Here’s how Miami is becoming a global hub for entrepreneurship
eyond its white beaches and salt-rimmed margaritas, Miami is home to a youthful startup scene which is entering a new era of entrepreneurial activity. We take a close look at the city's unique ecosystem and find out why it has so much potential.
Startup Guide has just launched its second book in the US in the sunny city of Miami. Florida's second most populous city is home to a colorful and diverse mosaic of people, cultures and opportunities.
Rated number one for startup activity by the 2017 Kauffman Index, a measurement of new business creation in the country’s largest metropolitan regions, Miami is one of the fastest growing entrepreneurship hotspots in the States.
“Miami has quickly established itself as a global innovation hub,” says Sissel Hansen, CEO and founder of Startup Guide. “In the past couple of years, new accelerators and incubators have cropped up to support startups, transforming Miami into a city synonymous with startups.”
Since 2014, a constellation of startups have set up shop in the Floridian city, including Magic Leap, a virtual reality company which has raised $2.3 billion overall in funding, and Chewy.com, an online pet supply shop which was sold in 2017 in a blockbuster acquisition.
Among Miami’s other milestones is the city’s inclusion as a finalist for Amazon’s HQ2. Amazon began searching for new corporate North American headquarters in 2017 and although Miami made it into the top 20, it ultimately wasn’t chosen.
To find out more about Miami’s young, but promising, ecosystem, we had a chat with Knight Foundation, a non-profit foundation that supported Startup Guide Miami as well as co-created the book with us.
Youthfulness and quick growth
When Knight Foundation became actively involved in the development of the local community in Miami five years ago, the city was still affirming its position as a serious ecosystem.
“There were some successes here before then. There was Alienware, there was Terremark, there were companies that had done well, but it was a fairly disparate kind of ecosystem. It hadn't yet coalesced,” Raul Moas, program director at the Knight Foundation told Startup Guide.
Since 2012, Knight has participated in strengthening and uniting the community and has made more than two hundred investments, totaling more than $25 million in entrepreneurship initiatives across Miami.
According to Raul, the exponential growth of Miami’s infrastructure in the last decade can be compared to no other region in the US. The city seemed to explode “out of the blue,” gaining a national profile as a city with real cultural relevance.
People here are striving to build something more, something better.
“As a community as a whole, Miami is pretty young and as a startup scene, it’s even younger,” Raul says. The city is 122 years old. It was incorporated in 1896 with less than 500 citizens under the name, “The City of Miami." Even though Miami is relatively young, Raul says it already has an “insane amount of international flair, flavor and relevance.”
In the last ten years, the city has had a cultural overhaul with the arrival of a science museum, an art museum, a performing arts center and an orchestral center. Miami has been transformed from an annual winter home for Arts Basel to a year-round arts town, where world-class art can be enjoyed round the clock.
In this sense, Miami is still going through an “adolescence of sorts,” Raul says. “So much has happened here in terms of construction and development,” he says, adding that the city looks and feels completely different compared to fifteen years ago.
A city where worlds collide
The formation of a budding entrepreneurial ecosystem was a natural next step for a place comprised of “small businesses and immigrants,” Alberto Ibarguen, president and CEO of Knight Foundation, told Startup Guide.
Miami is geographically positioned between the US and Latin America, acting as a gateway for the exchange of knowledge and experience between various cultures. 52 percent of Miami’s population is foreign-born, and 68 percent of its population is Hispanic.
In the past couple of years, new accelerators and incubators have cropped up to support startups, transforming Miami into a city synonymous with startups.
“More than two-thirds of the city was not born in Miami, and more than half were not born in the country. It's the world's largest foreign-born population,” Raul says, adding that the proliferation of different languages and cultures is one of the city’s biggest assets.
“We have a lot of Spanish, a lot of Portuguese, a lot of English. There’s small Chinese communities, there’s folk from Latin America, there’s a French expat community, an Israeli community and a small German community here too.”
Miami is increasingly becoming the middle ground between the Eastern and Western hemispheres as well. “When the East and West try to engage with Latin America, they do that in Miami,” Raul says. He adds that a lot of investment in Latin America is processed through Miami, and vice versa.
From tech to venture capital
While Miami’s economy traditionally rested largely upon tourism and real estate, the city has done its utmost to shake off that tired reputation.
According to Alberto, startups have cropped up in sectors ranging from trade and logistics to construction. He adds that the Knight Foundation is focused on helping these ventures scale, “especially in industries where Miami is uniquely positioned for success.”
Miami is also currently experiencing a tech boom. Aside from Magic Leap, there are many tech companies in Miami’s ecosystem that are interacting with other industries to create better services. CareCloud is one of them. The startup was able to attract significant attention from investors in November 2016, raising a notable $31.5 million in a Series C round of funding.
Moreover, Nearpod, cited by Raul as a startup in Miami that is scaling quickly, is revolutionizing education through an interactive classroom tool for teachers.
A problem that ostensibly bedevils Miami’s startup ecosystem, however, is the lack of capital investment available. The region raised just $26.1 million in venture capital in the first quarter of this year.
While raising money in Miami may be tougher for startups due to the short history of angel and venture capital investment in the region, Raul disagrees with people who say there’s not enough capital or talent in Miami. “I think if you have a really solid idea, you tend to figure it out,” he says.
Culture and hustle
“An entrepreneurship hustle, if you will, is endemic to the city,” says Raul. “Miami is very much a town full of people that are striving to build something more, something better. And they want to do this through hard work and effort.”
With Miami emerging as a city with a world-renowned startup ecosystem, it's becoming a place where entrepreneurs are flocking to and building companies from scratch with few limitations.
From Raul's point of view, the city’s openness to new business ventures comes down to the lack of social constructs within Miami’s culture. He thinks that since the city is still young, certain aspects of social etiquette or behavior have not had the chance to take root.
“Anybody can just pull up a chair and start building,” Raul says. “There is no waiting for your turn, or asking for permission, or paying your dues for a handful of years before you’ve had a chance at effectuating change in your city.”
To find out more about the movers and shakers in Miami’s ecosystem, you can purchase Startup Guide Miami here.
See also: Startup Cities: Miami's New Vice
Main photo: Unsplash/Ed Derrico