Ask Susan Amat to name all the countries represented in her Miami accelerator and she stumbles for a moment: “Panama, Italy, Romania, Spain, Venezuela, Colombia, Argentina, Cuba . . . Omigosh, I’m missing so many people . . . Belgium, Denmark, Hungary and Curacao, and I’m sure I’m forgetting someone. Oh, and India.”
She beams. Her accelerator, Venture Hive, is a microcosm of entrepreneurship in Miami: international with a strong Latin flavor.
Geography isn’t supposed to matter that much anymore. Business, we’re told, can be done from anywhere with a wi-fi connection.
But location is everything to Miami entrepreneurship. Poised between two continents, it’s the perfect vantage point for startups from one to enter the markets of the other. It’s where wealthy Latin Americans move their money to keep it safe and where they send their children to be educated; it’s where rich Russians and Germans buy second or third homes. It’s a city of immigrant churn and hustle.
Miami has long held the informal title of Capital of Latin America, but it can now add another: Entrepreneurial Capital of Latin America.
A hemispheric city
In his 2011 book, Miami: Mistress of the Americas, author Jan Nijman, former director of Urban Studies at the University of Miami, describes it as the first hemispheric city, the result of globalization built around geographical organization of production and markets, a concentration of international capital, a large say in the global economy and the presence of a large number of domestic and international immigrants.
“Miami’s importance lies in its relational capacity, its ability to connect business flows. These are flows of finance, trade, services, people, and corporate communications,” Nijman writes, adding that the city is more important internationally than it is domestically.
Miami certainly feels more international than any other U.S. city. Partly, it’s the palm trees and warm weather, but the city flaunts its global nature through its food, music, architecture, ethnic enclaves and the jumble of languages spoken on the street.
Miami comes up short in many areas when compared to the country’s leading startup centers: talent pool, university tech transfer, investment capital and entrepreneurial culture, but it does have one advantage no other city can claim. It’s the destination of choice for an entire continent of entrepreneurs.
“The differentiator is Latin America. Without that, we’re nothing,” said Manny Medina, a successful entrepreneur and venture capitalist leading a campaign to transform Miami into a tech hub.
Miami has become an entrepreneurial destination by offering what many Latin American countries cannot: political and economic stability, a pro-business environment that celebrates startups, access to capital, legal safeguards, lower taxes, solid infrastructure, global connections and prestige.
“It is easier to be here because it’s a great place to do business. The government, the laws, the overall legal and administrative and tax system here works,” said Silvina Moschini, an Argentinian tech entrepreneur and news commentator who lives in Miami.
Benefits of being an outsider
Ironically, it’s easier for many Latin American entrepreneurs to do business across the region from Miami than it is to operate from their own countries.
“Running a business from a lot of these countries is almost impossible now. The taxes, I mean, it’s really crazy what happens. Most of these countries are very anti-business,” said Venture Hive’s Amat.
Open English is one of Miami’s great entrepreneurial success stories. The company, which uses online courses to teach English in Latin America, employs 2,000 people and has raised about $120 million in investment capital.
It has offices throughout Latin America, including in Caracas, where the company launched in 2008, but headquarters is in Miami. Open English originally moved to San Francisco to raise money, but its founders soon realized Miami offered better proximity to its markets and a pool of bilingual talent.
“It really is an optimal place to run a company if you’re focused on Latin America, if you’re focused on the U.S. Hispanic market, even into Europe. It’s nice to have a place in the U.S. you can do all that from,” said co-founder Andrés Moreno.
For the same reasons, U.S. companies such as Pepsi, Emerson, Microsoft and Wendy’s have based their Latin America headquarters in southern Florida.
Miami offers better air service than anywhere in Latin America. In 2012, its airport was ranked No. 1 and No. 2 in the U.S. in international freight and passengers, respectively. Its 90 international destinations are nearly twice the number of its domestic ones. Latin American and European entrepreneurs can fly to Miami faster than they can to Seattle, San Francisco or Austin. The airport in neighboring Fort Lauderdale complements the service. And the cargo ports in Miami and Fort Lauderdale are among the busiest in the country.
