Kansas City’s startup season targets the economy’s weak spot

Kirk French first pitched his new business concept to a soccer dad during a party for an under-15 boys team he coached.

“I said I got this idea,” French recalled. “The first thing he said was how much money do you think you’re going to need. So I kind of knew I had something.”

Three years later, French and business partner Jacques Tournoy have attracted almost 16,000 soccer players and 4,400 coaches to College Sports USA. The website puts high school athletes’ profiles in front of college coaches.

But it has to do more to succeed as a business, and French turned to a Kansas City-based business boot camp called SparkLabKC for help.

It’s startup season in Kansas City.

This week saw action at two other business boot camps, and a bevy of other events lies just ahead.

On Monday, the Sprint Mobile Health Accelerator kicked off with 10 emerging enterprises that moved to Kansas City from as far away as San Francisco and Israel. Wednesday evening, two dozen local entrepreneurs pitched their startup stories at the BetaBlox demo day at Union Station. So many people wanted to attend that the BetaBlox gang repeated it all Thursday evening.

A budding television show called the Startup Hour is holding auditions at the Innovation Cafe on Tuesday. Kansas City Startup Weekend – a 54-hour idea-to-impact crash course in May – runs a bootcamp on March 25. LaunchKC will begin taking applications March 31 for up to 10 grants of $50,000 each to tech startups nationwide with the winners chosen in September during this market’s first Techweek. We’re only the sixth city nationwide to get its own seven-day technology conference and festival.

French is two-thirds of the way through SparkLabKC’s three-month business accelerator program. On April 12, he and nine other startup owners will pitch potential investors.

But here’s the key question: Does any of this help?

It had better. America needs more Kirk Frenches – people with an idea and the entrepreneurial spirit to turn it into a startup business. This country used to be crawling with them.

And it was no coincidence that jobs were plentiful as the nation reached a startup peak in 2006. But the Great Recession, which struck late in 2007, rendered new companies more scarce than at anytime since at least 1978. The economy has been fighting its way back, but entrepreneurship across the nation lags badly, according to findings presented last month by the Ewing Marion Kauffman Foundation.

Kansas City’s latest startup efforts, and similar ones in other cities, have emerged after traditional business incubators – low-cost workspace and support services – fell short of expectations.

The Kauffman Foundation now wants to kickstart some empirical studies to test how well this new entrepreneurial ecosystem helps deliver the startup successes the country and job hunters need.

Sparking action

Entrepreneurs thrive on original thinking, but they all follow the same path. They begin with inspiration, grind through a startup phase and eventually grow to build scale as a business and employer.

Kansas City, like other markets, offers several inspiration builders such as 1 Week KC and its participation in Global Entrepreneurship Week.

E. J. Reedy at the Kaufman Foundation said startup numbers nationallly have begun to climb but only now seem to be nearing pre-recession levels.

He’s more concerned about a longer trend in which America sees fewer and fewer startups compared with its total population. This decline has lasted for decades.

In a report released last Tuesday, the foundation urged cities and states to focus on building entrepreneur-centered environments. It cited “catalytic events” such as the weekly 1 Million Cups sessions that have popped up in 67 cities and Startup Weekend events that have happened across the globe.

“I think it’s the ecosystem that keeps the real entrepreneurs going. To take the dive is always a personal decision,” said Erika Klotz.

She should know. Klotz is in the midst of her second startup.

Klotz is chief executive officer of PopBookings, one of the 10 businesses in the SparkLabKC accelerator program. PopBookings is building an online tool for promotional agencies to find temporary staff, and giving each the opportunity to rate the other.

Top of the funnel

In the startup phase, think of an entrepreneur’s world as a funnel. Would-be entrepreneurs pour into the wide mouth at the top hoping to be among the few to emerge a success at the other end.

And this is where the economy is falling down. Fewer startups means fewer successes.

“If you’re not feeding that top of the funnel, you’re not going to find the next Cerner, Perceptive Software, even a Freightquote – these companies that turn into large employers,” said Jeff Shackelford, director of Kansas City’s Digital Sandbox housed at Union Station.

Digital Sandbox stands at the top of the funnel, helping turn inspiration into startups.

Since February 2013, it has worked with more than 200 entrepreneurs in the early stages of starting digital companies. Most get referrals to other programs and resources to help them along.

More than 40 have gotten Digital Sandbox grants to finance a key project. .

All have been local, and Shackelford has identified 160 Kansas City area jobs among former Digital Sandbox companies that found further funding.

Payday at BetaBlox

A startup owner’s hunt for a payday isn’t always about money. This was on display Wednesday at demo day for 24 companies working at BetaBlox, a startup program in Kansas City.

BetaBlox businesses typically have made it down the funnel a bit. Demo day comes every three months and is a chance to ask an audience of their peers, investors and others for whatever they need.

Dawn Kidwell, founder of Bippity Box, told the audience she seeks a mentor for the operational and financial side of her business. The company delivers a “completely random” gift for $25, including shipping.

“I’ve been in online marketing for 14 years, but math is still kind of hard for me,” Kidwell said during her 3-minute pitch.

BetaBlox business owners find benefits from working together.

“You also see that your problems are not unique,” said Justin Prestidge, whose TrailerBid makes custom trailers. “I’m not doing a bad job, they’re just start-up problems.”

Kickoff at Sprint

The biggest startup show around here kicked off Monday at the Sprint Mobile Health Accelerator. It is backed by the Overland Park-based wireless carrier and run by Techstars, which invited some surprisingly strong young companies from deep in the funnel.

For example, Alcohoot, which hails from New York, already has raised $2.3 million, employs 10 people and is on its “second iteration” under new chief executive officer Chris Ayala.

Ayala joined last August when Alcohoot was targeting consumers with its $99.99 breathalyzer that plugs into the earpiece jack of a smartphone or tablet. Pop a clean nozzle into the device, blow for a few seconds and the app calculates your blood alcohol level.

Under Ayala, Alcohoot has pushed to add a business audience, notably ones with fleets of drivers. The company is preparing to face two existing competitors.

“We still are looking for a business model that is repeatable and scalable,” Ayala said. “We’re still identifying who our key customer is in consumer retail, and we’re still in the early stages of our B2B (business customer) strategy.”

His experience shows just how difficult it is to make it through the funnel and how much work it takes to create jobs even in a recovering economy.

This story was originally published March 13, 2015 at 5:44 PM with the headline "Kansas City’s startup season targets the economy’s weak spot."