Thinking Bigger Business—July 2017 by Thinking Bigger Business Magazine

VOL. 26 // ISSUE 7 // JULY 2017

CREATING CURB APPEAL Sean Simms and SKS Studio provide landscape architecture for global projects.

INVESTING IN ENTREPRENEURS What’s the funding environment look like in Kansas City?

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CONTENTS

JU LY 2017 VOL. 26 // ISSUE 7

F E AT U R E

28 Entrepreneurial Investment Rises in Kansas City

The Funding Environment Is Looking Up

D E PA R T M E N T S

07 The Bigger Picture 08 Legislative Briefs 10 BIG | deals 12 25 Under 25 ® Updates 13 Biz Bits 49 BIG | shots

OUTLOOK

26 KC Futures More Women in Tech

42 Banking and Finance

Industry Trends

A diverse economy is boosting KC’s financial services industry.

S M A R T S T R AT E G I E S

20 | KC ENTREPRENEURS

32 BIGGER | growth Growth is where you aren’t looking

34 BIGGER | hr Noncompete and nondisclosure agreements

HE ON T R E V O C

A WORLD OF

OPPORTUNITY

36 BIGGER | sales Creating sales compensation packages

Sean K. Simms and SKS Studio design landscapes

38 BIGGER | law

for elite hotels and resorts around the globe.

Trade Secrets 101

39 BIGGER | tech Password storage programs

14 4

THINKING BIGGER BUSINESS // July 2017

B IG I N F LU E NC E

| 16

B IG S TA R T S

| 16

MADE TO LAST

C O M PA N Y T O WAT C H

KC M A D E I T

ENTREPRENEURIAL JOURNEY

17°73°

Madison Flitch

Lessons Learned

Conner Hazelrigg makes Haiti’s mobile phones ring.

John Pryor makes furniture with local roots.

Gary Short, founder of sys-tek, shares five pieces of wisdom. SMART COMPANIES THINKING BIGGER®

CONTENTS

JULY 2017

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Elizabeth Usovicz

Are You Pushing for “Simple” in Your Business?

The Basics of Growth Hacking

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THE BIGGER PICTURE

Where Ideas Can Lead

ou’d think that after 25 years

a solution. The result? Her Sunshine Box is

of meeting and talking with

changing lives in Haiti.

entrepreneurs, I would no longer

Ted Arehart had always been interested in

be surprised by the niches in which they

telekinesis—the belief that the mind can move

manage to create successful businesses or

objects. Rather than just be fascinated by it, he fig-

the mindsets they adopt in order to steer their

ured out a way to create virtual reality games that can

companies through challenges.

be played with brain waves. The result? His company is

But I do still marvel when I hear some of the stories. The

helping elderly patients maintain neurological health.

company owners featured in this month’s issue have

Belger Carter realized nearly 100 years ago that

especially compelling entrepreneurial journeys.

motorized vehicles would replace horse-drawn wagons,

Sean Simms at SKS Studios said he and his team

so they bought a truck to transport their product.

adopted a “SEAL Team survival mode”—the ability to do

The result? The company has expanded into multiple

whatever it takes—early on. It’s now an intrinsic part

industries and states. It outlasted its competitors and

of the firm’s character. The result? The company used

is preparing for its centennial.

that mentality to weather the recession and now has

We’ve all heard the saying in some form or another

landscape design projects in 50 countries.

that ideas without action aren‘t ideas—they’re regrets.

Conner Hazelrigg at 17° 73° learned about the scarcity

Kudos to all the entrepreneurs in Kansas City who are

of electricity while she was an intern. She put her

living out their ideas daily, in spite of the challenges,

mathematics and physics degrees to work to create

rather than keeping company with regret.

Ke lly S can lon

// Publisher // kscanlon@iThinkBigger.com

SMART COMPANIES THINKING BIGGER®

L E G I S L AT I V E B R I E F S

FEDERAL House Votes to Eliminate Dodd-Frank Provisions

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THINKING BIGGER BUSINESS // July 2017

On June 8, the House voted to pass the CHOICE Act of 2017. Among the CHOICE act’s goals are to reform and restructure the Consumer Financial Protection Bureau (CFPB) into an enforcement agency replacing the Dodd-Frank Wall Street Reform and Consumer Protection Act. The CHOICE Act would attempt to unleash financial growth and opportunities by allowing consumers and job creators more access to capital and relieve them of many of the regulatory burdens often associated with the Dodd-Frank law. Critics claim that the CHOICE Act would allow Wall Street institutions to be less regulated leading to economic instability. The Act moves to the Senate for a vote where it will need bipartisan support to be successful.

U.S. Labor Department Rolls Back Guidance Documents Issued During Obama Era

On June 7, U.S. Labor Secretary Alexander Acosta announced that the U.S. Labor Department would be withdrawing its 2015 and 2016 informal guidance letters on joint employers and independent contractors. The 2015 and 2016 informal guidance letters put employers at a greater risk for employment violations. Additionally, the letters were criticized as creating informal standards that were not subject to formal notice and comment rulemaking in Washington D.C. Accordingly, many business owners were not given a chance to formally protest the measures and explain the effect on business. The change by Secretary Acosta will return the Department to the pre-Obama rules which are still ripe with confusion as to the meaning of joint employer and independent contractor status. To date, there is no bright line rule on either issue.

Small Business Committee Advances Five Bills

On June 15, the House Small Business Committee announced that it had approved five bills aimed at amending both the Small Business Act and the Small Business

Investment Act to make the SBA more accountable and run more efficiently as well as allow small business owners greater resources to ensure support. The bills, H.R. 2763, H.R. 2594, H.R. 2333, H.R. 2364 and H.R. 2056 all venture to support small business. H.R. 2763 mandates that Small Business Innovation Research (SBIR) is more readily available to Congress and allows small business technological innovation to be used for federal research and development projects. H.R. 2594 gives greater protection to contractors working with the federal government. Namely, H.R. 2594 would allow small business contractors the ability to be paid sooner when the government executes change orders on agency projects that the small business has contracted with the government to complete. H.R. 2333, the Small Business Investment Opportunity Act of 2017, allows greater leverage for small business investment companies (SBICs) to have access to capital. Similarly, H.R. 2364 increases the caps imposed on banks wishing to invest in SBICs. Finally, H.R. 2056, the Microloan Modernization Act of 2017, would increase the microloan limit from $5 million to $6 million, allowing greater assistance a microloan intermediary can offer to small businesses. All five bills were advanced with bipartisan support.

KANSAS Kansas Legislature Finally Reaches Tax Deal

In what was always seen as an uphill battle, Kansas lawmakers finally reached a deal rolling back Governor Sam Brownback’s signature tax plan. On June 6, the Kansas legislature overrode Governor Brownback’s veto reversing the tax cuts that Kansans had become accustomed to over the last five years. This override will ultimately raise taxes by $1.2 billion over the course of two years, raising both the highest marginal rate in the state and repealing the so-called LLC exemption.

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BIG | deals

AWARDS/RECOGNITIONS Local Company Earns Top Honor for Customer Service Again One Hour Heating & Air Conditioning in Olathe was awarded the President’s Award by Direct Energy. The company is part of the Direct Energy family of brands. Ramon and Janet Blachly have operated the business for nearly 30 years. The President’s Award is the company’s top honor that it gives to its home services brands. This is the third year that One Hour Heating & Air Conditioning has earned the award.

» » » » »

The Running Well Store // Kathy Gates Insurance Pros // Chris Goodwin Apple Pie Painting // April Kramer Matai Services // Nick Lewman Novella Brandhouse Group, Inc. //

Elizabeth McFadden » » » » »

Yotabites Consulting LLC // Mani Raman Noble Designs, Inc. // Sara Noble Ocean & Sea // Brendan O’Shaughnessy MusicSpoke // Jennifer Rosenblatt Right Angle Advisors // Lori Worthington

THINKING BIGGER BUSINESS // July 2017

EXPANSION

The U.S. Small Business Administration awarded the University of Missouri-Kansas City Innovation Center one of the first ScaleUP! America program contracts in the nation. ScaleUP! KC launched in January 2015 with 15 small business owners. The five cohorts since then have produced 77 graduates. NEW BUSINESSES

ScaleUP! KC Selects 16 Firms for Sixth Cohort ScaleUp! KC has selected 16 entrepreneurial companies for the sixth cohort to undergo training that will help them develop better management and growth strategies. The four-month program focuses on startup business owners seeking skills to move to the next level. The sixth cohort includes: » Assel Consulting LLC // Thomas Assel » First Response Construction LLC // Chris Ayala » MD HomeCare LLC // Cristina Betts » ClassApps LLC // Sheryl Briggs » Cramer Capital Management // Dawn Cramer » Crum Cleaning // John Crum

private party space, a bar-b-que pit, vocational training and offsite catering. Chef, sommelier and caterer Carey Weir and chef Richard McFarlane-Clark will run the day-to-day operations. Weir has been the chef at Bistro 105, also located in Kearney, and runs Salt Catering.

