WEBVTT - Why It's So Hard to Build a Startup Outside the Big Tech Hubs 0:00:00.440 --> 0:00:03.800 A couple of years ago, an entrepreneur named Jayce Wilson 0:00:03.920 --> 0:00:07.000 was trying to raise money for his finance startup called Neighborly. 0:00:10.119 --> 0:00:12.399 Jason is from a small town in Missouri, and he 0:00:12.480 --> 0:00:16.320 started looking for local investors in Kansas City. I love 0:00:16.440 --> 0:00:20.200 Kansas City with all my heart and tried for two 0:00:20.239 --> 0:00:22.919 and a half years to really make something work there, 0:00:23.680 --> 0:00:26.520 but he just couldn't get the help he needed. He 0:00:26.600 --> 0:00:29.600 met with about twenty five investors and they all told 0:00:29.680 --> 0:00:33.640 him no. It was heartbreaking, you know, because it was 0:00:33.880 --> 0:00:36.320 we took it as we're just stupid, we're failures, you know, 0:00:36.360 --> 0:00:39.880 like we can't do this. It took coming to California 0:00:39.920 --> 0:00:42.560 to find somebody who believed in the company. I don't 0:00:42.560 --> 0:00:45.760 think of him as a as a movie movie sorry, 0:00:45.720 --> 0:00:47.559 and that's where he's got to start. But you know, 0:00:47.640 --> 0:00:51.280 he's a very savvy business person, so I wasn't surprised 0:00:51.280 --> 0:00:55.320 by him getting it like that. That investor he's talking about, 0:00:55.800 --> 0:01:01.280 it's Ashton Kutcher, Yes, the Ashton Kutcher. For Jace. It 0:01:01.360 --> 0:01:03.400 turned out to be easier to get money from a 0:01:03.440 --> 0:01:06.760 world famous movie star and an investor in startups like 0:01:06.880 --> 0:01:11.559 Uber and Airbnb than from investors back home. After all 0:01:11.560 --> 0:01:14.560 the rejections he faced in Missouri, Jas came out to 0:01:14.640 --> 0:01:17.520 California in two thousand and fourteen to enroll in a 0:01:17.560 --> 0:01:20.920 startup accelerator kind of like a boot camp for founders 0:01:20.920 --> 0:01:24.039 to help them build their businesses. The programs called five 0:01:24.280 --> 0:01:28.360 D Startups, and it gave him some credibility in Silicon Valley, 0:01:28.400 --> 0:01:31.640 but not back in Kansas City. I think it was 0:01:31.680 --> 0:01:35.840 also people in Kansas City were looking at the D 0:01:35.920 --> 0:01:39.360 name of the company and saying, you're not a finance guy. 0:01:39.680 --> 0:01:41.760 You know, they were expecting something to show up in 0:01:41.800 --> 0:01:46.679 a three piece suit and to you know, sort of 0:01:46.760 --> 0:01:50.240 pattern pattern match with what they know from the world 0:01:50.280 --> 0:01:54.560 of all my banking. Working more and more out of California, 0:01:54.840 --> 0:01:57.640 Jason realized that he was tapping into some key advantages 0:01:57.680 --> 0:02:00.640 in the Bay Area, so after closing a five point 0:02:00.720 --> 0:02:04.040 five million dollar funding round that included a check from Ashton, 0:02:04.600 --> 0:02:07.920 Jas decided to stay out West, abandoning his dream of 0:02:07.960 --> 0:02:21.560 building his company in the show me State. Hi, I'm 0:02:21.560 --> 0:02:25.079 brad Stone and I'm Sarah mcbrad and this week on 0:02:25.200 --> 0:02:29.520 Decrypted will expore one of the technology industry's biggest contradictions 0:02:29.880 --> 0:02:33.280 a lot of effort has gone into cultivating entrepreneurs outside 0:02:33.280 --> 0:02:36.800 Silicon Valley, but building a startup someplace else can be 0:02:36.919 --> 0:02:40.640 really tough. This isn't just in Kansas City, and the 0:02:40.720 --> 0:02:44.679 experience isn't unique to Jason. It's something familiar to founders 0:02:44.720 --> 0:02:48.680 in lots of smaller cities all across America, and it's 0:02:48.720 --> 0:02:52.639 not for lack of smart people or big ideas. Often 0:02:52.680 --> 0:02:54.919 the problem comes down to how much harder it can 0:02:54.960 --> 0:02:58.200 be to get capital when you're away from big venture centers. 