Step 1 government support
Earlier in the week I wrote about the key steps we needed to take in order to build a vibrant community down here. There are 6 key groups I feel we need support from in order to thrive as a community of technologists. They are: government, businesses, individuals, investors, other communities, and the media. Its easy to point fingers in this whole thing, and not offer up any solutions, so with your help, maybe we can collectively improve upon my proposals/ideas.
There are two types of tech communities, those that emerge naturally and those that are the product of outside stimuli. South Florida has a small tech community relative both to other hubs (such as Austin, Boston, New York, Seattle, and San Francisco) and to its own size (5.4M people in South Florida), but it has the potential to be a large community relative to other communities worldwide. South Florida has many of the necessary ingredients to foster a potentially world class community: good weather (most of the time), a number of colleges and universities (over 150,000 college students in South Florida), lots of commercial opportunities (Miami is the financial hub of Latin America), and a very hard working community (given the opportunities). What we’re missing is support from the government.
Paul Graham wrote a great piece “Can You Buy a Silicon Valley? Maybe” back in February, and he posited that it would cost you about a million bucks per company to fully seed, fund, and grow a company in a non-traditional tech hub. He suggested that for the price of a stadium (cough Marlins cough), a city could fund a thousand of these companies, which in turn would create substantially more jobs and economic growth in the area.
We don’t need, nor have the capacity for, a thousand companies to be funded, but could very much benefit from 30 or 50 new companies being sprouted here in South Florida. At that rate you’re talking about $50 Million (by Graham’s estimation), which pales in comparison to the $1 Billion for the Port of Miami tunnel or the $515 Million Marlins’ stadium in Little Havana. Tech in general can also be seen as a boost to all the other industries South Florida is famous for, tech improves them. Who says we here in South Florida can’t invent the next piece of technology that revolutionizes the cruise industry, or make our airports better, or our entertainment industries more profitable? These are just a few existing industries down here that currently have to look ELSEWHERE to facilitate their tech and IT needs. The only thing preventing that from happening is money.
So what are the key things we need from the government, in this case the cities, counties, and state of Florida?
- Investment funds (There is an intitiave with the florida growth fund, but its half-baked at best.)
Small scale grants .
$10k-25k to local businesses with guarantees of doubling their GRANTS(not loans) if they meet certain goals/requirements (business coaching, proper tax filing, local spending)
Small scale seed investments
These would be in the $25-100k range. Enough to start most businesses in tech (outside of biotech) and build a prototype. This cash helps the small tech business get to the series A stage.
Large scale growth funding
$100k-5M for existing businesses to grow beyond their current means. This could also be in the form of lines of credit to reduce the risk for the fund.
- Incubators/business centers
- Cheap or free space made available to entrepreneurs around the region.
- Central hubs for business training and support
- Offer continuing education and workshops
- Tax incentives
- On top of the fact we have no state income tax at the personal level, we need to further incentivize companies to either move here or stay here. There is an immediate 4% sales tax advantage in Florida over California and a 9% income tax difference as well.
- Local spending/hiring incentives
- If legal, it would seem to be a win-win if the governments can incentivize local companies to hire other local companies. (shop/spend local)
So how do we make any of this happen? We call our councilmen, our commissioners, our mayors, our congressmen, our senators, even the governor. We write to them. We write about what we want to do with the tax-payer dollars that are currently going to ridiculous things like building a stadium no one wants, or a tunnel no one needs.
Next up: How local businesses can take part in this movement.