Ingredients for Nurturing a Tech Ecosystem: A Spark, an Anchor, a Leader, and (Lots of) Patience
It’s been really interesting watching the debates on Twitter about the Silicon Valley exodus and the rise of Miami as a tech hub. Especially as a 305 native who remains a die hard Miami Heat fan despite living in NYC, I’m certainly rooting for my hometown to thrive. However, it’s not whether one city “wins” or another “loses,” but how this migration and remote work boom can lift up the entire country as tech’s importance in our economy is only going to increase more over time.
Something that I haven’t heard much about are the critical ingredients for nurturing and scaling a tech ecosystem. What does Miami (and any other city for that matter) need to do now and post-COVID to thrive as a tech hub?
At Work-Bench we’ve spent the last 7+ years building and investing in the NYC enterprise tech ecosystem brick by brick, hosting over 200+ events a year across meetups, dinners, roundtables, playbook lunches, and more, and investing in many local enterprise startups including Cockroach Labs, Socure, Catalyst, Spring Health, VTS, ArthurAI, FireHydrant, Alkymi, Backtrace, x.ai, RippleMatch, Datalogue, Tilt, and others. For a fun throwback on some of our early learnings, check out my co-founder Jess’ blog post on building community from back in 2015.
So I figured I’d share some lessons learned from our community-first approach.
For any fellow Dashboard Confessional fans, I modeled the ingredients after their 2003 album “A Mark, A Mission, A Brand, A Scar.” If you want to get your emo on, check out the album here.
The key ingredients for an ecosystem to thrive are: A Spark, An Anchor, A Leader, And (Lots of) Patience.
1. A Spark
NYC: In NYC, the key spark to launch our local enterprise tech ecosystem was the Financial Crisis. Until that point, Wall Street attracted lots of the area’s top tech talent because they could pay better than anyone and had interesting problems to solve across data, infrastructure, and more.
After the financial crisis though, banks never regained their stature to pay as well, and when paired with the rise of tech companies like Google, Twitter, and Facebook who opened meaningful offices in the area, tech was poised to thrive here.
Elsewhere: For this wave, the spark has clearly been COVID-19 and the ensuing remote work boom, which has led people to try out new cities, while being able to work from home.
Going Forward: This is certainly a catalyst for change, but the key question then becomes what can sustain these moves to keep transient travelers in these new cities and even encourage more groups to flock to the new potential hubs?
2. An Anchor
NYC: When we launched Work-Bench in 2013, we had 32,000 sq ft office which we used to serve as a home and hub for all things enterprise tech in NYC.
We hosted over 200+ meetups a year, including our own marquee event the NY Enterprise Tech Meetup, but also other groups’ events ranging topics from Sales to Customer Success to UX + Data to Information Security, and lots more.
Over each year we had thousands upon thousands of people attend events at our space, and the serendipitous connections that got made fueled co-founder relationships to launch companies, key executives to be hired, VC funding to help scale companies, and lots more. In addition to our space, there were several hubs where enterprise tech people often hung out and networked.
Elsewhere: Right now, in-person networking is tough. There’s no indoor meetups given social distancing rules, and in many places it’s hard to even do outdoor coffees if you’re in the middle of winter. Miami and Austin have benefits here because the great weather means you can meet people 1:1 or in small groups outdoors while remaining safe.
While I haven’t been the biggest fan of virtual conferences since I don’t think anyone has cracked the “hallway networking” aspect, something that has made virtual networking fun and relatively seamless is Upstream. Calling themselves “the best way to grow your professional network,” they offer a mobile app that lets you hear interesting speakers over a punchy 10–15 minute talk, and then network with 3 people at the event for 5 minutes each. The light-weight experience and rapid fire nature of it lets you block off a 30 minute block during your day to learn something new and meet some potentially relevant people.
While I certainly think in-person meetups will be back post-COVID, Upstream is an interesting approach to professional networking that I can see sticking around as a complement.
Going Forward: An important consideration for any tech ecosystem in the making is who will organize meetups, where will they be hosted so that enough critical mass can attend them, and what topics will be relevant for meetups to build a high quality attendee base that consistently attends the events? Geographic density of a tech region plays a part here, because the closer an event is to attend, the more likely people will consistently participate in them.
3. A Leader
NYC: We were very fortunate to have Mayor Bloomberg invest in making NYC a formidable tech hub by implementing policies that encouraged tech startups to locate in the area, championing tech education to improve technical skills of the city’s workforce, and appointing Rachel Haot as the city’s first Chief Digital Officer in January 2011.