There are other reasons why Miami attracts foreign startups. Entrepreneurs in this country complain about government red tape; Third World entrepreneurs worry about civic unrest and nationalization of industries.
Political instability is one reason why Predictvia, a marketing software startup in Venture Hive, moved from Venezuela, said CEO Ernesto Olivo.
“The situation in my country is not the proper place. Right now, there’s a pretty rough political situation,” he said, adding that he and his co-founders hope to move their families here soon.
Of course, sunny, cosmopolitan and multilingual Miami attracts entrepreneurs from Europe as well as Latin America.
Etienne Gillard was a Belgian living in Spain when he moved to Miami to launch Waleteros, a mobile banking service aimed at the Latin American and U.S. Hispanic markets. Despite being told to move to California to start his business, he said southern Florida is the ideal location.
“When you look at the U.S. market from Spain, Miami is the place,” he said.
Miami needs entrepreneurs like Gillard because the city doesn’t have the same appeal for U.S. entrepreneurs as it does for foreigners, said Venture Hive’s Amat.
“We recruit internationally because many of the local startups don’t have people on their team who have grown and scaled $100 million businesses,” she said. “Top technologists and entrepreneurs from international markets bring with them, not just market knowledge, but some of them have had serial exits. Some have experiences that strengthen our local ecosystem in ways that would take us years to achieve if we were trying to create it from our local resources.”
Just passing through
Of course, that transience has drawbacks as well. Miamians, particularly the wealthy and well-educated, have a tendency to move on. Author Nijman likens the city to a hotel: “People check in, use the facilities, and check out again. They show little interest in their neighbors, they do not invest in social relations, they come with a sense of entitlement, and they have no stake in the future of the place.”
Miami also suffers from the perception that entrepreneurs, in order to hit it big, have to move to New York or the West Coast.
That makes it hard to build a robust and self-supporting entrepreneurial community. Amat, Medina and others trying to make Miami an entrepreneurial hub say keeping homegrown talent in the city is a priority. They are well aware that Amazon’s Jeff Bezos and Facebook COO Sheryl Sandberg are from Miami, but struck entrepreneurial gold elsewhere.
Bezos and Sandberg aren’t relocating to Miami, but the next superstar might have been among the dozens of young Latin American entrepreneurs at the eMerge Americas conference in Miami Beach in May.
They sat by open laptops at small tables in the back of the exhibition hall, hoping to attract the attention of investors, mentors, customers — anyone, really, who wanted to learn more about their companies.
Komal Dadlani made the trip from an incubator in Santiago, Chile, to spread the word about Lab4u, her educational startup that teaches science through the capabilities of cell phones. Looking around the exhibit hall, she sounded ready to move to the Entrepreneurial Capital of Latin America.
“I would definitely base the headquarters of Lab4u in Miami because it is the perfect place to reach and expand to Latin America and the U.S. at the same time,” she said.
Why is Latin America having such an affect on Miami and its startup hopes? Consider these facts:
Airport and Seaport Stats
- 1 – Miami’s ranking among U.S. airports for international freight (2012)
- 2 – Miami’s ranking among U.S. airports for international passengers (2012)
- 12 and 13 – Rankings of Ft. Lauderdale and Miami ports, respectively, among U.S. ports
Flight Time Stats
- Flying time between Buenos Aries and San Francisco – 13.5 hours
- Flying time between Buenos Aries and Miami – 9.25 hours
- Flying time between Caracas and New York City – 4.75 hours
- Flying time between Caracas and Miami – 3.25 hours
- Flying time between Santiago and Austin – 10 hours
- Flying time between Santiago and Miami – 8.75 hours
Miami-Dade County has the country’s largest populations of:
2nd – Miami’s ranking among top U.S. cities for immigration July 2012-July 2013
- Pop. — 2.62 million
- Hispanic – 64.3%
- Foreign-born – 51% (largest in U.S.)
Foreign Direct Investment
- 71 – Countries with direct investments in Miami
- 179 – City-regions with direct investments in Miami
- 9 – Miami’s ranking on fDi Cities of the Future rankings (2014)
Language Spoken at Home
- Spanish – 70%
- English – 22%
- Other – 8%