How a tweet sparked a feud in Miami, pitting Silicon Valley tech transplants against the city's old guard

  • Silicon Valley transplants have loudly declared Miami the new hot spot of tech innovation. 
  • But Miami’s established tech leaders have taken issue with the newcomers’ “savior complex.”
  • Mayor Francis Suarez has been caught in the middle.
  • See more stories on Insider’s business page.

On April 25, Delian Asparouhov, a principal at Peter Thiel’s venture-capital firm Founders Fund, sent a tweet announcing the “unofficial start of the inaugural Miami Tech Week.”

The tweet went viral, prompting almost 1,000 tech-startup founders and investors to immediately descend upon the city for a week of Silicon Valley-style festivities. 

 

The problem was that he sent that tweet without realizing that Melissa Medina, a member of the established tech community, had been hosting an annual technology conference since 2014 called eMerge Americas that the locals had already dubbed “Miami Tech Week.” Medina serves as president of the annual conference.

The tweet surprised Medina and other members of the community. There was “zero coordination or communication for this year’s event,” said Medina, who was born and raised in Miami.

The tech world is looking at Miami as a possible next Silicon Valley — a place where exploding startups create wealthy founders who invest in more local startups and so on. But the tweet, and the underlying spat it caused, shows how newcomers can sow discord when they descend on a new city rather than prosperity.

Insider spent three days in Miami interviewing recent transplants as well as government officials. We also talked to nine members of the city’s established tech community to get a sense of why the tension exists and how the two groups might reconcile. 

‘OGs’ vs. the Valley

The city’s mayor, Francis Suarez, has found himself in the middle of the brewing feud.

On one side is Miami’s established tech community, or “the OGs,” as he refers to them, which includes the Knight Foundation, Refresh Miami and people like Softbank Chief Operating Officer Marcelo Claure, the serial entrepreneur Maurice Ferre Jr., e-Builder CEO Ron Antevy, the healthcare tycoon Mike Fernandez, and Manny Medina, Melissa’s father, who sold his company Terremark Worldwide to Verizon in 2011 and is considered one of the first huge tech successes in the city.

The mayor had learned a few days earlier what Asparouhov had planned to tweet and knew Medina wasn’t looped in.

“So there was a little disconnection, and I got in the middle of it, because I know them both well, and facilitated the connection,” Suarez told Insider. 

In the end, Suarez smoothed tensions enough to rally Medina and the existing community to organize other events around Asparouhov’s timeline. But the damage was done.

“We are excited by the new folks, but people are coming with this savior complex,” said Maria Derchi Russo, executive director of Refresh Miami, a nonprofit that seeks to connect Miami’s tech and startup communities. “You are not our saviors.”  

Russo said that while the entrenched community wants the help from the newcomers, it also wants courtesy and respect. “Please understand that we have laid the foundation and groundwork,” she said.

Asparouhov was thankful that the established players organized events for the week and explained that his tweet was fired off when he “didn’t know the local community at the time” because he had just moved in April, only weeks before the event.

Even so, he was unapologetic. “Why would I be obligated to coordinate with anyone for parties I had already planned and was announcing and not asking for anyone’s help or input?” he said.

Miami’s tech moment was ‘a decade in the making’

Miami’s tech scene is having a moment in the sun right now after a few key Silicon Valley investors and startup founders moved there and loudly declared it as the new hot spot.

One recent transplant, Sizhao Yang, the cocreator of Farmville, drove his family across the country in a Tesla three months ago. In a recent interview at the hip 1 Hotel, Yang described Miami as a “light on a hill” or a city that shines as an example of hope and inspiration. 

But as new arrivals like Yang flood the city, bitterness from the old guard grows.

“These folks are saying they ‘discovered’ Miami, which to us is frustrating,” said Brian Breslin, director of The Launch Pad, the entrepreneurship center at the University of Miami and the founder of Refresh Miami.

“It’s like Columbus coming and claiming he discovered America when there were natives that have been here for decades,” he said.

Matt Haggman, executive vice president of the Beacon Council, the economic-development organization for the metro area, agrees.

In 2012, Haggman created the Knight Foundation’s grant program, which has since deployed millions of dollars into the Miami tech ecosystem.

The way Haggman sees it, the friction between the OGs and the recent transplants is due to Silicon Valley’s ethos of asking for forgiveness instead of permission. But, he says, the OGs operate that way, too. So instead of melding, the two groups of highly ambitious people are building companies and relationships in their own lanes.

Another concern some locals have is the close relationship Suarez has developed with some of the new tech players in town. Speaking to Insider from City Hall, Suarez rattled off a long list of celebrity tech leaders he’s met in recent months. 

