6 Things That Keep Arizona From Becoming a Hot Tech Community

Yesterday I had lunch with a man I respect who implied that I was relentlessly and perhaps ridiculously optimistic about Phoenix. And yes, I have been Phoenix’s chief evangelist for the past 20 years, even while moving in and out of the Bay Area, but that doesn’t mean I don’t know what’s wrong.

I’m just reluctant to talk about it publicly, because “what you look upon grows.”

But here’s where I believe we are right now as an entrepreneurial community:

1) We are still pretty fragmented. That will never change, because of our geography. Even the people who are trying to get us together, like Bob LaLoggia(AppointmentPlus) and Brad Jannenga (Galvanize) have recognized that they have to start a CEO Roundtable in Scottsdale and another in Phoenix to get participation. Incubators and entrepreneur training programs also feel the need to minimize the geographic distance their cohorts have to drive. Phillip Blackerby and I have coached groups in Mesa, Scottsdale, and Phoenix just in the past year.

2) We are still pretty naive about what it takes to build a scalable business. I see this all the time. Many will start and few will finish. Some entrepreneurs, likeClate Mask and Bob Parsons, have built relatively big businesses in Phoenix, but as they scale they are occupied inside and their knowledge isn’t shared often enough. And when they exit, they make real estate investments.

3) The tech community does not communicate well enough with the non-technical business community. Tuft and Needle is our big exception to that. It has decided to play in the community big time and share its expertise. I’d like to see more of that from Carvana, or from Discount Tire, or from some of the other local businesses that may not know much about technology except how to call tech support but have generated millions and even billions for this community. The hospitals, for example, and the real estate developers.

When I was in business myself, the business leadership of the community included all kinds of industries. There are commonalities among businesses, and one of those is knowing how to scale successfully. Our tech entrepreneurs could learn from our non-tech entrepreneurs — if they even traveled in the same circles.

4) We still have significant capital constraints (probably as a result of the three above). If the tech and non-tech people knew each other better, there might be more angel investment, which I believe we sorely need. Not VC, because that can come from outside the area, and often does. But the kind of capital a business needs to get from a prototype to a product, to a business, to a real company. We can see from companies like Infusionsoft that late-stage capital, in the form of firms like Goldman Sachs, is willing to come here. But I remember the struggle Clate and his team had to get to this point.

5) We have some terrible community issues that historically stop us from succeeding on a global scale. Arizona is the Donald Trump of the U.S. Every time it gets on track, something from the legislature, such as SB1070, Joe Arpaio, or the lack of education funding erupts and derails our progress. No matter how you spin it, millennials leave this community faster than they come here. I see this brain drain every day, because I mentor and advise so many people. And then they end up in San Francisco or New York. That sucks.

6) We think we can fix everything with a new brand for the city, the state, or the community. As I’ve said many times before, a brand is a promise you make to a customer, and we can only make the promises we’re sure we can keep.

Francine Hardaway is a serial entrepreneur, brand strategist and CEO of Stealthmode Partners, an accelerator for entrepreneurs. Reach her at francine@stealthmode.com.