0:03:04.680 --> 0:03:09.000 Think about this. Last year, venture capitalists invested sixty nine 0:03:09.080 --> 0:03:12.720 billion in startup companies. That's billion with a B, but 0:03:12.800 --> 0:03:17.359 almost all of it went to startups in California, Massachusetts, 0:03:17.400 --> 0:03:19.640 and New York. If you're a startup and you're not 0:03:19.680 --> 0:03:23.120 in any one of those places, good luck. And Kansas 0:03:23.120 --> 0:03:25.160 City even got what it thought would be a huge 0:03:25.200 --> 0:03:29.080 advantage Six years ago. Alphabet, the company we used to 0:03:29.120 --> 0:03:32.320 call Google, said it would kick off a massive initiative 0:03:32.360 --> 0:03:35.360 in Kansas City. Right at the time, Google wanted to 0:03:35.400 --> 0:03:39.200 blank at the country with super fast, super cheap fiber internet, 0:03:39.320 --> 0:03:42.560 starting with Kansas City. People from the mayor on down 0:03:42.680 --> 0:03:44.600 thought that would do a lot for the city, and 0:03:44.640 --> 0:03:48.120 in particular that it would jump start small technology companies. 0:03:49.120 --> 0:03:53.200 Think of education, think of entertainment, think of e commerce, 0:03:53.560 --> 0:03:56.400 think of attracting developers. And not only that, but it 0:03:56.480 --> 0:03:59.640 just drives the economy around you. So for Kansas City, 0:03:59.640 --> 0:04:06.400 it's been toasting. That's a Google executive Milo Meddon talking 0:04:06.400 --> 0:04:09.560 in a video presentation during the announcement that Google Fiber 0:04:09.720 --> 0:04:13.560 was coming to Kansas City. Over a thousand cities had 0:04:13.600 --> 0:04:16.320 competed to be the first to get it in Kansas 0:04:16.360 --> 0:04:22.320 City one, but not everything turned out like you said. 0:04:23.640 --> 0:04:27.320 Google gave about a hundred schools in Kansas City free fiber, 0:04:27.720 --> 0:04:30.760 and in some ways, Kansas City is doing great in education. 0:04:31.200 --> 0:04:35.240 About forty of the population has at least an associate's degree. 0:04:35.520 --> 0:04:38.080 That's way ahead of other cities in size, like Las 0:04:38.160 --> 0:04:42.200 Vegas and Cleveland, but its economies growing slower than the 0:04:42.240 --> 0:04:45.279 rest of the country. Things could be turning based on 0:04:45.360 --> 0:04:48.840 some government economic data for last year, but in two 0:04:48.839 --> 0:04:53.040 thousand twelve, two thousand thirteen, two thousand fourteen, and two 0:04:53.120 --> 0:05:03.400 thousand fifteen, Kansas City grew slower than the rest of America. Also, 0:05:03.520 --> 0:05:07.119 a smaller percentage of the population works for startups. Mayor 0:05:07.160 --> 0:05:11.680 Mark Holland of Kansas City, Kansas said evaluating specific benefits 0:05:11.680 --> 0:05:14.720 of Google Fiber is tough. One of the things it's 0:05:14.760 --> 0:05:18.760 hard to measure is without this, would we have done worse. 0:05:19.240 --> 0:05:21.200 He points to lots of ways the city has done 0:05:21.240 --> 0:05:24.880 well over the long term, like overall job growth. I 0:05:25.000 --> 0:05:28.359 do think Google has had an impact on that, but 0:05:28.440 --> 0:05:30.960 I don't know if I'm if I would be the 0:05:31.040 --> 0:05:35.760 right person to parse out percentage that represents. When it 0:05:35.800 --> 0:05:38.159 comes to startups, It's not like there's no money to 0:05:38.240 --> 0:05:41.440 spend on them. All around America. There's a ton in theory. 