About AZ Disruptors

AZ Disruptors is a startup incubator for software companies.

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Join us for a Disruptive Lunch

We are starting a series for lunch to give us an opportunity to meet with those who are interested in being involved with AZ Disruptors. So if you have an idea for a software startup or you just want to meet the people behind AZ Disruptors, join us for lunch.

Our first lunch will be hosted by Arkayne, a Scottsdale-based software company just around the corner from the AZ Disruptors headquarters.

If you are interested, RSVP Now for Friday, February 4th at 11:30am.


More Details About AZ Disruptors Incubator

Today, the framers are working hard to build out the framework of the AZ Disruptors offices. Here is a picture of where things were at as of this morning:

Keep in mind that this space is a brand new 6,000 sq foot addition which is adjacent to the two anchor companies that will also play a part in AZ Disruptors. Once completed, the Axosoft and TransferBigFiles offices will all be one with the AZ Disruptors offices in a 12,000 square foot space.

While the framers are putting up the physical frames to build out the AZ Disruptors office space, we have been a little busy framing the structure of the AZ Disruptors business and how target companies will be funded. Some of those details are now on the home page of the AZ Disruptors web site. We've also changed the structure of the AZ Disruptors web site so that the home page is always showing the latest information about AZ Disruptors. The News & Blog page are now a secondary link. This makes it easier to find out what AZ Disruptors is all about. Sending someone to the http://www.AZDisruptors.com home page will now give them the quick overview of the software incubator and how it will work.


Accepting the LAUNCH Accelerator Challenge

Recently, serial entrepreneur and angel investor, Jason Calacanis, issued a challenge via his LAUNCH Conference blog:

A Modest Proposal for America: Build 500 Accelerators

Jason’s not talking about Large Hadron Colliders. Although a boost in particle accelerator production could potentially be helpful to the economy, he’s talking about business incubators. The kind that accelerate the process of bringing disruptive ideas to life.

Jason is spot on. If there is something America needs to get out of its financial funk, it’s a boost in creating innovation. Innovation is exciting. Startups are exciting. What better way to foster exciting and disruptive innovation than to build an ecosystem of accelerators?

The accelerator model provides early phase startups with the total package: mentoring, a great tech environment, minimal initial funding, and a clear path to additional funding...if justified.  Groups of entrepreneurs are funded simultaneously, and together they make up a “class.”

AZ Disruptors is doing its part, aiming to build Arizona’s best accelerator system for entrepreneurs. Construction is underway, and the first class will begin in May 2011.

An Idea Whose Time Has Come

With Y-Combinator’s $250 million in Q4 exits, the accelerator model is hot.  It’s been heating up for some time, and now it’s to the point where there are at least 58 Y-Combinator-like incubators around the world.

And get this:

  • Over ⅓ of all accelerators were founded within the past year
  • At the current pace, 250 accelerators by 2016 is easily realistic
  • About ½ of all accelerators are located in the United States, and about 40% of US accelerators are located in California and New York
  • 70% of accelerators are privately owned
  • 75% of accelerators provide an initial investment of less than $25k
  • The average accelerator class spans from 3 to 5 months

More Meaningful

I’m going to shift to first-person here, so I can talk about how personally excited I am about AZ Disruptors. Not only is it bringing the accelerator model to my home state, but it’s right in my own backyard.

I’m an Axosoft employee. I’m also playing a small part in helping to design the AZ Disruptors flavor of business incubation.  But most of all, I’m someone who has been working for software startups for pretty much my entire adult life, and words can’t describe how much I look forward to giving back to the community in the form of mentoring the classes that make it through our doors.

I remember my first day on the job at an angel-funded startup over 15 years ago.  I HAD NO IDEA WHAT TO DO.  No idea! I can definitely elaborate on that in later guest posts. But the point here is that I can mind-dump my tech marketing experience and help good people with good ideas accelerate their growth and prepare them for what’s to come. 

That’s a wonderful prospect. The hands-on intimacy of this style of incubator is where I believe the magic lives.

I also look forward to the energy I suspect our first class will bring to our building.  We’re already pretty pumped up about growing our business on a daily basis.  I can only imagine what it will be like when we get 10 to 15 more smart people in this building to geek out with over amazing technology and products.

