Mon September 24, 2012
Launch KC Hopes To Attract IT Startups
Part of the hype that’s come with Google Fiber is how great the super-fast internet speed could be for IT businesses.
But is Google Fiber enough to attract the world’s high-tech entrepreneurs to Kansas City, especially when the technology will probably spread to other cities within the next few years? On September 10th, local business leaders and politicians proposed a plan called Launch KC to sweeten the pot for potential new IT companies.
The giant window of Mike Burke’s office provides a panoramic view of Crown Center, Liberty Memorial, and a big chunk of midtown. From his 21st-story perch, the lawyer and former city councilman can see a lot of what’s happening in town, but late last year, when he wanted to see what the city was doing to court entrepreneurs, he had to pick up the phone.
“Last December, I called up our Economic Development Corporation,” says Burke, “And I just posed a hypothetical. I said ‘I’m Joe from Cincinnati. I’m intrigued by the high-speed Fiber in Kansas City and everything that is going on there. I don’t know a soul in Kansas City, but I’ve got a four-person firm. We’d like to move there and work on developing our ideas. What can you do for us, and where can you put us?’ And at that time, the answer was, ‘We’ll get back to you.’ They didn’t have an answer. Cause they really hadn’t delved into what I startup needs, to what the attracting points are, to what private industry can do, and to what role government should play.”
So Burke, who’s also the chair of the Mayor’s bi-state innovation team, started reaching out to Kansas City’s IT businesses to find out what the city ought to do.
“In talking with the tech community – I’ll even use the word ‘geek’ community, because many of them wear that badge proudly – they said ‘Here’s what we need: we need wi-fi in our business districts, we need access to data storage that is gear to assist the startups, we need a proof of concepts center where we can go and work with professionals and have the equipment that we can test our applications – test our products, and we need people to introduce us around.”
What came out of these discussions was a plan called Launch KC. It’s a joint project among big businesses like Hallmark and DST Systems to offer incentives to entrepreneurs. In addition to the free wi-fi, data storage and proof of concepts center, they also came up with mentoring programs, start-up financing and free to cheap office space. The KCMO city council is also trying to pitch in.
“What the city can do and the mayor’s going to be introducing, this ordinance is some sale/leaseback arrangements on equipment – on computers, on screens and all the little things that a startup company would need.”
Mike Burke recently announced Launch KC along with the mayor in the Crossroads district. This is where a lot of the free or cheap office space they’re providing is located. He says the neighborhood is ideal for attracting the kind of people we need.
“Cities don’t say ‘We’re going to create a geek districts, and all you geeks move there.’ We did just the opposite. We talked with tech people and followed where they are. And they’re not looking for the glass cube on 435. They’re looking for a neighborhood that has a real urban feel, that has quirky little hangouts, whether it’s coffee shops or restaurants or barbershops. And that’s why Crossroads, and West Bottoms and River Market, and 18th and Vine all kinda popped up. Those were the areas – along with Hospital Hill – that we’re focusing on, because that’s where the tech communities are already. We’re following them rather than them following us.”
But why are all these big companies so eager to help out what might be future competition? Burke says it’s really about growing the overall metro economy and technical capabilities.
“The big picture is that we - Kansas City – and Kansas City businesses are in a competition with every other city in the world for talent. And Google estimates that by 2020, which isn’t that far away, there will be two and a half tech jobs for every person trained to fill those jobs. So the cities that are going to succeed are the cities that can attract, train, nurture, keep, steal talent. Kansas City is well positioned in that. We’re an inexpensive city to live in. We already have a great tech community here. By taking it to the next level with Launch KC, we hope to enhance those districts that are very tech-friendly districts. From the point of view of the larger companies, even the ones that are not tech companies are tech dependent. A bank in this day and age is very tech dependent. Even a little retail shop on the corner is tech dependent. Having enough trained people to fill the jobs is certainly in their best interests.”
If you’re talking about jobs, high-tech start-ups don’t employ anywhere near the number of workers that a factory or big corporation does. But Burke still believes attracting IT entrepreneurs should be a priority.
“One thing I’ve learned in 40 years of economic development work is you don’t go steal a Fortune 500 company from another city. You grow them in your own city. Hallmark is homegrown. Sprint is homegrown. DST is homegrown. And Cerner is certainly homegrown. We need to grow the businesses of the future in Kansas City. We’re a wonderful climate for that. And if we can attract the right kind of talent, and doing it the way we are with Launch KC, not only interests the small entrepreneur, but guess who else it interests? It interests the companies that are searching for people to fill their tech jobs. If we create the incubator, if we create the atmosphere, if we create the districts, if we create the buzz that Kansas City is the place for people of talent to go, certainly that’s going to have dividends for us that will extend decades.”
What Launch KC wants is to steer the metro area away from is Kansas and Missouri fighting each other for jobs.
“To spend 45 million dollars to move across the state line is insanity. We need to put a stop to it. If we’re going to spend that kind of incentive money we ought to be spending it moving companies from San Francisco or Boston or Chicago or New York to Kansas City. I think Mayor Reardon understands that. Mayor James certainly understands that, and I think our civic leaders understand that. Some of the political leaders don’t.”
Of course, Launch KC was inspired by Google fiber. The high-speed network has come with a lot of big promises about what it could mean for businesses. But Mike Burke says Launch KC is needed to take the next step.
“Just having high-speed Fiber, in and of itself, does not make Kansas City – won’t make Kansas City – the great digital crossroads. All it does it get faster downloads for movies at home. What we really realize once we start looking at it, it’s what we do to take advance of the opportunity that has been handed us. We will be the fastest download city in the United States, but we are only going to be the fastest download city for a short period of time. It may be a year or two or three at most. But other cities are already onto this. They’re financing either privately or publicly expanding Fiber within their communities. There’s a groups that’s raised 200 million dollars to work with university towns to extend high-speed Fiber. So it’s a fleeting opportunity and if we don’t take advantage of it, some other city will. My nightmare is waking up in three or four years and saying ‘Well, Kansas City had this wonderful opportunity. They were ahead of everybody else, but they didn’t realize how to take advantage of it.’”
The city council is soon expected to consider the measure to get rid of sales and property sales for certain purchases by IT entrepreneurs.
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