To those who know him, Sinjin Lee is one of Miami’s best at serving as a catalyst for start up success. 7 years ago, he served as a Go to Market consultant for some of the hottest high tech startups in Miami. He has helped build startups valued in the hundreds of millions, served as the Head of Strategy at a San Francisco startup that raised over $12 million in private capital, and was a Founding Member of Grooveshark, an online music streaming app that reached over 35 million users a month and a $300 million dollar valuation. Today is a rare opportunity for us to get his perspective on where Miami was, where it is, and the possibilities of where we can go.
From Jeb Bush Jr, Partner Jeb Bush and Associates:
“Sinjin is a fine lad and very well connected in the Bay Area! He has been a solid asset for business development and networking, helping Bush Ventures and other affiliates”
From Andres Barreto, Co Founder of Grooveshark:
“Sinjin is a connector, a startup igniter by focusing on what’s more important: people. He has a unique ability for putting together the right people that go on to build great companies. He connected me with my Co-Founders at Grooveshark and helped us navigate the Angel Investor scene in South Florida when building out Cloudomatic and Onswipe. He challenges and motivates aspiring entrepreneurs pushing them to go reach for their dreams, while at the same time providing useful connections that can help them through the process of building companies.”
From Luke Bearden, Co Founder of Awesome Highlighter, backed by Y Combinator:
“Sinjin is a tireless connector. By knowing him, you immediately expand your surface for opportunity. Through Sinjin, I met an Engineer who shared my passion for technology and entrepreneurship. Months later this person and I started a company that was accepted into Y Combinator.”
From Brian Bernstein, Managing Director of Harris Bernstein & Co.:
“Sinjin used to be at the center of the startup activity in Miami when I was getting started. Over the years he introduced me to several companies that I invested in, and have done very well. When Sinjin makes an introduction, I pay attention.”
MVCA: Hi Sinjin, tell us what the Miami startup scene was like when you first started?
Sinjin: About 7 years ago, I returned to Miami after helping to ignite the startup scene in Gainesville, FL. I was pleasantly surprised that there was a cohesive nucleus of creatives, entrepreneurs, and technologists that passionately cared about laying the foundation for a dynamic startup community. Some of my close friends suggested that I look into what was taking place at Refresh Miami and the Launch Pad. At that time, both groups were just beginning to extend their legs so to speak and feel out their higher purpose. I remember going to Refresh Events populated with about 10 to 12 technologists essentially just trading notes on best practices for software development. You could tell the ethos was right – the meetings generally involved focused technologists looking to make their proverbial dent in the world. The Launch Pad at that time was taking the lead on spearheading entrepreneurial activities in South Florida. It was actually through a start up event hosted by the Launch Pad that I was fortunate to meet Brian Bernstein, the Managing Director of MVCA.
MVCA: That’s really interesting, what were the biggest problems back then, what worked well?
Sinjin: I think if you look in front of you at any state of reality – there are always inherent problems that you need to address. After being in the Valley for the last 5 years I can tell you about 100 things that I thought were very inefficient, ineffective, and troubling. From the asymmetric nature of employee workforces ( African Americans make up less than 3 percent of the workforce at Facebook ), to the irrationally high costs of living ( $2600 a month rent for a 1 bedroom in a complex that looks like it was built in the 1980s ), to the utter one dimensionality of the Bay Area in general (Lots of Brogrammers – it’s very common to find companies staffed with 65 percent Male Engineers ) Silicon Valley has many things to work on.
Knowing that there is never a state of reality that is perfect – I think the Miami startup ecosystem 7 years ago was really just an organism trying to find its identity. There was no dedicated entity that could deploy a traditional Series A round of funding let alone a seed stage infrastructure that entrepreneurs could reliably count on as a funding source. There were a couple of “Angel Groups” in town but there cadence of investing was so slow that any Entrepreneur capable of building a worthwhile venture would logically just raise capital on Sand Hill Road.
To understand the traditional venture capital model one needs to understand how the industry was formed in the early 1970s by individuals likes Don Valentine of Sequoia Capital and Tom Perkins of Kleiner. The birth of the VC industry is a fascinating tale of how a handful of individuals created from scratch a method of investing in high risk/high reward ventures. What Silicon Valley had going for it was a close proximity to a world class research institute ( Stanford ) and its association with really the grandfathers of all tech giants Fairchild Semiconductor and Intel. From those early titans, talented folks naturally cycled out and started their own ventures ( Atari, Tandem, Apple, etc. ) helping to cement the Valley as the center of all high tech innovation.
MVCA: Now that your back, what has changed? Have we solved any problems?
Sinjin: So 5 years later a lot of things have changed. For starters, there are now a handful of funds that are trying to serve as a trusted source of early stage capital for Entrepreneurs. While I like the motive force of these groups I still think Miami is lacking in focus and clarity of purpose. Some of these players are behaving like incubators and others are projecting themselves to be giant sized funds. Further, if you actually take a close look at their portfolios you will see that a majority of their investments are OUTSIDE of Miami.
