
This is just a glimpse of what innovation looks like in Kansas City at this time:
• TVAX Biomedical is working on breakthrough technologies for treatment of brain and kidney cancers, and has received FDA authorization for its first round of final human trials. The Lenexa-based firm hasn’t developed a cure—yet—but CEO Gary Wood has reason to believe a major victory in the war on cancer is within reach.
• Toby Rush’s fledgling EyeVerify, also in Lenexa, is breaking new ground in mobile-device security using eye-vein biometrics, a technology that surpasses passwords, key fobs, access cards—even iris and fingerprint scans.
• The Center for Animal Health Innovation, based in Olathe, is taking a new approach to the concept of commercializing animal-health research, generating inquiries from domestic and foreign companies alike about doing business in the region’s animal-health corridor. An early success: Aligning with a K-State researcher to commercialize a novel natural antibiotic to treat mastitis in dairy cattle—a condition that inflicts an estimated $2 billion in losses on that industry every year.
• Bruce Steinberg, in the final stages of negotiating his first grocery shelf space for what he believes will be a disruptive force in a field as well-established as ketchup production. His Fine Vines Artisanal Ketchup varieties are being produced in Independence to bring product differentiation to a $500 million consumer category sorely lacking it.
• Even the way we teach innovation itself is being reshaped. Last fall, the Journal of Product Innovation Management recognized program changes at the Bloch School of Management’s Institute for Innovation and Entrepreneurship, ranking it No. 1 worldwide for innovation management research. On many fronts, Kansas City is carrying on the entrepreneurial traditions that spawned companies like Hallmark, H&R Block, Sprint, Cerner and Garmin. While much of the emerging roster is dominated by higher-tech interests or life-sciences companies, some of the most successful local innovators in recent years have been people with the vision to apply new processes to longstanding business models.
Bonnie Kelly and Teresa Walsh, who pursued the jewelry-party sales strategy that grew into Silpada and turned $25 in household grocery money into a $650 million sale to Avon in 2010. And BATS Global Markets, launched in 2005, has used advances in algorithm-driven trading to become the third-largest stock exchange in the world, already approaching the billion-dollar revenue threshold.
“One of the key elements of Kansas City’s innovation infrastructure is the proximity of so many great universities—from KU to MU to Nebraska—that turn out great talent,” says Joe Ratterman, CEO at BATS. His company has drawn extensively on the technology, engineering, and entrepreneurial talent coming out of those schools, he said: “Companies can only be successful and continue to innovate by building teams of smart, dynamic individuals and, with the rich educational foundation of the Kansas City-area, this has been an integral part of BATS’ success.”
Executives from companies engaged in new innovative efforts says that this area also is blessed with assets like the Kauffman Foundation and its research and promotion of entrepreneurship, a vibrant network of experienced entrepreneurs who share their expertise, grant-making organizations like the Kansas Bioscience Authority, and research efforts at regional universities and medical centers.
The flip side, innovators note, is that the advantage Kansas City holds in logistics and distribution—its central location—continues to be a disadvantage in one very key aspect of start-up company success: Attracting the kinds of venture capital and angel investment that is far more readily available in coastal population centers like San Francisco and Boston.
“Most people view the fact we’ve raised $10 million from angel investors locally as an extraordinary thing, which it is,” says Gary Wood, CEO at TVAX Biomedical. “But the money is on the coasts.” Historically, he said, venture funds want easier access to their projects, Wood said, and “it’s hard to do that from a distance. They want to be able to call up a CEO for lunch and not have to fly half-way across country to do that.”
Jeff Boily, CEO of the Center for Animal Health Innovation, said that in those coastal communities, “you can throw a stone and hit 50 investment opportunities without leaving your office. It is more difficult to raise capital here, but as we continue to promote the tremendous assets we have here, we’re hoping that more of the people with that kind of money investment capital will stop, take a look at Kansas City, and say ‘maybe we should be investing here.’ ”