0:05:42.000 --> 0:05:46.480 In Kansas City where Jason's some people are incredibly well off, 0:05:46.560 --> 0:05:50.119 building big name art museums and hospitals. They also build 0:05:50.200 --> 0:05:54.159 huge companies like Sprint and Hallmark. Driving around there, I 0:05:54.240 --> 0:06:00.960 saw that it's a pretty city. It's green. You pass 0:06:01.080 --> 0:06:05.840 landmarks all the time, performance halls and sports arenas, galleries, 0:06:06.360 --> 0:06:09.880 lots of corporate headquarters. You can tell people care about 0:06:09.920 --> 0:06:14.600 the place. The disconnect seems to be young companies. Entrepreneurs 0:06:14.640 --> 0:06:18.440 say it's really really hard to get investors interested in 0:06:18.520 --> 0:06:21.839 companies that don't have physical assets or are going to 0:06:21.920 --> 0:06:24.719 take a long time to get any revenue. And yet 0:06:24.960 --> 0:06:28.760 Jason's company is all about real stuff. He helps people 0:06:28.760 --> 0:06:31.800 build things like parks and roads in their hometowns. His 0:06:31.880 --> 0:06:35.320 ideas to make bonds for local public projects much easier 0:06:35.360 --> 0:06:38.320 for everyday people to invest in, to give something a 0:06:38.320 --> 0:06:43.120 little boring, a little zing. Make sexy again, right, Which 0:06:43.480 --> 0:06:46.200 that's the top piece of advice Jay says he got 0:06:46.240 --> 0:06:49.080 from Ashton Kutcher. It's even up on a poster right 0:06:49.120 --> 0:06:51.680 when you walk into neighbor Lae office in San Francisco. 0:06:52.320 --> 0:06:56.040 Let's hear that one more time. Make bond sexy again, right, 0:06:56.720 --> 0:07:00.880 Which is a crazy silly phrase, right, But it's also 0:07:01.440 --> 0:07:03.280 we think about it, you know, when we want to 0:07:03.279 --> 0:07:06.200 bring people back to the habit of investing in the 0:07:06.240 --> 0:07:08.760 community has to be fun and rewarding and sexy. Right. 0:07:08.800 --> 0:07:12.360 It can't just be uh, you know, based on the 0:07:12.720 --> 0:07:15.680 plane math. Has to be, you know, something that they 0:07:15.800 --> 0:07:20.040 value beyond just the investment, because US bonds are is 0:07:20.120 --> 0:07:23.680 such a a funky kind of you know, asset class 0:07:23.720 --> 0:07:26.680 at this point, they you know, and it really needs 0:07:26.760 --> 0:07:29.240 to be about the story of investing in your community. 0:07:29.720 --> 0:07:32.200 Jason was telling me all this from his office just 0:07:32.320 --> 0:07:38.840 off Union Square in San Francisco. It's a big shopping 0:07:38.880 --> 0:07:41.080 district but also home to a lot of banks and 0:07:41.160 --> 0:07:44.520 cooled cast iron buildings. Neighborli is in one of those, 0:07:44.560 --> 0:07:47.080 and it's old school, no lobby. You just get buzzed 0:07:47.120 --> 0:07:49.680 in from the street and ride the elevator up. They 0:07:49.720 --> 0:07:52.560 have the whole sixth floor, but it's not actually so big, 0:07:52.600 --> 0:07:57.160 one of those narrow railroad style buildings, high ceilings, exposed bricks, 0:07:57.200 --> 0:08:00.400 typical startup. When you get off the elevator, you see 0:08:00.480 --> 0:08:02.960 rows of old bond certificates hanging in front of you. 0:08:03.360 --> 0:08:06.600 It's actually a California version of their office in Kansas City. 0:08:06.800 --> 0:08:10.200 They still keep a foothold there. Yeah, we've got an 0:08:10.200 --> 0:08:14.440 event space and then our office that's open, big windows, 0:08:15.120 --> 0:08:21.320 lots of plants and fun things. That's Chris Parrot showing 0:08:21.360 --> 0:08:24.440 me around neighbor Le's office in Kansas City. He's one 0:08:24.480 --> 0:08:29.680 of Jason's co founders. We've got