Political Branding Consulting Firm Launches PoliticalBranding Associates, a political branding consulting firm founded by Bonnie Siegel, has opened in Overland Park, Kan. It specializes in creating and driving brand identity for local, state, gubernatorial, congressional and presidential candidates. Kearney Culinary Academy Opens A new culinary academy made its debut last month in the Kansas City area. The Kearney Culinary Academy opened its doors and ovens on June 12. The academy, located at 105 S. Jefferson in downtown Kearney, Mo., is a state-of-the-art, 4,000-square-foot facility. In addition to its commercial bakery, class offerings, and chef and peer demos, the facility will host public tapas nights, offer

Boulevard Brewing Announces Expansion Boulevard Brewing Company is planning

to break ground on a 24,000-square-foot, single-story building next to the current brewery on Southwest Boulevard. The $10 million expansion project will accommodate Boulevard’s canning line, which it introduced in 2015. The new state-of-the art canning facility will allow Boulevard to fill 350 12-ounce cans a minute, with room to grow. Colony KC Adds Rock and Roll with The RINO Colony KC in Northtowne is opening The RINO, a music venue and event space featuring rock and rock-related bands, this month. The company wants to attract local and touring bands and songwriters on a nightly basis. Besides rock, the venue also may include some jazz and hip-hop nights, said co-owner Zach Henderson. The space is also available for rent for corporate events, parties, weddings and

other events. The company also announced a brewery expansion and a full kitchen to be built later this year. Colony KC is a family-owned bar that focuses on the craft beverage movement. It serves beer, cocktails, espresso and coffee as well as fresh baked goods from The Kansas City Baking Company.

ANNIVERSARIES Financial Services Firm Celebrates 10 Years WiseWealth LLC is celebrating 10 years of providing financial services to clients. Located in downtown Lee’s Summit, WiseWealth has six employees. It specializes in wealth planning, wealth management, wealth transfer planning and workplace financial education. Stephen Stricklin, president and founder of WiseWealth, is releasing a book and speakers bureau program called “Simplify Your Retirement” as part of the celebration. The book and program are intended to educate consumers and guide them through retirement income planning. ON THE MOVE Bullseye International has moved from

Lee’s Summit to a new location at 4006 East 137th Terrace in Grandview. Bullseye is a service-disabled veteran-owned business that provides facility and janitorial supplies for businesses across the country. It focuses on American-made products that are ecofriendly and safe. OTHER BUSINESS Warehouse1, an international provider of

new and used warehouse and storage equipment, is now 100 percent employee owned. Mary Lou Jacoby founded the company in 1988. She recently led the company’s 49

employees through an Employee Stock Ownership Plan (ESOP). Warehouse1 got its start back in 1986 when Jacoby saw opportunity where others saw trash. Jacoby thought the retail shelving, storage cabinets and other items in the building at 33rd and Troost could be resold to other companies if they were just cleaned up a little. Jacoby struck a deal to buy the building by reselling the used inventory, and Warehouse1 was born. Laurie Roberts Named President of Parris Communications Laurie Roberts is the new president at Parris Communications. Previously the firm’s chief operating officer, Roberts started as director of account services in 2001 after spending 17 years as a television and radio broadcast journalist.

Roberts has served in management roles for much of her tenure at Parris Communications, including as managing director. She became COO in 2014. Roberts heads up several practices within the firm, including the crisis communications, real estate, and health care and life sciences groups. During her broadcast career, Roberts racked up three Emmy Awards for anchoring and reporting, and she won the national Gracie Award, which is awarded by the Alliance for Women in Media Foundation. Parris Communications specializes in corporate media and strategic communications, crisis communications, and public affairs management.

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Midwest Technology Center to Debut in August Technology Group Solutions (Class of 2010)

more than quadrupled its space when it relocated to 8551 Quivira in Lenexa on May 1. Construction of a new Midwest Technology Center is currently underway, with an opening on August 3. Technology Group Solutions’ CEO Lenora Payne said, “Since 2005 we have grown to $55 million in revenue, over 50 employees, and have expanded our headquarters in Lenexa to a 22,000-plus square foot facility that is home to Kansas City’s first Midwest Technology Center. This technology center will provide education and training to the local community.” Payne said that educational offerings such as manufacturer classes, IT certification courses and extended education for those graduating from locally based Centriq Training Technical School are in the works.

k12itc Named to Fastest-Growing List A recent article in Finding Kansas City named k12itc (Class of 2014) as one of the fastest-growing technology companies to work for in Kansas City. According to the article, at the end of 2016, there were 4,7000 tech jobs posted in the Kansas City area. k12itc was listed along with C2FO, AutoAlert, FitBark, VeriShip, DEG, DSI, blooom, Pinsight Media, FanThreeSixty, mySidewalk and Red Nova Labs.

EAG Wins Eight BMA Fountain Awards EAG Advertising & Marketing

(Class of 2007) won eight Fountain Awards and one Certificate of Merit at this year’s event in May. 12

THINKING BIGGER BUSINESS // July 2017

Photo credit: Landworks Studio

Several 25 Under 25 Alum Win Meadowbrook Work The Johnson County Park & Recreation District (JCPRD) recently awarded Harmon Construction work on the Meadowbrook Park Improvements and Activity Building project in Prairie Village. The $8.3 million project is being built on 80 acres of land on the former Meadowbrook Golf and Country Club property. Several 25 Under 25 alumni have been involved in the project. Harmon Construction (Class of 2002) is the selected contractor collaborating with Landworks Studio (Class of 2016), the lead design firm for the park. JCPRD hired Landworks to complete the master plan for the park and was subsequently retained to complete the final design and construction documents of the park. Landworks teamed with consultants Shockey Consulting Services (Class of 2015) to head up the public involvement components of the project and Affinis Corporation (Class of 2012) to provide civil engineering and traffic consulting. A ribbon cutting is scheduled for April 2018.

» Content—Nurturing/Drip Program //

sipVine Compliments Campaign » Collateral—Product Sheet // Livers Bronze Product Line » Identity—Packaging // Commenco Rental Stickers » Identity—Logo // Commenco » Identity—Stationary // Commenco Proposal Folder » Online Advertising—Banner Ads // Invision » Event Marketing—Traffic-Generating // Bryant Dealer Recruitment » Public Relations—Reputation/Crisis/ Brand Management // SKS Studio The firm picked up a certificate of merit for a product brochure for Commenco.

Schloegel Snags 2017 Guildmaster Award GuildQuality recently honored Schloegel Design Remodel (Class of 2004) with a 2017 Guildmaster Award. The GuildMaster Award celebrates excellence among home builders, remodelers, developers, property managers, home services contractors and real estate professionals each year. This is the second consecutive year that Schloegel has received the award.

BIZ BITS

Dana Knapp Named ArtsKC CEO, President ArtsKC did a national search for a new president and chief operating officer but found that it really wasn’t necessary to leave its own offices. Council officials decided they already had the best candidate in Dana Knapp, who was interim CEO and president. On May 22, they named her the new president and CEO, effective immediately. ArtsKC is a nonprofit regional arts council that promotes the arts across a five-county metro region.

businesses through education and mentorship. The organization, which has a network of more than 10,000 volunteers nationwide, is supported by the U.S. Small Business Administration. If you are interested in becoming a volunteer or want more information, call (816) 235-6675.

UMKC Chancellor Morton Retiring

SCORE Seeks Volunteers If you have management skills and some spare time, the Kansas City chapter of SCORE is looking for volunteers. SCORE is a nonprofit association dedicated to helping launch and grow small

share insights into buying and selling a business. Hosted by the Kansas Small Business Development Center, the halfday conference is designed for people that want to purchase or sell a business. Others individuals involved in the buy-sell process— accountants, attorneys, business brokers, lenders, financial planners and others— are also welcome to attend. For more information and registration, visit http://bit.ly/BuySellConference.

