For decades, large corporations looked to metro Phoenix to place back offices and call centers. While some might view this with a negative connotation, these expansions actually signaled focused attention on a market with labor availability, low regulation, and a pro-business climate. The outcome? The presence of leading companies such as Charles Schwab, Silicon Valley Bank, American Express, Discover, and Home Depot.
Soon, other companies took notice, and the tech scene started taking off. In 2010, Yelp expanded into Greater Phoenix, starting with plans for 200 employees in the Scottsdale Galleria. Today, more than 700 people are working in the Yelp offices, in addition to the 75 jobs created when Yelp’s food delivery service Eat24 expanded to the Scottsdale location to support Eat24’s growth across the United States.
Now, business, civic, and education leaders alike are collaborating to help turn Phoenix into a leading market not just for large corporations, but also tech companies. Driving across the region you can see signs for other major tech companies from Silicon Valley, including Weebly, Uber, Shutterfly, Prosper Marketplace, BoomTown, Gainsight, and DoubleDutch. These companies, and others like them, saw reprieve from the exorbitant costs of doing business in the Bay Area and the spiking labor competition, but were also drawn in by the value of running their expansion offices in Greater Phoenix.
To ensure that this momentum helps budding entrepreneurs, not just established tech companies, groups like #yesPHX and the StartupAZ Foundation have built an ecosystem to support up-and-coming companies. Marketing itself as “the world’s most generous community for entrepreneurs,” #yesPHX has created a repository of resources for aspiring entrepreneurs — from a directory of tech-related Slack channels, to a list of Arizona SaaS companies. StartupAZ Foundation was created as a way to provide connectivity and capital for growing technology companies in Greater Phoenix. An important component of StartupAZ is Founders Collective, which encourages founders and CEOs to provide mentorship and guidance to help young companies.
Greater Phoenix is home to 4.5 million people, with more than 22 cities and towns within its borders, and yet it is the closeness of the community that founders tout as one of the biggest attributes of the market. Billed as a place where you can roll up your sleeves and get to work on day one, metro Phoenix is a community built on connectivity. What really stands out to tech companies currently in the Bay Area, however, is the cost of living.
When Tuft & Needle cofounders Daehee Park and J.T. Marino were brainstorming for a new company, they were in Silicon Valley. But when they considered creating their company, they turned to Phoenix. Their experience of founding their Phoenix headquarters was so eye-opening that they set up a new website, PHXbuilt.com, and shared their first-hand experience of starting their company in the market. Billboards started popping up around town, stating “We Believe in Phoenix,” directing people to the PHXbuilt site, where other companies have shared their reasons for being in the region.
Another reason why companies are choosing this market is the amount of talent being produced by the higher education institutions in Arizona. For three years in a row, Arizona State University has been named the No. 1 most innovative university in the nation, beating out Stanford and MIT. With nearly 90,000 students, ASU is home to the Ira A. Fulton Schools of Engineering, which teaches more than 20,000 engineering students, further adding to the deep labor pool that exists in metro Phoenix.
ASU is not alone in producing talent for tech companies: Grand Canyon University has a strong cybersecurity program and engineering school, and Maricopa Community Colleges teach more than 260,000 students each year, who study a variety of disciplines attractive to tech companies. There has also been a surge of coding programs expanding or opening up, including Galvanize and Thinkful, in addition to the Phoenix Coding Academy, a local high school.
The market is fortunate to have leaders who are willing to work hard to build an ecosystem where business can thrive. It has never been about one person or one entity, but rather a cohort of local and regional leaders who are dedicated to supporting business — a lesson that other aspiring tech hubs should take to heart.
Partnerships have led to local businesses working with the community colleges to build specific programs around jobs needs; university presidents who partner with local high school districts on mentoring programs to drive graduation rates and college entrance; and mayors working with community leaders to build vibrant communities.
Greater Phoenix is no longer just a call center market. It is a region where companies benefit from immense talent, where entrepreneurs can plug in, and where individuals can become part of a community.
Chris Camacho is the president and CEO of the Greater Phoenix Economic Council, and is a member of the Economic Innovation Group Policy Council.