A perfect storm is brewing in Miami, and it’s not a hurricane
Posted on December 10, 2012
Published by Upstart Business Journal
Andres Moreno moved his startup from Venezuela to Silicon Valley in 2006, with hopes of raising funds and making it big. By all definitions, Open Englishhas done just that.
With 60,000 Latin American people learning English on its online platform and $55 million in venture capital funds, Moreno is upending the traditional, time-intensive and costly bricks-and-mortar language education industry.
But it isn’t in Silicon Valley where the company thrives. It’s Miami.
Moreno moved Open English to Miami three years ago to take advantage of a multicultural talent pool and easy access to the countries he planned to target—Brazil, Colombia, Panama, his native Venezuela.
“People don’t understand the Latin American Hispanic market in the Bay area,” Moreno tells me. “They think of immigrants moving to the U.S., not a burgeoning LatAm middle class.”
Moreno is among a whole new breed of Miami entrepreneurs realizing the potential of their region—the nation’s 7th largest metro area—as a U.S. hub for international startups. And they are surrounded by eager and enthusiastic government leaders, universities, real estate developers and a well-known charitable foundation, providing unprecedented support and funds for high-growth potential startups.
It’s a big week in Miami, with the western hemisphere’s largest contemporary art show, Art Basel, wrapping up this weekend and six big entrepreneurial events taking place hoping to capture some of its buzz and traffic. So we’re taking time to highlight the assets and opportunities of this fast-moving city by the sea.
- Among the first to recognize the potential within Miami was Susan Amat of the University of Miami. In 2008, she started Launch Pad, a business mentorship and support program for university students, faculty and staff. It’s since graduated 80 companies, and in August, received nearly $1.5 million in city and county development funds to create a technology accelerator for hospitality/tourism, creative (art, fashion, music, film) and health care startups in downtown Miami. The first class kicks off in January 2013.
- The developer behind Miami’s thriving Art Deco-inspired South Beach and Manhattan’s quirky cultural center SoHo, Goldman Properties, has spent millions of dollars over the last four years buying up old properties in Miami’s Wynwood neighborhood. There, old warehouses are being converted to art galleries, dance studios, creative offices… and co-working spaces. The LAB Miami is putting the finishing touches on its new 10,000 square foot building (an upgrade from an existing 740 square feet) to become a hub for the startup community. This weekend, it hosts a two-day hackathon and next week, a Demo Day for 17 companies from around the world involved in Wayra, a global startup accelerator. “Miami is a very fragmented place,” says LAB Miami co-founder Wifredo Fernandez. ”We saw a need to bring everyone together in one space, where everyday you can run into entrepreneurs, startups and nonprofits all working in this innovation space. You can work and have coffee in the day, and learn in the evenings.”
- Venture capital firms may be scarce in Miami, but there’s no shortage of wealth. The entrepreneurial community is working to educate high net-worth individuals and family estates about the opportunities to invest in startups. The annual Americas Venture Capital Conference, hosted by Florida International University’s (FIU) Pino Global Entrepreneurship Center next week in downtown Miami, will help. Open English’s Boston investor Flybridge Capital Partners has already taken advantage of the Latin American learnings and invested in additional Hispanic startups, Moreno says. But funding is still tough in the city. All of Open English’s investment comes from elsewhere.
- There’s no personal income tax in Florida. Enough said.
- Speaking of FIU, the college is a highly ranked research institution and now boasts the ninth most engineering graduates in the country. Combined with the University of Miami and Miami Dade College, the largest college in the nation, the city now has the seventh most college students per capita. There’s huge potential in keeping talent and technology from those campuses in the city.
- Moreno already mentioned it. Talent. Major corporations like Apple and FedEx call Miami their Latin American headquarters. There are marketers and lawyers and accountants and consultants with experience doing business in those countries. And many speak Spanish, Portuguese and other native languages.
- The John S. and James L. Knight Foundation (founders of the Miami Herald) wants to help build an infrastructure for all of this to succeed. The Miami-based nonprofit foundation has in recent years committed $86 million to help grow the arts community, and entrepreneurship is its next big push. Knight’s program director Matt Haggman won’t share the projected spend, but the foundation has pledged to sponsor events and conferences, accelerators, convening spaces and educational programs. It also has a goal of creating a mentorship network. “Our mission is about creating more informed and engaged communities,” Haggman says. “There are some really compelling trends that have led us to think we can strengthen the startup community in Miami.”
Throughout Miami, entrepreneurs are energized by all the momentum, signing up in droves to attend the events and meet each other. Included is Brian Brackeen of Kairos, who moved from San Francisco in 2008 to build a global facial recognition technology company.
“The weather was my connection, but I fell in love with Miami and its culture,” Brackeen says. “We were one of many cool companies in San Francisco, but here, everyone is very excited about what you’re doing and excited to help.”