For so long, Silicon Valley has been a top destination for entrepreneurs looking to grow their startups with the hope that they thrive, but the incredible and unprecedented success of Silicon Valley brought with it some disadvantages. Vlad Vahromovs, CEO of Intellectsoft, the technology partner of Fortune 500 companies, shares his insights on the drawbacks of running a business in the Valley and the rise of a new tech paradise.
Among the many disadvantages facing tech startups in today’s Silicon Valley are the exorbitant home and rental payments coupled with quickly rising taxes. For many residents here, the dream of acquiring a home, enjoying affordable transportation and education, and paying reasonable taxes has become out of reach.
What’s more, the economic difficulties that came with the Covid-19 pandemic made it extremely difficult for most residents to deal with the aggressively expensive city of San Francisco. At this point, it makes absolutely no sense for professionals to live in over-priced apartments while working remotely. Reports show that the cost of living and the average rent is quite disproportionate in Silicon Valley.
For the above-stated reasons and more, entrepreneurs are leaving San Francisco for neighboring cities with less overhead costs. As many as 70% of the professionals in Silicon Valley believe that the town no longer possesses the technological edge that it used to have. Much of this is happening due to the talent drain caused by the high cost of living in the Valley.
It makes logical and business sense, then, to move to a state that offers the tech industry better affordability without compromising talent or potential business opportunities.
Miami has gained popularity as an optimal destination for IT professionals due to the many perks that the city offers. Miami offers lower tax payments than San Francisco and has a mayor who wants to collaborate with business owners, creating fantastic business opportunities. The appeal of Miami extends beyond its business capabilities. Miami is a refreshing mix of warm, sun-lit afternoons, sand, sea, and ideal living conditions. The addition of exciting nightlife, amazing nightclubs, busy beaches, and diverse restaurants makes Miami an attractive destination for tourists and young tech entrepreneurs alike. Miami can be described as the next potential tech hot spot.
Miami’s time zone puts its residents at just five hours behind the UK and at the same time zone as South America. It’s a win-win situation. Besides, Miami is a top city by the percentage growth of graduates, and its absence of state income tax makes it an excellent city for labor costs optimization. Covid-19 has been very hard on every city globally, but Miami has handled its Covid-related situation quite well. There is so much to attract potential residents to this flourishing city of tech, innovation, and more.
Miami’s Tech Potential
The Covid-19 pandemic has caused many companies to re-evaluate their need to have their companies in a crowded and expensive talent pool like Silicon Valley. To the surprise of many, Miami, Florida, has emerged as one of the top choices of locations garnering the interest of companies and investors. Thanks to the overly expensive housing costs and stringent business regulations, it is estimated that 653,000 Californians left the state in 2020. 82,000 of these emigrants moved to Texas, while many of them have Miami as the following viable location on their go-to list.
Miami has seen a recent surge in well-known and global tech giants setting up their offices and investing in the city. It is no surprise that the state is already ranked among the most desirable for startups and tech companies.
There has been an enormous migration to Florida in terms of tech giants and talents. Major tech players like Facebook, Spotify, and Apple already have an established presence in Florida, and Intellectsoft recently set up an office to cater to the high-end software needs of the industry giants in the state. Goldman Sachs and Blackstone Group have also joined the new tech movement by setting up offices in Miami. Huge and well-known accelerators like 500 Startups and Softbank are also betting big on Miami. Softbank believes in Miami so much that it has set up a mind-blowing $100M fund in support of tech advancements in the city, while 500 Startups claim that Miami is uniquely poised to become a truly inclusive and global hub for entrepreneurship. All of this solidifies the city’s position as an exclusive hub for tech entrepreneurs.
Furthermore, the Mayor of Miami, Francis Suarez, had a meeting in Las Vegas with Elon Musk to discuss the future of Elon Musk’s new tunneling company there. In addition, surveys show that recent college graduates and engineers now consider Miami, Philadelphia, and Houston the hot spot for technology implementation and career development. Miami creates a welcoming and nourishing atmosphere for CEOs to capitalize on young talents while minimizing tax costs. This ultimately makes cities in Florida and Texas appealing to potential investors.
Major tech players like Facebook, Spotify, and Apple already have an established presence in Florida, and Intellectsoft recently set up an office to cater to the high-end software needs of the industry giants in the state.
Blockchain Ecosystem in Miami
It is no secret that the adoption of and demand for blockchain technology has blown up immensely since its inception, primarily due to its connection to cryptocurrencies like Bitcoin and Ethereum. Blockchain technology can be explained as an electronic listicle used for keeping verified and connected records in their simplest form. All the features of blockchain technology make it a viable option for identity protection, data access, and data validation (it’s a most common use case today).
Blockchain has been used in other areas such as intracompany transactions and record-keeping. The technological potential and extensive interest in blockchain technology by enterprises make it a very lucrative venture for startups looking to raise millions of dollars in investments in their early offerings.
Statistics from 2020 provided an insight into the interest of global organizations in the blockchain. It was found that over 36% of companies plan to invest over $5M in the technology. Further research shows that global spending in this industry might peak at $6.6B in 2021. An estimation that blockchain solutions spending might hit $19B in 3 years makes Miami a sweet spot to take advantage of this ever-evolving technology.
Miami also sets itself up as a forward-thinking city with its partnership with Ethereum developers to leverage blockchain for the city’s services. Plus, the idea of adding Bitcoin to the treasury of Florida was appealing to the mayor of Miami. A segment of The Scoop’s new episode stated that the Mayor of Miami, Francis Suarez, in conjunction with Ethereum creator Vitalik Buterin, is starting a new collaborative project intended to put city services on the blockchain.
What Does This Mean for Miami?
While it is impossible to predict the future and say when Miami’s tech industry will hit its peak, it is safe to say that Miami is evolving in many ways and has become a beacon of hope for many tech entrepreneurs, talents, and enthusiasts. The city has a lot to offer in terms of technology, socialization, and habitability.
No one can tell which city will follow the Miami trend. However, one thing is for sure: as more companies are turning to local hubs, like those seen in Florida and Texas, to source tech talents, many are considering emerging markets and it’s quite possible that the next tech hot spot could be outside the US.
Intellectsoft, for instance, has its Research and Development facility in Ukraine, a country known for its incredible talent and relatively affordable talent cost. Like governmental support in Miami, Ukraine provides suitable conditions for helping business ventures grow to the next level.
The best part of our current era is the borderless talent pool that wireless technology and practical remote tools provide. This means a company can quickly get the talent resources needed to build a venture from anywhere in the world. So, who is to say where the next unicorn surge will occur?
ABOUT OUR GUEST WRITER
An accomplished tech executive with over 15 years of executive leadership experience delivering cutting-edge solutions to industry giants, Vlad is the CEO of Intellectsoft, the technology partner of Fortune 500 companies including EY, Nestle, and Jaguar. Vlad holds modern courses degrees from Stanford and Erasmus University Rotterdam. For the last five years, he worked and lived in Silicon Valley before moving to Miami in late 2019.