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Bay Area Startups Find Low-Cost Outposts in Arizona

31 points| adrianmacneil | 9 years ago |nytimes.com | reply

85 comments

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[+] pyre|9 years ago|reply
To all of the start-ups that want to base themselves out of Phoenix:

How do you plan on wooing applicants that may fall victim to racial profiling because they are within 100 miles of the border, or that might end up in one of Sheriff Joe's tent camps just due to being accused of something (or looking at one of his deputies the wrong way).

Do you not think that this limits your talent pool because many people of different ethnicities might not want to take the risk of relocating to such a hostile environment for them?

[+] leereeves|9 years ago|reply
I've heard conservatives say similar things about the Bay Area, where they might be assaulted for supporting Trump and would probably be arrested for owning a gun.

And to focus on something that will affect everyone, not partisan fears, in Phoenix mere mortals can actually afford to buy a home.

[+] btkramer9|9 years ago|reply
This is grossly out of proportion with reality. I've lived in Arizona my entire life with a diverse group of friends and colleagues. Practically no one, except for those that are illegal, worry about this.
[+] ladytron|9 years ago|reply
Downtown/Central Phoenix is one of the most diverse cities I have encountered. We have many large refugee communities (I think due to the ease of inclusion, Phoenix being a city of transplants), a very large Hispanic community, and people that move here from literally every part of the country. Central Phoenix, again, is a very unique place compared to the mostly very small towns in the rest of the state. It is similar to how any large urban center is much more diverse than some of the smaller communities a few hours away.
[+] muzz|9 years ago|reply
Off-topic, but in a similar vein of things that might be unexpected to someone from the Bay Area. Quote from the article: "along with some local touches, like a “No Weapons” sign to remind employees that open-carry laws do not extend onto company property."
[+] ladytron|9 years ago|reply
Phoenix is actually several hours from the border. We host refugee centers all over the city and refugees from many countries settle all over Phoenix. We have a large Middle Eastern population, as well as larger groups from Somalia, Sudan, Bosnia, and Serbia as some examples. We have a large Hispanic and Native American population. There are many people of different ethnicities living in the Central Downtown Phoenix area where startups are locating.
[+] mce1123|9 years ago|reply
Yes, and CA schools will force our sons to wear dresses and then die of measles from some anti-vaxxer's kids. The media loves to inflate stereotypes, doesn't it?
[+] rrdharan|9 years ago|reply
I generally avoid travelling to Arizona because I'm likely to be racially profiled and I don't feel like carrying my proof of residency around with me at all times. I've had plenty enough of that in my life already and don't feel the need to reward a state that seems to actively encourage it with my tax dollars.
[+] kondor6c|9 years ago|reply
Do you mean a drivers license? That should be sufficient. But you should go, if you get racially profiled, you have a lawsuit!
[+] mce1123|9 years ago|reply
This is not the experience for AZ residents. Check it out and you'll find a welcoming and supportive community.
[+] zghst|9 years ago|reply
This is not true at all. This is a false, hysterical fear, I assure you Arizona is safe for everyone
[+] mark_l_watson|9 years ago|reply
I have lived in the mountains, about a two hour drive north of Phoenix, for 18 years. I love it here. My wife and I used to live near the beach in San Diego and the overcrowding and traffic made us want to leave. There is a lot to be said for low cost of living and beautiful and low population areas of the country. Travel is easy enough since I take a shuttle to the airport, I can work in transit.

We lived in Mountain View in 2013 when I consulted at Google, and I admit that was fun living there for a while, but life is very good in inexpensive low population areas. BTW, the mountains in Central Arizona are significantly cooler than Phoenix and we get a little snow in the winter which is fun.

[+] downut|9 years ago|reply
I live in Prescott. The weather is fantastic, all four seasons. Weatherunderground zip 86301 for the next week :-) I've been here 22 years. The outdoors activities are world class: hiking, mt and road cycling. I live in-town and Federal wilderness is literally 5 miles away.

My wife and I are both post-graduate STEM evacuees from the BA (Mt. View, 2nd and Townsend in SF, Santa Clara). We miss a lot about the BA, but as mentioned in the article, once you have a kid, two 1 hr commutes, possibly in opposite directions, are a non-starter. The thing we miss most about the BA are the people associated things because... the retrograde politics and essentially fascist outlook of the politically powerful has become suffocating. It is quite common to be in a restaurant and have some ragged beat down old white fellow packing a large gun. I have a youngish couple who walk an infant in a stroller by my house in the evening and the otherwise normal looking man-boy carries a giant pistol. I had words with the typical sort in Trader Joes because he felt he needed to pack a gun while shopping for groceries. Prescott has essentially no crime, nor much in the way of minorities, for that matter. It's not about safety.

This never happened 10 years ago, and earlier. Something happened around 2008, and things have been going downhill ever since.

