Is Miami The New Silicon Beach?

Can Miami become the next Silicon Valley? Some experts say we’re almost there, while others are doubtful that the Miami tech scene will ever become a dominant player on the world stage. The truth is, we still have some major challenges to overcome, but our trajectory is promising. Miami’s tech scene has, undeniably, blossomed rapidly over the past few years, and will continue to do so into the future. Will Miami ever achieve the world-renowned-tech-hub status of Silicon Valley? Nobody can say for certain. But we don’t need to be Silicon Valley. We’re doing just fine right now, as the new Silicon Beach.

A BOOST FOR THE ECONOMY

As Miami’s tech scene grows, so does South Florida’s economy.

Job growth in Miami’s tech sector is already outpacing our general economy by leaps and bounds. Thousands of Miamians are finding productive, high-paying tech jobs every year. This is not only a good thing for job-seekers, but for the economy in general. A rising tide lifts all ships.

Even South Florida’s real estate market is feeling the Silicon Beach effect. CBRE released a report in 2016 showing more than a hundred percent increase in commercial real estate space leased by tech companies in Florida between 2013 and 2015.

HYPE

Whether or not it’s based in reality, there has been a lot of hype over the past couple of years surrounding Miami’s new tech-hub status. National, mainstream media outlets have increasingly made use of the moniker “Silicon Beach” when talking about Miami’s booming tech scene.

From CNBC to TechCrunch to Miami Herald and the New Times — everyone is excited about the new Silicon Beach.

WHAT’S ACTUALLY HAPPENED SO FAR

STARTUPS

In 2017, Miami surpassed Austin, Texas as the #1 Startup Capital in the United States. A caveat, though — this ranking is only for the rate at which new startups are created, not for how big they eventually get.

There are hundreds of incredible startups growing in Miami right now that are doing great things and bringing huge amounts of money into the economy. We can’t mention them all, but here are a few pretty spectacular examples that caught our attention:

NearPod

NearPod is a virtual reality company based in Aventura. They’ve raised tens of millions of dollars to develop their technology, which is now being used in more than a tenth of schools across the country, and by over four million students worldwide. NearPod’s tech allows students to “visit” historical places like the Egyptian Pyramids and the Eiffel Tower, watch video lessons, and take quizzes, all from the comfort their virtual reality headsets.

Founded only a few years ago, NearPod has been growing rapidly. The startup now employs more than seventy people, in nine thousand square feet of office space in Aventura.

Open English

Headquartered in Coconut Grove, with hundreds of millions of dollars in VC Funding, Open English is using Miami as a strategic location to teach English to more than 500,000 students throughout Latin America and the United States.

Magic Leap

Magic Leap may be the most famous startup to have come out of South Florida in recent years. Described by TechCrunch as “one of the most valuable startups in the world,” Magic Leap burst onto the world stage with its viral videos of mixed-reality whales and elephants interacting with the real world.

Since then, Magic Leap has raised more than 1.4 billion dollars, from huge players like Google and Alibaba. Magic Leap is now estimated to be worth around $8,000,000,000.

In contrast to Virtual Reality and Augmented Reality, Magic Leap’s mixed reality actually interacts with the world around you. While its technology is still in the development stage, Magic Leap has the potential to revolutionize the way we interact with the world.

Chewy

Chewy.com started out as a simple idea, and it has since evolved into a simple (yet effective) website. It’s basically an Amazon for Pet Food.

As simple as this might sound, Dania-Beach-based CEO Ryan Cohen recently sold the website to PetSmart for around three billion dollars. That’s the largest payday ever for an e-commerce website. With more than 5,000 employees and nine hundred million dollars in yearly revenue, Chewy will continue to energize South Florida’s economy for years to come.

MATURING INDUSTRIES

Animation & Gaming

Five years ago, there was no video game / animation industry to speak of in South Florida. Today, South Florida is home to more than twenty companies producing high quality video game and animated content.

John Schappert was born and raised here in South Florida. If you’ve heard his name before, it might be because he founded a company called Tiburon, which created a little video game series called Madden NFL, and was acquired and marketed by EA Sports. Madden NFL has gone on to gross over four billion dollars in revenue.

Schappert has since moved back to South Florida, and founded a new video game company called Shiver. Shiver has an office in South Miami, with fifty game developers working on creating the next huge video game franchise.

Healthcare Tech

Christian Seale, the founder of Miami startup accelerator Startupbootcamp, says South Florida is perfectly positioned to become the next big hub for healthcare tech innovation. As Seale points out, “Miami is the second largest healthcare hub in the U.S., with 8 hospitals, over 33,000 beds, three globally recognized research universities and a legacy of successful healthcare companies.” Combine that with a rapidly burgeoning tech industry, and the sky’s the limit for Miami healthcare tech.

In accord with Seale’s assessment, several SoFla medical-tech companies have already exploded onto the scene over the past few years.