Kansas SBDC to Host Business Buying and Selling Conference A team of experts will convene at Johnson County Community College on July 27 to

Leo E. Morton, chancellor of the University of Missouri-Kansas City, is retiring in spring 2018. During his tenure as chancellor, which began on Dec. 15, 2008, Morton oversaw significant growth

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in enrollment. Additionally, Morton led the university’s most successful capital campaign, the creation of a strategic plan for diversity and inclusion and a successful campaign to advance UMKC’s Downtown Campus for the Arts. The latter is one of the Kansas City Chamber of Commerce’s Big Five priorities. Morton was chairman of the UMKC Board of Trustees when he stepped out of his corporate retirement to take on the role of interim chancellor in 2008. Within a short time, he was asked to take on the UMKC leadership role on a permanent basis.

the midcontinent region, which encompasses the area from the Rocky Mountains to the Appalachians.

Kauffman Foundation Awards Grants to Eight Venture Accelerators The Kauffman Foundation has announced grants and sponsorships totaling $840,000 for eight local venture accelerators that work to increase the success of early- and growthstage entrepreneurs. The awards are part of Kauffman Foundation’s KC Accelerator Challenge, which was announced last fall. The venture accelerators receiving funding are BetaBlox, Enterprise Center of Johnson County’s Investment Bootcamp, Helzberg Entrepreneurial Mentoring Program’s Amp Up, Sprint Accelerator, Techstars Kansas City, Project United Knowledge, Rightfully Sewn and ScaleUp Kansas City.

Mid-Continent Venture Capital Scholarship Recipients Announced The Ewing Marion Kauffman Foundation and Kauffman Fellows have announced the first four recipients of the Kauffman Foundation Mid-Continent Venture Capital Scholarships. The program is a two-year venture capital and leadership program based in Silicon Valley. It is designed to close the capital investment gap in the Midwest by increasing expertise in capital formation expertise in the Midwest and build Kansas City as a regional hub for investor networks. The 2017 Kauffman Foundation MidContinent Scholarship recipients are Lisa Feria, Kansas City, Mo., CEO of Stray Dog Capital; Thad Langford, Kansas City, Mo., founding partner of Flyover Capital; Scott Bernstein, St. Louis, Mo., principal at Lewis & Clark Ventures; and Victor Gutwein, Chicago, Ill., founder M25. Each year, two recipients will be selected from the Kansas City area. Another will be chosen from either Missouri, Kansas, Iowa, or Nebraska, and the fourth will represent 14

THINKING BIGGER BUSINESS // July 2017

BIG INFLUENCE | THE GIVING GROVE

Event Hosts Needed for Global Entrepreneurship Week Kansas City will put its small business community on stage Nov. 13-17 at the 10th anniversary celebration of Global Entrepreneurship Week. The week, which the Kauffman Foundation launched in 2008, has grown into an international celebration and showcase of innovators and entrepreneurs in more than 160 countries. Roughly 12,000 people attended more than 100 events in Kansas City during last year’s celebration. The 2017 program will feature four tracks of themed events: makers and creators, youth entrepreneurship, business growth and business services. The business community may propose events for the program by visiting www. gewkc.org through August 18. Volunteers and sponsors also are needed.

Designing Orchards There’s more to Greg Finkle’s passion than architectural design. As an architect, Greg Finkle designs buildings. But when he’s not busy with the projects at Finkle + Williams Architecture, the firm he founded, he’s busy designing programs that help low-income people, children and community groups in Kansas City grow their own food. Finkle is one of three founders of The Giving Grove, a non-profit program of the Kansas City Community Garden. He and co-founders Kevin Birzer and Ray Makalous officially launched it in 2013 when they realized hunger was an increasing issue in the Kansas City area. The Giving Grove plants tree gardens on deserted property, in vacant lots, next to food pantries and on school and church grounds. The group decided to grow fruit and nut trees because they are sustainable and nutritious. More than 2,000 new fruit and nut trees have been planted at 133 sites, with an annual harvest potential of 256 tons. Finkle said that executive director Rob Reiman, the staff and board have carried out the vision and execution well. The neighborhood stewards who watch over the orchards play an important role. Finkle said reaching more people is the next goal. “We have a proven model and we want to make it portable to other cities in other states,” he said.

C O M PA N Y T O WAT C H K C

1 7 ˚ 7 3 ˚ I N N O VAT I O N C O .

E N T R E P R E N E U R S

(Photo courtesy of Austin Walsh Studios)

The Sunshine Box MAKING HAITI’S MOBILE PHONES RING

17° 73° (816) 244-5828 www.1773innovationco.com

onner Hazelrigg just wanted to provide an easier way for people in Haiti to charge their cell phones. Her desire to help has led to the creation of 17° 73°, a company that could make solar power available to less-developed countries around the globe. Hazelrigg has developed a solar-powered battery apparatus that can charge 10 mobile phones at a time. It is a boon for Haiti, which is a mobile-first society where residents often depend on their devices for food, commerce and digital currency transactions. The name 17° 73° reflects the coordinates of Port au Prince in Haiti.

TYPE OF BUSINESS

COMPASSION FOUNDS A COMPANY

ENTREPRENEUR

Conner Hazelrigg C O M PA N Y I N F O R M AT I O N

Solar-powered battery box designed to charge mobile phones in countries with insufficient electrical service

Hazelrigg was an intern at Sunshine Electronic Display in St. Joseph, Mo., when she heard about Haiti’s electricity scarcity. About 80 percent of people in Haiti have access to a cell phone, but only 12 percent have convenient electricity service. Many pay as much as 60 cents per half hour to charge phones at far-flung stations. Hazelrigg, who studied physics and mathematics at William Jewell College in Liberty, consulted with colleagues and developed a solution: the Sunshine Box. The solar-powered device is the size of a briefcase and stands about six inches tall. Its 20-watt solar panel maintains a constant power supply, and the apparatus is portable and waterproof. Hazelrigg completed the box with a Kauffman Foundation grant and tested it in Haiti in 2014.

When she saw the user reaction, she realized her invention was transcendental. Haiti now has six Sunshine Boxes, and Hazelrigg wants to raise that to 100 by the end of 2017. Hazelrigg is the only full-time person at 17° 73°, although others help out. Sunshine Electronic makes the boxes for 17° 73°. TAPPING INTO DIGITAL CURRENCY

The Sunshine Boxes are sold to missionary and church organizations, which operate in Haiti and other countries. One of the device’s new functions will enable users to send a text message to the boxes for payment rather than bringing cash, which can make them robbery targets. The small fee also becomes an income for the church. 17° 73° also plans to hire Haitian locals to sell the boxes as entrepreneurs. With Haiti’s digital currency, residents use their phone to pay for food and are paid for their work by phone. A dead battery means no food and no wages. The company has Sunshine Boxes in 11 different countries on four continents, but Haiti will remain the principal focus of 17° 73°. Hazelrigg plans to use a Digital Sandbox KC grant to update the Sunshine Box so it can accept Haiti’s digital currency.

Terry Wooten is content development manager for Thinking Bigger Business Media. SMART COMPANIES THINKING BIGGER®

AT A G L A N C E K C

E N T R E P R E N E U R S

BIG STARTS | TELEK

MADE TO LAST | BELGER CARTAGE

Telek Targets Neurological Health

Belger Cartage Cranes Toward 100

Company develops virtual reality games driven by brain waves.

Innovation and customer service have lifted the company to success.

COMPANY // Telek

In 1919, other printers were using teams and wagons to move paper stock in and out of Kansas City printing plants. But Richard Belger saw the future was in motorized transportation, so he purchased a truck to serve his printing customers. As Richard and subsequent generations of Belgers continued to innovate, Belger Cartage Services, Inc., became The Belger Kansas City team works at a leader in the crane Union Station to move the new street car. industry. After 98 years, the company’s cranes lift delicate and heavy equipment, their trucks haul it away and customers can store the haulage and other equipment in Belger’s warehouses.