[+] dikaiosune|9 years ago|reply
I too live a couple hours north of Phoenix at the moment, and I think it's a real shame that Phoenix is the part of the state getting this Bay Area outflow -- good entry/mid level jobs are hard to find in northern AZ, and you're right that it's a much nicer place to live than Phoenix. I would much rather move to SF than to Scottsdale, even with the discounted housing.
[+] clumsysmurf|9 years ago|reply
I lived in Phoenix area for almost 20 years.

As Andrew Ross writes, Phoenix is one of the least sustainable cities in the world (1).

Flowing from its corrupt politics and supply-side economics, I suspect AZ will go the same way (for some of the same reasons) as Sam Browback's Kansas / Bobby Jindal's Louisiana with huge structural revenue deficits.

(1) https://www.amazon.com/Bird-Fire-Lessons-Worlds-Sustainable/...

[+] niftich|9 years ago|reply
One remarkable thing about Phoenix is that it's actually a very, very populous metro (currently the 12th most populous Metropolitan Statistical Area, just shy of the northern two-thirds of the Bay Area in 11th place [1]) in what's essentially the middle of nowhere -- and I'm not using this term as facetiously as you may suspect.

Phoenix has poor connectivity to just about everywhere else, is on a detour (I-10) from the straight-line Tucson to San Diego road (I-8) and is skipped by Union Pacific's main railroad line between Yuma and El Paso. It's bypassed completely by I-40, the successor to the famous Route 66 as the road from the midwest to the California coast, and by BNSF's southern transcon that follows that route closely. The road linking it with its nearest big neighbor, Las Vegas, despite recently having been expanded to a divided highway, is still vastly short of an interstate [2]. To get towards Flagstaff or Prescott (or towards Vegas) you have to climb out of the Gila basin.

And yet, despite these odds and the oppressive summer heat, the desert floor is covered in Phoenix' rectangular sprawl for nearly 50 consecutive miles. More so than perhaps any other large city, it creates it own demand just by the virtue of existing.

[1] https://en.wikipedia.org/wiki/List_of_Metropolitan_Statistic...

[2] https://en.wikipedia.org/wiki/Interstate_11#History

[+] niftich|9 years ago|reply
Some highlighted quotes:

"This year, the company opened a downtown Phoenix office with sales and customer service jobs. “San Francisco is a terrible place for entry-level people,” Mr. Coburn said, because the infrastructure and housing are “failing.”"

"But as the latest exodus gathers steam, these outlying cities hope some of the higher-paying engineering jobs will start moving as well.

“We don’t want to be San Francisco’s back office — we need more creators here,”"

This pretty much summarizes the article. Phoenix isn't yet seeing a mass influx of developer jobs, but it's hoping that because some companies already have offices there for other positions, they'll be able to lure some high-end talent as well.

[+] ladytron|9 years ago|reply
Phoenix Startup Founder here. Central Phoenix is one of the best kept secrets in America - but after articles like this one the secret needs to get out. Central/downtown Phoenix, where many tech startups are located, allows a lifestyle and work environment that is unparalleled anywhere else in the country.

Cutting edge/super cheap hacker space incubator wet/dry labs- http://www.ceigateway.com, http://www.seedspot.com, http://www.cohoots.com

Great coffee/art/music/community- http://www.luxcoffee.com, http://www.artlinkphoenix.com, http://www.rooseveltrow.org, http://www.valleybarphx.com, http://www.crescentphx.com

Gorgeous, walk-able, affordable historic districts- http://www.willohistoricdistrict.com, http://www.windsorsquarephoenix.com, http://www.rooseveltneighborhood.org

July and August are the only months with truly hot weather, but San Francisco is a 90 minute flight away, and its a quick weekend trip to San Diego and LA, and a day trip to Flagstaff where its 30 degrees cooler. June and September bring cooler pleasant mornings and evenings, you are generally in your office midday anyway. October until May is truly gorgeous, the best weather in the country.

Central Phoenix is one of the most liberal, inclusive, and open minded places in the country. Many from Phoenix are from someplace else originally so there is less of a nepotistic, "who you know" culture here than the Coasts. People here are extremely independent and very friendly.

Comparing urban Central Phoenix, where most startups are located, to to other towns an hour or more away in more suburban/rural areas is similar to comparing Palo Alto to a small agricultural town outside Silicon Valley. Its apples and oranges.

[+] mininodes|9 years ago|reply
^ What she said. There are also the annual events like Barrett-Jackson and the Open, as well. On the tech side, we have an abundance of datacenters, and there is some cutting edge engineering work being done in the Node.js and Docker ecosystems, too.
[+] btkramer9|9 years ago|reply
Hi Ladytron, would you care to share what your startup is?
[+] jakerockland|9 years ago|reply
We're excited to be building our startup here in Phoenix. 8 months out of the year, the weather is fantastic. Burn rate is much lower than it would be in/around SF, our money goes much farther here. Great large public research institutions at ASU/UA is a great outlet for finding talent.
[+] mce1123|9 years ago|reply
I hear a lot of talk about regressive politics in AZ.

