Jeff Bonar could be considered the personification of South Florida’s future — or the future of the Internet itself. Or he could just be one of those people with a good idea that never catches on, living and working somewhere out on the periphery.
He spent most of last year creating a new wireless software program out of a spare bedroom in his home in Delray Beach, Florida, anticipating the need for venture capital, and hoping to change the world — though maybe not in that order. He shares these ambitions with a cadre of entrepreneurs in the region: technologists, visionaries, sun worshippers — people living the good life.
Bonar knows that his future is anything but assured, yet he believes that he’s in the right place at the right time: Palm Beach County, where elections stall and electronic startups can still bootstrap small fortunes out of great ideas. Consider what passes for a high-tech conference room in Florida on a November day: an umbrella table, a few chairs, a swimming pool, a blue sky, and a hummingbird hovering around the purple flowers by the pool (all in an affordable neighborhood). The temperature is well into the 80s. Inside, in a spare bedroom, Bonar’s wireless firm, Mobilelements Inc. (formerly JumpStart Wireless Corp.), was headquartered until a few months ago when the company moved to offices in the area.
Like Bonar, the entrepreneurial horde in this region believe that they are perfectly situated: They live at the epicenter of a new age in computing, one that will arrive when Web-based application services, fiber-optic networks, and wireless technology create universal connectivity with nearly total freedom of movement and virtually unlimited bandwidth. “The real wireless revolution hasn’t even begun,” says Bonar, 45. “It’s 5 to 10 years away. In the wireless world, we don’t even have the equivalent of DOS.”
Bonar earned his chops as a software wizard for IBM. Now a free agent, he is selling a monthly service to small businesses that uses cell phones to link frontline employees — maintenance workers, delivery people, anyone who travels a lot — to an Internet application that guides and tracks their workday. If Bonar is right, this strip of Atlantic coastline may become the very last Best Place to Live and Work — before wireless technology makes where you live and work irrelevant. The future may have its address here in South Florida.
Home of the Internet Future
Boca Raton, best known as a retirement community for New York snowbirds, is an unlikely place for the future of technology to take up residence. And yet, for more than two years, South Florida has been scrambling to position itself for explosive growth, hoping to emerge over the next decade as a major global center for wireless computing, software development, and Internet traffic. This positioning — driven mostly by a self-organizing volunteer movement of nearly 2,000 business leaders who have branded themselves and their region as the Internet Coast — is more than just a logo. A genuine potential for major growth has emerged, along with the fiber-optic infrastructure to make it possible. The three most notorious counties in Florida — Miami-Dade, Broward, and Palm Beach — have put aside partisanship and joined together to create what they hope will be the site of technology’s future.
The signs are already there. In 1995, almost single-handedly, Citrix Systems Inc. helped originate a new model for computing. Based in Fort Lauderdale, Citrix began selling software that paved the way for i-mode technology with Web-based application-service providers (ASPs). The company now has more than 100,000 customers, including 90% of the Fortune 500.
Qtera Corp., a small startup founded in Boca Raton in 1998, was sold to Nortel Networks for $3.25 billion before it ever earned a penny. Qtera owned an unmarketed technology that enabled fiber-optic transmissions to cross 2,500 miles without regeneration — nearly 10 times the range of previous fiber-optic signals.
In 1995, Scott Adams founded Hiway Technologies Inc. in his home in Boca Raton. In three years, it became one of the world’s largest Web-hosting companies, with 240 employees and 150,000 customers in 135 countries. In 1999, Adams sold the company to Verio Inc. He now runs Cenetec LLC, one of the most respected high-tech incubators in Florida.
And it’s not just hot startups. Motorola’s pager division is headquartered in Boynton Beach. Siemens has a large presence in the area. Hundreds of multinational companies have Latin American headquarters in South Florida, including AT&T Corp., LM Ericsson Ltd., Lucent Technologies, Microsoft, Nortel Networks, Qualcomm Inc., and Tellabs Inc.
All of this growth and development is in the service of a much larger strategic theater. In less than a year, South Florida will become one of the world’s five largest and most powerful Internet hubs, connecting four continents with massive fiber-optic installations. If everything develops as expected, South America will become the next China, the Internet Coast will become the next Hong Kong, and South Florida will be an Internet beehive, where North American organizations network themselves into the entire Southern Hemisphere — primarily South America, but also Africa and the Caribbean, as more and more of those populations go online.