and that's the other 0:08:29.760 --> 0:08:33.559 co founder, Patrick Hasti. He's the compliance officer. Chris is 0:08:33.600 --> 0:08:37.760 the numbers guy. Super nice space. Frankly, I think um 0:08:37.840 --> 0:08:41.440 for a very reasonable price, especially when compared to the 0:08:41.480 --> 0:08:44.719 coasts or other larger cities. That's what I heard from 0:08:44.760 --> 0:08:47.360 a lot of startups in Kansas City how little it 0:08:47.440 --> 0:08:50.600 costs to do business there. But I got the sense 0:08:50.880 --> 0:08:53.959 that could almost be a bad thing. Perhaps part of 0:08:54.000 --> 0:08:56.680 the reason so many startups succeed in slicon valleys, that 0:08:56.720 --> 0:08:59.880 there's so much pressure since that another company could eat 0:08:59.880 --> 0:09:02.760 your lunch at any time. Why not. Entrepreneur told me 0:09:02.800 --> 0:09:06.080 about how life in Kansas City was almost too easy. 0:09:06.400 --> 0:09:09.240 He said it allowed people to dabble in starting companies 0:09:09.280 --> 0:09:12.240 without really committing. He even had a word for it. 0:09:12.720 --> 0:09:16.319 I ran it by Jay's from neighborly. Are you familiar 0:09:16.360 --> 0:09:22.760 with the term entrepreneur? Entrepreneur? Somebody told me there are 0:09:22.800 --> 0:09:29.960 a lot of entrepreneurs in Kansas City. Entrepreneur. Um, yeah, 0:09:30.240 --> 0:09:33.160 let's see entrepreneur. What can you help me define it. 0:09:33.160 --> 0:09:35.800 It's like somebody wants to be an entrepreneur, but they 0:09:36.080 --> 0:09:41.240 because people aren't as comfortable with the concept of risk 0:09:42.200 --> 0:09:46.240 do it on the side. Like the Jays said, in 0:09:46.280 --> 0:09:50.000 some ways, starting a software business is actually riskier in 0:09:50.120 --> 0:09:56.240 Kansas City. It gets back to, you know, in silicon value, 0:09:56.679 --> 0:10:01.160 if an engineer commits to a project and you know, 0:10:01.200 --> 0:10:05.640 they may you know, take lower uh salary for a 0:10:05.720 --> 0:10:09.040 year or two and get a larger chunk of equity 0:10:09.080 --> 0:10:11.640 and something that may or may not work out. Um, 0:10:11.720 --> 0:10:14.120 but if that thing doesn't work out, you know, they're 0:10:14.120 --> 0:10:17.560 not in an unemployment line for six months, or they're 0:10:17.559 --> 0:10:20.000 not trying to retool their career to figure out how 0:10:20.000 --> 0:10:23.320 they can remain relevant in the the future. They're being sought 0:10:23.360 --> 0:10:27.200 after by ten other companies at any given time. Let's 0:10:27.200 --> 0:10:30.720 play Devil's advocate here. That situation could really be a plus. 0:10:31.120 --> 0:10:33.160 It might mean companies that do start up in the 0:10:33.160 --> 0:10:36.840 Hartland have less turnover and can really focus. Yeah, while 0:10:36.880 --> 0:10:39.440 I was in Kansas City, I met an entrepreneur called 0:10:39.520 --> 0:10:41.920 make Farmer who spent a few years trying to get 0:10:41.920 --> 0:10:46.840 a search company called Leap off the ground. He explained 0:10:46.880 --> 0:10:49.680 something he noticed on a visit to Silicon Valley talking 0:10:49.760 --> 0:10:55.839 with an Apple executive in a coffee shop near Stanford University. 