ENTREPRENEUR // Ted Arehart WHAT THEY DO // Telek develops virtual

reality games that are played with brain waves to help elderly patients maintain neurological health. Studies show puzzles and games can help many patients with Alzheimer’s disease and other neurological disorders, but some people are unable to manipulate the physical games. Telek uses an EEG (electroencephalogram) to measure brain waves to drive the game so these patients can participate in a virtual reality setting. Telek aims its services at hospitals, retirement homes and rehabilitation centers. The company provides the hardware and software and also works with patients. Telek developer Ted Arehart plans to have the program operable by this fall. THE INSPIRATION // Arehart said he had always been interested

in stories about telekinesis, the belief that the mind can move objects. “I started the company because I had been interested in virtual reality and brain-computer interfaces (BCIs) since college,“ Arehart said. He used an oculus rift, which is a virtual reality headset, to experiment with EEGs. He wrote code and combined the headset with a consumer-grade EEG for a first test. WHERE YOU CAN PURCHASE // www.telekvirtualreality.com

As the company grew, it expanded its services outside the printing industry and outside Missouri. Today it has customers in aviation, defense, energy, medicine and construction. Besides Missouri, the company has offices in Kansas, Oklahoma and Texas. Plans are already underway for the company’s centennial in 2019. Evelyn Craft Belger, the company’s current CEO and president, said that for a company to reach its 100th anniversary, it adapts to what customers need. “Focus on your strengths, listen to your customers and don‘t be afraid to take a chance,” she said. Evelyn is the fourth to lead Belger. Richard’s sons John and Larry followed him, as did his grandson, C. Richard (Dick). Evelyn became president on July 3, 2015, after working as the company’s chief financial offer.

THINKING BIGGER BUSINESS // July 2017

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KC MADE IT K C

MADISON FLITCH

E N T R E P R E N E U R S

Furniture With Local Roots MADISON FLITCH GIVES NEW MEANING TO KC’S SALVAGED TREES ohn Pryor, the founder of Madison Flitch, is the master of “tree to table” furniture. The young company recovers wood from local trees that were displaced by construction, felled by windstorms, damaged by illness or stricken by other calamities. Pryor catalogs each piece of wood’s story and then turns the wood into furniture with a unique design. Instead of rotting in a landfill, the former trees go from blight to beauty. “Which we think is a great way to contribute back to the community,” Pryor said.

THINKING BIGGER BUSINESS // July 2017

WORK WITH MEANING

The smell of wood lured Pryor back to Kansas City from Boston, where he toiled without joy in a corporate job at a tech company. He wanted to start a business that would celebrate the city. He has a passion for woodworking, furniture-making and doing work with meaning. “Being able to give local trees a second life through furniture making seemed like a great idea to cross off all of these goals,” Pryor said. Pryor was raised in Kansas City, but his family hails from the Lake of Ozarks area,

where his grandfather sold souvenir novelties, including small cedar boxes. The company is named after his great-grandfather, Madison, also a woodman. Flitch is an old English word for a slab of timber sawed from a wood log. In the “tree to table” process, Pryor manages furniture-making from the time the tree comes down until the piece is on the showroom floor. All designs are original to Madison Flitch. Each piece of furniture has a unique story because it is made from a local tree. A

(Photo courtesy of Bobby Burch, Startland News)

favorite story concerns his 909 line of furniture. The wood for the first pieces came from 120 trees the city removed from a blighted area to build the Kansas City Crime lab. The 909 collection is named after the 909 Walnut apartment complex, which has heavy art deco architectural themes. The collection recalls the city‘s art deco past. FROM BLIGHT TO BEAUTIFUL

Pryor‘s greatest satisfaction is knowing that Madison Flitch is genuine and authentic and operates with integrity. “I can trace where the tree came from,” Pryor said. “I can enjoy the wood and make furniture out of it. I curate it, design it, and build it, then look back at the end of the day and know it is going to someone’s home.”

Pryor has some advice for other entrepreneurs. “One thing is that you have to get over your fear,” he said. Instead of deciding what you want to build, he said, make sure the market will embrace it. At first, Pryor used simple designs from YouTube. But he decided he needed more training and enrolled in the Marc Adams School of Woodworking in Franklin, Indiana, and studied under global masters. He is taking courses from the school now to become a master woodworker. “Knowing I was going into the field gave me the confidence to launch a business like this,” he said of Madison Flitch.

A SECOND LIFE FOR DEVELOPMENT CUTS

Pryor launched Madison Flitch in May in the Crossroads Arts District, and is focused on the Kansas City market. For now, he mans the shop alone, but he wants to move into a larger workspace in two to three years. He plans to hire as many as 10 employees later. Kansas City is a particularly good place for Pryor’s “tree to table” process. “With the incredible growth of Kansas City, many trees will be coming down due to development projects,” he said. “Our company is a great way to give these trees a second life by creating beautiful furniture pieces for the home or office.” Terry Wooten is content development manager for Thinking Bigger Business Media. SMART COMPANIES THINKING BIGGER®

“SEAL TEAM SURVIVAL MODE” Sean Simms and his team developed a do whatever it takes mentality early on, and it’s become an intrinsic part of the company’s character.

20 THINKING BIGGER BUSINESS // July 2017

KC ENTREPRENEURS

A WORLD OF OPPORTUNITY Sean K. Simms and SKS Studio design landscapes for elite hotels and resorts around the globe.

ENTREPRENEUR

Sean K. Simms C O M PA N Y I N F O R M AT I O N

SKS Studio 1925 Central St., Ste. A Kansas City, MO 64108 (913) 544-5730 info@sksimms.com www.sksimms.com TYPE OF BUSINESS

Master planning and landscape architecture YEAR FOUNDED

2008 E M P L OY E E S

5 KEYS TO SUCCESS

A willingness to do whatever it takes.

ven billion-dollar resorts need curb appeal. That’s why hotel developers around the world rely on SKS Studio for one of the most important elements of their projects. Founder Sean K. Simms and his team have been hired for landscape architecture and master planning jobs in more than 50 countries. They tackle a variety of projects, including commercial retail, but much of their experience is in hospitality. Right now, they’re hard at work on the Royal Atlantis Dubai, a $1.5 billion hotel project slated to open in late 2018. The 800-room, 200-apartment development will serve an elite international clientele, and visitors are going to expect an experience that enchants and awes. “The simplest way to tell people what we do is we design everything but the building,” said Simms, who is headquartered in Kansas City’s Crossroads Arts District. For master planning projects, clients will come to SKS with a large tract of land and ask for guidance in how to best to use it. Should the property include commercial retail? A golf course? A hotel?

Simms and his team will not only give expert opinions on what should be built, but where. The other half of SKS’s business is pure landscape architecture. The team designs pools, hardscapes, walking paths, parking and other exterior attractions. These are the first things that visitors see and the ones that leave the deepest impression. When you come back from vacation, you probably don’t think about your hotel room or the resort’s plumbing, as important as those things are. You’re more likely to rave about the stunning view or the great time you had lounging poolside. That’s one of the keys to making these mammoth projects succeed, Simms said—always remembering the human element. His team wants to make sure guests will have places where they can take great pictures to show friends back home. “We‘re all about creating environments—destinations, if you will,” Simms said. “So you know, we want to know, how is it going to feel when you‘re there? Because at the end of the day, it‘s the experiences. That‘s the takeaway. It’s in the memory. Where’s the photo op?”

left // Sean K. Simms,

founder and president

by James Hart // photography by Dan Videtich SMART COMPANIES THINKING BIGGER®

That’s one of the keys to making these mammoth projects succeed—always remembering the human element. Sean K. Simms // Founder

‘NO SAFETY NET, NO PLAN B’

Simms was born in Kansas City, but grew up in Scottsdale, Arizona. He came back to the Sunflower State for college. He earned his bachelor’s degree in landscape architecture at Kansas State’s world-class architecture and design program. Then, after graduation, Simms landed jobs with firms in Fort Lauderdale and Orlando, eventually becoming a principal. He loved the work and, over the course of 12 years, amassed a portfolio of striking landscape architecture projects for international clients. But Simms still felt the pull to strike out on his own. In 2008, he decided to make his move. “My wife was born and raised in Olathe, so we’d kind of been wanting to get back home,” Simms said. “We decided to take the plunge and move back to Kansas City and start the company.” Right now, SKS Studio employs a team of five. Back in the early days, though, it was just Simms, sitting at the coffee table at home. But this may have been an unexpected strength. “I think the one thing that has enabled us to succeed is that from Day One I’ve been all in,” Simms said. “There’s been no safety net, no plan B, no what-if scenario. You know, I didn’t have funding or a trust. There‘s nothing to fall back on.” So, how did a brand-new firm in a highly specialized niche land its first clients? Simms relied on 22