“If you would have told me in December that I was going to have a conversation with Elon Musk, eat lunch with Peter Thiel, become friends with Keith and meet Brian Armstrong pre-IPO and Fred and the Winklevoss twins, I would have told you, ‘There’s no way you can make this stuff up,'” Suarez said, referring to Rabois and Coinbase CEO Brian Armstrong and its cofounder Fred Ehrsam. 

In separate conversations with Insider, the new VCs in town touted the cozy relationship they have with the mayor as one of the biggest draws of relocating to the Sunshine State. 

When Founders Fund is ready to announce its next Series A funding for a Miami-based company in a few weeks, it plans to reveal the news through the mayor’s YouTube channel in a series it’s dubbed #CafecitoTalk instead of going through traditional media, Asparouhov said.

“I can’t even imagine a world where I would say we’re doing a fundraising announcement with Mayor London Breed,” he said, referring to the mayor of San Francisco.

There was also a dinner party at a private home in November where Abraham, Rabois, and Suarez discussed turning the Wynwood neighborhood into a tech hub over a plate of branzino paired with white wine.

Abraham’s VC firm, Atomic, and Thiel’s Founders Fund, where Rabois is a partner, signed leases for the Annex in Wynwood shortly after that dinner.

Suarez does not actually have the power as mayor to grant every wish dreamed up by the new tech arrivals. He can help to facilitate conversations, but, in Miami, the city manager is the one who controls the budget and day-to-day operations. 

Bringing the Valley’s problems with them

But it’s not just bruised egos driving the old guard’s concerns. Experts also warn that Miami’s economic-inequality problem is being exacerbated by the influx of tech arrivals.

“If the mayor is the cheerleader of tech, I’m the gatekeeper,” said Ken Russell, a member of Miami’s Board of Commissioners who chairs the tech equity task force. He describes the job as trying to get people who come for the postcard version of Miami to “stay for the challenge.” Russell announced Thursday that he’ll run for US Senate in hopes of defeating Republican Sen. Marco Rubio in 2022. 

Some of the hurdles he anticipates include affordable housing, environmental issues like rising sea levels, and transportation gridlocks that can surface when a tech company moves into a city with busloads of employees. 

In January, the hedge fund and major investor Blackstone signed a long-term lease in downtown Miami. The tech giants Microsoft and Apple are also reportedly eyeing real estate in the city. And Goldman Sachs is said to be making plans to move its asset-management arm there. 

“My goal is to make sure that we set up this ecosystem to anticipate those conflicts now. So let’s have our fights early, not down the road when it’s too late,” Russell said.

The city cannot afford to ignore such dangers. A 2019 report from the think tank Miami Urban Future Initiative found that Miami is the second-largest metro area with growing income stratification and a shrinking middle class.

“Miami is squeezed between an influx of the .0001% buying $20-50 million waterfront compounds and a huge low-paid service class of hospitality workers and a large concentration of economically disadvantaged neighborhoods,” Richard Florida, the author of the report wrote in an email. 

Parties and more tweets

Despite the clash, some of the old guard can see that, ultimately, the influx should be good for them.

The city has traditionally lacked the draw of celebrity founders like Facebook’s Mark Zuckerberg or Twitter’s Jack Dorsey. Instead, some of its most brilliant have left the city, like Amazon’s Jeff Bezos and Facebook’s Sheryl Sandberg. 

The city also lacks a great research university, like Stanford, which can serve as a feeder for talented entrepreneurs and engineers, often the catalyst for a top-tier startup ecosystem. 

So this crop of Valley tech folks have arrived to “pour gasoline on the fire,” said Alex de Carvalho, a digital marketer who has been in Miami for 16 years.

The new arrivals bring optimism that the city’s tech scene is here to stay, not just a pandemic trend, de Carvalho said. 

Even so, Suarez is worried about brokering the peace: “I get concerned sometimes because I want my Miami OGs to be a little more patient, and I want the new guys to be more embracing,” the mayor said.

There are some signs of integration. For instance, on Tuesday, Atomic hosted an open house to meet some of the local tech players.

More coordination is taking place for next year’s tech week event, too. Melissa Medina was added to the Miami Tech Week 2022 WhatsApp group. And her annual conference, eMerge Americas, announced it will reschedule its dates at the Miami Beach Convention Center from March to April next year to coincide with Founder Fund’s version of the new Miami Tech Week.

But all is not yet well between the factions. When announcing next year’s Miami Tech Week dates, Asparouhov tweeted, “We’ll do it even bigger and better, and yes it’ll be a vibe.” Two minutes later, Suarez retweeted it with an important clarification: “We are so excited to announce the dates for Miami Tech Week 2022 alongside @foundersfund and @eMergeAmericas.”

Medina is very clear that the OGs have no intention of being usurped.

“We have a very special ecosystem here, and the new transplants can play a vital role in building that,” Medina said. “But it does not mean we are trying to be the next Silicon Valley.”

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