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Miami looks beyond beaches, bikinis to tech

Monday - 5/5/2014, 7:34pm  ET

In this Thursday, April 10, 2014 photo, Stonly Baptiste, left, and Michelle Dow share a glass of wine as they work on their computers at The LAB Miami, a new tech focused collaborative space in the Wynwood Arts District in Miami. Famed for its beaches, cruises and cafecitos, South Florida is now angling to become one of the nation’s next tech hot spots by leveraging its role as the gateway to Latin America and luring northern entrepreneurs with cheap living costs and lots of sun. (AP Photo/Wilfredo Lee)

Associated Press

MIAMI (AP) -- Famed for its beaches, cruises and cafecitos, South Florida is now angling to become one of the nation's next tech hot spots by leveraging its role as the gateway to Latin America and luring northern entrepreneurs with cheap living costs and lots of sun.

The region in and around Miami has long pinned its financial fortunes on real estate and banking, but a combination of factors -- the recent recession that shook those economic drivers coupled with an increase in cloud computing, the rapid growth of mobile devices in Latin America, and the area's vast health care industry -- now have civic leaders and local entrepreneurs making a push to diversify into the tech industry.

"We're not trying to replicate what other tech hubs are doing. We want to complement them," said Daniel Lafuente, a 26-year-old Miami native who co-founded the new, open workspace and tech training center Lab Miami. "Miami is a place that provides its own benefits: lower costs of living, no income taxes, the proximity to Latin America and the beach."

Two years ago, the idea of a tech hub in Miami seemed a longshot to Lafuente and his partner Wifredo Fernandez. The recent University of Pennsylvania graduates had returned to their hometown but found few innovative business opportunities. So they created their own in a small room in Miami's gritty Wynwood Arts District, a place where freelance web designers and startup entrepreneurs rent space, meet and collaborate.

Much has changed in just a short time. The nonprofit John S. and James L. Knight Foundation is helping spearhead efforts to draw the tech industry to Miami, committing $6 million in the past 18 month to an array of projects.

"In Miami there are enormous disconnects," Knight Foundation Program Director Matt Haggman said. "If you are an entrepreneur and you want to connect with an investor, where do you go? To date it's been you're really on your own."

On a recent evening inside the mural-splashed former warehouse that now houses Lab Miami, more than 100 young professionals, tech geeks and artists roamed between a 3D printer demo on one side and a bilingual review of the latest fashion industry apps on the other. Nearby, civic-minded coders huddled, tapping out ways to improve city services.

Meanwhile, across Miami's Biscayne Bay, the Venezuelan founder of the tech-based, English-language school OpenEnglish feted the region's top 100 tech movers at his poolside South Beach condo.

Last week, Microsoft announced the opening of its first U.S.-based technology innovation center at the new downtown entrepreneurial training center and startup Venture Hive.

"We look at Miami as a great hub for technology from the Southern U.S. perspective," said a Microsoft vice president, Sanket Akerkar. "It's a great destination in and of itself, and then you add that it's a gateway to Latin America."

Manny Medina, the former owner of a data services company he sold to Verizon for $1.4 billion in 2012, is behind the tech conference eMerge Americas that kicked off Friday, mixing investors and players such as IBM and Accenture with startups from across the region and Latin America, while throwing in local color in the form of rapper and entrepreneur Pitbull.

The global nonprofit Endeavor has also become a catalyst. Endeavor has long matched small companies looking to scale with its network of investors and Fortune 500 mentors in the developing world. The group founded by New York venture capitalist-turned Miami transplant Peter Kellner opened its first U.S. office here last fall, also thanks in part to $2 million from Knight.

Michael McCord, co-founder of the online training platform LearnerNation, is being vetted by Endeavor.

"There's a lot of money down here in Miami, but there's not a culture of investing in tech," McCord said. He believes the nonprofit's presence and rigorous screening will improve investor confidence.

Coming to Miami was about finding the right fit, says Andres Moreno, head of OpenEnglish. Moreno launched his company in 2007 in Caracas to provide live, one-on-one English classes with native speakers via computer but says few Latin Americans were willing to invest. So he headed to Silicon Valley, sleeping months on a friend's outdoor balcony until he came away with $2 million. But by then he'd decided to move to Miami.

Silicon investors were focused on the U.S. Hispanic market, he said. They couldn't understand why Venezuelan or Colombian professionals would pay $80 a month for classes when they could download cheap language apps.

"That works in the U.S. where people want to learn some vocabulary," he said. "In Latin America where people really want to learn to speak, you can't do that without a person on the other end."

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