Knowing what I know about the people involved in AZ Disruptors...this is going to be one hell of a ride.  And AZ Disruptors is going to be the place to be for Arizona software startups.


This article was written by Angelo Coppola. He is a software industry veteran who currently serves as Vice President of Marketing for Axosoft. Angelo will provide AZ Disruptor classes with mentorship in the areas of marketing, design, and user experience.


CEO of the Year Goes to Groupon's Andrew Mason

In case you missed it, the Crunchies CEO of the Year award went to Groupon's Andrew Mason:

Andrew came across as a brilliant, yet extremely modest guy who doesn't take Groupon's leadership position for granted. His short acceptance speech and interview with Michael Arrington gives some insight into Andrew's character.

You can see the entire Crunchies event video here: 


CEO of the Year is 1:45:00 into the video

Here is the CEO of the Year portion:


Watch us Live at the Crunchies Tomorrow Night

One of the companies housed at the AZ Disruptors headquarters is TransferBigFiles.com, a web-based service that allows users to send large files that are too big to email.

Tomorrow night, TransferBigFiles.com will be sponsoring the Crunchies Awards in San Francisco. The Crunchies Award is an event organized by TechCrunch and recognizes a number of different companies, products and individuals who have been instrumental to tech, including Startups.

The event is completely sold out with more than 1,000 attendees. However TechCrunch will be live-streaming the event on their web site. It should be an interesting event to watch as the list of Crunchies award finalists includes the top companies, products and CEOs in technology.

I will personally be presenting the CEO of the Year award on stage to one of the following candidates:

  • Dick Costolo, CEO of Twitter
  • Reed Hastings, CEO of Netflix
  • Drew Houston, CEO of Dropbox
  • Andrew Mason, CEO of Groupon
  • Mark Zuckerberg, CEO of Facebook

Who do you think should win? Leave a comment.


What: Crunchies Awards

When:  Friday the 21st of January at 7:30pm Pacific (8:30pm Arizona Time)

How: Visit the Crunchies Web Site to watch a live stream



No Exit Strategy is Your Best Strategy

"What is your exit strategy?" is one of the top questions heard by an entrepreneur when pitching their business. When an investor puts cash into a startup company, their goal is to eventually get a big return on their investment. So investors obsess over their exit strategy. If they can't exit (pull their money out), then there is no opportunity to make a handsome return.

So it's understandable that an investor would want to focus on the exit strategy.

But that's the investor's problem, not yours! Your problem is to build an awesome company with insanely great products that you'd want to keep forever. You should never be planning your exit strategy before you have a fantastic company with great products.

Mark Zuckerberg didn't have an exit strategy in building Facebook. To this day he doesn't have an exit strategy and has resisted doing an IPO (taking the company public -- which is considered an exit strategy). Facebook, of course, is now worth over $50 billion and has rejected buy-out offers from Microsoft, Google and Yahoo. Additionally, Facebook investors have been quite happy and are able to easily exit their investments for a great return if they want to. However, don't use the Facebook example or you'll quickly hear "well, you ain't no Mark Zuckerberg and this ain't no Facebook."

Ughh, how short-sighted some investors can be.

Of course, not all investors think alike and your job is to find the ones that think like you, or that are compatible with you. Yes, the exit strategy is important for all investors, but the next time an investor asks "what is your exit strategy?" your best answer is to tell them "I have no exit strategy. I plan to build an awesome company that I'd want to keep forever -- a company that creates knock-your-socks-off products -- and if I'm successful at doing that, I'm sure there will be buyers lining up for every share of the company."

At AZ Disruptors, you won't have to worry about your exit strategy, but you will have to worry about creating great products! Learn More


Disruption Begins

A Disruptive Technology is an innovation that disrupts an existing market. The term is used in business and technology literature to describe innovations that improve a product or service in ways that the market does not expect.

AZ Disruptors helps Disruptive Software Startups become successful. We provide tangible tools like office space, desks, chairs, Internet connectivity and even seed money to make payroll and buy equipment. But most importantly, we also bring intangibles to the table. We've created unbeatable environment that brings smart people together in a single space with successful software companies and new software startups. Everyone can have lunch together, bounce ideas off of each other, chat about the latest innovations and get mentorship from people who have been there and done that.

We know you've got questions. That's why we've put together a list of FAQs on the About Page and we've also built a Discussion Forum where you can discuss topics relating to startups.

