Boasting an unmatched record of success, Silicon Valley remains the reigning world champion of tech. But just a few hundred miles away in the desert, a promising shift in strategy might just give Arizona’s technology sector a shot at the title. The construction of TSMC’s $165 billion semiconductor campus has attracted considerable international attention — and investment. Companies from around the globe have landed in Phoenix to support TSMC’s supply chain, while entrepreneurs have pioneered novel solutions for streamlining the industry’s operations. As a result, the region is not only expanding its manufacturing capacity, but building a broader culture of innovation and excellence in technology. For this budding tech ecosystem to reach its full potential, the community must actively cultivate an environment where startups can be supported at all stages of growth.
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A culture of collaboration among entrepreneurs, investors and academia doesn’t happen spontaneously, but Will Xander, founder of the Arizona-based tech startup TruthKeep, says the effort pays dividends.
“Creating spaces where people can meet spontaneously is critical because human connection is one of the most important parts of business,” he says.
When Xander started TruthKeep in 2022, he recalls the tech community feeling “empty and desolate.” Searching for a co-founder seemed impossible to do alone, and he found the events aimed at doing that very thing to be underwhelming.
One day, however, Xander sat next to Brian Swartz at an Arizona Technology Council event. In their conversation, Xander expressed his desire to be involved in Arizona’s tech ecosystem but shared that it “seems kind of dead,” given the absence of serious AI innovation.
Swartz, who helped to found the Arizona Technology Council, took this feedback to heart and decided to launch a new nonprofit organization called AI Venture Network (AIVN), which focuses on connecting founders, innovators, investors and clients within Arizona’s AI, machine learning and robotics community.
During an AIVN event, Xander had a chance meeting with someone who later became one of his biggest customers.
This experience is one that many in Arizona and working to replicate, including Kyle Macdonald, co-founder of Silicon Oasis, a non-profit dedicated to strengthening Arizona’s tech ecosystem by breaking down the barriers between founders, investors and tech organization members.
“We’re trying to create that [ecosystem] here,” Macdonald says. “If you’re building a company here, we want to provide opportunities for you through our events and media so you can have interactions with all the other builders here in town. We don’t want any founder here to go unnoticed.”
Order of operations
The Valley’s nascent semiconductor industry and operational advantages thanks to business-friendly policies are part of the region’s strengths, but when the market loses companies to California, it is often because businesses prize the proximity to investors, founders and innovators. Even without California’s track record of unicorn tech companies or mountains of venture capital, Arizona still has massive potential to scale its tech ecosystem. Doing so, Macdonald says, requires attracting the right mix of professionals — especially entrepreneurs.
Xander agrees, adding that there’s a misconception that plentiful access to funding is needed to make a place conducive to start-up growth.
“It’s not capital that brings talented founders to a market — it’s talented founders who attract good money,” he continues. “Everybody thinks the problem is not having enough dollars, but the problem is not enough talent.”
Many tech innovators want to be in places like Silicon Valley because they know they’ll be surrounded by other ambitious founders and tech ecosystem that supports them.
“How can you create a funnel for Arizona to be the place where people want to come? The culture has to come first, then marketing and incentives,” Xander says.
For a healthy entrepreneurial ecosystem to take root, Macdonald says there needs to be five key elements — great universities, plenty of venture dollars, experienced mentors with exits under their belts, along with support from the community and government. Phoenix’s tech sector has benefited from a series of initiatives spearheaded by ASU, GPEC and the ACA to ensure the region lives up to Silicon Desert moniker.
One example is the Arizona International Soft Landing Experience (AISLE) program. A partnership between GPEC and ASU, the AISLE Program aids international startups by providing them with the tools and resources they need to make a “soft-landing,” in the Phoenix market.
The program has brought “a lot of innovation and talent to Arizona’s tech sector,” Thomas Maynard, senior vice president at GPEC, explains. The companies involved receive guidance from ASU and GPEC, “helping them scale quicker and gain experience navigating the U.S. marketplace.”
Universities are valuable partners to technology startups because they can provide vital services at a fraction of the cost in the private sector. When Xander was building TruthKeep, he received a non-financial sponsorship from ASU. Several students were assigned to his software development project as part of their capstone program.
“To be quite frank, I don’t know if we’d be where we are today without that experience,” Xander says.
University and government support are a great driver for startup success in Arizona, but a healthy community of technologists, investors, founders and established entrepreneurs is the only vehicle that can bring Phoenix over the finish line as a contender. The Arizona Commerce Authority sought to do just that when it launched its inaugural Arizona Tech Week in April. This is a week-long calendar of fundraising, investing and networking brought the state’s entrepreneurs together to connect and learn from each other.
Taken together, the efforts made by the private and public sectors share the same goal: “It’s about getting people to believe, connecting them and watching the magic happen,” Macdonald concludes. “We want people to feel like there’s a serious community here.”
