How Phoenix nonprofits built a startup culture in a few years | Crain's Phoenix

How Phoenix nonprofits built a startup culture in a few years

PHX Startup Week drew roughly 6,000 attendees this year. | Photo courtesy of PHX Startup Week

A collective that helps to connect and nurture startups in the greater Phoenix area – #yesphx – describes itself as a 100 percent community-owned association of entrepreneurs.

Hosting regular events that bring entrepreneurs together face-to-face, the nonprofit is part of a wave of public and private organizations – sometimes in partnership – springing up across the country to kick-start locally grown tech companies.

“It’s a non-organization,” said Jonathan Cottrell, the founder of #yesphx. “It’s really an organic, community-led effort.”

Three years ago over cigars and drinks, Cottrell and two other founders discussed the concept that would eventually become #yesphx. The notion of a common hashtag was developed, with the intention of amplifying everything that was happening in the Phoenix startup community. The idea was to unify a rather disparate ecosystem in the Valley.

“We wanted to clarify our collective vision, which has been determined by the community,” Cottrell said. “And that was that we want to be known as the most generous community for entrepreneurs. Amplify, unify and clarify; that's kind of our three-fold mission.”

Cottrell says that in just the last couple of years he’s met with about a thousand entrepreneurs to offer his assistance and 40 percent of his time has been dedicated to supporting them and their startups. Though he is committing less of his time today, much of it is still spent connecting entrepreneurs. Most of them need help with things such as funding, plugging into the startup community, finding out who’s hiring and getting their products built.

“Yesphx.com is really my best answer to all those needs, which were discovered over time,” he said. "It’s become pretty great on its own. We have about 25,000 subscribers, across all different channels – all different types of people who are meeting and organizing in a number of different efforts across the spectrum of the startup business.”

Cottrell was involved in launching PHX Startup Week, the largest entrepreneur event in Arizona. The inaugural event three years ago had about 2,300 attendees. It grew to about 4,500 in the second year and rose to roughly 6,000 in February. The free, five-day event is a celebration of the local startup ecosystem and anyone interested in entrepreneurship.

“They had a pitch competition where they gave away $50,000,” said Cottrell. “It’s a way to bolster and encourage the entrepreneur spirit here in Arizona.”

The local tech industry has grown significantly in recent years, according to Cottrell, and there is lots of momentum at present. He says there is a wealth of new, institutional venture capital and other seed capital finding its way into Arizona to fund increasingly more startups.

“There’s never been more startups getting the right kind of funding, partners and team members,” noted Cottrell. “We also have a really healthy biotech and life sciences community. Then there's education technology, and cybersecurity is really growing. So, a lot of good things are happening here.”

For example, Phoenix-based Invest Southwest connects investors with emerging growth companies in the region. These alliances, facilitated by the nonprofit organization, create opportunities for both sides. Over the past 25 years, the organization has helped startups raise more than $300 million in capital.

“Our target audience is startups from the Southwest,” said Executive Director Karen Katzorke. “The idea is to engage the investors with the startups here in Arizona, as well as the broader Southwest.”

The Valley is quickly becoming a tech-sector hotbed and Invest Southwest is helping to foster this environment, says Katzorke. As part of that effort, the organization hosts Venture Madness, an annual, bracket-style pitch competition that began in 1992. What was originally known as the Arizona Venture Capital Conference became Venture Madness in 2013. Each winter, in partnership with the Arizona Commerce Authority, Invest Southwest chooses the top 64 startups, who then battle it out in a head-to-head contest.

“I think we’ve seen a big movement with #yesphx, which recognizes the technology and startups here and helps promote the growth of companies in Arizona,” said Katzorke. “Invest Southwest is certainly a part of that.”

Long-term projections are always difficult, but Cottrell is certainly optimistic about the Valley and, more broadly, Arizona.

“I think we’re going to see more funding start to come in. We’re going to see some serious players in the VC or incubation space planting a flag in Phoenix – and not just visiting, but having a presence here. I also think we’re going to see more small-to-medium-sized acquisitions. We’re going to see a continued influx of talent coming here from other markets, having grown dissatisfied with what’s happening there. In Silicon Valley, and other places, the cost of living is really unbearable.”

In Cottrell’s view, companies and entrepreneurs, alike, will reach the conclusion that Phoenix offers everything they need – in terms of the talent pool and the community – to grow their companies.

“I think the future looks bright,” he said. “It’s vibrant. We’ve come a long way in a very short period of time. The last three years have been tremendous for our growth and our community, but there’s always more to do and we can’t have a short-term vision.”

Clearly, Cottrell is a big believer in Phoenix and he’s putting his money where his mouth is.

"I’m here for the long haul. I have three amazing kids and this is where I want them to have their families, so that we’re all here together. I want them to feel that this is a great place to live and work, and to start and run a company. I’m very optimistic about what Phoenix is becoming. All the signs point to it being incredible in the coming years.”

July 18, 2017 - 1:27pm