While tourism might be the first “T” word you think of when it comes to Arizona’s economy, technology is clearly the wave of the future. From statewide government programs and incentives, to partnerships with public universities, incubators and accelerators, across-the-board efforts are boosting the state’s reputation as a hub of tech and innovation.
According to the Arizona Technology Council, tech industry employment and wages are up almost 5 percent in the past year, while venture capital investments rose 3 percent to $175 million in 2018. New talent and emerging companies can look to the following home-grown tech leaders to see the trajectory they might take.
In the Fast Lane
Can buying a car be fun? A peek north of Loop 202 in Tempe at Carvana’s first fully automated, coin-operated “car vending machine” in Arizona will make you a believer. Upon arrival, a Carvana customer advocate hands customers an oversized, commemorative Carvana coin to drop in the slot, and their car is vended to them as easy as a bag of chips.
However, behind the gleaming glass—and tantalizing vehicles—the vending machine concept represented a challenge to the company founders, whose vision of a high-rise structure filled with cars was grand, to say the least.
“We had this kind of crazy idea, now how were we going to make it happen?” says Ryan Keeton, co-founder and chief brand officer. “We were lucky to find some really great partners who had the expertise and knowledge of those kinds of systems and structures. It’s a combination of structural engineering, software, hardware and design.”
Since the first patented car vending machine debuted in Nashville in 2015, 14 more have been built across the country.
While the new vending machine adds more “wow” factor to the Valley skyline, the company’s origins here date back to 2012. Based on his experiences in various roles at DriveTime Automotive, co-founder, president and CEO Ernie Garcia formulated the concept that customers should experience an easy, transparent—and yes, fun—car-buying process. Today, the Carvana e-commerce platform handles the buying, selling and financing for more than 10,000 used vehicles, with as-soon-as-next-day vehicle delivery in 83 markets.
Facilitating transactions in minutes, rather than hours, is no small feat, requiring vertical integration through every step—from securing and inspecting inventory, to delivery to the customer’s driveway or getting the car from the vending machine.
“In addition to talented, passionate employees, a lot of technology goes into Carvana,” says Keeton. “Imagine having an e-commerce retail business, a bank, an auto repair shop, a DMV, a photography studio, and an engineering firm all wrapped into one. That’s a glimpse into what we have.”
Out of Thin Air
Think our desert air is dry? Zero Mass Water has the science to prove otherwise. The company was founded in 2014 by Cody Friesen, a materials scientist and professor of engineering at Arizona State University, as a spin-off of a technology developed at the university’s materials science lab.
The company’s Source Hydropanels pull water vapor from the air and turn it into safe drinking water using a self-contained combination of photovoltaic cells, batteries, fans and solar thermal panels. After being released into a reservoir and mineralized with calcium and magnesium for taste and health, the water can be dispensed wherever needed, and an app lets users see how much water they’re generating.
Counterintuitively, sunshine is more important than humidity. “Being based in Scottsdale, we can demonstrate the product under some of the driest conditions,” says Sidnee Peck, the company’s chief of staff. “Even at 10 percent humidity, we’re still making water—and that’s true in any community that gets at least partial sunlight.”
Source panels generate enough water to replace 300 standard water bottles a month, usually installed in arrays of two for single-family homes and sized up for schools, hospitals or corporations. Some of the notable projects include the Santa Monica office of ASU, a farm-to-table restaurant in Australia, and the Samburu Girls Foundation, a non-governmental organization school in northern Kenya. Zero Mass Water also participated in Hurricane Maria disaster relief, installing panels on a fire station in Moca, Puerto Rico, to provide the community access to clean water.
Since the commercial launch in 2016, Zero Mass Water has expanded to 18 countries and 16 states. Last year, company revenues rose about tenfold, and Microsoft co-founder Bill Gates and his Breakthrough Energy Ventures recently led a funding round.
“First and foremost, we’re an innovation company,” says Peck. “Our engineering and material science teams are constantly testing and learning how to make more water in better ways.”
Stressles Home Sales
Offerpad co-founder Brian Bair cut his teeth for a little over a decade as traditional real estate agent in the Valley. For a competitive advantage, he implemented a 24/7 concierge to handle all the details for sellers, from pool maintenance and landscapers, to housekeepers to get homes in show-ready condition—services usually found only in the luxury market.
“The idea was to take the day-to-day friction away from people who were in $200,000 to $400,000 homes,” he says. “The opportunity I saw with Offerpad was to marry technology with real estate experience, allowing a consumer to push one button and sell their home.”
Founded in 2015 by Bair and his partner, single-family-rental veteran Jerry Coleman, Offerpad not only pairs technology and real estate, but logistics and capital-intensive finance.
Once a prospective seller completes a short website survey, the company’s OfferComp technology system digests hundreds of data points, supplemented by a review by an analyst in the local market, to formulate a price offer within 24 hours. (A service fee, averaging 7.5 percent, accounts for expected time on market and anticipated renovations.) If the price is acceptable, the seller can simply name—and even move—their desired closing date, sign documents, and go through a home inspection. Once Offerpad owns the home, they complete the needed renovations and refresh work to put it on the market.
Most of the homes purchased are in the $200,000 to $500,000 range, and built since 1969. Currently operating in Phoenix and seven other markets, Offerpad expects to add another eight to 10 locations in 2019.
“Our customer satisfaction right now is 94 percent and people are reaching out from different markets asking when we’re going to be there,” says Bair. “We feel strongly that the more educated the consumer is about the process, the more appealing our product is.”
By Jake Poinier
Photography by Mark Lipczynski