Should I move to Silicon Valley to immerse myself in technology and entrepreneurship?

I get asked this question a few times a year so it is time to write a post about some of the most common misconceptions of being in a wrong or right place.  It is very true that there are a lot of factors, but let’s explore two, what your potential customers think and what your potential suppliers/employees think.

Your customers won’t really care where you are as far as you have a great product/service.

Think about it for a moment, unless your product or service has a strong correlation to its origin, like Champagne or Tequila, does it matter where it was made? For most people the answer simply is no; for most customers, good quality and price are more important.  The point I am trying to make is that unless your product falls on a specific category were location is part of the brand, where you are is not so important.Golden Gate

For many companies, the “where something is made” is just a function of either cost or closeness to raw materials. This two factors will have the greatest impact on location, so let’s expand on that because costs and the sourcing of raw materials are intrinsically intertwined. For example, if you are close to the providers of raw materials then your costs might be less, but the place where you need to deliver your products is far you might need to add the cost to ship your products.

The same hoholdsrue for some services, it might be cheaper to service a customer from an offshore location, but you might incur additional overtime because the service time window is not the same.  For many transnational corporations, this is a constant balancing act, as new markets emerge and competitive pressures drive prices down, they must constantly find better ways to extract the cost from the process of manufacturing their products and deliver their services.

The other key ingredient of successful entrepreneurial ecosystems is the ecosystem itself.

While it is true that Silicon Valley has lead the high-tech revolution and as a byproduct created one of the most successful entrepreneurial ecosystems, it is not the only one. There are many thriving entrepreneurial ecosystems in the USA and around the globe. Some exist as byproducts of beneficial economic conditions and other were purposely created to fuel the improvement of economic conditions. There are great examples all over the world, all the way from Chile to Israel, from Miami, Austin, Boulder to Shenzhen China ( The Silicon Valley of Hardware https://www.youtube.com/watch?v=SGJ5cZnoodY )

So you are thinking about going to Silicon Valley in order to start a career and get immersed in high-tech; First of all congratulations, you have chosen one of the most exciting paths I can think of. Entrepreneurship and technology will continue to be areas of incredible growth for many more years. Historically, Silicon Valley has been the place to be surrounded by like-minded people. One does not need to wander too far to find some interesting places to land, for example, Startup Embassy ( http://www.startupembassy.com/ ) is the oldest entrepreneurial residence located in Palo Alto. They provide a soft landing for international tech entrepreneurs they claim to be a community of like-minded founders and provide collaboration, living and workspace. In short, Silicon Valley’s ecosystem does a good job welcoming people (https://youtu.be/r44RKWyfcFw ) but the key point is that there are many other great places too.

So you see, where one should go really depends; like the Cheshire cat in Alice in Wonderland says ( https://www.youtube.com/watch?v=G4fHre-yRPY ) it all depends on what you want to do.

Drop me a line in the comments below, what would you do?  Would you pack your bags and head to Silicon Valley, Austin, Boulder, Shenzhen or Miami? If so, tell me why or why not?

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Is Miami the place to catch the next Unicorn or just a bunch of mosquitos?

Start-up city Miami

Start-up city Miami

Sometimes opportunities reveal themselves in very subtle ways that only trained eyes can spot.  Some other times, opportunities are like a mosquitos that it just keep coming back, and keep buzzing around until you slap yourself, only to realize that you missed it.

The story of Miami and its up and coming startup scene, is turning out to be like that of the mosquito; an opportunity that you almost slapped your neck and missed it – but didn’t!

Back on September 16th, 2013, I wrote in this same blog, a post about the Miami tech scene (https://innovationstrategy4.biz/2013/09/16/is-the-super-hot-miami-tech-scene-sustainable/ ), in it I speculated if the movement that started to gain the attention of a few was sustainable, it could turn out to be something big. The post attracted some attention and was the trigger for many interesting conversations with high-tech investors and VCs in South America, Europe and the US Norths East.