Apply to Participate in AZ Disruptors

There are two ways to participate in the AZ Disruptors Software Incubator:

1. Apply as a Startup Software Company - To apply to participate in the AZ Disruptors software incubator as a startup with any of the following products:

  • Licensed Software (Windows, Mac or Linux)
  • Software as a Service (SaaS)
  • Web-Based Application
  • iPod, iPhone or iPad Software
  • Android Software

Use this application: Apply as a Startup Software Company

Application Deadline: April 29th, 2011

2. Apply as an Individual Disruptor - If you are interested in participating with the AZ Disruptors in any of these capacities:

  • Want to be considered as a partner with a Startup
  • Want to be considered for employment with a Startup
  • Want to participate as a potential investor 
  • Want to participate as a mentor or advisor role

Use this link: Apply as an Individual Disruptor

News and Updates

To stay up to date on the latest news about AZ Disruptors, be sure to visit the Blog and subscribe via RSS, Email or Facebook on the right sidebar.


Creating Disruptive Products and Companies

When looking for a disruptive company, investors often look for a product idea that has never been done before. With this mentality, they also miss out on the best, most disruptive opportunities that take place in our industry. Yahoo and AltaVista (remember them) along with dozens of other VCs and individual investors passed on the opportunity to buy or invest in Google for a mere $1 million valuation in its early days. The investor reasoning was sound: the field of search was already dominated by Yahoo, Excite, Alta Vista and others. What chance would a newcomer have in a market that already has multi-billion dollar players?

It turns out being first to market, while it has great advantages, is not the predominant characteristic of disruptive companies. Think about portable digital music players. By the time Apple entered the market, there were more than 130 different MP3 devices in the wild. Apple was also late to the smart phone business. Facebook was late to the social media game, which was dominated by Friendster and later by MySpace before Facebook took over. YouTube was late to Internet Video as a brand new entrant in 2005. Or take the latest multi-billion dollar disruptor, Groupon. I can only imagine the pitch to potential investors: "We're going to create a coupon business where the receivers of the coupons will promote the coupon itself. Will you invest?" Ha!

So what makes a product or company disruptive?

If it's not first to market, then what is it? Superior technology? Nope. The landscape of the tech sector is covered by the corpses of companies and products with superior technology. Analyzing any of the disruptors of the past decade also quickly shows that none of them had superior technology at the time they first came to market.

So is it better marketing? Nope. That's not it either. Google had spent a total of $0 on advertising and marketing before it was a billion-dollar entity. Same with YouTube. I don't recall ever seeing a FaceBook ad. Today Facebook is valued at $50 Billion. Marketing and advertising can help accelerate the adoption of disruptive products. Apple has been great at that, but it wasn't and has never been the key to their success.

Disruptive products have one thing in common: A Disruptive User Experience.

Google's Disruptive Search Engine

Google's "Page Ranking" algorithm is often wrongly credited with being the reason behind Google's success. In fact, when random samples of search users are surveyed, time and again users are unable to detect a significant difference in organic search results across various engines. The Page Ranking algorithms used in Google's code was also quickly approximated by other search engines. So why did Google get the stickiness that so many dominant search engines of the time failed to replicate?

To answer that question, lets take a look at time-appropriate screenshots of AltaVista's home page and Google's home page:

If you knew nothing about either search engine, which of the above web sites would you prefer to use? The answer seems obvious now, but somewhere along the line, the dominant search engines had forgotten the most important reason they existed. Instead of leading their users to perform quick searches, they were after more page views and more ads per visit. They also had another problem: they had revenue. While Google was free to experiment with any user interface it wanted (it didn't have any revenues to worry about), existing search engines had to make sure they protected the millions of dollars they were already generating.

Google was disruptive by changing the user's experience when doing search. The home page popped up in sub-second time. There was hardly anything there. Google had to add a footer to their home page just so users would know it was done loading. It was faster than any other search page on the planet and you could do what you wanted and get the results before other search engines had loaded their front page. That was disruptive!

