The secret life of start-ups in Kansas City; Kansas City – often referred to locally as “KC” – has a history of entrepreneurship

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March 11, 2014 4:04 pm

The secret life of start-ups in Kansas City

By Jonathan Moules

Kansas City – often referred to locally as “KC” – has a history of entrepreneurship. Hallmark Cards launched here in 1910, shortly before the United Telephone Company, which later became the telecoms group Sprint. These foundations are now being built on by some of the US’s most respected start-up enthusiasts.
Why Kansas City? 
As well as history, KC is home to the Ewing Marion Kauffman Foundation, a non-profit body dedicated to fostering entrepreneurship. More recently, the city has sought to foster a tech start-up mentality, duly acquiring the moniker “Silicon Prairie” in the process.

Brad Feld, an early-stage investor, tech entrepreneur and author of Startup Communities , and Jonathan Ortmans, a senior fellow at Kauffman, have each hooked up houses with high-speed internet connections using Google Fiber in KC and offered free use of them to founders who move to the city. The houses are a way of supporting Kansas City Startup Village, an entrepreneur-led initiative whose goal is to make KC the “premier start-up city in America”.
The case against: 
Kansas City is a well-kept secret as a tech start-up hub, which has implications for achieving a critical mass of founders and fundraising. “There is a perception that we do not have abundant sources of later-stage capital,” says Peter deSilva, president and chief operating officer at UMB Financial Corporation, the KC-based bank. He adds that this is changing as interesting start-up teams develop locally, which then attracts outside investors.

Mr deSilva also believes there is a latent entrepreneurial spirit among talented people in KC’s larger companies and research institutions that no one is yet tapping.

The international connections are limited, even by air, making it difficult for companies looking beyond North America for growth.

Local heroes: 
EyeVerify has created the patented Eyeprint Verification System, a simple, safe replacement for entering passwords on smartphones.
Show me the money: There is a need for more private equity cash. VC funding has not kept pace with the significant increase in start-ups in the city, locals complain. However, moves are afoot to attract more angel and VC funds to the KC area.
Is it well connected?
Kansas City International Airport, which is 15 miles northwest of downtown KC, barely lives up to its name. It has 15 airlines and nonstop service to 51 cities in the US, Canada and Mexico. To go further you must fly to another US hub airport.

Connections with Silicon Valley are good, however. United Airlines flies direct to San Francisco in less than four hours.
What do the locals say? Ben Barreth, founder of Homesforhackers.com, which encourages founders to move to KC, says: “We’ve got a very different thing from Silicon Valley going on here . . . a smaller, fledgling, fired-up start-up community where everyone wants to help out and make a difference.” But he adds: “The investment scene is much more conservative, which can be a challenge.”

Matthew Condon, founder of healthcare software business Bardavon Health Innovations, says: “Kansas City affords a unique environment that promotes, supports and motivates a remarkable group of young people and innovative minds that are able to combine incredible intelligence with a Midwest work ethic.”