Wiring the Internet Coast
It’s still early in the morning, but in the stretch limousine, there’s fresh ice, Perrier, soda, and rows of glasses stuffed with identically shaped paper NAPkins folded with origami delicacy. This isn’t just any limousine — it’s the Internet Coast limo. “We need to hurry,” Jeff Kline, 41, tells his driver. He turns to me: “I know this thing is a pig, but it enables me to work and stay productive when I’m on the move. I want to tell you how this all began.”
Now president and CEO of Accris Corp., a Web-development and data-storage company in Boca Raton, Kline has closely cropped hair, blue eyes, and a look of barely suppressed impatience over the rate at which the globe turns. Almost two years ago, he organized a dinner, inviting a few friends to talk about the future of South Florida. That’s where the Internet Coast movement was conceived.
At the time, Kline was suffering from an acute spell of nouveau-riche aimlessness. He’d built a small fortune by founding Ameritrend Corp., a company that provided one-stop solutions to businesses for all of their hardware and it needs: computers, networking, telephone systems, copiers. He sold the business to Danka Business Systems in 1996 and became independently wealthy.
Still in his mid-thirties, he retired. He kicked back, wore sweats, became a mildly obsessed day trader on his home computer, and began chauffeuring his kids to school and soccer games. As carpooler and scorekeeper, Kline got to know his children’s friends so well that when his son brought home a class picture, he had inside information on every face in every row.
“I named every single child and did a light bio on each one,” he says. “My wife said, ‘You have to get back to work.’ Another time, we were at the Atlanta airport. I saw this road warrior with his computer and little suitcase on wheels. My wife saw the look in my eyes as I was staring at the guy. She said, ‘What do you think?’ I said, ‘I really miss it.’ “
So in June 1998, he got back into the race by starting Accris Corp., but it wasn’t enough. As he focused on his own need to do something productive with the rest of his life, he realized that the world had changed in the course of only one year. New and strange things were happening all around him.
“I was stunned by what I saw,” he says. “I thought, We have to brand this. I organized a dinner with Scott Adams and a few others. We went down into the wine cellar of a local restaurant where they had a private table set up for us. We hashed out what we needed to do. We came up with a phrase: We’re here to enrich the soil for growth. I went home that night and went to bed. I woke up at 2 AM and started searching domain names. I sat there for two hours. I tried everything I could think of. My last effort was ‘Internet Coast.’ There was nothing for ‘.com.’ Nothing for ‘.net.’ Nothing for ‘.org.’ So I bought them all.”
At around the same time, Scott Adams, now 37, was undergoing a similar experience, having built Hiway Technologies from a meager $8,000 nest egg into one of the largest Web-hosting companies in the world. The business began almost by accident. Adams had wanted to start a simple Internet-service provider but couldn’t afford it, so he offered to manage other people’s Web sites. The business took off, and eventually he sold it for roughly $200 million to Verio. Like Kline, he realized that he wanted to help guide the region’s growth. With the help of four Florida-based venture-capital firms, he formed Cenetec to incubate the most promising high-tech startups in the region. Adams and Kline became the point men for the entire Internet Coast movement, which seemed to crystallize around them on its own.
It was when they met Larry Pelton that things started to gel. Pelton, 55, looks the part of the distinguished corporate executive, yet his ideas over the past decade have been nothing short of revolutionary. President of the Business Development Board of Palm Beach County, he had attempted to start an Internet-based movement exactly like the Internet Coast back in the early 1990s. But it was a classic case of a good idea a little too early for its time. He commissioned the Stanford Research Institute to study the South Florida economy. The studies identified six industries with the most potential for growth. The IT/communications cluster was among the most significant.
When Pelton met with Adams and Kline, he showed them his research. What had been nothing more than a brand name for the region began to emerge into something with numbers and addresses. Something was out there growing in obscurity — something that confirmed their intuition.
In September 1999, Adams and Kline asked M.J. Arts, president of the Greater Boca Raton Chamber of Commerce, to let them speak at the chamber’s annual membership retreat. The brand name, the whole idea of an Internet Coast movement open for free membership, electrified the crowd. Adams and Kline knew that they were onto something.
“Everybody was bubbling,” Kline says. “It was really the birth of the Internet Coast. That’s when it started coming together.”