THINKING BIGGER BUSINESS // July 2017

his network of professional contacts and past clients, people who knew and trusted his expertise. In fact, personal networking is still how SKS discovers most of its new business. That’s the nice thing about operating in a niche. “Folks move around all the time,” Simms said. “And so you know someone you may have worked with at one company has moved to another company, and they’ve got a new project, but you still have that personal relationship.” Is a Midwestern address a drawback when courting international clients? Not necessarily. Global clients care more about what you can do and less about where you’re from. Thanks to modern technology, performing a job in the Middle East isn’t that different from working a project in, say, Tulsa. “Kansas City is probably not the first place they look for their landscape architect,” Simms said. “There are ones where it takes a little convincing. But because of our portfolio and because we’ve worked in a variety of places, we can establish, hey, we’ve got experience.” HAVE PROJECT? WILL TRAVEL

While SKS spends most of its time here in Kansas City, working internationally requires a certain amount of globe-trotting. Recently, Simms traveled to seven countries in the space of eleven days. A client needs his team in Cambodia?

Landscape architects Chadd Fuemmeler, Jordan Below and Cody Peratt meet about a new project with SKS Studio founder Sean K. Simms.

If you’ve got an opportunity, they’ve got passports. Sometimes that means going to countries or regions where other firms might not venture because they don’t have history or connections and just don’t feel comfortable. “I think our willingness to do kind of whatever it takes to get something done is something that is a huge advantage,” Simms said. When SKS Studio debuted in 2008, the U.S. economy was cratering, but SKS Studio stayed busy by finding projects in other regions.

“That was actually one of the reasons why I’ve always felt we were able to grow through the Great Recession,” Simms said. “We were diversified in a bunch of different places around the world, and when there was nothing going on in the U.S., we were working in Europe. And when Europe was tanking, we were in Morocco. When there was not much going on in the Middle East, we were in China.” Even when Simms and his team are at home, they’re still collaborating with colleagues around

“I think the biggest thing he has helped me with is to be able to understand my business based on a set of metrics, measurable things,” Simms said. The SKS founder has created a spreadsheet that tracks important measurables like leads and proposals, so that he can see how the business is truly performing and forecast what he should do next. The spreadsheet isn’t very complex—just a couple of quick pages. Nevertheless, Simms said, “I know what we’ve got going on financially. I know what we have going on from the business development side.” The tool has become so important that he checks its numbers every single day. ‘THE OPPORTUNITIES ARE KIND OF ENDLESS’

the world via teleconferences and email. The Dubai project, for example, involves a global team, and SKS Studio must coordinate closely with all the other players. “There’s two sets of architects,” Simms said. “One’s based in Toronto. One’s based in New York. Two sets of interiors folk— one based in London, one based in Paris. Lighting designer’s based in Singapore. Project and clients are based in Dubai.” The ability to do whatever it takes—what Simms calls “SEAL Team survival mode”—became an intrinsic part of SKS Studio’s character early on. When the firm’s business took a big leap forward in 2014, the team stayed

hungry. They don’t take new business for granted. “You’ve got to be willing and able to take on anything that’s thrown at you,” Simms said. “And not just take it on but knock it out of the park.” METRICS THAT MATTER

SKS Studio has excelled because of the exemplary service and technical skill that Simms and his team offer. But like a lot of entrepreneurs, Simms acknowledges that he didn’t know everything about the business side of business. “We kind of—frankly kind of muddled along for a long time, and I kind of learned as I went,” Simms said.

He has realized that he doesn’t need to do everything himself. In addition to building a solid team internally at SKS, he has developed a team of external professionals, including his attorney and accountant, to help guide the company. “I’ve surrounded myself with a good team of folks that help me out,” Simms said. “Let smart people do what they’re good at.” At the same time, he has also invested in his own development. A few years ago, he joined the Helzberg Entrepreneurial Mentor ing Program. HEMP pairs established but growing owners with seasoned executives who serve as mentors. In Simms’s case, that’s HushMat founder Tim McCarthy.

SKS Studio is always looking to expand into new markets, and there are two that Simms is studying right now. One is Africa. The other is a lot closer. “We simply don’t do a lot work here in Kansas City, which is unfortunate,” Simms said. “We would like to.” It’s a problem that Simms and his team are working to fix. “There’s so much we have to offer to the community and to the region from a design standpoint,” he said. Not that Simms minds working globally. “The commute’s a little longer, but I think the world has gotten a lot smaller,” he said. “And the ability to do work in far-flung places has become a lot easier. I think because of that, in my opinion, opportunities are greater. “If you’ve got that attitude where, ‘yeah, we’ll do anything anywhere,’ then the opportunities are kind of endless.” James Hart is a freelance writer based in Kansas City. SMART COMPANIES THINKING BIGGER®

ENTREPRENEURIAL JOURNEY K C

E N T R E P R E N E U R S

Here are Short’s Top 5 lessons for running a small business: Lesson 5 // Build your company to replace you.

Many entrepreneurs start a business with a great idea, a specific skill set and know how. I believe you should immediately hire that skill set to replace yourself. This is what allows you freedom! Freedom to learn and develop the other skills needed to run your own business. Lesson 4 // As an entrepreneur, it is easy to

chase the next “shiny coin.” However, you and your company should stay focused on your main skill set, or the entire company will pay the price. Ultimately, many of those shiny coins are made of wood. Lesson 3 // Diversify! Never let any one client

represent more than 30 percent of your business, even if you must say “NO.” Growing a business by increasing staff for a large client is a double-edged sword. The only safe way to increase sales with a major client is to increase sales with other clients by 70 percent or more; otherwise, you will become dependent. The risk is that at a moment’s notice that large corporation can change personnel. If your contact moves on or retires, you could lose that business very quickly without much notice. There is zero freedom if your customer base is not diversified.

Lessons Learned After 30 years of running businesses, Gary Short shares what he’s learned from experience.

ary Short founded sys-tek in 1995. When he started the company, Short focused on delivering engineering design for mission critical, pharmaceutical, higher education and life sciences projects. But over the years, he saw opportunities to change direction in order to grow the company. Those markets continue to be a focus for sys-tek, but at the same time, Short and his son Travis have been carving out a niche in 24 THINKING BIGGER BUSINESS // July 2017

technical commissioning combined with testing, adjusting and balancing. Combining their strong engineering background with a solid knowledge of control system operation, construction and start-up services has allowed them to grow the company and also provide their clients with more complete solutions. The growth has resulted in sys-tek opening a second office in Houston, Texas. Along the way, like most entrepreneurs, Short has encountered a number of challenges—and also learned several lessons. “After 22 years of owning my own business and eight prior years in a partnership, I have discovered that there are several lessons that every small business owner should learn early in their journey,” he said.

Lesson 2 // Verify recommendations from

your accountant and legal attorney. Playing the loophole game with the IRS is like playing with dynamite. The IRS will get what they think is owed, and when the chips are down, the original accountant and attorney are long gone. Have two accountants and two attorneys and get two answers. Lesson 1 // Never run out of cash. Your balance

sheet and P&L can look great, but if you are out of cash and specifically cannot make payroll, you are out of business. The account receivables you show your banker and your P&L prove you can operate at a profit, but without cash, the balance sheet and P&L just become pieces of paper. Cash is king.

Gary D. Short, P.E., LEED A.P, CCP, CPMP, is the owner of sys-tek, an engineering and building testing firm with specialized expertise in creating high performance buildings. Sys-tek is based in Kansas City. After 45 years in Kansas City, Gary moved to the Houston, Texas, area to open a second office. His son Travis now manages the Kansas City office.

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KC FUTURES

( by Kara Lowe )

KANSAS CITY‘S TECHNOLOGY INDUSTRY NEEDS TO ENCOURAGE MORE WOMEN TO ASPIRE TO TECH CAREERS.

