‘Third-tier’ startup city? KC growing beyond tech snapshot, leader says

Momentum matters for a startup city, Ryan Weber said.

A recent report ranking Kansas City in the middle of the pack among Midwestern startup hubs doesn’t factor in the ongoing rapid growth of the city’s tech scene, Weber, KC Tech Council president, said.

International tech publication TechCrunch listed Kansas City as No. 9 out of 15 of the best startup cities in the region. Chicago led the group with Minneapolis in a distinct No. 2 spot, according to the report. The ranking took into account such factors as the number of companies founded since 2015, investment round counts and venture capital funding.

Kansas City ranked alongside what TechCrunch called a “third tier” of cities that “seem to chug along quite nicely” behind the Nos. 1 and 2 entrepreneurial ecosystems. The gap between tiers proved wide with, for example, Chicago posting 357 startups since 2015, compared to 72 in Minneapolis and 41 in Kansas City, according to TechCrunch.

“Chicago is a very different tech industry, but it’s also the fifth largest city in the country. No surprise there,” Weber said of the Windy City’s firm position atop the Midwest startup scene. “But that doesn’t mean we can’t compete. Do we have more momentum going forward than Chicago?”

Criticism of Chicago’s inclusion in the ranking was addressed by TechCrunch itself.

“In startups and venture capital, networks are everything, and cities with bigger, more variegated populations typically have the richest networks,” the report read.

Weber agreed on that point: The bigger the city, the bigger the entrepreneurial footprint and resources. Looking ahead, that’s actually good news for Kansas City, he said.

A CBRE Tech Talent Report released in July reported that Kansas City’s tech workforce grew 39 percent between 2011 and 2016, adding about 15,000 new tech staffers. And forecasts show the industry expanding another 23 percent in Kansas City by 2020 — much more quickly than others on the TechCrunch list, Weber said.

But to realize that potential, Kansas City must be forward-looking, making investments for the long term that encourage entrepreneurs to call its startup community home, he said.

“Young people pick a city first before ever picking a job,” Weber said. “We shouldn’t be the last to catch up to our competition.”

Recent improvements to transportation and urban living, like the KC Streetcar project, are among those that demonstrate a commitment by people, politicians and companies to foster a welcoming environment for the next generation of entrepreneurs, he said.

“Tech companies in the future are only going to exist in cities that create their own talent,” Weber said.

One of Kansas City’s closest tech rivals is No. 2 Minneapolis, Weber said, noting the similar demographics and relative size of the two cities. And while Minneapolis boasts retail giant Target as its largest employer, he said, they’d love to have companies like Kansas City-based Cerner, Hallmark and H&R Block.

“We will eventually overcome cities like Minneapolis,” Weber said. “The industry is changing.”