At this point, Adams knew that he and Kline faced a large obstacle. His huge battery of Web servers at Hiway was constantly butting up against the expense and the lag time involved in the back haul needed to connect South Florida users to the Internet in Herndon, Virginia. (To understand back haul, imagine sending an email from 101 Main Street to 103 Main Street in Boca Raton and having it travel all the way to Virginia and back to connect with the network and return to its destination.) With telecommunications charges for every mile of back haul, distance and sluggish bandwidth between South Florida and Virginia’s network-access point (NAP) were adding cost to everything that Hiway did for its customers. Adams knew that the foundation of all future growth in South Florida depended on eliminating this back haul by building a nearby NAP.
Adams and Kline recruited Richard Paul-Hus, vice president of business development at Hypower Inc., a small construction-services firm in Fort Lauderdale that lays fiber-optic cable in the region. Deeply involved in Republican politics, Paul-Hus served on the finance committee for Governor Jeb Bush’s campaign and had clout with the governor’s IT task force. He helped set up a meeting with Bush and agreed to spearhead a committee devoted to getting a NAP built.
Paul-Hus was going through a sort of premature midlife crisis of his own, and he wasn’t even 30. He’d been getting restless, wondering if he should scrap his career as an electrical contractor and try something new — something involving maybe a small boat and as many swordfish as possible. Instead, he shifted his focus to laying fiber-optic cable, and suddenly, here was a movement that promised to spike demand for fiber-optic bandwidth in his market.
Like Adams and Kline, Paul-Hus, now 31, doesn’t look the part of a behind-the-scenes operator. There’s no razor-sharp edge underneath what he says and does. He isn’t rehearsed or scripted. He walks around at a southern pace in his dusty old Dr. Martens, with the latest Green Day CD in his car, making big things happen for the entire state — and unlike so many others, he’s done it all so far without taking a penny of profit for his own company.
Paul-Hus arranged for Kline to meet with Julia Johnson, who heads up IT Florida, the governor’s task force. “She just lit up,” Kline says. “She started to contribute ideas. She came down to Boca, and we explained the major engines behind the growth along the Internet Coast. She agreed that the governor should have his first cyber-town meeting here, so she set up a meeting with him.”
When he arrived, Bush was already fired up. It turned out that he had just read a Wall Street Journal article that morning about centers of high-tech innovation around the country. The story snubbed Florida.
“I hope you came here to talk to me about this,” Bush said, holding up the paper, before Adams and Kline could even take a seat.
As it turned out, it was exactly what they wanted to discuss.
“That article couldn’t have been better timed,” Kline says. “As we started talking, Bush got more excited. He had 30 minutes blocked out for our meeting. His assistant kept coming in and saying that he had to move on, but Bush kept saying no. He kept jumping out of his seat and going over to the bookshelf. He was excited. We were excited. He asked us if we needed money. We told him that we just needed his support. We asked him to write to all of the major telecommunications companies and tell them that Florida is serious about building a NAP. We told him that we needed this effort to be backed by corner-office or top-level support.”
“Done,” Bush said. “Email me a list of whom I need to talk to.”
“We sent him the phone numbers of all of the CEOs at the major telecoms,” Kline says. “He legitimized the whole thing.”
Almost immediately, the momentum snowballed. In February 2000, industry leaders had already convinced it Florida to do a small feasibility study on the need for a NAP with recommendations on tax incentives. In March, a meeting in Miami established a core of telecoms that would back the project and identified Orlando-based EPIK Communications Inc. — which lays fiber-optic cable and then leases connectivity where the market in Florida promises to grow — to do a more extensive feasibility study.
“We had a closed-door meeting with Internet Coast officers and the telecoms,” says Kline. “We started talking about the benefits, the South American market, Brazilian B2B. Everybody saw the upside. A year ago, why would you have put a NAP in South Florida? It’s out on the edge of the nation. Everyone was thinking national, not international. But from an international perspective, it’s perfect.”
What happened in that room was essentially a universal and simultaneous flash of insight in hundreds of brains at all of the largest telecommunications companies. It was a vision of immense profit. The southern tip of the state is already a hub for transoceanic fiber-optic cable — a globally centralized portal for all Internet traffic in Africa, the Caribbean, Latin America, North America, and southern Europe. Much of the infrastructure is already in place, and yet, until this meeting, the telecoms simply hadn’t recognized that a tier-one NAP in South Florida could link all of that fiber-optic cable — and most of North America — to an explosion of e-commerce in the Southern Hemisphere over the next decade.
