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Not a bad idea but probably a tough sell in June. Forecast high temperature of 115F this week. Which translates to 125F+ at ground level in the parking lot where you have to walk to your car.
"But it's a dry heat"
But if you try to raise money, you suffer from a valuation penalty for not being in Silicon Valley - just from the fact that there will be fewer interested investors. That valuation penalty is probably going to far exceed the cost savings of being outside Silicon Valley.
Next time you think of spinning up a company in silicon valley - try to remember there is likely someone else trying to build the exact same thing here and doing it with 2x the number of employees(because labor costs are less here) and an extra year worth of capitol because space is cheap.
Yes heat is tricky, but compared to the pain of failure or losing out to a better functioning competitor it seems a small price to pay.
It might make sense if you are bootstrapping and Phoenix is a place you want to live. (It is too hot, too conservative, and too suburban for my taste) But if you try to raise money, you suffer from a valuation penalty for not being in Silicon Valley - just from the fact that there will be fewer interested investors. That valuation penalty is probably going to far exceed the cost savings of being outside Silicon Valle…
To demonstrate, let's do some math. If I make 60K after taxes in Phoenix and spend 18K/year on rent (1.5K * 12), and let's say another 12K on food and gas and miscellaneous expenses, then I have spent 30K and have 30K remaining. That's 50% of my income goes to expenses.
If I live in San Francisco and make 120K/year after taxes, and I spend 50% of my income on rent and food like I did in Phoenix, then I've both made 2x the Phoenix salary and I've spent 2x the Phoenix expenses. But what's left? Instead of 30K in savings, I have 60K in savings.
By living in SF, I've saved an additional 30K over what I would have saved in Phoenix. Now, I'm using nice round numbers here to make a point, but even if SF expenses were 2.5 or even 3x Phoenix expenses, I'd still come out ahead.
Sure, the psychological impact of paying less feels good, but unless you can keep your pay closer to SF pay while living in Phoenix, you're probably not going to come out ahead financially.
My two cents.
Interesting. I've always seen Phoenix as a place where you spend most of your life indoors due to the heat. And it always has given me a "suburb" vibe when I've flown over it. Haven't lived there though.
That said, if you like to play outside, it's a paradise. We've got thousands of acres of public land within reach, easily accessible and free to all.
Keep in mind the law enforcement in Phoneix and Maricopa county make the Bay Area look like Holland.
Interesting. I've always seen Phoenix as a place where you spend most of your life indoors due to the heat. And it always has given me a "suburb" vibe when I've flown over it. Haven't lived there though.
I am from Phoenix, BTW.
Startups go to Silicon Valley and NYC because that's where the talent is. Talent goes there because that's where the startups are. Even if everything about Phoenix is objectively better, how are you going to overcome this trend?