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Entrepreneurs reflect back on Kansas City Startup Village

January 18, 2019

KANSAS CITY, Kan. (AP) — Nobody’s in a huge hurry these days around the narrow crossing of State Line Road and 45th Street, where cars take turns at a four-way stop.

On the northwest corner, an upholsterer is closing in on 50 years of meticulously stitching new life into old furniture.

But for a time beginning in 2012, the world’s largest news operations descended on these porches. They came to report on a grass-roots push to attract young, laptop-armed entrepreneurs to the fastest internet speeds anywhere.

It was the first neighborhood in the country to receive Google Fiber internet service. Then it became home to Kansas City Startup Village. America’s “fiberhood,” some declared it.

Today, Google’s historic gigabit connections remain. But the buzz of a village is no longer, leaving behind a couple of faded “KCSV” flags flapping in the wind.

“I knew a lot of them would fall on their faces,” said Gary Boyce, the corner upholsterer who manages Andrews & Abbey-Riley Inc. “What were they actually producing ... an idea?

“They just did this all day,” and Boyce wiggled his fingers as if pecking a keyboard.

But the end was bound to come, former village people told the Kansas City Star .

“This was kind of a magic kingdom for startups ... but there was never a grand plan,” said co-founder Adam Arredondo. He now helps run the downtown-anchored Kansas City Startup Foundation.

“People still talk about the spirit of the village,” he said, “even though the village itself doesn’t really exist anymore.”

So what’s become of the so-called Silicon Prairie that so many imagined would accompany Google Fiber?

As civic and business leaders now concede, Google Fiber never did turn the metro into a tech paradise. One reason: Google scaled back plans to wrap the nation in gigabit fiber, making Kansas City’s online ties to other businesses no more up-to-speed than the computer systems on the receiving end.

But it was a catalyst.

“Startup Village was a wonderful study in the sociology and psychology of the entrepreneurial millennials,” said boomer and one-time Kansas City mayoral candidate Mike Burke. “The city benefited by having that laboratory here.”

In 2011, the candidate who beat Burke, Mayor Sly James, tapped him to help lead a bistate commission assigned to recommend strategies for adopting Google Fiber and fueling the growth of web startups.

Nowhere in the commission’s proposals was the seeding of Startup Village, started by entrepreneurial dreamers who rented space and even bought homes in the neighborhood without local government funding or special tax breaks.

Their solidarity grabbed the notice of a nation curious about the hype over Google service, which was said to be hundreds of times faster than what other homes at the time had. The village’s narrow streets swarmed on occasion with tour buses, cars in search of slots to park, 20-somethings toting laptops, and CNN, The New York Times, Wall Street Journal and inquiring visitors from 80 countries.

“It’s an audacious and unproven experiment,” reported The Washington Post, calling Kansas City’s fiber fanfare “the equivalent of replacing country roads with the Autobahn speedway and then assuming Formula One race cars will materialize.”

Google, with local headquarters a short stroll north to 43rd Street, had just threaded its first lines through the surrounding neighborhoods of Hanover Heights, the West Plaza and Spring Valley, the latter becoming Startup Village’s home base.

“It was loosely put together on the fly by these younger, aspiring entrepreneurs,” Burke said. “The fascinating part was watching how they all shared and collaborated together.”

Those entrepreneurs included Arredondo, then in his late 20s, and Matthew Marcus, a Gen-Xer who owned a home in the village. They saw new commercial opportunities in the antiques district, despite its wedge-in houses, parking problems and infrastructure that predates the Plaza several blocks east.

Marcus converted his late mother’s residence and design studio to office space and leased to as many as eight web startups at a time. The minds behind ventures such as Leap2, FormZapper, Rivet, Local Ruckus and SquareOffs stocked office refrigerators with beer, fired up outdoor grills and shared trade tips.

“Being able to walk across the street and talk with someone who might know marketing or could point to a grant you’d never heard of was super important for us as a young company,” said SquareOffs’ CEO Jeff Rohr.

An early village booster, Johnson County web engineer Ben Barreth, shelled out $48,000 for a vacant, raccoon-infested house that he rewired and renovated to lodge starry-eyed techies for up to six months — mostly rent-free.

Before opening his nonprofit “Home for Hackers,” Barreth sat at his home computer and emailed a handful of other gigabit buffs.

