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Boca Raton Magazine - November/December 2000

We all know that a good product is just a good product, but a superb product is a good product with excellent marketing behind it.

That's what ran through Boca businessman Jeff Kline's mind in 1999 before embarking on the "Internet Coast" endeavor. Having sold his high-tech company in 1998, Kline "retired" for a year so he could spend some time with his family and catch up on personal matters.

Upon his return to work in 1999, he opened up a new business in Boca, specializing in Internet services, which he named Accris. Naturally, one of the first things Kline did was check up on his old contacts and business colleagues. "I was stuck with how much Internet growth had occurred in a period of one year," Kline said, "and coming from a marketing background, I saw the need to brand South Florida for what it was becoming - a major hub of Internet companies." Sitting in front of his computer at 2 a.m. that night, Kline decided to research what names he could come up with to capture the amazing movement, which was reshaping South Florida's corporate world. "There was already a score of Silicon Valley wannabes, such as Silicon Alley and Silicon Prairie. I didn't want to be another one of those," he said. "I realized that unlike Silicon Valley, the growth in South Florida was not driven by the development of silicon products and microprocessor chips. It was spurred on by the Internet revolution."

To his surprise, InternetCoast.com was available as a domain name and as a trademark, and so Kline grabbed it at once. "The name was very fitting. It denotes both our technology and location." The following day, over lunch at Arturo's, Kline presented his idea to two friends who also own high-tech firms, Scott Adams and Jeff Rubenstein. "We were actually in the wine cellar when I finished my 'presentation', and they both liked the concept very much." Adams got Kline in touch with Boca Raton Chamber of Commerce's Mike Arts, who asked the two to make a presentation to tri-county officials and business leaders at the chamber's retreat.

"The Boca Chamber was really instrumental at the beginning. The chamber's endorsement was vital to the project," said Kline. "Following that first meeting, Scott and I started delivering speeches at other meetings and events, and everyone embraced the idea," said Kline. "Last November, we met with Governor Jeb Bush and Florida's IT Task Force Chair Julia Johnson, and both liked the idea tremendously. Mr. Bush is very passionate about the project, since no taxpayer dollars are used, yet it helps develop Florida's economy." Kline emphasized that the Internet Coast is not an organization, but merely a group of business leaders who volunteer their time to push for a mutual cause. It is in the best interests of each high-tech company owner in the area to help spread the word, he said, since the project will only help draw more qualified workers and venture capital to the area. "There are no county interests or special interests involved. The project doesn't cater to any specific county or city. If anything, the project actually unites the three counties under one cause." Adams added that "the unspoken rule of the project, laid out from the onset, was that no one person or business will profit directly from the Internet Coast but everyone will indirectly benefit from it in the long run."

A web site was launched, www.internetcoast.com, with the purpose of raising the national and international awareness of South Florida as a sophisticated, high-profile Internet hub. The site contains hundreds of pages of information and dozens of useful links to business organizations and high-tech companies in South Florida's Internet Coast. For example, to businessmen who wish to start an Internet company in the area, the site offers resources for finding venture capital, employees, office quarters and avenues for marketing. And to high-tech workers in- and out-of-state, the site offers resources to relocate to South Florida, including help in finding a job, a house, and other community services. The Internet Coast now boasts close to 500 Internet, high-tech and information-technology companies, including more than 200 dot-coms. "This project is about enriching South Florida's soil," Kline said, "but instead of growing tomatoes or oranges, we cultivate multi-million dollar Internet companies."

Crunching the numbers
Becoming a top high-technology center is not going to come by easily. First, as usual, there is the money issue. Florida ranks 6th in technology industry employment, 9th in growth in the number of high-tech employees, but only 24th in percent change in high technology employment and 26th in number of high tech workers per thousand private sector workers. The state ranked 8th in total high tech payrolls, but only 32nd in average wages paid, and 35th in both numeric and percent change in the average annual wage. Compared with the average high-tech wage in the state of Washington: $81,400, California: $62,800, Massachusetts: $59,622, and Texas: $53,778, Florida musters an annual average of only $42,984. Even though it is considerably above Florida's private sector average wage of just over $26,000 annually, it is still way below the wages paid in the other leading regions. "South Florida, being largely a service-sector economy, barely provides livable salaries for the average resident," says Carolyn Dekle, Executive Director of the South Florida Regional Planning Council. "We need to change that. The business community needs to recognize that in order to attract a pool of highly-trained workers, they must pay competitive wages."

While other factors, such as no state income tax and Florida's lower cost of living, add an "invisible" wage increase, the savings do not outweigh the twenty, fifty and even hundred percent difference between Florida's and other top regions' pay ranges. Next, comes another issue the Internet Coast has to face: the image that is already ingrained in the heads of most Americans -- Florida is where tourists go. "The biggest obstacle has been in attracting the focus of the prospective employment base," says Mike Arts of the Boca Chamber of Commerce. "So far the focus has been into better-known high-tech regions such as San Francisco, California; Atlanta, Georgia; Austin, Texas. A lot of people still think of Florida as mainly a tourism attraction, and they don't realize how much progress has been made here in the past few years."

