Big Tech and Finance Are Arriving in Miami. What Does It Mean for the Rest of Us?

Dave Fano is a Miami kid through and through.

His father, a native of Cuba, owned his own building and contracting business at a shop in Hialeah. The house the elder Fano built was twice featured on “Miami Vice.”

Dave Fano became an artsy type sitting at his father’s drafting table. He enrolled at Florida International University to study design while still working part time for his father’s firm.

When it came time to graduate, the opportunity presented by Columbia University’s architecture graduate program school proved too enticing to keep him around the Magic City. As soon as he was accepted, he was gone to the Big Apple. There was no plan to return.

“I never thought about moving back,” he said.

“The job opportunities weren’t really there. I never even applied to jobs in Miami.”

Fast-forward a decade, and Fano found himself driving down Interstate 95, wife and kids in tow, back home — this time, it seems for good.

Thanks to Miami Mayor Francis Suarez’s success in capitalizing on the COVID-spurred interest in Miami, Fano believes there will soon be enough investors that he can successfully take his startup, a career advisor software company, to the next level.

As tech entrepreneurs and finance gurus relocate to Miami, many locals are asking, “What’s in it for me?”

It’s a question with profound resonance. About 96,000 people in Miami-Dade remained unemployed in December, resulting in a 7.3% unemployment rate, the second highest among Florida counties. Another 80,000 Miami-Dade workers have dropped out of the labor force entirely over the past 12 months.

Meanwhile, according to new U.S. Census surveys, more than one in seven Miami metro residents are experiencing food insecurity, a rate solidly above the national average of about one in nine. And South Florida ended 2020 with the lowest wage growth for any metro region, at 1.5%.

Some, like Fano, believe the newcomers can help boost prospects for their own businesses.

Others like Suarez, see it as a matter of potential.

“What’s the alternative? If they weren’t here?” Suarez asked in a December interview with the Miami Herald. “If we didn’t have intellectual and monetary capital? If we weren’t attracting the most productive, innovative people on the planet? It creates lifestyle. It creates livelihoods. Everywhere these people have gone they have created jobs. They have a track record.”

Local development leaders largely agree. But they caution that benefits may be slow to materialize. Still, this moment is pivotal; they say: What happens in the next few months will set the tone for years to come.

Critical mass

The vision being laid out by area economic development leaders is that eventually, South Florida will be home to a critical mass of ambitious professionals.

Granted, catching “whales” like global investment group Blackstone, which hopes to create as many as 215 local jobs, will likely prove rare. More common will be small but growing firms that relocate and make a handful of local hires. Still, over time, those smaller moves will reshape South Florida’s economy, bringing the long-sought diversity to a financial ecosystem that has long depended too heavily on tourism.

And, they point out, this current wave of business people is indeed different from the recent past, when CEOs who moved here typically left their companies behind.

Raul Garcia, chairman of the Miami Finance Forum and principal at Kaufman, Rossin & Co. accountancy, calls that the “Eddie Lampert” model, referring to the former Sears Holdings CEO who moved to Indian Creek Island in 2012 but left Sears in Illinois. Its successor company, privately held ESL Investments, is based in Connecticut.

Today’s CEO moves are more akin to the “Carl Icahn” scenario, Garcia said, referring to the 2019 decision by the storied corporate raider to uproot his entire company from New York in favor of Sunny Isles Beach. Other firms that made similar recent jumps include staffing startup Shiftpixy, with 50 employees; tech insights group Nucleus Research, with 30 employees; and Boston Private Wealth, with 25 employees. Another recent arrival, merch platform SwagUp, hopes to add as many as 20.

Miami’s biggest gain, Garcia said, is simply the idea that it is now possible to do business here.

“It’s not going to be huge new offices,” he said. “What is changing is that people now feel there are business opportunities, that you can raise capital and find talent in South Florida.”

Finance, diversity play

Most hedge funds and private equity firms moving to the Miami area are following their wealthy clients, Garcia noted. Because relationships in that industry are critical, many of these firms’ high-end roles will be filled by employees who also relocate.

“It’s almost religious — sometimes I feel like clergy or a priest. They tell their money manager everything,” Garcia said.

As a result, the local hiring landscape has yet to catch up, said John Nykolaiszyn, director of business career services at FIU’s College of Business.

“This is the beginning stage,” he said. “I haven’t seen or heard any traction with our students or graduates.”

But that doesn’t mean it’s not coming, he said. And Miami’s talent is uniquely positioned because of its diversity — a goal corporations of all stripes are trying to meet.

“We hit a lot of buttons for companies looking for diversity — that’s major play for firms that move down here,” he said. “If [a company] can leverage it, they’re going to win.”

Other bold-faced finance names that announced Miami moves have yet to officially arrive. Even as Citadel CEO Ken Griffin last year traded out a pair of Miami Beach condos — purchased in 2015 — for an assemblage of lots on residential Star Island, the Miami office Citadel signaled last fall that it was planning for Miami has yet to open. A Citadel spokesperson declined to comment on when that might happen.

Meanwhile, Chicago-based equity firm Thoma Bravo has said it will open an office here after its CEO bought a house in Miami Beach. But its headquarters will remain in Chicago.

Miami is accustomed to slow moves: Icahn bought a seasonal home in Indian Creek Village back in 1997.

