meeting our grandmother, a go-to apparel maker in Battambong, Cambodia, known for her intricate work on traditional casual pieces, the trip reaffirmed our core business values. Values that she passed down to my mom, who also sews. This deep, direct connection explains our empathy towards apparel makers, shaping The Academy."

What is the key to succeeding in the retail industry?
"As a brick-and-mortar retail shop, we feel the key is welcoming our customers as if they are walking into our home, sharing what we're working on and simply taking a note of any interests for that day. It really is a long-term relationship approach."

What's is the biggest mistake you've made -- and what did you learn from it?
"We've said 'yes' instead of 'no' and overburdened our loads. For a moment, these struggles seemed inevitable with our custom-made apparel and on-the-spot tailoring approach. We learned not to internalize this urge to say 'yes,' as if it's some form of prerequisite for success."

What are some common pitfalls to avoid when starting up in the retail space?
"After the honeymoon phase of opening up your business or introducing a new product, you may lose touch with your original excitement and enthusiasm. Find a way to sustain it because most customers that walk in, reach out to you or just feel out your offerings, for them, it's totally new, exciting and potentially a novel, groundbreaking experience. Every time. Every customer."

What's your best advice to entrepreneurs looking to break into retail?
"While customers are savvy, they have never been so inundated with choices. Your retail space, products and services must address the core problem and that problem should be something you're intimately aware of."

What surprises you the most on your entrepreneurial journey?
"That everything circles back to basic preparation and following through on your creative plans. While easier said than done, we try to keep this Abraham Lincoln quote in mind, 'Give me six hours to chop down a tree and I will spend the first four sharpening the axe.'"

Why did you choose to base your company out of Los Angeles?
"Our home, Los Angeles, and in particular Long Beach, has the unique physical geography and cultural diversity that's a literal canvas upon which to anchor many of our products and services. For example, Long Beach has taken it upon itself to be a bike-friendly city, which is a natural fit to our bicycle commuter riding pants. Many of our products' features are honed from the customer feedback and that lives in our clothes."

Related: This Barber-Turned-Entrepreneur Is Cashing In on the California Drought by Painting Dead Grass Green

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Photo of Dennis Delgado, courtesy of Sam L. Dean of SLDeanstudios

3. SyncFab: Connecting retailers with manufacturers

Founders:
Dennis Delgado, Jeremy Goodwin, Jay Ligda, Andy Tong

Year founded:
2013

Location:
Los Angeles

What does your business do and what problem does it solve?
"SyncFab, a combination of the words 'synchronized' and 'fabrication,' matches retail product developers with local automated fabrication facilities. We want to make finding a manufacturer easier and more transparent to accelerate product development and to boost local economic activity.

"Factories are hard to find, hard to price and often complicate tracking order progress. Most factories are currently found through word-of-mouth referral, often with consequence. SyncFab aims to streamline this process by leveraging advanced manufacturing methodology and digital fabrication technology."

What inspired you to start your company?
"The company was born out of a collective frustration in finding facilities that could produce our products locally, and witnessing many manufacturing facilities closing due to offshore manufacturing.

"Currently, to manufacture anything locally, you have to go through a word-of-mouth recommendation system, commit to a facility without having a great understanding of its credibility and suffer endless hours on the phone. We wanted to develop a platform that would streamline this process and help bring business back to local manufacturers at the same time."

What is the key to succeeding in the retail industry?
"Sticking to your mission while collaborating in the market. There are many instances when developing a product when you get diverted or pivot from your initial intention during the creation process. Always remember why you created this product to begin with and don't sacrifice your initial intention."

What's the biggest mistake you've made -- and what did you learn from it?
"Overcomplicating what you're making. As entrepreneurs, we like to traverse the business landscape on assumptions and jump into our problem head-first. There is huge importance on gathering feedback and research before rushing your product to market. Don't be afraid to share what you're making and ask people for help."

What are some common pitfalls to avoid when starting up in the retail space?
"Not keeping things simple. Instead, focus on the core function of your business, then add the bells and whistles later on as your grow."

What's your best advice to entrepreneurs looking to break into retail?
"First, don't be afraid to share what you're making and ask people for help! No one is going to help you unless you ask for it. Next, figure out the retail locations you want to be in and create a plan on how to approach them. And, finally, don't leave your marketing strategy solely up to social media. You have to talk to some people face-to-face along the way."

What surprises you the most on your entrepreneurial journey?
"Starting a business is not easy and isn't successful overnight. It takes many hours and it's taught us to persevere and adapt. You do it because you truly believe in what you are creating."

Why did you choose to base your company out of Los Angeles?
"Los Angeles County has the largest county concentration of manufacturing activity and California State has the highest level of manufacturing employment in the nation. SyncFab also is the first to link Southern and Northern California with a common manufacturing hub as the resident startup for the San Francisco Mayor's Office of Innovation, with its roots in industrial Los Angeles."