More Women in Tech on KC’s Horizon? An industry report published by KC

In the average area tech industry office, only three out of every 10 employees are women. Tech Council shows tremendous The bright women with tech roles in opportunity for our city to become Kansas City are a happy, fulfilled and passionate bunch. They share a few other common the technology hub of the Midwest. traits as well: they’re comfortable being By increasing the access to computer the only woman in the room, but would be delighted to have more female peers in the science in the classroom from an industry they love. More importantly, they’re early age, our region’s tech talent often surprised to have landed in this induspipeline would be transformed, and try at all. For many, their path wasn’t forged in the classroom or via a college major. the gender gap in tech could dramatiRather, it sort of appeared, as some kind of cally improve. Reducing these barriers unanticipated left turn off the well-lit road they were traveling. of entry would attract more women to Many of the women I know in this indusa field that is especially lucrative for try are former nurses, educators, graphic them here in Kansas City. designers, etc. Although 30 percent of Kansas City’s tech workforce is made up of women, only about half of that number are repren Kansas City, there exists a sleeping sented in Kansas and Missouri’s computer I giant: an industry filled with talented science undergraduate programs. So, it’s individuals from all walks of life who value no surprise that so many of their careers creativity, critical thinking, problem solving began in non-tech roles. and variety. This industry Imagine if more We should strive to procurrently pays women women’s pathway more than it pays men. into tech began in a vide a clearer path to this It also pays everyone classroom. Not through a 78 percent more than amazing industry, so that “choose between comthe average salary in town. puter camp or volleymore women find their Kansas City made headball” extra-curricular, lines recently for landing way here by aspiration but because computer near the top of this year’s science is an integral part rather than circumstance. “Best Cities for Women in of curriculum. Imagine Tech” list by SmartAsset. what that would do to com. In KC, women in bolster their numbers in computer science tech earn more than their male counterparts programs—and increase their footprint in on average, a key factor contributing to this offices and boardrooms. Imagine that many ranking. Women working in one of Kansas girls following a career path that currently City’s more than 3,700 tech companies may pays them more than boys, and much more see our second place ranking and look around than most other jobs. the office, puzzled. “It’s good to be us,” they It’s not all that challenging to demonstrate may think. “But why aren’t there more of us?” the importance of a broad and talented tech 26 THINKING BIGGER BUSINESS // July 2017

workforce to the strength of our local economy. It’s also not challenging to demonstrate the return on gender equality in any industry. Companies in the top third of equal gender representation boast nearly 4 percent higher investor returns than companies in the bottom third. We should be proud of our silver medal for “Best Cities for Women in Tech.” But, our work isn’t done. We should strive to provide a clearer path to this growing industry, so that more women find their way here by aspiration rather than circumstance. At the KC Tech Council, we believe that the tech industry in Kansas City is missing Kara Lowe

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Join us for:

Kara Lowe is the vice president of the KC Tech Council, an organization that serves as the regional advocate for Kansas City’s tech industry. It focuses on three strategic pillars: workforce development, policy advocacy and industry access. (913) 730-7020 // http://www.kctechcouncil.com/

in B u sin e s s S u m

m it

m en

a critical point of influence for our young people: the early, formative years where they decide what they want to be in life. Initiatives are underway now to identify those opportunities in a classroom setting and to connect kids with the fulfilled, passionate tech professionals who can encourage them to follow the path. Stay tuned. Our economy will be all the better for it.

NAWBO KC’s A Taste For Business An exclusive event, featuring expert speakers in the fields of Marketing, Finance, and Business Development. Sept. 28 The Culinary Center of Kansas City 12:30 pm *Early bird pricing available for a limited time. For more information and registration, visit @NAWBOKC on Facebook. SMART COMPANIES THINKING BIGGER®

ENTREPRENEURIAL INVESTMENT

RISES IN KANSAS CITY

THE FUNDING ENVIRONMENT IS LOOKING UP FOR KC COMPANIES—BUT THERE’S STILL WORK TO DO. ( by Kevin Collison )

The funding environment for new businesses seeking investors has never been better in Kansas City. An estimated

$752 million in capital is available, almost quadruple the amount a few years ago. “If entrepreneurs tell you there isn’t any money in town, they’re wrong,” said Kelly Sievers, managing director of Women’s Capital Connection. “If there are good deals out there, they’ll get funded.” The $752 million in available capital is the result of multiple equity capital players either entering the market or expanding, said Kate Hodel of KCSourceLink, which reported the estimate in its annual “We Create KC” report, which tracks the impact of entrepreneurship on the local economy. Since 2015: • The region has seen the expansion of Mid-America Angels and the establishment of Northland Angel Investor Network. • A substantial increase in angel investment was recorded, increasing from $1.4 million in 2012 to $3.6 million last year. • KCRise Fund and KCInvestED were established. • Firebrand Ventures, an early-stage fund, was launched. • Royal Street Ventures, a Utah-based early-stage fund, opened a local office. • LaunchKC debuted as a national grant competition designed to attract startups to Kansas City. • Leawood Capital began operations.

“We have been able to identify a significant amount of capital that’s available,” Hodel said, “but entrepreneurs have to be ready for it.” ‘THE ENVIRONMENT IS VERY MUCH IMPROVED’

Pepper IoT, a Kansas City-based startup that helps firms take advantage of the “Internet of Things,” recently completed an $8.5 million round of funding. “The environment is very much improved in terms of access to capital,” said Scott Ford, CEO of Pepper IoT. “There are more sources, as well as an environmental change related to the level of investor sophistication and comfort in investing in early-stage, high-risk ventures.” Ford has seen all sides of the investment world, having run the venture capital operation at Sprint from 2005 to 2008 and then co-founding OpenAir Equity Partners, an early-stage venture fund. He became Pepper’s CEO last year. “We’re not Silicon Valley,” Ford said, “but we’re much better than it’s ever been since I arrived in the community.” Li r lia Liliana Younger is the co-founder of na Younge Mobility Designed, which manufactures a new, SMART COMPANIES THINKING BIGGER®

more ergonomically comfortable version of crutches. She said her company has received more than $900,000 in funding since 2015. “Initially, we did a seed round with angel investors who were in our friends and family circle,” she said. “Later, we brought in more funding from angels outside our immediate circles, and then we went on to pitch angel investment groups.” Younger agrees the local funding environment has improved significantly. “In our experience, there is a big appetite from the investment community in Kansas City to put their dollars to work,” she said. “They are open to hearing companies with new and promising businesses.” MIND THE FUNDING GAP

Maria Meyers, executive director of the University of Missouri-Kansas City Innovation Center and founder of KCSourceLink, said her organization has striven to help startups and early-stage firms find the assistance they need to pitch successfully to investors. “We have watched Kansas City as a community dive in and work to provide better access to capital for entrepreneurs,” she said. “We believe Kansas City is well positioned to be a place where people can come to get access to capital for early-stage companies.” Hodel said KCSourceLink is still seeing a gap in the funding network for entrepreneurs whose companies have gotten past the seed-funding stage and are looking to grow to the next level. These companies are seeking “mid-range” investments of $100,000 to $1 million. The lack of investment at this level isn’t unique to Kansas City. “It’s a common gap,” Hodel said. “When you think about the continuum of funding, 30 THINKING BIGGER BUSINESS // July 2017