Fast-forward to today and you can actually feel the vibrant ecosystem buzz with energy, very accurately represented by the sign on the terrace at the top of BUILDING.co, one of the newest and hottest co-working spaces in Miami that reads: “Start-up City Miami”.

I think the 2015 Kauffman index (http://www.kauffman.org/microsites/kauffman-index ) is not wrong, Miami has the highest startup density, and if you have already started your search to catch the next Unicorn (a company valued at $1 Billion dollars+), you most definitely need to keep a watchful eye on Miami, because if you blink, you will end up slapping your neck, only to realize that just like that mosquito, you might have just missed your chance of a life time.

Is the super hot Miami tech scene sustainable?

According to a recent article published by Fast Company, Florida ranks number one for Innovation and number three in Revenue per startup at $1.2 million.  There seems to be a consensus from the various media outlets that Miami’s high tech movement has legs.   I can attest to the veracity of the rankings and media buzz because almost every other day I learn about a new startup, technology event or product being launched either here in Miami or by a Miami based startup.

Brickell Ave

Brickell Ave

Unlike some hyper-local technology hubs, the theSouth Florida (SoFL) and in particular the Miami (MIA) tech hub has significant international influence and its ripples can be felt from as far as Buenos Aires (Argentina), Santiago (Chile),  Western Europe and of course San Francisco, California.  Much of the success can be attributed to the many local organizations doing a great job energizing and attracting talented individuals to the region.  Their hard work in conjunction with local and state leaders, educational institutions and local companies is paying off big.  I do want to mention some of the organization that should receive recognition, below in no particular order:

http://www.southfloridatech.org

http://venturehive.co/

http://refreshmiami.com/

http://sfima.com/

http://www.lift1428.com/projectlift

http://www.miamijobfest.co/

The good news is that all this attention is good for Miami.  The fact that media is labeling Miami’s Technology hub as “Silicon Beach” and social medial hash-tags like #SunshineEconomy are found frequently in twitter, has help attract some key technology events and conferences, like:

 http://tedxmiami.com/  

http://tfamericas.org/

http://fiba.net/

http://www.simemia.co/

http://webcongress.com/miami/

But I believe being able to attract great talent, foster collaboration and innovation, will only get you so far without a steady flow of capital.  To really make a significant and sustainable impact, investors must make money.  It seems traditional venture capital (VC) firms have just begun to expand their portfolios in SoFL, but most remain cautious and most continue to fund predominantly west coast startups based in “Silicon Valley”.

But not all the recent buzz has gone unnoticed, we have seen some organizations very active locally like the Knight Foundation and some non traditional organizations making inroads. Many agree that Miami already has the attention of the Latin American investors, or at least the local media is quick to point out in some of their recent publications like: “TechCrunch Disrupt Finale: Mark Zuckerberg, Marissa Mayer and .. The Latin Invasion” or “How Miami Is Filing The High-Tech Void In Latin America”.

And all this is beginning to sound very familiar, it it sounding like an excerpt from Andres Oppenheimer’s best seller book Cuentos Chinos, where he proposes a connection of between Miami’s success and the worsening economical and social situation in Latin-america.  I am not an economist, but one can easily extrapolate and conclude that if Miami’s high tech success is depending heavily in Latin-america, then the party will abruptly end by 2017 when Brazil economy decelerates and the rest of the region finds some form of equilibrium.

But independently of the outcome of Latin America and its impact on Miami, the region still must prove to the investors one thing and one thing only: it must show returns.  All this must produce success stories and demonstrate there are profits to be made.  If “Silicon Beach” is here to stay, it must produce a stable stream of IPOs (Initial Public Offerings), buyouts or any arrangement where institutional and private investors can see returns.

It takes a couple of years for the average startup to start seeing profits, this means if Miami’s high tech scene is going to be sustainable, we should be starting to hear the IPO chatter soon and hopefully thing getting ready to go no later than 2016.

So lets get the ball rolling, shall we?  What Miami based company do you think will IPO or be sold/bought first?

by Juan Meza

Blog at WordPress.com.

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