‘Not So Abysmal’: Defending The Strength Of Miami’s Startup Ecosystem
In May, the Miami-Fort Lauderdale area was ranked No. 1 among the 40 largest metro areas in the U.S. for new startup activity on the Kauffman Foundation index.
The Kansas City-based foundation develops and funds global research and entrepreneurship programs. The index uses government data to determine the rate of entrepreneurs opening businesses. It also measures startup density.
However, this index focuses on new business creation and is limited in what it shows about the entrepreneurship ecosystem, Miami Herald reported. Kauffman’s Growth Entrepreneurship Index, published in June 2016, told a more sobering story: Miami ranked second from the bottom for entrepreneurship growth among the 40 biggest metro areas in that study.
Another recent Kauffman report ranked Miami No. 2 among the top five metro areas with the highest percentage of immigrant-owned businesses. The top five include San Jose, Miami, Los Angeles, San Francisco and New York.
Statewide, Florida also ranks poorly for entrepreneurship growth. This was apparent in the 2016 Kauffman study and in Bloomberg’s 2016 U.S. State Innovation Index. Released in January, the Bloomberg index ranked Florida in the bottom third of states.
Following Miami’s No. 1 ranking for new startup activity, The New Tropic wrote a piece digging into several metrics of a startup ecosystem that Kauffman measured, titled “The truth about Miami’s startup status.“
Brian Brackeen, a leader in Miami’s startup community, started a robust debate on his personal Facebook page, taking issue with the angle of the story and the data on which The New Tropic based its conclusions. In the interest of having an open, vibrant conversation about the strengths and weaknesses of Miami’s startup ecosystem, The New Tropic asked Brian to share his criticism.
Brian is CEO and founder of Kairos, a Miami-based facial recognition software company.
From The New Tropic. Written by Brian Brackeen.
Let’s talk about Miami. I realize your mind automatically takes you to beaches, blue water, nightlife and amazing Latin food. I get it. Miami is all of those things.
Yet it is Miami’s history of outrageously rapid, large scale economic growth that’s the real power behind this town – and no one seems to want to acknowledge it. Which is perplexing. Because when gauging Miami in terms of historical trends in economic growth, the fact that until just under 40 years ago it was a laid-back vacation spot primarily inhabited by retirees has to be considered.
In fact, as the 1980s began, Miami went from being on no one’s international radar to the No. 3 international banking center in the nation, one of the fastest-growing real estate markets in the country, and the epicenter of global tastemaker luxury – and still is ALL of these things today.
Now here we are in 2017, and the new wild growth is entrepreneurship. And it is definitely growing. Yet, I constantly find myself in the position of defending Miami’s credibility as a legitimate place to be in business.
And here’s why.
A few weeks ago, The New Tropic published a piece boldly titled, “The truth about Miami’s startup status,” wherein such declarative statements as “Miami’s showing is quite poor” and “But from what we see now, it hasn’t happened yet” are thrown around freely and frequently. The data referenced in the piece was the 2016 Kauffman Index report on startup growth by metropolitan area – but it relied partially on their 2013 data. So, their “truth about Miami startups,” at the time of publication, was supported by a 4-year-old study.
This was one issue, yet not the one that mattered most, because frankly, the 2016 Kauffman Index report is at first glance equally unfavorable in terms of its data around our startup growth (I’ll get into that in a minute).
The article was problematic for me because as an entrepreneur who is actively participating in the cultivation of Miami’s ecosystem, I expect more of a positive narrative from local media. Particularly from a Miami publication that itself counts the Knight Foundation as an investor.
Might be click bait…
I was asked to amend my original response to reflect the fact that new data had since been made available – data which basically reinforced that Florida was still on the bottom of the list. And it is. The 2016 Kauffman Index places Florida at No. 24 of 25 for startup growth in large states.
This sounds pretty abysmal. Certainly, based on this fact, I could say that Miami seems to have a long way to go to be take seriously in terms of startup growth. Yet, if you consider that California is at No. 11 with 60 percent growth, and Florida is at No. 24 with close to 50 percent growth, that “24 of 25″ doesn’t seem so abysmal.
In fact, it doesn’t seem very negative at all. However, saying “Florida is 24 of 25 states in terms of startup growth” in a title, or constructing a column about how Miami’s startup growth sucks, solely based on that statistic without offering the details around it, might be angling for click bait rather than reporting with transparency.
Baseless bad-mouthing of Miami’s ecosystem is actually harmful
More than simply being irritated by false accusations of stagnation, I strongly believe that the bad-mouthing of Miami’s ecosystem is harmful. When I am in front of investors having to explain “why Miami,” in addition to presenting real, current, tangible evidence that Miami is in fact an amazing place to work, live, invest, I have to fight against this kind of contagious, negative reporting.
An investor will conduct some initial Google due diligence, see “The Truth About Miami’s Startup Scene,” click, and proceed to read what he interprets as “STAY AWAY FROM MIAMI.” It is irresponsible and dangerous to make such assertions with what amounts to a sensationalized, under-analyzed presentation of data because it only makes it harder for those of us who know Miami and believe in Miami to bring investment dollars to the city. And when a Miami-based, Miami accelerator-funded publication is effectively telling investors to stay away, I’m just not sure who wins.
So much good to say…
Perhaps somewhere in their “truth,” The New Tropic could have mentioned the Knight Foundation, which supports journalism, the arts, and technology, and began supporting Miami entrepreneurship the week of July 12, 2012. Their investments have fostered growth for dozens of companies, Kairos included.
Also with the support of the Knight Foundation, Endeavor Miami was launched. Endeavor, a global non-profit organization that has advised and helped scale more than 800 high-impact companies in 26 countries around the world, obviously missed the “no growth” memo, because they chose Miami as their first U.S. affiliate. There are now 25 Endeavor entrepreneurs existing and growing in Miami.
Then there’s Angel List (basically Match.com for startups, angel investors, and job-seekers), who reports that over the last three years, Miami startups have grown over 100 percent year over year. And according to the American Investment Council’s 2016 report, Florida ranks fourth in the nation for investment from private equity – spreading $41.8 billion over 219 Florida based companies. And then there’s Brickell, the rapidly developing international banking center becoming one of the most highly desired parts of the city by Millennials – coined by Forbes as “Wall Street South” back in 2015.
Miami isn’t simply developing as an entrepreneurial city. This is a true, positive representation of the “truth about Miami’s startup status,” which Miami publications should absolutely feel the responsibility to report.
Read more at The New Tropic.
This article was published with the permission of Brian Brackeen.
Sign up for the Moguldom newsletter — the most compelling business news you need to know about reversing inequality in tech, delivered straight to your inbox.