The projections for Brazil alone are stunning. B2B in Brazil represented a $164 million market in 1999 and is expected to grow to $2.4 billion by 2003. Although Latin America had only 11 million Internet users online by the end of 1999, Jupiter Communications has projected that number to grow sixfold over the next five years to 67 million, a 30% compound annual growth rate — the fastest in the world. Others project 100 million users by then. With a similar wave of growth predicted for Africa in a few years, it isn’t hard to see why a gold rush of telecoms assembled so quickly to begin construction of the NAP — a $60 million project.
The telecommunications companies knew exactly how they would make money: by providing service to thousands of companies in South Florida, in addition to the lucrative service of back-hauling a geyser of Internet data flow from South America and back down again. At a cost of about $500,000, EPIK Communications drew up an inch-thick feasibility study — free of charge — and handed it over to the Internet Coast NAP subcommittee.
The study acted as the perfect catalyst for action. The telecommunications companies began signing up by the dozens to lease either space or services from the facility, and they formed a limited liability corporation last September. The organization works almost like a trade union, giving more than 70 telecoms a way to work together for equal access to the NAP. Cooperation has been the hallmark of the entire project.
“When we needed to select one site that all three counties could agree on, the Internet Coast committee called together county and city officials, state senators, and commissioners,” Kline says. “We gathered them into one room and let them talk it out. After only two hours, they agreed: The NAP needed to be built in Miami. They had never agreed on anything. Ever. Things just happen that are unexplainable. It’s a God thing.”
It was also a money thing. The state pledged a moratorium on sales tax for any and all supplies and materials purchased for the NAP construction. The City Commission of Miami promised to expedite the processing of permits. In fact, all permitting for the NAP was done in two weeks. Paul-Hus charged his Internet Coast committee to come up with a name for the facility, and the one that they chose — NAP of the Americas — has become the official name, with a logo already designed for the building’s facade. “Everything about this project is just falling out of the air into our laps,” Kline says. “It’s all just showing up like room service.”
The project is now nearly finished, with service set to begin by early summer. In the process, last year, BellSouth Corp. broke away from the group and began construction of a competitive virtual NAP called the Florida Multimedia Internet EXchange (MIX), with four major fiber-optic nodes throughout the Internet Coast. Kline and the others don’t regard this development as a threat; they see only benefits to the entire region. Competition would ensure the best possible service, the best possible fuel for growth.
“All the stars have lined up on this one,” Kline says.
And it’s a generosity thing. Kline donated the Internet Coast domain name, the logo, the trademark, and all of the branding work. It’s as if each person on the team could see what was coming and understood that the only way to maintain momentum was to give up on making money too soon — or risk hindering what would happen five years down the road.
The Boca Raton Boosters Club
Richard Ford lives in a single-story house with a swimming pool in a gated community that is only five minutes from his office by car. Dark-haired, youthful, and confident with a PhD in physics from Oxford University, Ford sits at the kitchen table with his wife, Sarah Gordon, a top authority on the psychology of people who write and unleash computer viruses. She’s blue-eyed, red-haired, and fair-skinned, and her name calls up pages of hits on a Google.com search.
These two technological geniuses are informal Boca boosters. And it isn’t a casual choice. They’ve given up a lot of money to live here. Gordon works as a senior research fellow at Symantec Corp. Ford works at Cenetec helping the accelerator pick the best applications from entrepreneurial, high-tech startups. They’re here for life.
“Quality of life is king for us,” says Ford, 32. “I came here from New York. I had an awesome job at the IBM T.J. Watson Research Center, but I wanted to move to South Florida. This is a great area. There are a lot of jobs, a lot of opportunities, a lot of startups. People shooting for something big. The work ethic is good but not ridiculous. There’s no one sleeping under a desk. A lot of folks who want to make money and have a quality of life live here. When I first came here a little over two years ago, all of the recruiters said that there was nothing going on. There are a ton of recruiters here now. Things have reached a critical mass. There are some absolutely top people in South Florida.”
“There’s an incredible amount of Internet access here,” Gordon adds. “What more could you want?”