I think in life you have to model your behaviors from those that have experienced great success in the outcomes you seek. With that said, I feel that the funds in Miami should structure themselves like the seed and Series A funds in the Valley. It makes no sense to focus on Series B and Series C deals in South Florida when we have not really mastered the seed and Series A stages.
Some Series A funds that we should emulate are Homebrew, General Catalyst, and Lightspeed.
Those vehicles take small bets ( $500k to $2 million ) and provide high touch services to their Entrepreneurs. I think if you go the Incubator route DO NOT model yourself after Y Combinator.
YC in the early days was a beautiful business paradigm. It truly was a high touch service providing capital at the riskiest stages and offering mentoring in an intimate environment of only 5 to 10 startups in one class.
Now I feel like YC is nothing more than a factory that treats their entrepreneurs like lottery tickets. I don’t think they truly care about the entrepreneurs they back and instead they pool their resources for the two or three Belles of the Ball so to speak. That’s a big shame as every entrepreneur should be given their undivided attention and shown some “hustle” to remove obstacles that will naturally be in front of them.
It feels like a mechanized outfit that views you as a number rather than as a start up with a unique opportunity – very little personal interest in each team and much more concern for cold statistics and which two start ups are the next Airbnb for the current batch.
With regards to Miami, I think we now have many strong and vibrant resources for entrepreneurs to lean on. From We Work to CIC to Refresh Miami, South Florida now possesses many thriving communities where an entrepreneur can learn and perfect their business model.
MVCA: What are your observations on the scene here generally? What worked in the Bay Area that would work here? What works in the Bay that absolutely will work here? What won’t work here from Silicon Valley?
I like what I am seeing so far. The spirit and enthusiasm for entrepreneurship is 10x greater than 5 years ago. Miami has always been home to incredibly talented people ( Sheryl Sandberg, Jeff Bezos, etc. ) but our problem has been retaining them.
At the end of the day Miami is a world renowned city because of its dominance in finance, tourism, and hospitality. We now need to figure out how to bring high technology into the mix. I think the best route to achieve this goal is to somehow persuade our Fortune 1000 companies to come to the table. From Ryder to Carnival Cruise Lines to Burger King – I believe we need to bring our blue chip corporations into the dialogue. With their huge balance sheets and resources they can serve as both funders and acquirers of innovative ventures.
What the Valley has perfected is the Seed and Series A stages. There literally might be 100 different options to choose from for an entrepreneur. So literally if one investor passes on your deal you can go knock on 99 more doors.
That is the beauty of Silicon Valley – they posses an abundance of capital. And it is this abundance that makes the Valley the envy of the world.
In addition to the deep pockets, the Bay Area has perfected the rhythm and unwritten rules of how to fundraise and close a deal. The system has been codified in every way imaginable. From term sheets that have been triple washed by Serial Entrepreneurs to a network of Limited Partners and General Partners who all drink from the same watering hole – it is very difficult to take advantage of an entrepreneur in the Valley.
Terms, funding dynamics, and reputations are transparent, and if you studied Economics you know that the pie gets bigger with transparency and perfect information.
So if an LP or a GP screws over a fund or an entrepreneur in the Valley they ultimately will not sustain their careers.
As alluded to earlier, I think Miami should focus on creating strong Seed and Series A funding channels. We should create funds that take small bets ( $500k to $2 million ) and we need to master how to scale ventures ( find product market fit ), and then proceed to either perfecting a Series B model and/or learning how to build a predictable/methodical exit environment where entrepreneurs can feel confident that they will have a market to sell their venture for large returns.
The Valley is also expert at offering their entrepreneurs access to a plethora of educational events and workshops. In my quick review of some of the local coworking spots I observed that there was definitely no shortage of interesting startup oriented events to attend here in South Florida.
Events are important because they can serve as a platform to meet a future business partner or close a new business deal.
What we cannot import from the Valley are the 10 plus companies that employ over 20k people each. From Facebook, Google, Apple, Oracle, Salesforce, LinkedIn, Intel, etc. the Valley will always be the place where Giants are born and sustain themselves.
Once we accept that reality we can try and be our best selves and create a future that uniquely serves our own desires. There are obviously tradeoffs with everything in life.
Because Silicon Valley is home to so many Fortune 1000 companies they consequently experience issues with scarcity of housing ( Google engineers making six figures can be found living in two room apartments with their three children ). On top of that, there seems to be a superficial appreciation of anything else other than technology in the Valley. Aesthetics, an appreciation of architecture, and even good food are not the strong points of the Valley. In a weird way I think this is because the region is so heavily skewed towards Type A engineers. Picture an Engineer who codes 8 hours a day in a t-shirt and jeans – will they really be interested in appreciating modern design and architecture? Or enjoying some soul food?
Miami on the other hand is a bit more well balanced I think. It’s good to meet people NOT ONLY in technology. And let’s be honest – the food in Miami is just heavenly.
MVCA: Any other comments?
I believe if you keep your goals simple and clear that ultimately anything is achievable with time. With that said, I see it as realistic to state that Miami can create a vibrant Series A funding structure to offer its entrepreneurs within 5 years.