CloudCare, founded in 2009, has raised over a hundred million dollars to develop its cloud platform for patient contact and medical records. CloudCare’s mission is to do away with paperwork, digitizing everything to save doctors time and improve patients’ experiences. CloudCare is based right here in the heart of Miami (on Blue Lagoon Drive just across the Dolphin from MIA), not too far from TechLaunch headquarters in the Mall of The Americas.

A similar healthcare company based in Boca Raton was founded in 2010. Since its inception, Modernizing Medicine has raised over two hundred million dollars in VC funding. They’ve got 550 employees and are taking in over a hundred million dollars per year in revenue.

Cybersecurity

Cyxtera Technologies recently became a major force in the world of cybersecurity. In May of 2017, Manny Medina (founder of eMerge Americas, among other things) closed a $2.8 billion dollar deal that gave Cyxtera fifty seven data centers, four cybersecurity & data analytics companies, and thousands of employees around the world (in place ranging from Boston to Dallas to Silicon Valley, Bogotá, Gothenburg, Sweden, and London). All of it is based right here in Coral Gables.

CONFERENCES

eMerge Americas

While there are many small conferences that happen throughout the year, eMerge Americas is by far the biggest.

Since its inception a few years ago, eMerge Americas has grown to the point where it attracts tens of thousands of attendees and participants, from more than 50 countries, every year.

2017 speakers included Steve Wozniak, Pitbull, Alex Rodriguez, Suze Orman, Uri Levine (co-founder of Waze), and Marcelo Claure (CEO of Sprint).

COMMUNITIES

At the core of any great tech hub are great tech communities. CoWorking spaces, incubators, and meetup groups have been springing up all over Miami. Here are a couple of the most well-known tech communities that have developed over the past few years:

Refresh Miami is the longest ongoing tech meetup in Miami. With regularly scheduled meetups in beautiful venues, Refresh is a great place to meet other entrepreneurs, technologists & startup founders.

Venture HIVE startup incubator is arguably the most famous incubator right now in Miami. It was founded by Susan Amat, who also founded the UM LaunchPad and serves on the Technology Advisory Council for the State of Florida.

VENTURE CAPITAL

In the past, bringing in world-class funding had been one of Miami Tech’s biggest struggles. In recent years, more and more funding has been flowing in. What started as trickles has become rivers and torrents. Several investments have reached into the billions of dollars, for companies like Chewy, Cyxtera, and Magic Leap.

While many venture capital firms have been funding Miami startups lately, The Knight Foundation deserves special recognition.

The Knight Foundation was one of the first VC Funds to recognize Miami’s potential for becoming the new Silicon Beach. Since 2012, the Foundation has committed over twenty five million dollars to over 200 startups in the Miami area. Funded projects include Miami Dade College’s Idea Center, Startupbootcamp, 500 Startups, LaunchCode, Endeavor Miami, and the Miami Urban Future Initiative. The Knight Foundation is also heavily invested in increasing diversity in tech, sending millions of dollars in support for PowerMoves and BlackTech Week here in Miami.

“Diversity is our differentiator; unlock talent and amplify capital.” Matt Haggman, Program Director, The Knight Foundation

EDUCATION

With all of these multi-billion-dollar projects going on, simple things like tech education often get overlooked. Luckily, local tech education leaders like Arnie Girnun and Rick Beasley are dedicating their attention to developing the next generation of Miami Tech.

Through their efforts working with the Obama Administration, Girnun & Beasley were able to bring millions of dollars into the Miami Tech Education ecosystem through Former President Obama’s TechHire Initiative.

Those millions of dollars in federal funds are now being put to good use, teaching tech skills to high schoolers in underprivileged neighborhoods. Florida’s first TechHire high-school summer bootcamps just got underway, and are off to a strong start.

Through innovative programs like this, Miami’s tech community grows deeper roots. By elevating kids who might otherwise have gotten lost in the cracks of a rapidly changing economy, we are simultaneously enriching lives, improving the economy, and building the foundation for the Silicon Beach of the future.

CHALLENGES, BOTTLENECKS & SETBACKS

While most in the Miami tech community have been bullish about our potential to become a global player in the tech world, some have taken a more tempered view.

In his Miami Herald article, “Time to bury ‘Silicon Beach’ in the sand,” Juan Pablo Cappello advocates for a more balanced perspective.

According to Cappello, “South Florida will likely never compete with Silicon Valley.” His reasoning? “Silicon Valley works because many of the the most innovative technologies in the world are developed in San Francisco and around Stanford University.”

While this isn’t a very convincing argument, perhaps it wasn’t intended to be. If you read through the entire Herald piece, it isn’t nearly as pessimistic as its title sounds. And clearly, neither is Cappello. He’s still an active investor in Miami tech startups. He’s a co-founder at The Lab Miami and at AGP Miami. But his article does bring up some important points.