0:10:57.040 --> 0:10:58.640 She said, I don't know how you can do this 0:10:58.679 --> 0:11:02.480 from Kansas City, just since this energy in this room, 0:11:02.480 --> 0:11:05.520 and I actually took the complete opposite point of view 0:11:05.559 --> 0:11:07.880 that you know, if you're gonna build something, it's going 0:11:07.920 --> 0:11:09.600 to be very unique and it's going to have a 0:11:09.679 --> 0:11:13.839 completely different point of view doing it on a call 0:11:13.880 --> 0:11:16.000 it an island or a place like Kansas City. I 0:11:16.040 --> 0:11:19.280 think you have a and you can tap in to 0:11:19.520 --> 0:11:23.640 any of the relevant movements that are happening in in 0:11:23.840 --> 0:11:28.560 technology UH and know how to leverage those as need be. 0:11:29.120 --> 0:11:31.600 But you're able to stay really focused on what you're 0:11:32.160 --> 0:11:38.760 wanting to build. Makes company didn't work out, but there's 0:11:38.800 --> 0:11:42.240 evidence to back him up. Last year, the big Chinese 0:11:42.280 --> 0:11:45.440 company Ali Baba spent a hundred million dollars buying a 0:11:45.520 --> 0:11:49.280 Kansas City startup. I verify the scan veins in your 0:11:49.280 --> 0:11:51.360 eye to figure out if you're who you say you are. 0:11:52.000 --> 0:11:55.720 And another company, c Tufo, has raised a hundred million 0:11:55.760 --> 0:12:00.320 dollars from investors like the big Singapore firm Tomask working 0:12:00.360 --> 0:12:03.960 on some cool financing ideas around working capital. Noticed that 0:12:04.000 --> 0:12:07.679 those companies got major backing from firms outside Kansas City. 0:12:07.800 --> 0:12:10.560 That's because raising cash away from big venture centers like 0:12:10.559 --> 0:12:15.720 San Francisco it's just too hard. Exactly. Here's Jay's talking 0:12:15.720 --> 0:12:17.960 about trying to raise money a couple of years ago, 0:12:20.000 --> 0:12:22.640 and at that time it was still you know, give 0:12:22.760 --> 0:12:27.640 us your you know, your pro forma for five years. UM, 0:12:27.679 --> 0:12:30.080 tell us how you're going to get to profitability in 0:12:30.080 --> 0:12:35.120 the next year. It was tell us, you know what 0:12:35.200 --> 0:12:37.480 physical assets you're gonna buy so that part of our 0:12:37.480 --> 0:12:41.880 money isn't you know, is recoverable in the event that 0:12:42.000 --> 0:12:45.800 this goes under. The problem is Neighborly was a startup. 0:12:45.840 --> 0:12:49.840 They didn't have pro format revenue, that's essentially projected revenue, 0:12:50.120 --> 0:12:53.640 and their path to profitability is years away. They didn't 0:12:53.640 --> 0:12:56.839 need any physical assets and didn't plan to buy any. 0:12:56.960 --> 0:13:00.720 For most investors in Kansas City, that made them bad bet. 0:13:01.520 --> 0:13:04.599 Here's lancelom Ay, an investor at open Air, one of 0:13:04.640 --> 0:13:09.199 the more established VC firms in Kansas City, talking about startups. 0:13:09.200 --> 0:13:13.400 There probably a fair criticism for from some of the 0:13:14.440 --> 0:13:16.800 you know, the founders of the entrepreneurs to say that 0:13:16.800 --> 0:13:18.840 they're collector of being held with a higher standards. They 0:13:18.880 --> 0:13:21.240 probably are, but that's not just the Kansas City issue, 0:13:21.240 --> 0:13:25.720 and probably anywhere he means anywhere except Silicon Valley. In 0:13:25.760 --> 0:13:28.400 place like Silicon Valley, you know, people probably air on 0:13:28.400 --> 0:13:31.360 the side of taking more risks on at the Series 0:13:31.400 --> 0:13:33.640 A level because they're because the fear of missing out 0:13:34.040 --> 0:13:37.520 by Series A. He means the first investment round founders 0:13:37.520 --> 0:13:40.880 ways after they've tapped out friends and family. I think 0:13:40.880 --> 0:13:43.720 the biggest issue that we have here is probably you know, 0:13:43.760 --> 0:13:46.640 we don't yet have um it's a chicken and the 0:13:46.640 --> 0:13:50.440 egg problem. We don't have as many funds investing here 0:13:50.720 --> 0:13:52.439 that are here and that are investing here as we 0:13:52.480 --> 0:13:55.959 would like, and not the