“How can I help?” With that courteously indulgent tweet, one not-so-small-town mayor has startups and corporations alike packing up shop, joining a cross-continental exodus to a paradisiacal tech promised land–the beaches of Miami, Florida.
Before the tumult of last year, Miami Mayor Francis Suarez seemed an unlikely champion for startup founders and tech business leaders, and Miami an unlikely relocation destination. Back then, the San Francisco Bay Area was still the unrivaled spawning ground for innovation. Silicon Valley had forever been the place to be. California had an established tech dynasty, and her corporate subjects dutifully stayed put.
The sociological, economic, and political upheaval of the COVID-19 pandemic, however, has brought stark changes to the tech business landscape. And the future of Silicon Valley as tech’s capital is now less certain than ever before.
Late last year, after the waves of the pandemic had crashed—repeatedly—all across America, many technology firms had pivoted to a remote work policy. Employees were now working from pretty much anywhere.
From Google to Twitter to small, scrappy startups—everyone was now working from home. And as these California tech workers contemplated their futures while mired in the claustrophobia of lockdown, many of them started to wonder if a move was in the cards.
The rift separating tech leaders and California politicians had long been at a low boil, but now this dysfunctional relationship was making headlines. The gloves came off. In one of their more astonishing stunts last year, the San Francisco Board of Supervisors voted to condemn the naming of the city hospital for Facebook co-founder Mark Zuckerberg and his wife, Dr. Priscilla Chan. The couple had previously given the struggling public hospital 75 million dollars.
Such open antagonism from government officials fueled the desire to leave San Francisco among many corporate leaders in the tech industry. Spite from public officials, combined with the sheer monotony of a never-ending lockdown, left many thinking—where do we go from here?
Enter the Mayor of Miami, Francis Suarez. All it took was four words on Twitter—“How can I help?”—and suddenly, the tech industry had found an advocate, a concierge. What followed, as the Mayor’s tweet went viral, was a stampede of startup founders and industry leaders gauging the potential that Miami, of all places, had to offer.
“It became evident almost immediately that I had struck a nerve,” Suarez remarked in a recent interview with The Politic. “No elected official was doing what I thought they should be doing, which is trying to grow the tech industry in their city by inviting founders and innovators to their city.” For tech workers in San Francisco, who were feeling more than a bit underappreciated, the mayor’s candid offer was a breath of fresh air.
Suarez knows this. “There were multiple elected officials in the country that were actively pushing tech away from their city…and creating tax policy that pushed productive people away from their city.” Meanwhile, Suarez is establishing himself as the alternative, as a politician who is friendly to the technology industry, who presents a welcoming stance “counter-narrative to the way that government was responding to tech recently.” This approach “really just lit a fire” among San Francisco’s disenchanted tech community.
Any mayor can be, and should be, enthusiastic about their city. But what the tech community detects in Miami that creates excitement about building their business there, beyond a congenial mayor, is the movement of venture capital and private equity. “Traditionally, venture capital was located in the Valley. Hedge funds and private equity were located on the East Coast, in New York,” Suarez remarks. “What we’re seeing is a convergence of both of those macroeconomies in Miami.”
Suarez isn’t bluffing. Founders Fund, the prestigious venture capital firm of tech billionaire Peter Thiel, announced in early February that the Fund would be opening an office in Miami. This came after Thiel met with Suarez, and after Thiel himself bought properties in Miami Beach. If one of the biggest names in venture capital sees potential in your city, you’re probably onto something.
As for private equity, Miami is already in a strong position–the city is the financial center of much of Latin America. But can it shift the financial center of the United States of America? Miami might just pull this off. Blackstone, a major private equity firm (co-founded by Stephen A. Schwarzman ‘69), recently announced they would be opening an office in the Magic City.
But is all this just hype? Is it some kind of media mirage—Miami’s 15 minutes of tech fame?
Two members of the Miami-Dade Beacon Council, the official economic development organization for Miami-Dade County, spoke with The Politic. James Kohnstamm, the council’s executive vice president for economic development, takes the long view: “Our perspective is that this has been a slow burn for many years,” adding that with the arrival of mass-scale remote work, “the stars have aligned, and people recognize that if you can work remote, and you don’t have to be in New York or Silicon Valley, Miami has a great quality of life opportunity, and we have a lot of the pieces of the puzzle for a great technology hub.” These pieces, according to Kohnstamm, have been “simmering under the surface” for years as Miami quietly geared up.