Apple Disrupts with iPod, iPhone then iPad

Looking at the string of disruptive products that Apple has released over the past decade, it's hard to remember they were on the verge of going out of business in 1996. What are some of the lessons we can learn from Apple's incredible comeback? Apple was first to market with the PC and even a GUI-based PC. Neither was enough to save it from a near-death experience in the 90s. In fact, when Steve Jobs took over in 1997, he had given up on trying to be first-to-market with new products. He already knew it didn't matter. My Rio MP3 player had been out for years before the iPod came out and I was a Windows Mobile phone user for more than 7 years before the iPhone 1 came out. It was also more feature-rich! It could multi-task, run any application, it had an SDK and could even copy and paste. None of that seemed to matter.

So what is it that made Apple so disruptive? Again, it's the user experience. Whether it's the iPod, the iPhone or the iPad, a 2-year old child can master the interface. No other product in its class could make such a claim. While I "could" do anything the iPhone could do with my Windows Mobile phone, I never had any desire to because of how complex the simplest actions were. Trying to scroll the screen on a phone made prior to the iPhone in 2007 was to ask for a slow and painful death. 

Facebook Disrupts with 600 Million Users

Think about the single most important feature of a tool that would be used by nearly half of the Internet's population: Ease of Use. When FaceBook was launched, MySpace had already dominated the social network scene and was the single most popular site to put up a personal page and connect with friends. So what made Facebook so disruptive and gave it the ability to crush its largest competitors? Again, the answer lies in the user experience.

The difference was that when you visited a MySpace page, things appeared to be in chaos. Music would start playing. Random things would flash at you. There were sections with bits and pieces of information all over the page. And then there was the horrible use of colors. Looking back, it was terrible and so obvious that it couldn't be a site used by the masses.

Facebook changed the experience by having a uniform look and feel for user pages. It made it brain-dead simple to add friends and even used the social graph to recommend new friends. 

Disruptive is: Easy. Intuitive. It Just Works!

The three most common things that disruptive technologies have in common is that their users would describe them all in the same way: Easy. Intuitive. It Just Works. In the early days of these technologies, if you had asked a user why they would have recommended Google over Yahoo, a MacBook over a Dell, an iPhone over Windows Mobile, FaceBook over MySpace -- their answers would be similar. All of these products have a disruptive user experience. So much so that they dominate their fields.

So when you search for that next disruptive product or company, forget about trying to solve a problem that nobody else has solved before. Look for problems where others have solved it in an inefficient way. Make your solution stand out by making it brain-dead simple. Make it disruptive by surprising the user with the ease of use. Make sure your users would fall in love with how your solution "just works."


Let's Get This Party Started

Today marks the start of construction on a brand new 6,000 square foot facility that will eventually be home to a number of software startups in Arizona.

I'm excited that an idea I've been kicking around for a number of years is finally starting to take shape. The idea is simple: Build a place where technology enthusiasts can come together, build cool stuff, and talk to other people who build cool stuff.

The idea is nothing new, not even in Arizona. Some good folks in Chandler (Derek Neighbors and Jade Meskill) have already built a community of technology enthusiasts under one roof at Gangplank. I love what they've done. At Gangplank there are a number of successful software companies benefitting from each other's experiences every day. Companies like Page.ly (wordpress hosting), Authority Labs (keyword rank monitoring) and EventDay (soon to be released event management solution) are just some of the companies that are headquartered in the Gangplank offices. Each company's success adds to the knowledge base concentrated in the Gangplank building. It creates better mentors, advisors, engineers, marketers and designers -- which all help to create more successful businesses.

We need more of that activity in Arizona, and that's what AZ Disruptors is about. We want to help new software startups become successful by bringing them together in a ridiculously productive environment. In this location, there are already a couple of successful, profitable software companies including Axosoft (Agile Project Management Software) and TransferBigFiles.com (rapid file-hosting and sharing solution). We're also lining up a number of super-stars in the tech field that are eager to help (more about that later).

The AZ Disruptors offices are being built adjacent to Axosoft and TransferBigFiles offices in North Scottsdale. Once completed, it will be a single 12,000+ square foot facility.

We expect to be operational with our first set of startups in May of this year, and we have a lot of work to do. If you are interested, be sure to subscribe to this blog either using RSS, Email (see the sidebar to the right) or as a Facebook fan. We will be posting our progress, some ideas on how to build a disruptive company / product, and we'll also be providing instructions on how you can apply to become a part of the activities here at AZ Disruptors.

It's exciting to finally get this party started!

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