Almost all of the 500+ software companies in the Phoenix area are in just a few zones, and there are 5 distinct zones. They aren’t all within walking distance in each zone, but they are within a few square miles, just a short drive away. That’s similar to Silicon Valley (outside of downtown San Francisco), but with a lot less traffic.
By the numbers: Arizona software companies by city
The reality is 95% of Arizona software companies are in the Phoenix metro area. 84% of Phoenix area software companies reside in three cities – Scottsdale, Tempe and Phoenix.
The economic development teams in each of these cities now actively support software startups. Most startup events include an appearance by the mayor delivering words of encouragement and appreciation.
Here’s how I see the five “zones” of Phoenix software companies:
North Scottsdale – Scottsdale has been an attractive place for software companies to start and grow for the last 20 years. There are still a surprising number of big and small SaaS companies located in the upscale north part of town.
Downtown Scottsdale – Nearer to the airport and Arizona State University, Downtown Scottsdale has more shopping, restaurants and bars in a walkable area which attracts young talent. This zone has grown in the last 10 years and is a primary spot for Silicon Valley software companies to establish remote offices.
Tempe – Tempe startups and growth companies set up shop around the main campus of ASU. Tempe is also conveniently located in center of the local metro area and is next to the airport. New buildings are growing taller here, which is a sign of aggressive business expansion and municipal support.
Downtown Phoenix – The Downtown Phoenix zone includes companies in Central Phoenix just down the street. Both neighborhoods are new centers for fast-growing companies who want a more urban setting with rustic warehouse spaces, cool restaurants, eclectic entertainment and public transportation. This area is the fastest-growing new startup location in Phoenix: 10 years ago there were very few software companies downtown.
East Valley – This zone includes Chandler, Mesa and Gilbert and is the most spread out of the five zones. There are few areas of concentration such as downtown Chandler and the Price Road Corridor, but generally there is a wide distribution of companies here. The East Valley is known for less-expensive housing and office space, great schools and a large workforce of young and eager talent.
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Arizona software leaders struggle to connect, but we are closer than we think
Seeing all these companies on a map reveals challenges and opportunities.
In particular, most Phoenix software leaders struggle to connect with others software leaders. It’s a common complaint, one that caused me to publish Gregslist.
Blame it on our suburban sprawl, our long work hours and travel, the recent growth of software companies, the entrepreneurial spirit of independence or an influx of transplants. I’ve been here for 20 years and have experienced all of these challenges to connecting with others more.
Although we’re not all in one neighborhood within walking distance to common coffee shops, the reality is most software companies in Arizona are within 15-30 minutes driving distance of each other.
That’s actually a little closer than Silicon Valley companies. The Bay Area a 50-mile peninsula with software companies scattered from Los Gatos to Redwood Shores, 30 miles away. Drive further to San Francisco and across the bay to Oakland.
Despite the drive time and traffic, Silicon Valley networks are very connected. They invest in staying connected and reaching out. It’s a primary way to learn fast, attract talent, get moral support, build more connections and grow faster.
There’s a lot going on in the Arizona software ecosystem – much more than any one of us can see. I have written about how the Phoenix tech startup scene is booming and there are some really surprising facts about the Arizona software industry.