The Beacon Council’s chief marketing officer, Maria Budet, agrees that remote work catalyzed Miami’s surge on the tech scene. “For a long time, the conversations around Miami as a tech hub were stunted because of constraints around talent,” Budet notes. But with the arrival of remote work, “it’s a completely different landscape—the idea of being able to live anywhere, and work from anywhere, is really a different kind of currency.”
At this point, Miami does not yet have a reputation as a center of high technology—definitely not on par with San Francisco. But Kohnstamm says that technology has always been part of South Florida’s history, noting that companies like IBM and BlackBerry had a significant presence in the area throughout the last few decades, but the technology scene never really took off as it did in, say, Seattle.
But as for today? “This is not the Miami of the 80s,” Budet asserts.
“We want to flip our reputation on its head,” declares Suarez. And he believes this unique moment in time has the potential to catalyze years spent developing Miami behind-the-scenes. As startup founders start to arrive, Suarez predicts, “like everything else in life, success begets success. Interesting people bring interesting people.”
As the pandemic shows signs of ending, as vaccines roll out and infections decline, Suarez is confident he can retain these new arrivals. “Are they going to go back to a place where they’re going to willingly pay double-digit more in taxes? Are they going to go back to a place where public officials are openly hostile to them? I just don’t know how these cities turn it around,” he muses.
Let’s say Suarez is right. The Silicon Valley diaspora decides to give Miami a shot. The mayor needs a plan for ensuring the city continues its development. After all, the technology industry is constantly moving. If you stand still, you run the very real risk of getting left in the dust. Government is no exception to this rule—in fact, government routinely proves itself unable or unwilling to keep up with modern tech. But Suarez plans to do things differently in Miami.
First, Miami will “continue to make meaningful investments in education.” Suarez wants to ensure that children in Miami will have “the opportunity to be successful in this new economy, which is inevitably coming.” He believes tech is here to stay, that it is the industry of the future. Mayors who do not make a significant investment of time and energy into developing their city’s tech scene are “doing a disservice to not just my generation, but to subsequent generations.” Miami has been playing the long game with technology, and investing in technology-based education is a logical extension of that strategy.
As for innovation within government, he indicates that Miami has “decided to…occupy the cryptocurrency space.” Suarez is pushing to allow government workers to receive a percentage of their salaries in bitcoin. He wants all residents of Miami to be able to pay fees and taxes in bitcoin, which could convert a large portion of financial transactions in the city to a more digital and tech-centered format. The mayor proposes that the Miami city government be able to invest in cryptocurrency as an asset—a bold plan. Many finance officials continue to worry about bitcoin—mostly regarding its volatility—viewing the cryptocurrency as a highly speculative investment. Others maintain that the more bitcoin hits mainstream adoption, the more stable it is likely to become. Perhaps the mayor’s proposal is not a reckless investment in a wildly oscillating currency, but rather an exciting opportunity to get dealt in early to the currency of the future.
To keep up with the future, Miami will have to convince the world, especially young tech workers choosing where to live, of their competitive status as a rising tech hub. “What I would say to them is, where do you want to be? Where do you want to live?” Suarez says. He is betting on these young people wanting to live in a place “where the government’s not going to get more of your wages than what is necessary, where the quality of life is premium, where they have all of the sports offerings, and all of the cultural offerings that a major city would want.” He is convinced that Miami is “the most diverse new frontier economy in the world.”
Suarez reflects on the “old Miami” to illustrate an important contrast: “We were an intellectual talent exporter. We had many kids that went to high school here that would go to Yale, Harvard, or MIT…and a lot of them didn’t come back.” Miami, at that time, was not even within striking distance of then-top dog San Francisco and had virtually no place in the American technology ecosystem. In recent months, however, Suarez notes, “that narrative has changed dramatically…and I think now, we are going to be not only bringing in the top-flight talent from the U.S., but we’re going to be bringing in top-flight talent from different parts of the world, and making [Miami] a hyper-competitive place.”
As the flight from Silicon Valley shows no signs of letting up, Mayor Suarez has high hopes for the months and years to come, as he bets big on technology education and cryptocurrency. And the technology industry has a great deal of hope for Miami, as they find a new home that appreciates their talent and wants to work with them, rather than against them. So, what does the future hold for the Magic City? The mayor’s vision: “I really think that it is within the realm of possibility that Miami could become the most significant city on the planet.”