New York, San Francisco or Miami? Where to Set Up Shop if You’re a Latin American Entrepreneur
by Patrick McGinnis
What do you do if you’re a tech entrepreneur from Latin America and you’re looking to expand your presence to the United States? Over the last five years, I’ve seen the number of Latin American entrepreneurs setting up shop in the United States grow from a small trickle to a relative flood. I’ve also seen entrepreneurs jump around in search of the perfect home. Maybe an entrepreneur starts in Miami, but soon finds herself pulling up roots and setting up shop in San Francisco or New York. Conversely, also I’ve seen a growing number of entrepreneurs leave the mean streets of NYC or the pricey streets of SF for Miami. This begs the question: If you’re expanding or moving your company to Yanquilandia from Latin America, where should you go?
Let me start off with a caveat. You could go to Detroit, Atlanta, Boston, Los Angeles, or even Austin. All of those cities (as well as many more that I haven’t listed) are viable markets for startups. Thanks to the globalization of talent, capital, and ideas, Silicon Valley is no longer the end all be all that it once was. Still, while you could go to all of those places, most entrepreneurs from Latin America usually opt for either San Francisco, Miami, or New York. Each of these cities offers a particular combination of business opportunities, funding sources, talent pools, and lifestyle advantages that sets them far above other potential options.
Let’s take a look at each of these choices:
While even just a few years ago, the natural move would have been the West Coast, New York, it seems, has arrived. Google bought a couple of the largest office buildings in Manhattan, Facebook has expanded aggressively, and the Flatiron neighborhood of the city has become a bona fide tech hub. Plus, Cornell University just opened a science-focused graduate school on Roosevelt Island. As these important corporate and educational assets fall into place, investors have joined the fray. According to pitchbook, in 2016, New York accounted for 16.25% of VC investment, ranking second to SF with around 33.2%.
Those of us who choose to work and live in New York City aren’t surprised by the city’s ascendance as a technology hub. New York has tremendous diversity, a large population, and significant wealth. It’s a multi-industry town that has long been the (or at least “a”) global hub for all things fashion, media, advertising, and finance. It’s compact and easy to get around and it never stops. Let’s not forget the old adage, “If I can make it there, I’ll make it anywhere.” It’s true. The BS-factor is lower in NYC than just about anywhere else in the world.
Still, Silicon Valley remains the undisputed center of early stage technology and venture capital in the United States. As noted, San Francisco and Silicon accounted for over 33% of venture capital dollars in 2017. For these reasons, it’s not surprising that when MercadoLibre, Latin America’s dominant ecommerce platform, decided to re-open an office in the States (they once had a presence in Miami), they chose to do so in Silicon Valley. Lots of other large technology companies from Latin America have taken similar steps to open in SF as a way to keep a finger on the pulse of innovation and then bring new ideas back home. Plus, acceleration programs such as 500 Startups and Y-Combinator often draw some of the strongest startups from Latin America to Silicon Valley. If these companies thrive, hire, and raise capital on the West Coast, they are bound to set down roots there for the long run. Finally, SF is the place for the next generation of technology Whether you’re into AI or cryptocurrencies, when it comes to the newest wave of innovation (whether it will ultimately be viable or not), the most action is found on the West Coast.
Finally, there is Miami. Although the city ranked 11th in terms of venture capital funding in 2017, with 1.37% of capital commitments, it’s critical not to underestimate its vibrancy. Once upon a time, Miami’s Silicon Beach was the headquarters for all of the tech companies in Latin America. In the early 2000’s Lincoln Road was dotted by the headquarters MercadoLibre and Terra as well as long gone companies like Patagon, SportsYa!, Yupi, and StarMedia. Then, when the tech market crashed in 2000, all of these companies either closed down entirely or closed down their US offices. Now, almost two decades later, Miami is back, and in a much more sustainable fashion. Global entrepreneurship champion Endeavor opened an office in the city in 2013. Just five years later, it has backed 16 high-growth companies that have generated over $130 million in revenue and have created over 1,600 jobs. Meanwhile, South Florida’s Magic Leap has become the hot stealth startup of the moment, having raised several billions of dollars for its augmented reality headset. Moreover, a number of Latin American startups have chosen the city due to its relatively inexpensive lifestyle and its relative proximity their home nations.
In the end, choosing between New York, SF, and Miami depends on the needs of the company and the objectives of the founders and employees. If you’re looking for cutting edge, deep technology, super deep pockets, and a lifestyle that looks a lot like HBO’s Silicon Valley, then head west. If you’re focused on finance, fashion, or media, and you just cannot deal with life in SF (everything closes at 9 pm!) then come to NYC. Finally, if you value proximity to Latin America, a deep pool of Spanish and Portuguese speakers, connectivity to Latin-focused businesses, and a sunny and affordable lifestyle, head to Miami. Or better yet, get so successful that you don’t have to choose….just open an office in all three and then set your sights on Detroit, Boston, or even Austin.