By Rob Wile The Miami Herald
WWR Article Summary (tl;dr) Supporters of the startup scene in Miami say the region's diversity is a plus. While Silicon Valley remains dominated by white males, South Florida is home to numerous startups founded by women and people of varying ethnic backgrounds.
The Miami Herald
Miami has always been known for its by-your-bootstraps mentality. But in the wake of the Great Recession, opportunities came slowly.
It's one of the reasons why the Knight Foundation decided in 2012 to make entrepreneurship the centerpiece of its Miami program.
Since then, Knight has invested more than $25 million in co-working spaces, accelerators, and events as big as eMerge Americas and as small as community meet-ups to spark sustainable job creation.
Other organizations soon followed: Goldman Sachs brought its 10,000 Small Businesses program.
Endeavor, an international mentorship program, set up its first U.S. outpost in Miami. Cambridge Innovation Center, another startup convener, came from Boston. Silicon Valley's 500 Startups, a venture capital fund, opened in downtown last spring after previously investing in local startups including facial recognition experts Kairos and Clutch Prep, a textbook app. The University of Miami, Florida International University and Miami Dade College added entrepreneurship programs. So many co-working spaces opened that Miami soon had more per-capita than any other city in the country.
As the economy again slows, the question arises: Has this flurry of activity paid off with companies that have scaled up to survive the next downturn?
The answer, according to local entrepreneurship leaders: Yes -- and not yet.
"We've been seeing companies go through the growth process," said Raul Moas, Miami program director for the Knight Foundation, pointing to classroom tech company Nearpod, Apple IT experts Addigy, and CareCloud, the stalwart electronic health records software company.
"I think we have a healthy number of companies now. There's a sense of momentum building."
Some of the region's best-known successes lean on lifestyle, such as fitness companies Zumba and Orange Theory, or the Endeavor-backed restaurant group Pincho Factory. But the focus of the movement remains technology, whether as a standalone or in legacy industries like tourism, real estate and financial services that seek to modernize.
And according to Bureau of Labor Statistics data, as a share of jobs, Miami's tech industry is still closer to an average Midwest city like Wichita, Kansas, than that of a gleaming tech mecca like Seattle.
When it comes to essential ingredients such as talent, venture capital and unified community effort, local leaders say, there's still work to do.
But for Steve Case, the former AOL CEO whose Revolution investment fund and "Rise of the Rest" tour is exploring startup opportunities outside Silicon Valley, Miami's reputation as an innovation hub has soared.
Rise of the Rest will host a pitch competition in Miami May 2, and Revolutions has invested in two Miami companies, education technology company Caribu and sales development platform Blanket.ai.
"There's a recognition that it has risen quite a bit as a startup city," he said in a phone interview from his Washington, D.C., headquarters. "Sometimes it's just a matter of time."
JJ Desai, a former Johnson and Johnson Labs executive and now chief strategic innovation officer at Miami medical device company INSIGHTEC, agreed.
"I think you're just starting to see the nascent bubbling of Miami's potential," he said. Last year, Desai moved his work to Miami after shuttling between the Magic City and Silicon Valley for four years. "If you get in now, you're an early-stage early adopter."
In Desai's view, Miami's ecosystem trajectory is right on track -- and he would know, having scored various metro hubs while at JLabs, Johnson and Johnson's innovation center. L.A., he says, has already peaked.
Austin has plateaued. Instead, he likens Miami's current status to places like Minneapolis, Houston, and even Madison, Wisc., which are all looking to transform their economies away from traditional industries.
But Miami is an international hub, and will soon likely leapfrog those other places, he believes. And it can happen overnight.
"It takes a few key people," he said. "L.A. happened because three or four PayPal people moved down there, then other names declared they'd be coming. That's what it takes, and we're now starting to see that with influential people coming to Miami that have cash."
MIAMI SCORECARD Miami's standing as a launchpad for successful startups varies by the way it's measured. For the past two years, the Kauffman Foundation, a nonprofit focused on entrepreneurship, has ranked Miami No. 1 in the U.S. for startups -- but 36th out of 40 in scale-ups, or business expansions.
The Miami-Dade Beacon Council says that between 2012 and 2017, technology jobs in Miami-Dade increased by 40% to more than 11,000.
Based on historical data, the agency said, tech jobs are projected to grow an additional 11 percent by 2023 -- the fastest rate among the agency's seven targeted industries, which also include finance, aviation, and trade and logistics. According to the federal Bureau of Labor Statistics, the average wage of a Miami-Dade software developer is more than $87,000.
But the BLS suggests Miami has room for job growth in the tech sector. Its data put Miami-Dade's relative share of computer and mathematical occupations at 0.61 -- on par with Wichita, Kansas and just one point above Flint, Michigan. A score of 1.0 means the share is at the national average. In fact, tech accounts for less than 1 percent of the jobs in Miami-Dade.
By comparison, Orlando gets a score of 0.92. Tampa-St. Petersburg gets a score of 1.07. Even Tallahassee gets a score of 1.14. Those cities are boosted by large research universities or, in Tampa, MacDill Air Force Base.
Still, for Jim McKelvey, co-founder and director of point-of-sale app Square, Miami has come a long way. With an eye on the region's potential, he founded LaunchCode, a nonprofit training and job-placement program in 2017. He now splits his time between Miami, St. Louis and New York.
"We surveyed the nation [six years ago] and Miami, the South Florida region, was dead last as far as IT talent," he said.
Since opening, LaunchCode has placed about 150 trainees in jobs.
"I think Miami has awakened to the fact that it's not just 'party central USA,' full stop," McKelvey said. "It is a place where you can come and build a tech company -- or, you know, a bank needs programmers. And Florida has a friendly business climate. We're seeing demand for talent spike -- and if you have that demand call us."
HOME-GROWN SUCCESS Even in the lightning-paced 21st century, transformation takes time. It's true of communities, and true of companies, say experts.
Take the case of BrightGauge Software. The company was founded in 2010 by Brian Dosal, a Gulliver Prep grad who started his career at IBM before taking up a position at his family's cybersecurity company, Compuquip.
Dosal said BrightGauge, which specializes in client management software, prioritized sustainability over growth early on. In its first years, the company only hired a few employees annually, and later, never more than nine. By 2018, its team had grown to 33. And the company deliberately hired all of its talent from Miami, Dosal said.
In January, BrightGauge was acquired by Continuum, a Boston-based information technology company with more than 1,000 employees, for an undisclosed sum. At the time of its purchase, BrightGauge had annual revenues of $9 million and was growing 60 percent year over year, according to a source familiar with the company.
Dosal credits the acquisition in part to patience, and a "nose to the grindstone" focus on building a viable product. At no point did the company seek outside funding.
Dosal is now already on to his next startup, Strety, a human resources software company.
The BrightGauge sale is just one in a recent string of successful "exits" South Florida can put on its scoreboard. Brian Breslin, founder and chairman of Refresh Miami, a South Florida tech networking and community nonprofit and the current director of The Launch Pad, an entrepreneurship program for University of Miami students. said acquisitions like BrightGague's show the region is moving in the right direction.