Miami’s Mayor Woos Techies. What Does He Need to Succeed?

If anywhere could use innovation, it’s Miami—one of the country’s most unequal, environmentally vulnerable cities.
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Miami is home to a growing tech scene, but so far it's nowhere near the country's top cities for startups.Photograph: DANIEL SLIM/Getty Images

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When Francis Suarez ran to be the mayor of Miami, in 2017, building the next Silicon Valley was not part of his platform. But this December, after the venture capitalist Delian Asparouhov suggested on Twitter that the tech industry relocate to Florida’s sunny shores, it didn’t seem like such a bad idea. Suarez replied in fluent investor patois: “How can I help?”

Since then, Suarez has refined his pitch. He’s gone on Clubhouse, the virtual hangout of the tech elite, to make the case for his city. (Great weather! No income tax!) He’s addressed techies on Twitter, including an exchange with Elon Musk about building a network of futuristic “road tunnels” beneath the city. Could Miami really be a tech hub? Sure, Suarez says—all it needs is entrepreneurs and investors to move there. Startups might congregate in Wynwood, a hip neighborhood just north of Miami’s downtown—“like SoMa meets the Mission, but without the issues you get in San Francisco,” as the venture capitalist Keith Rabois recently put it. Rabois moved to Miami last year, and has become one of Suarez’s loudest cheerleaders. So have Jon Oringer, the founder of Shutterstock; Alexis Ohanian, the founder of Reddit; and Marcelo Claure, the CEO of SoftBank Group International, who all live in Miami and think you should too. 

On Wednesday Claure and Suarez announced that SoftBank will invest $100 million in Miami-based startups. The mayor says the new fund is part of his plan to improve the lives of all Miamians, a quarter of whom live below the poverty line. “I don’t know another way to try to deal with income inequality than actually having entrepreneurs and inventors creating the kind of jobs that allow your residents to be successful and provide for their families,” Suarez told WIRED on Thursday.

Suarez is, of course, not the first mayor to imagine this future. As Silicon Valley emerged as the country’s preeminent destination for talent and capital, dozens of American cities have tried to replicate its success, down to the aspirational nicknames: There’s Silicon Beach (Los Angeles), Silicon Forest (Portland, Oregon), Silicon Hills (Austin), Silicon Basin (Columbus, Ohio), and Silicon Slopes (Salt Lake City). Politicians have courted the tech industry with tax breaks and elaborate marketing campaigns, hoping that it brings new jobs, vast amounts of wealth, and a burnished reputation. But despite these efforts, the technology industry has remained remarkably concentrated in a few select cities. A Brookings report from December 2019 found that just five metro areas—three of them in California—accounted for more than 90 percent of the growth in “innovation” sectors.

Miami’s tech scene has been on the rise for years, but hasn’t come close to becoming a power player. Cities with fast-growing technology sectors tend to have a few things in common: They have high-caliber universities that produce talented engineers; they have strong economies with business-friendly regulations; and they have a few larger tech companies headquartered nearby. Bill Gurley, the venture capitalist, recently suggested that to develop a tech ecosystem, a city needs at least “three independent public companies north of $10 billion market cap that were founded in the region.” South Florida has only one: Chewy.com, the pet food delivery company, based in Dania Beach. (It was acquired by PetSmart in 2017 for $3.35 billion.) Unlike Austin or Boston or Raleigh, Miami doesn’t have top-tier universities feeding it star talent. And while a growing number of venture capitalists have moved to Miami, it’s not clear how many of them are reinvesting in the local startup scene. Last year, less than 1 percent of venture dollars landed there, according to Pitchbook data. Miami is the seventh largest metro area in the US in terms of population, but it didn't even crack the top 10 for VC activity. In a 2019 survey by the Miami Downtown Development Authority, local founders said that securing funding and finding talent were the two biggest challenges of operating a business in the city.

Still, Mayor Suarez believes that recruiting the right people can change that. “We’ve been a city that, for many decades, has produced talent that we’ve lost to bigger cities,” he says. “That’s something we want to recapture.” Miami has attracted a few smaller startups, like sleep tech company Eight Sleep. Matteo Franceschetti, Eight Sleep’s founder, moved to Miami for a higher quality of life, but found that the city was also good for networking. “I connected with more people here in the past month than in New York City in the past year,” he says. Franceschetti wants others to join him: In January, Eight Sleep announced a new promotion of 20 percent off mattresses to tech founders, investors, and employees who relocate to Miami.

