Miami’s tech start-ups are moving ahead fast. The buzz is loud. The parties are great. The meetups and the cheers are loud. The local crowd is very entrepreneurial. But … the number of growing companies (and even financed deals) is still low.
Between Kairos, Modernizing Medicine, Care Cloud and a few others you are actually left with a handful of real players in the whole South Florida market. And they are not known nationally either. Over the last couple of weeks I spoke with people who have big time connections on Silicon Valley and New York and nobody heard of any of these companies. And these are people like BVP and Andreeseen Horowitz.
The reality is that, outside of Miami, Miami is still seen as an exotic destination for beach side vacations and pina colada. “You guys have technology in Miami?” asked me one of my connections from Columbia University. “Wow! I did not know that.”
Why do we still have that national image despite all the eMerge Americas kinds of things and despite the presence of some large Corporations in the South FL markets (such as Citrix, Verio, Avocent and Terremark)?
Why are we still seen as a young, up-and-going geography for technology and how can we make it better?
And, more important, what can we do to attract investors?
Well, I surely don’t have a recipe but I’d say keep at it and grow bigger. Show some success stories. Build up the next Uber. And, very important, start attracting more and more people with tech acumen and business experience- as they are easier to get funded.
Now here are a few words of advice for start-ups. We literally have dozens of them going through our desks every month. Out of which a very tiny fraction ever get to the point to start something (let aside to grow).
1. Put together a real team
The experience of the founders matters. A lot. Despite popular belief and famous garage start-ups stories, investors value experience in the field and expertise. So have at least a business/sales person and a tech founder (or tech company partner) that you start with. Two competent sales persons with track records in that industry are better. Three are even better. Etc.
The first thing I am going to look at when I am evaluating your start-up is your resume and your LinkedIn profile as a Founder. That tells a lot. Same for your co-founder(s).
Do not show up right out of College with nobody on your side. You will stand no chance. I know. So long with Zuck’s and Bill’s stories.
2. Self finance first
Investors like to see that you have skin in the game. If you did not invest some of your own money how do you want a stranger to trust you with his/her money? So before you ask anybody for money, use some of yours. It does not have to be a lot. You can start as lean as $20k. But if you have nothing, it’s better to get a job first and save some money to invest.
3. Develop fast a lean functional product, even if not perfect
No matter what your product is (it can be even idiotic at a glance), finish a first version of it fast and with your own money. Without a minimally marketable product you are almost impossible to be financed in Miami.
Of course there are exceptions from this rule. If you are a PhD and just cured cancer (you wish you did that) and your product needs one year of development and you have a solid business plan and letters from immediate major buyers that’s something else. But I am not talking about that. Here I am talking the general population that works on relatively average complex products or services.
4. Work your butt and get paying customers early
Forget all the theories about business models, markets, segmentation and other stuff. Just work your butt to get paying customers early in the process. Never under-estimate how many people could actually be very interested in your product and service. Just work hard, give them a lot of incentives and sign them in. They are gold for your business.
See, investors in Miami are conservative. I may state the obvious here, but Miami is neither Silicon Valley nor New York. Miami has a reputation of flaky businesses and not a great national image. Here you have to have a working product (even if not perfect or full feature set but definitely up and running) and paying customers. Here you have to show that your company is actually worth something before you pitch more investors for money.
5. And only after that pitch to investors
When you have all that you can go ahead and pitch to investors. Carefully choose them because not every investor will be a fit with what you do but definitely go full blast if you got to that point.
Make it a great day!