The conversation turns into a South Florida love fest — an alternating round of praise about affordable housing, good schools, easy access to bandwidth, the nightlife in Miami, the inexpensive air-fares, and the availability of all major sports within an hour’s drive.
“The beach is gorgeous,” Gordon says. “I love the summers.”
“You get a three-bedroom in a gated community for $180,000,” Ford says. “We live slow but work fast. Why be an entrepreneur in the Valley? You burn your money in a quarter of the time. You compete for too few people. Real estate is incredibly expensive. The talent pool is here — if you can find it. It’s a matter of being around, having good connections. It’s networky.”
“I get offers all the time,” Gordon says. “I was offered a more than million-dollar signing bonus to leave Symantec. That’s a lot of money. I work at the Symantec research lab. I create testing criteria and methodologies for antiviruses. I discovered the first Word macrovirus and the first Excel macrovirus. I’m happy doing what I’m doing.”
“I get to work in a thrilling environment, not a breakneck environment,” Ford says. “I get stretched, but I don’t get broken.”
“This is the happiest I’ve ever seen you,” Gordon says. “Life here is as slow or as fast as you want it to be.”
Will It All Happen in Time?
But there is a cloud drifting across the clear Florida sky: Will money and manpower arrive in time to fuel growth now that the opportunity is at its greatest? Jeff Bonar may represent the region’s future, but Brett Cramer personifies the emerging crisis — a countervailing set of issues that could prevent much of that future from happening.
Cramer is president of TvTaxi.com Inc., a small company whose software allows companies to brand their streaming-media assets. The company is headquartered in Fort Lauderdale, around the corner from Citrix and next door to Microsoft’s Latin American headquarters. He knows that he has a valuable product. His software does everything that RealPlayer does — without all of the branding clutter. The problem: Time is running out for him to find seed money in Florida.
“I’ve been in computers for more than 15 years,” says Cramer, 36. “I started in my teens. I bought one of the first modems ever made: a Hayes 1200. This was around 1980, when I was in high school. The Web didn’t exist yet. Nobody knew that there was such a thing as the Internet. It was fun back then. With the bandwidth challenge and wireless, it’s back to being fun again. I’ve been incorporated for 16 years. I know how to make money.”
Cramer paces back and forth in a two-color conference room — a space that’s decorated with a lot of black accented with a sort of ectoplasm green — with a huge video monitor wired to a keyboard and a mouse on the conference-room table. He has a goatee, short black hair, and wire-rim glasses. In the conference room, there’s a whiteboard that Cramer plans to replace with a glass one because he just can’t get this one clean enough. The main room beyond the conference-room door is a jumble of equipment and a couple of workstations where young engineers do their jobs while listening to rapper Eminem.
Cramer is on a long, enthused rant. “We’ve created a media player that allows us to design the entire skin, the way it looks, according to the Web site’s own branding image,” he says. “You can’t control all of the antibranding messages that come with RealPlayer. With ours, the whole thing offers a seamless design that supports the sponsor’s own branding and design. Our player will read any kind of files, including RealPlayer files, but without all of the visual noise that you get with RealPlayer.”
Cramer’s business plan says that he needs $6 million for a network of six distribution centers around the country. But he can’t come up with even that.
“Bankers here don’t have a clue,” he explodes. “They are like, What’s a VC? There are no players here. Banks don’t get it. That has to change. It’s not ads, it’s not promotion that will make this region explode. Hello! You can’t get a bank loan! With workforce, it’s the same thing. A graphic designer here doesn’t know software. HTM what? Flash 2 what? I don’t have time to teach them. I’m going to visit San Jose and speak with a couple of real players. There’s a chance that I’ll decide to move to California.”
He isn’t nay-saying. This is a man who volunteered his company to design the current brochure promoting the Internet Coast. He’s fully behind the effort to enrich the soil for growth. But he just isn’t sure that he can stay in South Florida, with the current obstacles in place, and survive. Something has to be done fast to bring money and talent to the region, or his window of opportunity will close.
“Can I wait long enough?” he asks, more of himself than anyone. “I want the Internet Coast to be major-league successful. But I’m self-funded for now. We need VCs down here. We need headhunters. And we need them now.”
David Dorsey, a frequent Fast Company contributor, lives in Rochester, New York. Contact Jeff Bonar (email@example.com), Jeff Kline (firstname.lastname@example.org), or Scott Adams (email@example.com) by email.