“I think it’s extremely exciting for there to be new entrepreneurs, investors, and companies coming here,” says Natalia Martinez-Kalinina, the director of performance management at REEF Technology, which became Miami’s first tech unicorn in 2018 (when it was called ParkJockey). Martinez-Kalinina says newcomers will make the existing sector much richer, but “you have to come with the mindset that most things are not 100 percent built.” Miami isn’t a city with a massive tech industry ready to plug into—it needs a group of thoughtful people to come prepared with ideas about what that industry, and the city itself, should look like.

Those who are enthusiastic about Miami’s future as a tech hub think it can avoid the growing pains of Silicon Valley, where the rise in technology companies has accompanied rising inequality and a housing crisis, among other issues. Miami already has the second-worst economic inequality in the nation by some measures—worse, in fact, than any city in California. One-third of households in Miami-Dade County earn less than $35,000 a year, according to Annie Lord, the executive director of the housing nonprofit Miami Homes for All. “The problem is not going to be a few hundred people with very high net wealth moving to Miami,” says Lord. “It’s when you’re talking about the creation of new industries that dramatically change how people relocate to Miami, that’s really going to have a massive effect.” If tech entrepreneurs and startups relocate to Miami, they could create new opportunities for the people living there, ranging from service industry jobs to high-paying office work. But it could also exacerbate existing inequalities. A writer for The Miami Herald recently warned locals that “an influx of backpack-wearing venture capital disciples” would do to Miami what they’ve done in every other city: “raise housing costs astronomically, increase the douchebag factor in the region and generally make life miserable for everybody else.”

Mayor Suarez, for his part, believes that conflating income inequality and the tech industry is an oversimplification. “There’s a presupposition that income inequality has been brought by tech,” he says. “It’s not created by an industry, or a company.” Instead, he points to the housing crunch in cities like San Francisco, which have exacerbated homelessness and poverty. The Miami metro area, too, faces an affordable housing shortage, but Suarez argues that Miami-Dade County has “a tremendous amount of underutilized land”—something San Francisco does not—and the capacity to grow along with a new industry.

Some developments, however, have made urbanists more nervous about gentrification. Last year, the city approved a $1 billion development called the Magic City Innovation District, a commercial and residential area marketed to startups and entrepreneurs. The district is located in a part of the city known as Little Haiti, where many people live below the poverty line, and activists have argued that new construction threatens to push those people out.

These concerns are compounded by the most serious problem facing Miami: climate change. The city is one of the most environmentally vulnerable in the nation. Some scientists say that sea levels in Florida could rise by 3 to 6 feet in the next 50 years, displacing potentially hundreds of thousands of residents. And predictably, it’s the poorest people who are expected to bear the brunt of the damage. Thousands of Miami’s affordable housing units could be at risk of flooding. In neighborhoods like Little Haiti, meanwhile, which is also some of the highest-elevation ground in Miami, longtime residents “could easily be displaced onto lower ground since they are unlikely to be able to remain in a gentrifying neighborhood,” writes Mario Alejandro Ariza, the author of Disposable City: Miami’s Future on the Shores of Climate Catastrophe.

On Tuesday, in his State of the City address, Suarez acknowledged the challenges facing Miamians. “Drawing owners and executives of tech companies is not enough,” he said. “We need to put our people first by building and investing in a workplace development pipeline."

Still, if his recruitment pitch works, Suarez could bring innovation to a city that desperately needs creative solutions to its existing problems. “So many things are really on the table to be figured out,” says Martinez-Kalinina, who mentioned the city’s climate vulnerability and issues with infrastructure. Cities become technology hubs when they attract people hoping to solve similar problems, like Boston’s reputation for biotech or Pittsburgh’s renown for autonomous vehicles. Miami is unlikely to become the next Silicon Valley, but it could become the next destination for climate science startups, or companies that want to tackle income inequality. In Miami, a new technology sector could go a long way toward solving homegrown problems—not boring tunnels beneath its roads, but saving it from a future as Silicon Swamp.

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