Related: 7 Tips for a Smooth Start to Manufacturing

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Photo courtesy of Localism

4. Localism Inc.: Empowering local merchants

Founders:
DW Ferrell

Year founded:
2011

Location:
Long Beach, Calif.

What does your business do and what problem does it solve?
"Localism Inc. is a social enterprise focused on accelerating the local marketplace. We have a retail incubator called MADE in Long Beach that features fair trade products from over 120 local entrepreneurs.

"We're working to make the winning strategies typically reserved for major chains very accessible to a network of independent merchants, makers and manufacturers. Our staff is building a platform to accelerate the local marketplace. When we choose independent businesses, three times more money stays in the local economy, and even more when products are also produced by local makers. What we do is empower local entrepreneurs so they can collectively keep more money local."

What inspired you to start your company?
"In my previous career, I'd worked as a marketing and technology strategist for some of the largest international brands and shopping centers. I understood the winning strategies that helped the '1 percent' make their money. At the time, Occupy Wall Street was gaining momentum, and I knew I had to do something constructive.

"As the son of an entrepreneur, I knew exactly how hard it was for independent businesses to compete. I realized that if local businesses were linked in the right way, Metcalfe's Law would kick in and they could have a collective edge in their marketplace. I filed a patent in 2008 around some innovative concepts, and started speaking with makers and merchants about their needs and limitations. Around 2012, benefit corporations were gaining steam, and the 'profit and purpose' model of a social enterprise really resonated with me. In 2013, I found our first investors. We launched at We Labs, a coworking space in downtown Long Beach, and now we have our own 12,500-square-foot retail facility."

What is the key to succeeding in the retail industry?
"The key is to find a 'market fit' quickly. Put a rough version of your product in front of customers as soon as possible and write down everything they don't like about it. Then revise, tweak and iterate again until real customers are ecstatic about your product and can't wait to use it."

What's is the biggest mistake you've made -- and what did you learn from it?
"Trying to wear too many hats. It doesn't work. Initially, I didn't have a dime, so I bootstrapped and tried to do all aspects of the business. After banging my head against a series of walls, I really found my limits.

"These days, I am relieved when we hire someone who is highly skilled -- or better yet when we cultivate local talent and train them -- and I can take a hat off my head and empower them to do what they do best."

What are some common pitfalls to avoid when starting up in the retail space?
"Number one: Don't try to compete on cost. It is a never ending downward spiral. Instead, compete on quality. If you make something exceptional, you can build a brand around it, and people will want your brand, even if there ends up being knock offs of your product later on.

"Number two: Maintain channel control by carefully selecting where your product can be purchased. Retailers who curate excellent products do not need to compete on cost, and customers who want quality stay loyal to them. But as soon as you sell your products through a discount store or Amazon it will be hard to get it into quality-focused retailers who don't need to compete with discount merchants.

"Number three: Don't try to tackle the ton of legal and tax sand traps out there. I probably fell into all of them trying to handle them myself. Do yourself a favor and hire professionals to take care of those matters. They'll save you more than you spend on their fees.

"Number four: It is really essential early on to find loyal and trustworthy partners who see your vision and will help you achieve it."

What's your best advice to entrepreneurs looking to break into retail?
"Work in the retail sector for an established company and develop your acumen, knowledge and connections. Then, when you're ready to launch, make sure you're not in a position to get sued by your former employer for releasing a similar product.

"Or, on the flipside, find out if your former employer would be interested in supporting your new venture. Next, build connections quickly, for everything from material sourcing to marketing. Develop good connections that will become strong assets, and you need to protect them just like financial assets. Then you can start to cultivate the graceful art of social leverage, as I call it, which is to always offer value to those you need to help you, rather than just 'using your connections.'"

What surprises you the most on your entrepreneurial journey?
"I used to say 'yes' to nearly every opportunity and everyone, thinking there's some virtue in the power of 'yes.' But people begin to expect too much of you, and it's impossible to please everyone. Power can be found in limits, and being laser-focused on what we can say 'yes' to makes it easier to say 'no' to everything that will distract from that focus. And I'm still in therapy to really learn this point."

Why did you choose to base your company out of Los Angeles?
"Where we are based in the Greater L.A. area, in Long Beach, is that it is a perfect 'beta' city to really see if our grand ideas will fly. This is partly because Long Beach is extremely diverse and provides a rich backdrop of culture to engage with and represent. And, with downtown Los Angeles just a short commuter rail trip away, our local entrepreneurs have access to the manufacturing capital of the country. What's more, I fell in love with how bikeable and unique each of the districts in Long Beach are."

Related: Why Every Entrepreneur Should Focus on Local SEO

4 Hot Los Angeles Retail Startups to Watch

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