As a company with a base in Miami and personal roots in Europe and Latam, we are very aware that international entrepreneurs are innovative, creative and talented.
With an abundance of talent and lower costs than Silicon Valley, many international locations are fantastic places to start a technology company. That said, it is more challenging to scale a high impact technology company in Latam or Europe than in the United States. You can grow there, but it takes longer, and in many cases you can only get so far.
Is the Silicon Valley still your first port of call?
When heading to the US for the first time the knee-jerk reaction for most entrepreneurs for many years was to head straight to the “Silicon Valley,” and with good reason. However, today it is not so obvious. In the last year or two, there has been something of an exodus out of the area. California has a net loss of residents to other states each year, and more than 53 percent of Californians and 63 percent of millennials express a desire to leave.
One of the more prominent VC “exits” from the San Francisco Bay Area was Peter Thiel, who recently moved to LA. Why did he leave? He talked about a lack of diversity of opinion, a monolithic political culture and an exorbitant cost of living.
When he is not sleeping on the Tesla Factory floor in Fremont, Elon Musk is likewise ex-Silicon Valley, living just north of LA, in Bel Air. Tim Ferriss, of “4-Hour Work Week” fame, left San Francisco about a year ago for Austin Texas. He attributed his move to a sense of Bay Area “fatigue” resulting from “a suffocating smugness”, “mono conversation” and a high-stress “culture of cortisol.”
And then there’s me. I have personally been part of the Silicon Valley exodus. When I co-founded my first startup in 1996 there was never any doubt about moving it to Silicon Valley. But after 20 years in the Valley, I recently relocated to the Miami area. There’s a rapidly growing, high-energy startup scene here and a thriving business ecosystem with connections deep into the rest of the US as well as Latin America. I quickly realized that Miami could just be the perfect place to call home for many international companies looking for an alternative to Silicon Valley.
Why companies should consider using Miami as their US “beachhead”
Miami shares all the general US advantages for entrepreneurs, but it offers some additional advantages that are unique:
- The Wall Street of the South: Miami is the second largest foreign banking center in the US, and has been labeled the Wall Street of the South for its financial reach into South and Central America, the Caribbean and beyond.
- Gateway to Latin America: Miami is home to 1400 multinational corporations. It is a base for many Latin American companies who want to tap into the US market and multinationals who want to access the growing Latam markets.
- Connectivity: Miami is connected. Consider: Miami International Airport ranks 3rd in the world in international destinations with non-stop flights to major cities in Europe and Latin America. . PortMiami is also the #1 passenger port globally and China’s largest trade partner. Not to mention, it is one of the largest tourist cities in America.
- Cultural Affinity: Infrastructure, market, and regulation are important, but anyone who has ever moved to another country for business knows that for entrepreneurs to thrive, their families must thrive. Miami is more international than pretty much any other city in the US. For many “internationals”,Miami feels like “home away from home”.
Bottom line - where to make your base?
In spite of the many “exits” - and not the kind of Silicon Valley usually talks about - the rumors of the Valley’s demise seem premature. But the relevant question is not even whether Silicon Valley is shrinking. It’s not. The bigger question for entrepreneurs is:
- Does it still make sense for you to go there?
- Does your company need to be in the Valley?
- And is it reasonable to pay the premium it costs?
My venture friend in Austin put it well: “If your number one customer or channel is Google, or Facebook, or some other Silicon Valley powerhouse, the Bay Area may still be your best bet.”
But if you are looking for a US beachhead to access the market, recruit affordable talent, enjoy a reasonable cost of living, and raise additional capital at some point, then Miami could be a better bet.
