The Phoenix Startup Scene is Booming

The Phoenix Startup Scene is Booming

I have been part of the Phoenix startup and software scene for 20 years.

I see ten times more activity in startups and fast-growth software companies in Phoenix than there was just five years ago.

As an executive leader, I have helped two Phoenix software companies grow from startup or early stage to over $100 million in revenues (both SalesLogix and Infusionsoft). It can be done here. And it’s always hard.

I have attended countless entrepreneur meetups, startup events and tech conferences in Arizona through the years. I have personally mentored hundreds of ambitious founders and savvy software business owners in Phoenix.

There is an explosion of ambitious entrepreneurial energy every day in the Phoenix area.

The Phoenix startup community is exploding

It’s obvious to me there is something seriously happening now in Phoenix. It’s only a matter of time before more local startups grow up, more smart people start things here, more local investment capital is engaged and more Silicon Valley leaders move to Arizona.

It’s not obvious to everyone, which means it’s just a little early. And not all figured out yet. Entrepreneurs understand this and thrive in creating something before it is obvious to everyone else. We figure things out.

Phoenix has been real estate town for the last 30 years. Thousands of successful land developers and real estate investors looked at plots of desert and bet that one day there would be houses, roads, schools and parks. They made it up, made it happen and now it’s real.

The same thing is happening in startup tech in Phoenix, especially in the software business. (See the list of over 300 Arizona software companies and view them on a map.) This is what the future looks when it starts.

What do I see that others don’t see?

1) An explosion of Phoenix Startup events

Phoenix Startup Week doubled in size since last year’s inaugural event, with over 7,500 attendees and 175 expert speakers. There were crowds, connection and electricity. Every week there are meetups, conferences and events for startup founders that draw big crowds and lots of new faces. Other events like Infusionsoft’s small business conference ICON draw thousands of eager entrepreneurs to Phoenix.

Startup dreams are the beginning of the hard work and time it takes to build real companies. True, there are dreamers whose startup won’t survive, but there are many real startup businesses in Arizona with capable founders that are worthy of growth and investment.

2) New startup incubators, accelerators and coworking spaces every month

There are now dozens of incubators and workspaces across the Phoenix area that help startups and early stage growth companies. Startup founders can get mentorship, cheap office space and meet other people like them. I hear about new Arizona incubators and workspaces every week. Incubators are finding plenty of startup founders and experienced mentors.

3) Phoenix startup leaders are connecting and contributing

The Phoenix startup community is organizing itself with groups like TeamAZ  and the newly launched StartupAZ Foundation. Experienced entrepreneurs are working together and generously contributing to the startup ecosystem through mentorship, investment and connections. That’s a big change from the disconnected tech “community” of ten years ago.

There are many local leaders who tireless contributed to promote Phoenix startups and create the current wave we are riding. They have each have contributed time, money, reputation and resources to the cause. And our entrepreneur-turned-governor Doug Ducey and ASU president Michael Crow are tireless supporters of Arizona as an entrepreneurship center.

4) Arizona angel and seed investors are picking up steam

There are active local angel investor groups and regional venture capital firms looking for fast-growth Arizona firms to invest in. There isn’t a big VC fund based in Arizona yet, and most local angel investors are not tech savvy, but there are many people working to solve those problems and get in early. The annual Venture Madness conference brings a crowd of entrepreneurs and investors together with $100,000 in grants for the pitch competition winners.

5) There is talent in Phoenix and more on the way

There are more talented engineers, developers, marketers, sales leaders, execs and finance leaders than ever in the Valley. GM just hired 250 engineers in Chandler. Infusionsoft has grown to 600 employees and is still growing. True, there are not as many engineers as in Silicon Valley, but who would want to compete with Google and Facebook for talent and face that cost of living?  Every month I talk smart people in Silicon Valley who are trying to move to Arizona and are searching for opportunities here.