It is unlikely to take decades this time around. Still, experts say, the new arrivals may not make a big short-term local impact.

“It’s going to be what entertainment, what restaurants are they going to and where are they sending their kids to school,” said Kaufman Rossin’s Garcia.

Miami business, Miami talent

Miami’s tech-scape is further along — by a little — thanks largely to the Knight Foundation.

As Miami was emerging from the Great Recession, Knight, under the leadership of former Miami program director Matt Haggman, began focusing its considerable resources on bolstering the local entrepreneurship ecosystem. By the time the pandemic hit, Miami-Dade had become home to a range of incubators, co-working spaces, mentorship programs, meet-ups, tech coding schools and the eMerge Americas conference.

Among the most successful products of those efforts: Miami-based REEF, which became Miami’s first $1 billion-valued “unicorn” in December 2018 with an investment from SoftBank.

At the time, it was an upstart parking app known as ParkJockey. Today the company has rebranded with a mission described on the REEF website as aiming to “transform underutilized urban spaces into neighborhood hubs that connect people to locally curated goods, services, and experiences.”

In practice, that means using parking lots to locate trailers in which chefs turn out food for delivery.

And that involves local hiring. The company currently has more than 325 job openings, said REEF co-founder and senior vice president Philippe Saint-Just. That’s on top of the 3,000 full-time and part-time roles in Miami-Dade Saint-Just says the company has created since its founding seven years ago.

REEF’s growth spurt stems from pandemic-induced reliance on e-commerce and delivery, and massive investments from international investment group SoftBank. In November, SoftBank co-led a second major investment in the firm to help it expand worldwide, while keeping it firmly in Miami.

That funding has helped REEF poach local executives from other firms like Royal Caribbean, McKinsey, and scooter company Lime.

“We’ve been able to really build a Miami business with Miami talent,” Saint-Just said.

Led by Marcelo Claure, SoftBank, too, is seizing the Miami moment to produce its own immediate results. In January, it announced a $100 million initiative to invest in Miami-based and Miami-bound tech startups. In a presentation announcing the initiative, Suarez himself acknowledged that it was the first real example amid the current wave of a firm announcing how it would directly boost the local economy.

SoftBank itself counted about 60 Miami-based employees as of October, or about 40% of its total U.S. workforce.

Among those who applied is Miami entrepreneur Tony Newell. For years, Newell has been working to get his city-engagement apps off the ground. The new spotlight being thrown on Miami, he said, has meant investment firms are finally picking up his calls and taking meetings.

“Before this happened, there was not even a chance to make our case,” he said. The momentum being generated has meant that, if the venture game used to be about who you know, now “you don’t need to know anybody.”

“Your stock as a Miami-based startup begins to rise simply because you’re here,” Newell said.

Seizing this moment

Even techies who work for firms based elsewhere are beginning to call Miami home.

As the pandemic advanced, working from home became the norm for many companies. While some have crept back into offices, many have not.

Steven Galanis, the CEO of Cameo, a platform that allows users to order up brief video messages from celebrities, believes digital companies have made a permanent shift.

Galanis moved to Miami at the end of last summer from Chicago, anticipating a brutal Midwestern COVID winter. Most Cameo employees remain in Chicago or Los Angeles.

“I believe the fully distributed workforce is the model of the future, as it offers unprecedented freedoms to both employers and employees,” Galanis said in an email through a Cameo spokesperson. “Employers who adopt the model can scout and hire the best talent in the world for a given position — and employees who work for remote companies can decouple their desired lifestyle from their desired occupation.”

And a desirable place like Miami stands to benefit more than most cities.

“When employees are free to work from anywhere with a strong Wi-Fi connection, it unlocks the potential to move to amazing hubs like Miami, where the quality of life is high, the cost of living is low, the culture is creative and diverse, the weather is amazing, the food is unbeatable, and so much more,” Galanis said.

David Goldberg, general partner at Alpaca Venture Capital, agrees.

His travels to Miami has made him keenly aware of past hype cycles. But the rise of remote working is likely to prove a game-changer.

“Now there is no need to make the sacrifice and move to Silicon Valley,” he said.

But while it is still very early — “bottom of the First, maybe top of the Second inning,” he said — he is not seeing as much deal activity as he would like by this point.

“People who got here four months ago need to make a bigger commitment like putting their kids in school — something long term,” he said.

Leigh-Ann Buchanan, a longtime Miami entrepreneurship leader, is looking for a different kind of commitment.

Most recently head of Venture Cafe Miami, Buchanan is now focusing on her community building group, aīre ventures, help create equitable and inclusive startup ecosystems across the country. She wants to collapse the boundaries between old and new entrants to the ecosystem. It’s the only way the community can move forward in a way that benefits all.

“It’s about making sure everybody pays more attention to how we’re investing time, treasure, and talent to address gaps,” she said.

Economic development executive Matt Haggman cautioned that South Florida must seize the moment — not just ride on its wings.

“There has to be an intentional building of the ecosystem, to make it of, by and for the entire community,” said Haggman, recently named executive vice president of Miami-Dade Beacon Council’s One Community, One Goal economic diversification initiative.

“We have to believe and live the idea that diversity is our great differentiator — that we’re built on inclusion, that innovation here is built on a diversity of people and ideas.”