While that is changing, it is not changing enough. "Florida's technology industry is overshadowed by the state's image as a tourist mecca," the Florida IT Task Force report reads. "When people think of Florida they think of sun, surf, beaches, and tourist attractions, not e-commerce, high-tech businesses, venture capital, and information technology."

Where is South Florida's Stanford?
Silicon Valley's prosperity was without a doubt directly proportional to the results obtained in Stanford University's laboratories. Innovation was the name of the game, and new technology was the lifeblood of the Valley's economy. University personnel worked closely with businesses on new products, and in some cases even formed their own companies for that end.

Unfortunately, none of South Florida's universities has taken on the role until recently. "There will be a major announcement soon regarding the Internet Coast initiative at the FAU College of Business, which I am not allowed to divulge at this time," Dr. Bruce Mallen, Dean of College of Business at FAU said in a hush-hush tone. "But let's just say we intend to be the 'Stanford' in South Florida." According to Mallen, FAU intends on significantly beefing up its College of Business, already the largest in the area, with additional Internet and IT programs as well as business and e-commerce programs for Internet executives.

The university also plans on increasing the number of high-tech research projects it is involved in. "We want to not only provide the qualified graduates, but to help with building the economic infrastructure by hosting conferences, running symposiums, and offering scholarships for continuing education," Mallen said. "The new economy is here and it is really changing the business world in the order of magnitude of the discovery of electricity," he said. "In the FAU College of Business, [the Internet Coast] is taking the top priority." Mallen admits lower levels of education in South Florida schools do pose a problem, though. "K-12 is a major obstacle to be addressed and fixed quickly," he said. "A skilled workforce is the number one need of Internet and Internet-related companies. Proper education at all levels is crucial. If students do not get thorough education at lower levels, we will not be able to produce enough graduates to satisfy the growing demands of local employers."

State Representative Curt Levine (District 89) agrees. "Education is the biggest obstacle right now," he said. Not only is it important for the industry in terms of training skilled workers locally, but also "if highly-trained personnel wanted to move here, the school system would be the first thing they would look at. Skilled workers want good education for their children." Teachers are not paid well, he added, and Florida remains below the national average in terms of teacher wages. Also "reducing class sizes is being worked on, but it's a major missing piece." South Florida academic resources seem to still have a long way to go before it can be said that sufficient intellectual support for the Internet Coast is produced on a regular basis.

Always look on the bright side
On the other side of the spectrum, South Florida has made tremendous strides toward achieving the Internet Coast vision, plus it has a few additional cards up its sleeves. One of those cards has to do with South Florida's proximity to and tight ties with Latin America. As Adams put it in, "Why do so many Latin Americans like Miami? Because it is so close to the United States."

With Miami being the gateway to Latin America, the Internet Coast's diversity becomes one of its most powerful weapons, he said. In fact, the Florida IT Task Force reported it is concerned with positioning Florida as the natural gateway to Latin American markets for e-commerce, data transmission, etc., and recommended that an in-depth study be funded and conducted to assess current infrastructure capabilities for supporting Florida's Latin American connections, and for devising strategies and polices for best positioning the state in this regard. "Miami is not only the gateway to South America, but it is also a safe haven for South American businesses from countries such as Columbia, who feel personally threatened in their country and seek a safer base from which to conduct operations," said Levine. "Florida welcomes them." A

nother wild card, which may well prove an ace, is the South Florida NAP Initiative. A NAP is a Network Access Point. NAPs are giant Internet interconnectors, which serve as the backbone for the existence of the Internet. These are mammoth-servers onto which the thousands of individual Internet servers log on. There are currently only five NAPs in the nation: Chicago, NY, San Francisco, Washington D.C. and the Big East, and their presence in an area makes the area much more appealing for Internet companies due to financial and speed considerations. Internet Coast businesses are in the process of formulating a plan to have a NAP built in South Florida, and should they succeed, it will put the Internet Coast on the map in a big way, attracting even more Internet companies and greatly benefiting the ones already here.

And above all, the fact that the Internet Coast is the most organized, cohesive "Silicon Valley" movement compared to other regions may be the best card when all is said and done. Most of the Silicon Forests, Hills and Plains are behind South Florida when it comes to the initiative and involvement of its business leaders. "I think the real leadership [in creating the Internet Coast] is coming and will come from the business community rather than the state or county officials," said Dekle. "The people who work in the industry every day, who don't see county lines and are not concerned with party issues, these are the ones who will look at the whole area and develop the industry in the direction they see fit." The administration will definitely play a role, she said, but it will be more a "get out of the way and let the industry grow" type of help. "Most of these companies don't build smoke stacks, operate truck fleets or rely on train shipment," she said. "A lot of issues we in the government deal with regularly are insignificant in this scenario. We have been learning a lot, as other agencies have, trying to catch up with the technology sector. This is a completely new economy."

What the future holds
Who will win the "What wants to be the next Silicon Valley?" contest is hard to predict. Actually there may not be a sole winner. The Internet economy is zooming along so fast and expanding so quickly, that it probably will require scores of Silicon Valleys around the nation to sustain the growth. Some regions will catch the new economy wave, while others will be left behind. And with the Internet Coast project, the NAP initiative, university programs, and the backing of ready and willing local and state officials, South Florida will hopefully be surfing in style into the new millennium.

Sources: Bureau of Labor Statistics