function of you know, having 0:13:56.000 --> 0:13:59.679 more available startups to invest in, and the more successful 0:13:59.679 --> 0:14:01.840 start so we have here, the more that old capital 0:14:01.920 --> 0:14:05.160 to kind of feed. But Chase did get around that 0:14:05.240 --> 0:14:08.960 lack of hometown capital, right. Jason was something of a 0:14:08.960 --> 0:14:11.640 mover and shaker in Kansas City. He'd been part of 0:14:11.679 --> 0:14:14.560 the group that helped convince Google to wire Kansas City 0:14:14.600 --> 0:14:17.680 for fiber Internet, and through that project he got to 0:14:17.720 --> 0:14:21.920 know another mover and shaker, Lisa Mitchell. Lisa introduced him 0:14:21.960 --> 0:14:25.360 to an entrepreneur, Bow fish Back, who founded a startup 0:14:25.400 --> 0:14:28.320 called Zarle, and Bow introduced him to one of his 0:14:28.360 --> 0:14:32.080 own investors, Ashton Kutcher. Ashton grew up in a small 0:14:32.120 --> 0:14:35.240 town in Iowa, not far from the small farm town 0:14:35.280 --> 0:14:38.560 where Jays grew up in Missouri. Do you think part 0:14:38.560 --> 0:14:41.520 of the appeal for Ashton was that he's a Midwesterner too, 0:14:41.640 --> 0:14:45.560 and he liked to see, Yeah, he he has a 0:14:45.640 --> 0:14:50.200 unique perspective. He's seen like the United States and communities 0:14:50.240 --> 0:14:52.800 from the same eyes that I saw that like this 0:14:53.040 --> 0:14:56.160 very small town right that a town center, and and 0:14:56.240 --> 0:14:58.760 he gets community and he gets, you know, the need 0:14:58.840 --> 0:15:01.760 to come together and to good projects like schools and 0:15:01.800 --> 0:15:07.360 parks and libraries. And he's also exceptionally savvy as a 0:15:07.400 --> 0:15:17.080 business person and understands how industries operate with middleman. Kansas 0:15:17.120 --> 0:15:21.040 City has worked pretty hard to foster startup community. One 0:15:21.080 --> 0:15:23.720 guy who has worked on it is Matthew Marcus. He's 0:15:23.760 --> 0:15:27.200 helped pull together a community of entrepreneurs in a neighborhood 0:15:27.280 --> 0:15:32.440 nicknamed Startup Village. Matthew showed me around and I asked 0:15:32.520 --> 0:15:35.640 him whether it stings a little when a promising startup 0:15:35.680 --> 0:15:41.600 like neighborly leads town. Oh gosh, no, not at all. Um. No, 0:15:41.720 --> 0:15:44.120 I mean the thing is is that, I mean, entrepreneurship 0:15:44.200 --> 0:15:48.880 obviously very difficult path, professional path. Um. You know, sometimes 0:15:48.880 --> 0:15:51.240 a startup needs to go away from Kansas City or 0:15:51.280 --> 0:15:55.200 elsewhere to get to the next level. UM. I always 0:15:55.240 --> 0:15:57.720 wish him the best of luck, um, and I hope 0:15:57.760 --> 0:15:59.200 they stay in touch. I mean it's almost like a 0:15:59.240 --> 0:16:01.640 family member going off to the next phase of their 0:16:01.720 --> 0:16:03.760 journey and is hey, well, we'll see again, I hope 0:16:03.760 --> 0:16:06.240 and best of luck. He might end up saying that 0:16:06.280 --> 0:16:10.560 to Google Fiber. Last year, Alphabet stopped fibers expansion to 0:16:10.640 --> 0:16:14.760 more cities. Fiber laid off staff. The project CEO left 0:16:14.800 --> 0:16:17.600 in October, and the new head is far more focused 0:16:17.640 --> 0:16:21.040 on wireless. You could say that Fiber is on hold, 0:16:21.720 --> 0:16:24.520 but the people in Kansas City who have it still 0:16:24.560 --> 0:16:28.240 have it now. Other providers there off for fiber internet 0:16:28.280 --> 0:16:31.960 to Plenty of people believe it's perfectly possible to nurture 0:16:31.960 --> 0:16:34.680 startup communities almost anywhere in the country. One of the 0:16:34.680 --> 0:16:38.280 most famous advocates is of venture capitalist named brad Feld. 0:16:38.480 --> 0:16:41.160 Brad lives in Boulder, Colorado, a small town with a 0:16:41.160 --> 0:16:44.400 lot of startups. He wrote a whole book on this idea, 0:16:44.640 --> 0:16:47.080 and he also started a boot camp for startups called 0:16:47.320 --> 0:16:50.000 tech Stars. It operates in a lot of cities he 0:16:50.040 --> 0:16:54.120 wouldn't think of as big tech centers. That includes Kansas City, right. 