While Miami ranks #1 in the US for startup creation on the Kaufman Index for 2017, it only ranked #38 for startup growth.

Arnobio Morelix, one of the researchers on the study, put it this way: “If you look at startup activity in Miami, its new venture creation, it’s incredibly high. When we look at growth entrepreneurship, pretty low.” Morelix suggests that in order to really reach its potential as the new Silicon Beach, Miami needs to bring in more VC Funding. “If I want to increase the entrepreneurship performance overall,” Morelix continued, “I would be thinking a lot about the scale-up environment, including access to talent and access to capital.”

Silicon Valley is swimming in money. Institutional investors are already throwing billions of dollars in that direction, and that’s unlikely to change any time soon. Cappello continues to assert that instead of thinking about “the next big thing” and creating multi-billion-dollar companies, we in Miami should be focusing on supporting the wide range of small-to-medium-sized tech companies popping up all over South Florida.

Since the report came out earlier this year, there have been several multi-billion-dollar investments into South Florida tech startups, like Chewy and Cyxtera. Whether this will be an ongoing trend remains to be seen, but even with just these investments alone, Miami is sure to improve in the rankings in next year’s report.

ADVANTAGES WE HAVE OVER OTHER TECH HUBS

Miami is the link between the US & Latin American tech worlds

Many large tech companies are using South Florida as a link between the US and Latin America, while smaller, Miami-based startups base their entire business models around it.

Open English, for example, is a Miami company, through-and-through. As a startup that teaches English to Latin American students, it wouldn’t make sense to be headquartered anywhere other than Miami.

On the other side of the coin, big players like Facebook, Google, Twitter, Uber, and Vice have invested in opening big offices in Miami.

According to Laura González-Estéfani, Facebook’s Director of Partnerships & Mobile LatAm in Miami, “Miami is the perfect place to start or grow your business, specially if you are interested in an international venture.”

Diversity & New Perspectives

Juan Pablo Cappello, in his article for the Miami Herald, pointed to diversity as one of Miami Tech’s core strengths. Silicon Valley is known for its white-maleness. Silicon Beach is much more diverse. What new perspectives and innovations will Miami’s black and latino entrepreneurs bring to the table? Only time will tell.

Huge Universities Pushing into Tech

While most FIU students may not even realize it, Florida International University is the fourth largest university in the country. With over fifty five thousand students, FIU is a huge part of South Florida’s economy.

Aside from holding Americas Venture Capital Conferences a few years ago and focusing on STEM sciences, FIU is also developing programs like StartupFIU, to help its students become the next generation of entrepreneurs.

UM, another world-famous university, has a startup incubator called Launch Pad, founded by Susan Amat. Miami-Dade College is constructing a dedicated tech center called MAGIC (Miami Animation Gaming International Complex) to train students to be the video game designers of the future.

With three giant educational institutions pushing hard into tech, it’s easy to imagine Miami’s tech scene thriving well into the future.

Business Friendly Environment

Florida has no state income tax, which is great for entrepreneurs & business owners. Miami also has a much lower cost of living than cities like New York and San Francisco, so startup founders are able to scrape by more easily during their “pre-funding” phases, and business owners don’t have to worry about compensating employees for higher costs of living.

Tropical Climate

While Miami’s hot, balmy weather isn’t for everyone, it does set Miami apart, as far as tech hubs go. Most tech hubs, at least in this part of the world, tend to be in cooler, more temperate climates. For those talented techies who dream of beach bars, boats and bikinis, Miami may be the place to be.

OUTLOOK FOR THE FUTURE

Overall, the forecast for Silicon Beach, Miami seems to be… mostly sunny.

Also, hot.

With scattered showers, and the occasional bolt of brilliant lightning.

Xavier Gonzalez, the CEO of eMerge Americas, is optimistic. “With the major successes we’re seeing like Modernizing Medicine, Chewy.com and Cyxtera — not to mention the massive potential impact of Magic Leap — we are poised to have a number of very large, global technology companies based in this ecosystem. These companies and many others will continue to grow, innovate and attract talent from all over the world. That talent will develop new companies and bring even more interest from investors.”

The number of tech jobs in Miami-Dade county has grown by 27.6% between 2012 and 2016, according to the Beacon Council. There are now over 10,000 people working in the tech industry in Miami Dade, with an average salary of $95,087. The numbers are even better in Broward — more than 44,000 people are working in the tech industry there, with an average salary of $94,273.

While Miami may never become the next Silicon Valley, we’ll likely find that we are developing into a different kind of tech hub entirely. For better or for worse, we are Silicon Beach. We would do well to keep in mind our unique strengths and weaknesses, and proceed accordingly.

“When smaller cities play to their strengths while simultaneously working to shore up their deficiencies, they can attract talented entrepreneurs and provide them with the necessary tools to succeed.” Manny Medina – Founder, eMerge Americas

2017-07-27T12:02:10+00:00