“This is going to be a smoking hot little startup area,” he typed that night in 2012. “I think it’s going to get some national attention focused on our city.”

The first occupant of Barreth’s hacker home, a 20-year-old Boston resident named Mike Demarais, lasted a year before hightailing southwest with his MacBook, clothes and bicycle. He ultimately wound up back in Boston, the storied birthplace of Facebook.

Demarais was frustrated mostly by Kansas City’s spotty public transit, its lack of universities to drive high-tech research and a Midwest reticence among venture capitalists to gamble on bold ideas.

“There’s not enough of them willing to pull the trigger,” Demarais later told The Star. “Kansas City investors are risk-averse.”

And as the geek invasion intensified, generational tensions flared between longtime homeowners and ambitious young techies.

In 2015, nearly 70 residents in the Spring Valley district signed a petition that called for greater cooperation among the unfamiliar newcomers and goers, zoning officials in Kansas City, Kansas, and the neighborhood’s single-family property owners. Village organizers urged the startup staffs to ration their parking needs and keep lawns tidy.

Soon, however, their aspirations would succumb to economic realities. Once numbering 32 budding firms across 19 village properties, the village slowly shrank.

Barreth couldn’t sustain his “Home for Hackers” past 2016.

Too many repairs, too much mowing and too few occupants led him to pitch his philanthropy and sell the house to a business partner.

Still, as Startup Village brought fresh voices into the local conversation about attracting the next generation of entrepreneurs, several institutional players stepped up, too.

Initiatives to promote startups now include the University of Missouri-Kansas City’s “Digital Sandbox,” Sprint Accelerator, the Kauffman Foundation’s weekly “1 Million Cups” gatherings (now a nationwide effort) and competitions sponsored by LaunchKC offering cash prizes to the most innovative contestants.

“Those resources weren’t available in the early stages of Startup Village,” said civic leader Burke. “The village helped make it happen.”

In August, dozens of former villagers reunited at a farewell event in the former Village Square, which once offered shared workspace hookups but has since lost its signage to a new business tenant.

One former occupant toasted at the celebration was EyeVerify, now Zoloz Inc., Startup Village’s biggest success story.

In 2016, EyeVerify and its retina-scanning and face-recognition technology was acquired for more than $100 million by Alibaba, the Chinese version of Amazon. Zoloz is now located in a sprawling downtown office.

Eight or nine other outfits gained enough traction and investor support to grow their staffs and relocate into trendier digs around Kansas City.

Marketing upstart Rivet moved into a two-story space in the River Market; OneHQ, serving insurance companies with extensive data platforms, graduated to an elliptical edifice of glass and marble in Leawood.

Founded by village enthusiast Kyle Ginivan, OneHQ sprung from the claustrophobic basement of a Cambridge Drive A-frame, where a half-dozen techies reported daily. They included Kelechi C. Anuforo, a California transplant who became known as “K.C.” in a nod to his new hometown.

“We were not experts (in business), but learned by being so close to one another,” he said in a recent visit with co-workers back to the compact house.

OneHQ recently broke into Ingram’s Magazine’s list of the 50 fastest-growing companies in Kansas City.

Village co-founders Marcus and Arredondo helped form the Kansas City Startup Foundation, a nonprofit organization now renting space at the busy Plexpod building in the Crossroads district. The group oversees the online Startland News and an educational component to promote entrepreneurial learning among K-12 students. The foundation’s mission is to “access the passion, ingenuity and collaborative spirit of the Kansas City startup community.”

But the village they created is not entirely dormant.

Today, SquareOffs’ Rohr and partner Rachel Smith are the lone occupants of Marcus’ once-bustling property. And their startup, an interactive menu of news threads and topical debates, continues to grow. SquareOffs drew 50 million page views in 2018 and nearly 3 million paying users.

In recent weeks, Barreth’s former property sold again to Brandon Schatz from Springfield, who has startups of his own.

He already has spent six figures buying the perfect URLs: One is SportsPhotos.com, now employing photographers nationwide to shoot amateur sporting events that participants can download for free; RoadTrip.com lets travelers plan cross-country outings.

He operates the sites around the clock, wondering why it’s taken so many years for his ventures to take off.

“It is quieter around here now,” Schatz said from his home, in a neighborhood back to being Spring Valley. “But I don’t have plans of getting out.”

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Information from: The Kansas City Star, http://www.kcstar.com