0:16:54.160 --> 0:16:56.520 Didn't brad Feld even by a house there? Yeah, he 0:16:56.560 --> 0:16:59.440 did right after Google Fiber came to town. I actually 0:16:59.520 --> 0:17:03.720 visited at house in January. Matthew Marcus, who also runs 0:17:03.720 --> 0:17:08.679 the Kansas City Startup Foundation gave me a tour. Are 0:17:08.680 --> 0:17:17.920 you kidding me? Wow? Brad Let's promising young entrepreneurs lived 0:17:17.960 --> 0:17:20.439 there for free. Let's just say they don't always have 0:17:20.480 --> 0:17:23.199 time for housekeeping. I can only imagine. So, Sarah, what 0:17:23.240 --> 0:17:25.959 do you think can Kansas City join the ranks of 0:17:26.080 --> 0:17:29.359 San Francisco and Beijing is one of the world's top 0:17:29.480 --> 0:17:32.679 tech startup hubs. I've actually thought about it a lot, 0:17:32.800 --> 0:17:35.320 and I think that a lot more cities are going 0:17:35.359 --> 0:17:37.920 to become tech startup phubs. I think it's just going 0:17:37.960 --> 0:17:41.199 to get easier for places all over the world. And 0:17:41.240 --> 0:17:44.240 I think it has a lot to do with capital 0:17:44.600 --> 0:17:46.920 that I think will be easier to get. I think 0:17:47.400 --> 0:17:50.920 the fact Ali Baba went to Kansas City and invested 0:17:51.040 --> 0:17:55.320 and didn't make the company leave town is huge. Yeah, 0:17:55.359 --> 0:17:58.840 that's interesting. I mean, I think all these smaller cities 0:17:58.880 --> 0:18:00.719 have a little bit of an uphill battle. It's not 0:18:00.800 --> 0:18:05.400 just the availability of capital, but the absence of mentors 0:18:05.520 --> 0:18:09.440 and other companies that established technology companies that can pave 0:18:09.480 --> 0:18:13.720 the way and throw off experienced founders, the engineers who, 0:18:13.920 --> 0:18:17.080 upon graduating, if they are great and qualified, they might 0:18:17.119 --> 0:18:19.320 go seek out a place like San Francisco. On the 0:18:19.320 --> 0:18:22.040 other hand, as we both know, the cost of living 0:18:22.480 --> 0:18:24.520 on the coast is getting out of control, and so 0:18:24.640 --> 0:18:27.280 maybe a place like Kansas City starts to be alluring 0:18:27.320 --> 0:18:30.080 in that way as a sort of economic alternative. Right. 0:18:30.200 --> 0:18:33.360 I think it's changing. It's just taking way way longer 0:18:33.400 --> 0:18:36.560 than you'd think. And there are other problems there too, 0:18:36.600 --> 0:18:39.480 Like they don't have a big university like Stanford that's 0:18:39.560 --> 0:18:45.159 just spinning off engineers. They have some, but they're farther away. Right, Well, 0:18:45.240 --> 0:18:48.080 let me ask you this question. Did Google over promise 0:18:48.160 --> 0:18:50.760 with Google Fiber when it came to town. I think 0:18:50.800 --> 0:18:54.560 with Google everyone just thought, gig a bit Internet. That 0:18:54.760 --> 0:18:59.359 just sounds amazing. And the fact is, it seems like 0:19:00.080 --> 0:19:03.280 but liked gig a bit Internet. It turned out, you know, 0:19:03.640 --> 0:19:06.639 people like getting on the Internet a little faster. But 0:19:06.800 --> 0:19:09.840 for most startups it really didn't make a big difference.