The Silicon Valley Concept
by Clate Mask
Larry Sonsini once stated, “Silicon Valley is a concept, not a place,” and I’ve been thinking about this for a while now. Northern California has established itself as the leading hub for tech and innovation. The region has inspired cities to take on the concept to build up their own communities. It is as if every city wants to be portrayed as the “next Silicon [insert region].”
After all, it’s considered “the place to be” if you want to work for leading innovators, or pursue the modern-day American dream of building a tech startup. Their successful ecosystem has been designed and cultivated around their region’s strengths for decades. While they certainly serve as an inspiration to entrepreneurial communities worldwide, I believe success has no boundaries — and certainly no geographical limitations.
Fifteen years ago, Scott Martineau, Eric Martineau, and I started Infusionsoft in the “Valley of the Sun.” We worked our way up from a small office in Mesa to two custom outfitted office buildings in Chandler’s Price Corridor. Like most small business owners starting out, we struggled. But just like our city, we were determined, cautiously optimistic, and willing to adapt to the changes and challenges that came our way. Fast forward to 2016: Infusionsoft has become a $100 million venture-backed tech company with more than 600 employees, serving thousands of small businesses world-wide. And we made our success in Phoenix.
A hub of opportunity
Like entrepreneurs and small business owners, Phoenix is unique. Our market is distinct, as are our capabilities, opportunities, and challenges. We’re in the heart of the sixth most populous city in the United States, and although our city is relatively new compared to other regions, we have a rich and vibrant history. The city has undergone tremendous change, from our roots stemming in the “Five C’s” (Copper, Cattle, Citrus, Cotton, and Climate), to our reliance on tourism and the housing industry. We look entirely different today and are continuing to evolve at an even faster rate. The region is home to several leading universities comprised of a half million students at any given time, we have a thriving biomedical center, aerospace and aviation hubs, software tech corridors, a solid foundation in manufacturing and logistics, along with a thriving small business community. Time and time again, we’ve seen Phoenix embrace new developments with innovation and spirit. Our community is unique, adaptive, and resilient.
Yet, our success wasn’t accomplished in a silo. We had a lot of help from the community. Here are just a few things that are contributing to making Arizona such a great place to start and grow a business:
Government and financial backing
There is a reason why CNBC rated Arizona as one of America’s Top States for Business in 2015. Due to the pro-business environment, Arizona offers one of the lowest costs of doing business in the nation. The state offers numerous tax-friendly programs, such as no franchise tax, no business inventory tax, and no estate tax. In addition, the startup community has access to a range of programs, from Arizona Fast Grant, which provides technology commercialization assistance, to the Arizona Innovation Accelerator Fund, a loan program financing local small businesses and manufactures.
Angel Investment groups like Arizona Tech Investors and Desert Angels see potential in the city’s growing community of entrepreneurs, and continue to bankroll local startups. Most recently, Steve Case, founder and former CEO of AOL, announced he’s making a stop in Phoenix for his Rise of the Rest tour, which is focused on promoting the startup ecosystem in five cities outside Silicon Valley. Momentum is growing with numerous startups taking root and growing fast. In the past two years alone, we’ve seen numerous start-ups making headway. A few examples include Crowd Mics, who raised $1 million; MobileLogix received $2.2 million, IrisPR got $1 million, and Pure Chat with $1.55 million.
Infusionsoft’s growth would not be where it’s at today without the help of the Arizona community. The Arizona Angel Tax Credit program provided added incentive to investors who made capital investments in small businesses, which allowed us to raise our seed funding, and subsequent larger capital rounds.
Growing talent pool
According to Greater Phoenix Economic Council, “CNBC recently ranked Arizona No. 2 in the U.S. in terms of training, quality and availability of workers — while maintaining one of the lowest cost for labor in the nation.” In addition, the state’s projected employment growth is 85 percent — compared to the 20 percent national average.
Arizona is also quickly attracting outsiders into our thriving community. In the recent years, a flock of Silicon Valley companies have set up shop here, including Yelp, Apple, Uber, Lyft, Weebly, and more. Even Silicon Valley leaders are making their way to the desert. In the past year, Infusionsoft hired former Silicon Valley leaders, such as our newest vice president of marketing, Vidya Chadaga who came from Marketo, our chief finance officer, Curtis Smith who came from Keynote Systems, and our chief product officer, Terry Hicks who came from Intuit QuickBooks.
One of Phoenix’s advantages is in its convenience. From easy commutes, to very desirable living costs and real estate, people don’t need to sacrifice comfort to pursue their entrepreneurial ambitions. In 2014, Phoenix was ranked the eighth most affordable metro area for homebuyers. And more recently, Phoenix was ranked among the top cities for tech growth by commercial real estate firm, CBRE.
When we work together, we achieve great things
The larger Phoenix community is booming with organizations dedicated to growing the local economy. For one, its home to bedrock tech companies, such as Avnet, GoDaddy, LifeLock, and JDA Software. Fortune Magazine also recently labeled Phoenix as the country’s hottest new city for the automotive industry, with startups like Local Motors expanding rapidly. There are dozens of incubators, accelerators, and co-working spaces offering resources and mentorship to entrepreneurs. Seed Spot for example, is a local non-profit incubator focused on educating entrepreneurs who are creating solutions for social problems. It also happens to be one of the top 20 global accelerators in the world. Other well-known incubators and accelerators include, CO+Hoots, AZ TechCelerator, CEI, and Gangplank. In addition, Local First AZ has made Arizona home to the world’s largest coalition of locally owned business. Recently, nearly 700 entrepreneurs attended Startup Grind’s Summer Social in efforts to bring local communities together to celebrate Arizona’s entrepreneurship and innovation. What a view!
There is also a group of storytellers dedicated to sharing the message about Arizona’s startup and tech scene, such as the Phoenix Business Journal, Tech.co Phoenix, and TechAZ.org. Those are just a few examples of the many organizations and community supporters that exist today, and I believe we’ll be expecting even more development in the near future.
Entrepreneurs shape their respective communities, and Arizona has created their own definition of success. Phoenix is thriving because its people are dedicated to fostering its community and gives entrepreneurs and small business owners the opportunity to go out and build sustainable success. We’ve taken the Silicon Valley concept and made our community the go-to destination for those who want to choose to look at the bright side. If that’s you, I invite you to come join us because in my book, there’s no place better to start and grow a business.
CEO and Co-Founder
Clate has been educating and inspiring entrepreneurs for more than a decade, and is recognized by the small business community as a visionary leader. His passion for small business success stems from his personal experience taking Infusionsoft from a struggling startup to an eight-time Inc. 500/5000 winner.
Under Clate’s leadership, Infusionsoft has landed four rounds of venture capital including a $55 million Series D led by Bain Capital Ventures with contributions from prior investors, Signal Peak Ventures and Goldman Sachs. He was named an Ernst & Young Entrepreneur of the Year finalist, a Top 100 Small Business Influencer by Small Business Trends, and one of the 100 Most Intriguing Entrepreneurs of 2013 by Goldman Sachs. Clate is a national speaker on entrepreneurship and small business success, and co-author of the New York Times bestseller Conquer the Chaos: How to Grow a Successful Small Business Without Going Crazy.