As Haot shared with the New York Times in 2011, “This role is not just about a Twitter account. It’s about evolving government. It’s about doing a better and better job of serving New Yorkers.” She was a regular fixture at various tech events, and that momentum paired with participation from other NYC tech godfathers like Fred Wilson who generated significant buzz and momentum as activities scaled. Landing the Cornell Tech campus was another win by the Bloomberg administration, leading to significant job and startup creation, along with talent to feed the local startup ecosystem.
Elsewhere: Mayor Suarez appears to be the winner of this current migration. His initial “How can I help?” tweet in early December placed the spotlight squarely on Miami and its willingness to welcome techies with open arms and engage in an open manner.
As Suarez recently shared in a CNBC interview, “It gave me the impetus and energy and incentive to keep tweeting and connecting at a very high rate.” The article continued, saying that “in the month of December he had 27 million impressions on his account, and he’s seen a strong payoff from people coming over from the Bay Area and the East coast.”
This isn’t an overnight success though. As the article explains, “Suarez has been working on fomenting a tech boom in Miami for more than a decade, reasoning that it could bring higher-paying jobs for Miami residents, while also positioning the city at the forefront of innovation and the tech industry for years to come.”
Going Forward: While Miami certainly has a ways to go, there are great parallels between Mayor Suarez’s leadership and desire to build a tech hub, and what we went through in NYC a decade ago.
The question becomes what about everywhere else? I haven’t seen any buzz (or even formalized press releases if that’s what old school city officials prefer) from other cities vying to recruit tech talent. Government alone doesn’t make a tech ecosystem, but it certainly can help catalyze the zeitgeist of an early ecosystem by giving it a megaphone and promoting action.
4. Patience
NYC: Patience may be the hardest ingredient because it requires a combination of relentless hustle over a sustained time period. While a lot of activity began in the early 2010’s for enterprise tech to begin its rise in NYC (the NY Enterprise Tech Meetup for instance launched in January 2012, and we launched Work-Bench in July 2013), NYC enterprise tech arguably made it in 2019 when Datadog went public, making it the second local $10B+ infrastructure startup (along with MongoDB).
We began tracking funding activity for local enterprise startups by deal count and dollars raised in 2014. That year, NYC-based enterprise startups raised $577M over 55 deals. Fast forward to Q4 2020, and in that quarter alone NYC-based enterprise startups raised $1.5B over 51 deals. On a full year basis, that figure is $5.8B raised over 189 deals.
These stats haven’t been solely up and to the right throughout, but this growth has been incredible to experience. In this group we have 17 unicorns and plenty more growing companies behind them.
Elsewhere: The critical lesson from this NYC experience is that good things take time. Results won’t show up on the scoreboard immediately. During the building phase, critics may point out things beyond your control like “a lack of sufficient meaningful exits.” Ignore them. Focus on consistency.
Moving Forward: With the right leadership, and a combination of significant and sustained activities, other cities can build tech hubs, which will position their economies well for decades to come.
Bonus Ingredient: Culture
What can a city offer outside of work to make life great? As a Miami native I can tell you that the beaches, art, and nightlife are incredible. Living in New York the last 14 years, I wholeheartedly feel that we’re at the center of the world here, and can’t wait to take the subway to a Broadway show, museum, or dinner once COVID-19 is over.
Putting things like tax benefits or tech policies aside, this is an area where city officials can take leadership roles with minimal effort. Tout your hiking, skiing, beaches, BBQ’s or anything else that your city takes pride in. Make more people aware and use it as part of your sell.
n.b. For anyone going to Miami, one rule I’d like Mayor Suarez to enforce is that you need to root for the Miami Heat :)
Closing Thoughts
I think everyone would agree that the tech ecosystem as a whole will continue to benefit from more diverse representation, and as our country gets upskilled for the future, society at large will benefit. Hopefully this remote work boom accomplishes both.
An ingredient some may think I left off the list is having a critical mass of local investors. If the pandemic has shown anything, it’s that VCs are getting more and more comfortable funding startups outside of their backyard.
While local VCs will always have an edge to find the best startups in their neighborhood early, I don’t view it as a necessary condition for an ecosystem to flourish. More startup success will beget more local financing, and that positive feedback loop will reinforce continued ecosystem growth.
Cheers to an exciting decade of change!
Thanks to Kira Colburn for her helpful edits on this post!
