Jan 19, 2023 8:01 PM

Is Miami the next startup capital? I spent the last decade in Silicon Valley, and the past month in Miami, experimenting in four different neighborhoods. TL;DR: I think this place has a real shot, though I’ll still move to California once it’s back online.

Miami has excellent food. Great weather. Affordable housing. Durable American infrastructure. Pro-tech local government. So why not Miami?

Paul Graham has an excellent essay titled “Cities and Ambition”:

Great cities attract ambitious people. You can sense it when you walk around one. In a hundred subtle ways, the city sends you a message: you could do more; you should try harder. New York tells you, above all: you should make more money. There are other messages too, of course. You should be hipper. You should be better looking. But the clearest message is that you should be richer. What I like about Boston (or rather Cambridge) is that the message there is: you should be smarter.

Later on in this 2008 piece PG writes:

At the moment, San Francisco’s message seems to be the same as Berkeley’s: you should live better. But this will change if enough startups choose SF over the Valley. During the Bubble that was a predictor of failure — a self-indulgent choice, like buying expensive office furniture. Even now I’m suspicious when startups choose SF. But if enough good ones do, it stops being a self-indulgent choice, because the center of gravity of Silicon Valley will shift there.

An impressive foreshadowing of the future, as everything changed 3 years later. Dropbox, Stripe, Airbnb, and a few other unicorns moved to SF, and it suddenly became the place to be. (Coincidentally, SF would become horribly mismanaged. Living there became a predictor of sacrifice, not self-indulgence.)

That is the issue with Miami right now. If New York tells you to make money, Miami tells you: you should relax. You should enjoy yourself. You should get a tan. Buy a nice car.

Miami also has a terrible brand amongst the conscientious collective. I feel guilty being here. I will return to California in the After World. Miami feels like a city of sunshine and bliss, not discipline and dedication. It feels too nice, and I yearn to return to San Francisco precisely because of how bad it is there. “The frontier should feel unpleasant!”[1]

The Tel Aviv Paradox

Why do cities develop such particular personalities?

Some people think it’s the weather. Bay Area weather is to innovation what Earth is to intelligent life. Make it slightly warmer or slightly colder, and things don’t work. Warm nights feel great but too librating, leading to drink and debauchery. Too cold and the frigid winters don’t allow for any cross-pollination of ideas as communities remain small and insulated, refraining from visiting each other.

Maybe it’s the scenery. Walking amongst the Redwoods of California is what’s actually driving inspiration?

Others say that Miami can’t work because it’s a beach town. Beach towns are too much fun. You move for pleasure, not sacrifice. Having grown up in Israel, I find myself thinking of Tel Aviv. A very fine beach, with plenty of drinking and shenaniganizing, yet it has more startups per capita than London, Berlin, or Seattle. So beaches aren’t a killer.

Predicting the personality from geological settings seems hard. Like endless nature/nurture reasoning, but for cities instead of people.

Gravitational Orbit

In reality, environment might not matter. 95% of the success of any city might simply be the location of the top five cool tech companies. Get those to move, everything else follows. What founders really want is to be in the gravitational orbit of big planets. If the next SpaceX and Instacart move to Miami, that might be enough to create a second-tier Silicon Valley.

I don’t think Miami will beat Silicon Valley simply due to human capital network effects: Instacart won’t move because the best engineering managers are in the valley, the best EMs are in the valley because many companies are there, etc. (Even if the Bay Area were to fall like Rome, I doubt Miami would capture 100% of the diffusion.)

I don’t believe the location of VCs matters anymore (VCs will fund fast growth regardless of location), unless the VCs that move drag along with them a few unicorn headquarters.

In Closing

There’s an opening in the market. Miami has a shot – not at besting Google (== California), but at least at launching Bing. It has the brand of parties and beaches. But just like SF, style can change[2]. Really all you need for a startup city is (1) affordable housing and (2) three unicorn headquarters. If Miami were to attract a few highly applauded and technical unicorn headquarters (e.g. SpaceX, Snowflake, Instacart) to relocate in the next year, while California is in temporary hiatus and the narrative that “Silicon Valley has migrated to the cloud, you can be anywhere”[3], the city would mint economies overnight.

A second-place startup center would be a capital achievement, one many Mayors and Presidents would die for.

[1] For what it’s worth, I’ve come to judge the Miami aesthetic less harshly over time. Every city has a status hierarchy. San Francisco has blue checkmarks and Miami has green Lamborghini’s. This is how people show off here. The same operating system with different icons.

[2] Some would say SF only worked because of proximity to Sand Hill Road, but it seems as of late that VCs will finance any company with good growth, regardless of location. So the linkage might be less significant now. Talent networks still matter, but a joint exodus of unicorns plus Zoom might be sufficient to sow the seed.

[3] Like all narratives, I imagine this one – of “remote work forever!” will fade over time. We’ll remember that, gosh, real-world offices are, in fact, great!