If You’re Building a Startup You Need to Move to Phoenix (Not Silicon Valley)

You could replace Phoenix in the article with a number of other cities, and indeed find plenty of unique benefits for each of those areas. With the exception of possibly New York or Honolulu, you're almost guaranteed to find it would be significantly cheaper in every way.

It would be good to start to see the tech industry / startup space start to spread out just a little bit more than it currently is.

As a dev here in Phx with several friends in different startups who are also programmers, I can confirm a lot of what the article says.

Next time you think of spinning up a company in silicon valley - try to remember there is likely someone else trying to build the exact same thing here and doing it with 2x the number of employees(because labor costs are less here) and an extra year worth of capitol because space is cheap.

Yes heat is tricky, but compared to the pain of failure or losing out to a better functioning competitor it seems a small price to pay.

Interesting. I've always seen Phoenix as a place where you spend most of your life indoors due to the heat. And it always has given me a "suburb" vibe when I've flown over it.

Haven't lived there though.

Not a bad idea but probably a tough sell in June. Forecast high temperature of 115F this week. Which translates to 125F+ at ground level in the parking lot where you have to walk to your car.

I visited the Scottsdale area on vacation a few months ago and despite the pleasant weather, the complete lack of pedestrians was amazing.

There were these nice, big sidewalks but NOBODY was using them. I walked a few miles a day and passed less than 10 total pedestrians. There were quite a few joggers and bicyclists though.

One passenger on a shared airport shuttle asked the driver to go out of his way to drop him off directly in front of his door to avoid having to walk about 50 feet.

I was just floored by the whole experience.

I guess if I were pitching PHX as a place to live, I'd say this: let's say you're 40, got a family, fighting it out in the Bay Area everyday for some little piece of the pie, a place like Phoenix could be a real shift of gears towards the better. This is an easy to place to live: commutes are fairly relaxed, real estate prices are low, everything is laid out in a nice big grid, so you're never really lost.

The obvious criticism of The Valley, as we like to call it, is that it's an undifferentiated sea of vitamin-c colored houses, that's totally true. Absolutely. And yeah, it's gonna be 108 here at the end of the week. Nothing but sunny days for the next three months.

The key to survival of an Arizona summer is to find a pool, grab a beer, and settle in.

Arizona is not without its obvious issues, but this place is steadily getting better. We've got a really strong outdoors community, tons of people up at dawn, running around in one of the really sizable parks which dot our metroplex. Our cultural scene has come together well after the launch of the Crescent Ballroom in Downtown PHX. We're centrally located with easy access to all the pleasures of the west, from the beaches at Rocky Point, Mexico and San Diego to the mountains in Colorado.

I'm living in Las Vegas right now, but Phoenix is one of my favorite cities. For me, the benefits include the low cost of living, the low stress traveling by car and public transportation, and a diverse nightlife.

I grew up in NJ and I prefer 110 with low humidity over 85 and high humidity. The summer heat is tough mid-day, but the mornings and nights are really nice. I lived in PHX the most recent winter and had no complaints, and fall and spring are beautiful.

I'm not convinced yet Phoenix is the best city for a startup, but it does depend on the type of business you're getting into. I think Phoenix is a great city if you want to grow your company and expand operations with a new office.

The demographic is unique in Phoenix, and it's still hard for me to understand why people think differently. I find it amazing how different the demographic is than Las Vegas, which is also a desert and only 4.5 hours away. I really like the suburbs of Las Vegas, but I would move to Phoenix again if I was involved in a meaningful project.

Keep in mind the law enforcement in Phoneix and Maricopa county make the Bay Area look like Holland.

Should try New Hampshire... just slightly north of Boston so you get a lot of the benefits of being adjacent to the city but a lot nicer place to settle down in a lot of ways (lower cost of living, newer and more affordable housing, etc). And it still very much has an innovation atmosphere. In fact, there is a talent pool of people who commute down to Boston every day that would love to shorten that commute.

Nashua and Manchester New Hampshire are roughly the same distance from Boston as Providence, Rhode Island (which also has a tech scene) but I'd rather live their than Rhode Island.

Water supply: what's the latest (?) Lake Mead still seems really low:

http://arachnoid.com/NaturalResources/

An AZCentral article, from August 2014, which lays out some good news/bad news points, including the 2014 NASA groundwater study:

http://www.azcentral.com/story/news/local/arizona/2014/08/11...

It might make sense if you are bootstrapping and Phoenix is a place you want to live. (It is too hot, too conservative, and too suburban for my taste)

But if you try to raise money, you suffer from a valuation penalty for not being in Silicon Valley - just from the fact that there will be fewer interested investors. That valuation penalty is probably going to far exceed the cost savings of being outside Silicon Valley.

The author spends quite a bit of time comparing the expenses, but never really mentions the pay. It's a better deal if the pay stays the same. This kind of comparison happens a lot, but I personally think it's a little faulty.

To demonstrate, let's do some math. If I make 60K after taxes in Phoenix and spend 18K/year on rent (1.5K * 12), and let's say another 12K on food and gas and miscellaneous expenses, then I have spent 30K and have 30K remaining. That's 50% of my income goes to expenses.

If I live in San Francisco and make 120K/year after taxes, and I spend 50% of my income on rent and food like I did in Phoenix, then I've both made 2x the Phoenix salary and I've spent 2x the Phoenix expenses. But what's left? Instead of 30K in savings, I have 60K in savings.

By living in SF, I've saved an additional 30K over what I would have saved in Phoenix. Now, I'm using nice round numbers here to make a point, but even if SF expenses were 2.5 or even 3x Phoenix expenses, I'd still come out ahead.

Sure, the psychological impact of paying less feels good, but unless you can keep your pay closer to SF pay while living in Phoenix, you're probably not going to come out ahead financially.

My two cents.

If you are okay with not hiring the best, then sure, move your startup to Phoenix.

Startups go to Silicon Valley and NYC because that's where the talent is. Talent goes there because that's where the startups are. Even if everything about Phoenix is objectively better, how are you going to overcome this trend?

Many of the same reasons he lists are why more startups are popping up in Texas too.

and, well, Omaha. :-)

It's no secret that once you get out of California, the business climate is a lot different.