the early stage is where the most risk is, and it average, I will have two to three separate lessens as companies establish themselves in meetings with the entrepreneur to analyze the the market and get customers. deal structure, coach on their pitch deck, and “If you look at the under $100,000, there are go over other aspects to get them ready for the programs that have been helpful and filled the investor presentation.” pipeline. On the other end [above $1 million], There is also a need for potential investors there are a number of venture capital firms to be educated to evaluate new firms and the willing to invest because they see the upside.” risks involved, said Mark Meyerdirk, one of the Sievers of Women’s Capital Connection founders of the Alternative Investment Forum. agreed there is a gap in mid-range funding, yet “In the spring of 2016, we did a survey with narrowed the range to $100,000 to $500,000. KCSourceLink to find out why some investors Still, her network—which is geared toward were reluctant to invest in early-stage entrefunding startups with women in senior preneurial deals,” Meyerdirk said. management roles—has been “One of the major findings was more active than at any time that new investors don’t know how since its founding in 2008. to properly investigate deals.” “Women’s Capital A task force led by Meyerdirk Connection has done more followed up on that initial investing, with more dollars survey. It asked 96 professional and more companies, in the investment firms within a 200Ke last two and a half years than in mile radius of Kansas City about l ly S i e v e r s the whole first seven years of the how they evaluated startups. Fortynetwork,” Sievers said. three percent responded. The survey found there were clear About $1.7 million has been invested the past couple years, she said. Among the compa- similarities in how the firms conducted their due diligence and the types of data they nies that WCC has funded are Rawxies, Elias collected. Based on that data, the Alternative Animal Health and Hilary’s Eat Well. Each has received more than one round of funding. WCC Investment Forum and KCSourceLink plan currently has 17 women-led firms in its portfolio. to create a “Venture-Stage Due Diligence “I think the current situation in Kansas City Report Template.” Meyerdirk said the research should help is really exciting,” Sievers said. “There’s a lot potential investors feel more comfortable more money at work.” jumping into the equity funding market. A NEED FOR TRAINING AND SUPPORT “There is a lot of interest from investors But Sievers noted that many entrepreneurs to learn what’s going on,” he said. “There’s a seeking funding need to be coached about groundswell of high-net-worth individuals the process. looking at early-stage companies and a number “What most people don’t realize is the of venture companies being organized.” one-on-one work we do with the company One of the initiatives intended to educate wanting equity funding,” Sievers said. “On investors is the KCInvestED program. It

connects investors with the resources, events and tools to learn more about investing in early-stage companies. “We found a lot of mismatches out there,” said KCSourceLink’s Hodel. “There are investors saying there are no good deals and entrepreneurs saying there’s no good funding. “We need to continue connecting investors and helping entrepreneurs build companies that are attractive to investors. That’s the key piece.” WCC’s Sievers said that the investors in her group receive ongoing education on different topics, including performing due diligence on companies they are considering investing in. “Our Angel Capital Series with the Enterprise Center of Johnson County focuses on an introduction to investing from both the entrepreneurs’ viewpoint and potential investors’. We have pitch clinics as well at ECJC,” she said. Sievers noted that WCC participates in a monthly syndication call with Midwest regional investor networks such as Nebraska Angels, Mid-America Angels, Gopher Angels in Minnesota, Seed Step Angels in Oklahoma, Wichita Technology Ventures and others. “The call is a great opportunity for us to syndicate deals throughout the region,” she said. A MULTIPLIER EFFECT

A new player in the local venture capital field is the KCRise Fund. It was among the investors in the latest round of funding for Pepper IoT along with Leawood Ventures and Royal Street Ventures. “We’ve seen a dramatic growth in available capital and organized capital,” said Darcy Howe, manager of KCRise Fund. “Capital is less a challenge than it was a few years ago.” She credited KCSourceLink with helping better organize the world of investors and entrepreneurs. “Prior to now, there were capital sources, primarily families of wealth funding companies and entrepreneurs themselves, but everybody was doing it in a quiet way. “If you were an entrepreneur, you didn’t know where to go or whether an investor might be interested in the kind of business you were starting. It started with KCSourceLink identifying the problem.” Howe says her firm specializes in sidecar investing. “We only invest if an ‘approved VC’ invests in that round,” she said. “The process

is more that the entrepreneur attracts a VC— metropolitan area’s ranking for startup activity sometimes we make the intro and sometimes increased from 19th among the nation’s 40 they bring the VC to us for approval—then we largest metros last year to 15th. invest alongside the VC with the same terms.” The foundation reported that 370 out of From that vantage point, she’s seen new every 100,000 adults in the Kansas City metro equity players enter the Kansas City market. became entrepreneurs during any given month. They include Royal Street Ventures “There’s a lot more equity options from Salt Lake City; Dundee based in Kansas City than a year Venture Capital of Omaha; and a half ago,” said Nathan Lewis & Clark Ventures in Kurtz, senior program officer St. Louis; and Drive Capital for entrepreneurship at the from Columbus, Ohio. Kauffman Foundation. Among the Kansas CityKurtz said the increased based ventures being funded number of entrepreneurs in by the KCRise Fund and Royal Kansas City is not just due to Na t h a n Ku r t z Street are Backlot Cars, a new more available funding. He also online car auction site. KCRise also attributed the growth to the Google is partnering with Leawood Ventures Fiber network here, and to educational in funding SquareOffs, a new social media and networking programs like KCSourceLink engagement platform. and the Kauffman Foundation’s 1 Million “There’s always been some syndication in Cups program. Kansas City, but not really the amount you see “There are a lot of programs that have been now,” Howe said. around and are being used more now,” he said. KCRise Fund has made investments in 10 The Kansas City Startup Foundation has companies over the past nine months, many of been connecting and nurturing the burgeonthem in partnership with out-of-town firms. ing entrepreneurial scene in Kansas City since “The point is, we’ve got a multiplier effect,” the arrival of Google Fiber in 2012. she said. “There’s not only more funds in Kansas Adam Arredondo, the current foundation City, but more funds coming from outside president, said there’s been a noticeable Kansas City helping Kansas City companies.” improvement in the equity environment. “The biggest opportunity is there’s still a lot MORE FUNDING OPTIONS, of wealth on the sidelines—families and sucMORE STARTUP ACTIVITY cessful businesspeople—and a lot of education All this new startup activity is being tracked is needed,” he said. by the Kauffman Foundation. In its most “It’s clearly trending up, though, and we’re recent Kauffman Index report, the Kansas City getting national recognition. The entrepreneurial community has been more collaborative, and that’s building a more vibrant environment for entrepreneurs.” Ford said that as the Kansas City funding environment improves, investors should “The point is, we’ve got a embrace the need to be more tolerant of risk, an insight Silicon Valley learned years ago. multiplier effect. There’s “Failure in other investment hubs is often considered a badge of honor,” he observed. not only more funds in “We need to change the perception of failure so it’s seen as being part of the experience Kansas City, but more versus being a negative.” funds coming from outside Kansas City helping Kansas City companies.” Darcy Howe // KCRise Fund

Kevin Collison is a freelance journalist with more than 30 years of newspaper reporting experience in Omaha, Buffalo and Kansas City. SMART COMPANIES THINKING BIGGER®

BIGGER | growth S M A R T

( by Taddy Hall, Eddie Yoon and Linda Deeken )

S T R AT E G I E S

Real Growth Is Hiding Where You Aren’t Looking How to find new opportunities in often-overlooked areas of the market.

fter years of researching and advising clients around the world on innovation and growth strategy, we have observed that: 1 Nearly everyone wants innovation

and growth. 2 There is consensus that the very best way

to innovate and to grow is to “make the pie bigger”—that is, to grow categories and expand markets—instinctively recognizing that carving incremental market share out of the hide of your competition is a messy business. 3 Surprisingly few companies systematically pursue true pie-growing strategies. In general, we find clients engaging across a range of activities—some fruitful, some less so—to drive desired growth, which we’ve summarized here.

With a solid existing product in hand, most clients begin by transitioning further and further upmarket, striving (and often realizing) incremental pricing power and margin realization. This works for a while, until further growth is sought, and then clients often turn to increased specialization at the premium end. Eventually, there is a proliferation of customized and specialized products to address profitable niche markets and extract further value from the market. When that strategy begins to lose steam, clients turn to the lower end of the market, and work feverishly to make lemonade from lemons. The lemonade in these situations will often take two forms, either the development of new business models designed to enable profit realization at the lower end of 32 THINKING BIGGER BUSINESS // July 2017

the market or mechanisms to fundamentally unlock nonconsumption. And when those approaches collectively fail to drive further incremental growth, one is flummoxed. We’d argue that it’s not that growth potential is not there, it’s just hiding where businesses aren’t used to looking. Superconsumers and Jobs Theory Let’s introduce two concepts that are helpful in surfacing these opportunities from the often-overlooked areas of the market. Concept 1: Superconsumers // Who are they?

