Is Phoenix The Next Silicon Valley?

It’s no secret that some of the most successful startups spring up outside Silicon Valley – and even internationally. But a few up and coming startups are calling home in another valley, as companies like Stremor call the area near Phoenix, Arizona its home.

Stremor, which just announced it has raised $2 million in initial seed funding, is slated to launch a series of products and solutions for online content with a focus on mobile and tablet consumption. By following the philosophy of “lean startups,” Stremor has successfully found the “right talent” to launch these products.

For Stremor, finding the right talent meant looking beyond the Phoenix area (especially since Stremor is technically based in Scottsdale, just a few hundred yards away from Phoenix.) Brandon Wirtz, CTO and Silicon Valley veteran said, “Stremor’s approach definitely worked for attracting me to Phoenix. By having a clear goal and the start to a strong patent portfolio I got the sense that this was a company in it for the long haul. Knowing that the operating costs in the Phoenix area would be lower gave me the confidence that Stremor’s burn rate would mean they would be around for the long haul as well.”

Wirtz also continued to explain that the vital attraction for startups to this valley – as apposed to Silicon Valley – is the drastically lower cost of living. Wirtz is able to rent a three bedroom, two bath house in Phoenix for $850 per month – a home that would cost him $3,000 or more per month in Silicon Valley. He adds that the food is also cheaper, as well as the sales tax and the income tax, so as he says, “the dollar that you get paid goes a lot farther than in California.” Wirtz explains that having so much more financial freedom lowers the stress associated with working for a startup, as he can enjoy work/live balance and now worry about needing to save as much in the event his startup might fail.

And there are a surprising number of startups in the area – and the number keeps growing. Even Greg Rewis, VP of User Experience (and former Evangelist at Adobe), says, “there are way more than I even knew existed. It’s very attractive to startups too, especially when you start comparing costs against Silicon Valley.”

For these startups, finding talent can be difficult as the area is not as saturated with people looking for work – especially those at higher levels of management. However, that lack of competition can be beneficial to startups in the area, as in Phoenix, companies are competing not with other companies in the area, but with companies from Silicon Valley on factors such as quality of life – which as Wirtz says, “could easily tip the scales in your direction” as a startup in the area.

As Stremor has demonstrated, being in the “other” valley can lend to being just as successful – if not more – than being in Silicon Valley or other startup meccas. “No one believes we’re in Scottsdale,” says CEO Bill Irvine, “Everyone I talk to seems to think these kinds of ideas and companies can only start in Silicon Valley or New York City. But going from raw idea to seven-figure seed funding and fully staffed with impressive talent in just seven months, that’s a compelling startup story in any city.”

And with living and business expenses at barely 40% of the big cities – and the added bonus of being able to actually enjoy the quality of life while building a company – Phoenix and the surrounding area might just be the next Silicon Valley.