6) Startup communities in every city

Every city in metro Phoenix has an active startup center that is buzzing with creative energy – Central Phoenix, Downtown Phoenix, Chandler, Tempe, Scottsdale have it going on. Next up are Mesa, Glendale and Gilbert. The most amazing transformation is the city of Phoenix itself, whose urban core now attracts the young creative class and is becoming a hive for fast-growing software startups.

There isn’t just one place in Phoenix where young tech companies thrive and that’s just fine. With so much connection happening here, it’s not as important that all entrepreneurs work in the same neighborhood.

7) World class companies started here

There are plenty of local Arizona startups that have grown up to become world-class growth companies that win on the global stage. The fast growers include Infusionsoft, Facility Source, WebPT and Tuft & Needle. They are following in the footsteps of larger tech leaders in Arizona like GoDaddy, LifeLock, Insight, JDA Software that grew big, employ thousands, went public and paid back their early investors handsomely.

8) Government support

Government support for growing startups in the Phoenix area has never been higher. The Arizona Commerce Authority runs the semiannual Arizona Innovation Challenge startup competition and has identified over 1,000 Phoenix startups and has provided a catalyst for their exposure to investors, employees and advisors. Local mayors are showing up at startup events to sell young entrepreneurs on the benefits of starting up in their town.

9)  Silicon Valley is setting up shop here

Over a dozen software companies from Silicon Valley are setting up offices here to expand their operations, including Paypal, Weebly and Zenefits. Right now Phoenix provides cheaper call center operations for these companies, but thousands of these local employees are getting a first taste of fast-growth tech and learning that big companies don’t have it all figured out.

10)  ASU is an entrepreneurial university

ASU in Tempe is one of the world’s largest universities (yes, that is happening here in Arizona). There are legions of talented and eager graduates looking to make their mark and stay in Arizona. ASU supports entrepreneurship as on of its strategic priorities. The ASU SkySong in Scottsdale is a expanding hive of startup and entrepreneurial activity with thousands of daily workers. New buildings appear every year on the SkySong campus to house the expanding need for startup space and meeting facilities.

It’s really happening. It’s just early.

There is clearly something happening here that can’t be stopped.

In a few years, we’ll see even more smart starters, A-level talent, creative communities, bigger success stories and active local investment in Arizona. It’s happening now. This is what early looks like before it’s obvious to everyone.

It’s ironic to me that some naysayers look around and say, “It can’t be done here” when entrepreneurship itself is about creating something that isn’t obvious yet.

The paint isn’t even dry on our young state and many people say, “It is what it is and it won’t change.”

Don’t they realize this state was made up by pioneering people like themselves that made it up and then made it true? It was just hard and not obvious to the rest of the world yet.

Sounds like an opportunity to me. Arizona startup is happening.

We are creating a new future for Arizona. Spread the word.

[Photo credit: Thomas Hawthorne, Berry Good Photography]

4 Comments on “The Phoenix Startup Scene is Booming

  1. Loved your keynote talk at start up week! Being a part of this community from the beginning is something I can’t wait to tell my kids and future transplants about in the years to come.

    Thanks for sharing your thoughts!

    • Thanks for being part of Phoenix Startup Week last week for doing cool things in Arizona.

  2. Greg, I love your sentiment and your commentary and I agree with most everything you highlight. But, from the perspective of the angel community, the government is NOT supporting the local or statewide ecosystem. The Az Angel Tax Credits ran out in June 2015 and the state legislature is refusing to take action to remedy the situation. This is already having a deleterious effect on the early stage investment activity coming from Desert Angels. The investment landscape playing field has been leveled to the disadvantage of Arizona. In this age of online equity-based platforms, it is too easy for investment dollars to flow out of the state when there is no incentive to keep those dollars in the state.

    • I agree with you. Despite the support from the Arizona Commerce Authority and local mayors in many areas, the Arizona Angel Tax Credit has not been revived by the state legislature. It was a mainstay of the early days of angel investing in Arizona for sure. Not having it around is slowing down angel activity when we we need it most.

      Curtis, thanks for everything you do for the angel investor community in Arizona and for the startup community in Tucson.