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Kansas City: Five Reasons Startup Village Could Happen Only Here

Kansas City: Five Reasons Startup Village Could Happen Only Here

KC's Google Fiber pipeline is the furnace driving the city's startups.

Image credit: Google Fiber
This story appears in the August 2016 issue of Entrepreneur. Subscribe »
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Startup Village is a residential block that has been home to as many as 32 startups at once. It began with no funding or master plan but has evolved into an incubator and, as of last year, an official 501(c)3 nonprofit. Other cities may try to replicate the magic, but it won't be easy. Here's why. 

1. It was blessed by Google. 

In 2012, Startup Village's street was ground zero for Google Fiber, the tech giant's superfast broadband service that's said to be 80 times faster than the national average. Matthew Marcus, one of Startup Village's co-leaders, owns the house that first received service. 

2. Housing is affordable. 

When Fiber launched, the median listing price for a house in Kansas City was just $112,000. (That's $52,000 less than in Austin, Tex., the second city to receive Fiber -- and also cheaper than Nashville; Provo, Utah; and Atlanta, all three of which are now on Fiber's grid.) That made the city a gift to cash-strapped startups. Before Fiber's installation, software developer Ben Barreth purchased a home in Kansas City for just $50,000 and dubbed it “Homes for Hackers.” 

3. Midwesterners are neighborly. 

Barreth and Marcus lived six doors down from each other and hit it off. At the same time, a third house was beginning to harbor startups, which put about half a dozen businesses on their block. “When we put it all together, we couldn't believe it,” Barreth says. “We knew we had to start organizing.”

4. The city straddles two states. 

Startup Village covers a mile radius from its focal point on State Line Road, which lies on the border between Kansas and Missouri. Startups can take advantage of whichever state's policies serve them best. “On the Missouri side, they usually have to pay income tax but can deduct losses,” says Marcus. “On the Kansas side, they can't deduct losses, but they can avoid paying income tax and take advantage of angel tax credits.” 

5. Optimism is everywhere. 

Kansas City has new public transportation initiatives (like a trolley system) and a general sense of impending greatness -- affirmed by the Royals' World Series victory. “Kansas City's time has come,” says Barreth. “And that's true with so many aspects of the city -- not just the startup community.”

More on best cities for entrepreneurs: 

The 50 Best Cities for Entrepreneurs

Edition: November 2016

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