It is important that we face the brutal facts about Arizona’s startup community. Before you think I am being negative please read Harsh Reality Needed.
- The majority of ideas being presented here are shitty. There I said it. I let out the thing investors here are too polite to say. Stuff doesn’t get funded mostly because it is shit. Sure you see lots of this everywhere, but we don’t make up for it in volume like San Francisco and New York do. We solve this by presenting a lot more ideas and being honest with people when the ideas they share suck. They will either improve the idea or give up. You need not be “mean” in order to deliver this message.
- We lack a strong pool of mentors/business professionals with a track record of bringing product to market. Let’s face it we don’t have a plethora of successful stories with exits that leave us with trail blazers to help the next generation out. Most of the money here was made with scams, real estate or in many cases a combination of the two. We need to see if we can import talent here or use technology to get access to quality people. This is an uphill battle.
- Seed funding is a joke. We still have the mentality that something shouldn’t get funded until it’s already making money. The seed money that does get put into a small number of companies is lacking the second stage gateway to turn to these investments into significant success stories. We solve this by building secondary funding relationships and getting more people to engage in real seed funding. In other words pray to the God of your choice.
- We are technically poor. The local universities and employers are not challenging young engineers in meaningful ways. We are not attracting or retaining the brightest engineering talent. Technically we are rather weak. To fix this we need to build a place worthy of people staying or moving to and having more employers that push the boundaries of their people’s skill level.
I am sure that many of you blind optimists think that I am being hopeless or am flat out wrong because you can find an exception or two in these examples. However, I encourage that we have a dialog about how to start fixing these very real problems. It starts with us. The beauty of Arizona is that we can be part of shaping it’s future much more so than any other significantly growing area.
Excellent summary. Does GP have brown-bag type meetings to discuss solutions? I’d love to attend.
I strongly disagree with point #4. There is a massive amount of technical talent here. Just the semiconductor companies alone (notably Freescale and On, but there are dozens) employ tens of thousands of gifted engineers and programmers. Monster is here. Ebay is here. Paypal is here.
What you mean when you say “young engineers” is “engineers with no life and no job that I can rope in to this wish-upon-a-star plan I have,” in my opinion. While that is certainly true, that is most likely because of your point #1, not for any lack of talent. A good idea gets good people. A couple cocktail parties will see to that. And while a lot of the existing talent here may have been immunized to dreaming by the corporate mentality of the large companies here, the simple fact of the matter is that a start-up is a corporation looking for a mentality. If you’re being snobby about the help, you’ve got it too.
Thanks for this. I’ve found myself having versions of this conversation with different Tucsonans over the last 5 months.
Chris,
There are not ten of thousands of “gifted” engineers and programmers here. There are barely tens of thousands of engineers TOTAL. Probably less than 5% of them are exceptional. That makes for a really small number comparatively. Monster, Ebay and Paypal do not have their best engineering talent here. Mostly they are glorified call centers and support centers. Intel does have some great engineers, but I was not making “absolutes”. I even said that exceptions would be found to each point, but those exceptions are not the rule.
Ask anyone hiring technical talent in Arizona (not just startups) what they think of the current pool of available talent. It will not be a fun conversation. When I say “young” talent, I am not talking physical age. I am talking more about enthusiasm and relevance. We have good people here, but nearly enough to have a quality startup environment.
Derek–you make some valid points. It is, indeed, an uphill battle. And while I frequently find myself wishing for deeper pools of technical talent, I must say that we are finding some excellent people to propel Infusionsoft in our mission. We’ve added about 10 technical roles in 2011, all of which are turning out to be very good hires.
Having said that, I totally agree with your point/counterpoint with Chris Randall that the talented technical people need to have entrepreneurial enthusiasm in order to contribute to a great start-up environment in Arizona.
Regarding this last point–I don’t think the problem is lousy technical talent. I think the problem is two fold. First, the technical talent hasn’t seen entreprenurship work. Even Chris speaks of start-ups as “wish-upon-a-star plans.” Are there a bunch of bad ideas? Yes! But we all know that only 1 or 2 in 10 plans work. There aren’t ENOUGH ideas. As a result, the local tech talent hasn’t participated in serious value creation from start-up to exit, the kind of value creation that makes engineers millionaires, the kind of value creation that ignites imagination, breeds capitalism and encourages people to innovate. In the absence of these successful, local exits our technical talent migrates to the Ons and Intels of the world. Yawn. And if the young techies DO have some fire to create, they frequently head out of town to greener pastures of entrepreneurship.
We need exciting, value-creating, innovative companies in Arizona that speak to ambitious, entrepreneurial engineers. And we need more successful exits that demonstrate how worthwhile it is to take a risk and start an innovative company that makes a ton of money for its shareholders. Call it greed if you want, but it freakin’ works. It creates jobs. It creates smarts. It creates guts. And it creates game-changing solutions to tricky problems. And when those game-changing companies experience a successful exit, several more companies are spawned by the entrpreneurs who participated in the exit.
The second problem is our vast Valley. A great start-up community needs to be tightly bounded. Our sprawling geography in the Valley is a big challenge for us. It dillutes the talent, the energy and the opportunity. We need tighter proximity to attract and retain the best talent and opportunities that will create game changing companies.
I’ve seen these two problems play out very differently in Phoenix and Utah over the past decade. About 12 years ago, I worked for a start-up in Orem, Utah. We were housed on the old Word Perfect campus. We were one of a handful of interesting local tech companies at the time. Today, up and down the I-15 corridor that connects the Provo-Orem area to Salt Lake, there are dozens, maybe hundreds of small technology companies that are changing the game. And they are tightly bounded, geographically. It’s not Silicon Valley, but the place is littered with companies full of hungry entrepreneurs who have seen or experienced a lot of money made through stock options. There are several active VC firms and a bunch of active angel investors. The universities are pumping out good technical talent. And that talent is jumpint into the start-up pool instead of going to Novell.
12 years ago, the tech scene in Phoenix and Utah Valley were similar. Today, Utah has jumped far ahead. We can sit back and lament that fact, or we can create a better future in 12 years for our Valley. We need people to make a bunch of money with stock options. And we need to establish a tech hub, geographically, here in a specific part of the Valley.
One last point. Yes, the seed funding and early-stage venture capital market in Phoenix is abysmal. We can and must do better.
I’m doing all I can to make Infusionsoft a game-changer that opens entrepreneurs’ eyes to the opportunities that ARE possible here in Phoenix. And I’m trying to find ways to make it easier for entrepreneurs to get capital. Because I believe that capital and proximity will attract and breed the right entrepreneurial technical talent.
Sorry for the book. You struck a chord.
Thanks!
All valid points, but people need leaders, too. While Derek and Jade have invested a ton of time and money into Gangplank, we’re still missing that next level of people who actually do the work.
I saw few regular Gangplankers at Startup Weekend and even fewer owners from anchor companies within the space. Same thing for most brown bags (or any non workday event at GP) where most of the regulars leave.
For any of this to work, we need the space/resources AND the leaders. That may mean the leaders will have to spend more time looking for the right people to delegate responsibilities and/or install people in positions where they can make a difference.
Gangplank has planted a ton of seeds, but we (I’m included in this too) are doing a really shitty job making sure the soil is watered and the weeds are removed.
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