What I see on the ground here is that people from all economic backgrounds can afford to work, live, and have a family. What I see up there is a set of NIMBY policies that restrict prosperity to the 1%.

PHX adopts policies welcoming middle-skill, middle-income people and families; fauxgressives in SF Bay give them the middle finger.

[+] skpeck|9 years ago|reply
While yes, PHX metro is a more affordable option, no brand ever wants to be known as the low cost leader (we know this is never sustainable). Instead, my viewpoint as CEO of a young healthcare company is that PHX is ideal for us because of the industry experts in our space (aging) such as Banner Alzheimer's Institute and Barrow Neuro, access to our customer base (50+) and a theme of generosity of support for all startup founders. Then there's the development of new dev minds via our coding high schools, Galvanize, and UAT (as a few examples). Not to mention that this is the most livable place I've ever been.
[+] electrum|9 years ago|reply
> no brand ever wants to be known as the low cost leader (we know this is never sustainable)

I think Walmart would disagree with you on both.

[+] fernly|9 years ago|reply
There are so many economical, livable cities in the West within a 2-4 hour flight of SFO or SJC. Seattle is already too expensive, and I find Phoenix quite unpleasant, but Portland, Eugene (go Ducks!), Corvallis (go Beavs!), Spokane/Pullman (go Cougs!), Boise, Reno are all civilized, attractive, and relatively economical places.
[+] notadoc|9 years ago|reply
Seattle is cheaper than Portland at this point for being anywhere decent. Have friends in both and visit often, Portland has really jumped the shark and is very overrated. Also have a friend who just left Portland for San Diego because San Diego is now cheaper, and the weather isn't atrocious for 10 months.

The other places you mention are little college towns without any industry, could be appropriate for people in their early 20s who have their own job to bring. Spokane and Pullman are really cheap, but they're in the middle of nowhere. Reno is probably the best of the bunch, it's nice and has more of an economy, plus it's a relatively short drive back to civilization and San Francisco.

Some parts of Phoenix are really nice, as is Tucson, affordable, great weather, etc but the always-in-your-face abrasive politics of AZ can be off putting.

It's a bit further out, but I think the South will be major growth areas for tech. Highly affordable, friendly people, good weather for most of the year, great cities and culture, etc.

[+] bran-dog|9 years ago|reply
Phoenix is a miserably hot place 7-8 months out of the year with cuckoo politics.
[+] rblatz|9 years ago|reply
Phoenix has great weather 7-8 months of the year. The summer sucks, no doubt, but the rest of the year is amazing. No natural disasters to worry about, the worst we get is a bit of flash flooding in low lying areas and dust storms.

We also have great hiking, some of the best sunsets to be had, low cost of living.

[+] __derek__|9 years ago|reply
My understanding is that Portland and Seattle have effectively the same cost of living thanks to the same boom in Cascadian urban real estate prices. Seattle is building, though, so it's possible that its costs will level off or at least grow more gradually.
[+] davidw|9 years ago|reply
Bend is really nice too, but getting expensive thanks to rapid growth and NIMBYism that mirrors that in the bay area.

Way better climate, IMO, than west of the Cascades.

[+] xeromal|9 years ago|reply
Don't forget Salt Lake City. Tons of jobs, low cost of living, and a great outdoor community.
[+] cholantesh|9 years ago|reply
This is the first endorsement I've ever heard of Spokane. Has it changed in recent years?
[+] gee_totes|9 years ago|reply
Is there any startup/hi-tech activity in Pullman besides Schweitzer?
[+] DamnYuppie|9 years ago|reply
Boise is terrible, please don't move there.

Sincerely Yours, Idaho

[+] dmode|9 years ago|reply
I lived 3 years in Phoenix. Absolutely hated it. Won't ever move there and I actually avoid it for vacations as well. The weather is atrocious. The weather is only bad for 3 months is a nice sales pitch. But let me tell you that it gets to 100 early to mid May and lasts till September. So that's 5 months. Also, April and October remains hot during the day. In addition, as the article points out, most jobs are entry level jobs with low pay. Phoenix has very few fortune 500 companies, so if you are looking for strategic and interesting roles and moving up the corporate ladder, it is non existent. And the pay is laughable. Other things I didn't like - in your face politics, extremd bro culture, few places to visit, no interesting startup roles etc etc, but you get the point
[+] Ericson2314|9 years ago|reply
This makes me sad we don't do high density + low cost in the US.
[+] muzz|9 years ago|reply
I always wonder what would have happened if the New York of the 1970s and 1980s turned out differently than it did