They are the high-passion, high-profit consumers found in every category. They spend three to seven times more than the average person in a category. They are knowledgeable about the category and passionate, are willing to pay a higher price per unit and enthusiastically share their expertise and knowledge with others. Concept 2: Jobs Theory // This represents a

fundamental shift in our thinking. Consumers do not buy brands and products. Instead, they hire them to create desired experiences and make progress in their lives. Successful

innovations fundamentally identify people with important jobs to be done that have only incomplete or inadequate solutions—and then deliver solutions that enable the desired progress that people seek. Some jobs are “executive level” jobs meeting rational, emotional and social benefits, and others are more “entry level” jobs, addressing primarily rational benefits. The most successful innovations are fueled by converting nonconsumers into consumers and intermittent customers into regular, profitable ones. What happens when one overlays these concepts? New growth opportunities are brought to the surface. Traditional approaches and frameworks consistently highlight the intersection of Superconsumers and executivelevel jobs as the key area for margin growth, and just as many highlight opportunities to convert nonconsumers into consumers via successful delivery of entry-level jobs, often by category disruptors. Very few, however, surface the remaining two quadrants: entry-level jobs for Superconsumers and executive-level jobs for nonconsumers. Companies overlook those opportunities at their own peril.

Where Growth Is Hiding Executive Level Jobs

Entry Level Jobs

Opportunity for Disruption

Non-Consumers

Super-Consumers

Is Employee Onboarding Important? Yes, not only to the new hire, but to the business as well. The new employee orientation and mainstreaming processes are known as “employee onboarding.” Keep in mind that you have only one opportunity to leave a lasting impression, so make sure your new hires feel welcomed, valued and, most importantly, prepared for what lies ahead of them—both during their onboarding process and in the days ahead as a contributing member of your team. Below are some easy, yet effective tips.

How Keurig Found Hidden Markets Think about Keurig. If you try to imagine their ideal customer, one often immediately pictures consumers who love coffee and spend more than $600 per year on it. That focus is intuitive, and clearly benefits margin potential. But that’s not really the Keurig story. Instead, Keurig successfully performs an executive-level job for nonconsumers and an entry-level job for Superconsumers. Consider the following. Someone who doesn’t really buy coffee (a nonconsumer) is planning a splendid dinner party with a coffee course, but possesses little to no knowledge of how to deliver it. Enter Keurig. It makes a great cup of coffee that is completely customizable, a perfect finish to a meal and a reaffirmation of one’s exceptional hosting skills. That’s an executive-level job for a nonconsumer, satisfied by Keurig. For the coffee Superconsumer, Keurig is asked to do something decidedly different. For a true coffee Superconsumer, Keurig does not deliver an executive-level “craft coffee” experience, but rather an entry-level quick cup of coffee on a schedule. Such market opportunities are hidden in plain sight all around you. They are terribly difficult to spot, however, until viewed through the Superconsumer and Jobs Theory lenses. Only with this understanding can one truly see the “jobs” for which consumers are hiring, and the progress they are seeking to make in their lives. Only with that understanding can innovators meet consumers where they are, with solutions people will predictably buy, use and celebrate. Eddie Yoon is a principal with The Cambridge Group, a Chicago-based management consulting firm, and one of the world’s leading experts on Superconsumers. Linda Deeken is the Chief Marketing Officer of The Cambridge Group. Taddy Hall is a principal and leader of strategic innovation at The Cambridge Group. He is a Jobs Theory pioneer and leading practitioner.

•

Prepare for your new hire. Don’t wait until the last minute to get their work area ready. Have new hire paperwork such as W-4 and I-9 forms, direct deposit information, benefits applications, and so on prepared. If you’re throwing all that stuff together at the last minute in front of them, what message does it send?

•

Make their first day a memorable one. Organize a meet and greet or schedule a lunch.

•

Introduce your new hires to the family. Create a fun way to introduce the new hire to their co-workers and to their new place of business. Perhaps you could establish a welcoming team to greet the new hires.

•

Make the new employee orientation simple, yet interesting. Consider the overall experience from the new employee’s perspective and then find ways to make the experience informative, fun, exciting and, most of all, painless.

•

Don’t make a new employee learn things the “hard way.” Welcome the entire person rather than just the job duties and a warm body to fill the seat. Provide the new hire with all the tools needed to be successful. Put together a cheat sheet so they know who does what and where to find information.

Take care of onboarding the right way, and your new employee will hit the ground running.

When you have an employee issue, you need a professional answer right away. The HR Help Desk is ready 24/7 to answer your tough HR questions.

Give us a call at (855) 474-2836 to find out how to subscribe to get real-time solutions and guidance for your HR challenges.

855.474.2836 | thehrhelpdesk.com

www.thecambridgegroup.com SMART COMPANIES THINKING BIGGER®

BIGGER | hr S M A R T

( by Belinda Waggoner )

S T R AT E G I E S

Trust Isn’t Enough Protect your business with noncompetes and nondisclosure agreements.

hen you have high-achieving employees, you generally trust them. And trust can be a wonderful thing—until it isn’t. Ask any business owner you know about what can happen when an employee leaves. They are likely to tell you stories about what and who the departing employees took with them, and how devastating it was to the business. If you aren’t protecting yourself and your business with employee agreements, your enterprise could suffer even bigger losses than just the departing employees. They could walk away with: » Hard-earned customers » Know-how they learned from you » Confidential information » Information proprietary to your business and the manner in which you do business » Pricing information » Partner relationships 34 THINKING BIGGER BUSINESS // July 2017

» Intellectual property—and ownership rights to intellectual property » Other employees Employee agreements are used frequently in business, but we’re often surprised to find companies that use the “trust” method noted above instead of protecting the information they’ve worked so hard to build. These agreements aren’t something you should create yourself—do get professional help. If you don’t have expertise in this area, it’s very easy to accidentally introduce loopholes and mistakes in the document that could make it unenforceable. The only thing worse than not having this type of agreement is having one that isn’t enforceable. And, if it isn’t written correctly, if just one provision is unenforceable, a court may deem the whole thing totally unenforceable. Establishing what your agreement needs to cover is a good place to start. Customers We all have them, and your hard work has earned them. Your agreement should state

that the departing employee may not take or try to take those customers for a clearly defined period of time. Noncompete Your employees may not have known a whole lot about your industry when they joined you, but they probably do today. So much so that if they wanted to go work for a competitor or start their own thing, they’re in a much better position to do so than when you met them. Head that off at the pass … for a clearly defined period of time, at least. Confidentiality and Nondisclosure We all have confidential information that shouldn’t be disclosed to anyone about our business. That includes our customers, our pricing and our proprietary products and processes. Employees shouldn’t share that information while they’re employed, and they shouldn’t share it after they’re employed either. You don’t want someone downloading the entire client list and taking it with them. Partner and Community Relationships Maybe you have a partner that’s the only organization that does what you need doing and is, by virtue of agreement, only doing it for you. Examples are manufacturers that fill a niche, or experts who are the only ones

in their field. A former employee shouldn’t swoop in and take that relationship. Intellectual Property If you have someone working on your paid time creating something for you, then it belongs to you … right? Don’t put your company’s intellectual property at risk. Cover yourself with an agreement that states that creations and innovations that are produced by employees on paid working time are yours. Other Employees What’s worse than losing one key employee? Losing two. Your agreement should also have a statement that bars former employees from soliciting other employees of yours—or, to take it further—actually hiring other employees of yours. It happens all too often. Chances are, if someone had an adult conversation with you about what they were trying to do, you might be a bit more inclined to work with them versus having them hire somebody out from under you.

In Conclusion There are just a few things to remember. You can’t make these agreements so restrictive that you’re actually inhibiting someone’s right to make a living. If you contest someone’s choices under a noncompete and it’s viewed as too restrictive, lawyers or the courts may throw out your objections. In addition to employee agreements, you should think about your agreements with contractors, vendors and partners. Don’t many of the provisions we mentioned above apply to how these folks interact with your business too? Don’t be paranoid, but do be smart. You’ve worked too hard to get here for someone to waltz in and then waltz out with your information as a shortcut to making it big for themselves.

Belinda Waggoner is president of People People, which provides HR services to small and midsized businesses. (913) 940-5391 // belinda@peoplepeopleus.com // www.peoplepeopleus.com

Kansas City SCORE

4747 Troost Ave., Suite 101 Kansas City, MO 64110 https://kansascity.score.org/ 816-235-6675

SMART COMPANIES THINKING BIGGER®

BIGGER | sales S M A R T

( by Mike Montague )

S T R AT E G I E S

Creating Sales Compensation Packages Comparing base salary, commission, bonuses and combinations.

ompensating the sales team is one of the toughest things to get right in your business. If you pay them too little, good salespeople will leave for better opportunities. Pay them too much, and they get complacent and stop growing revenue. To inspire and motivate top-performing salespeople, you must use the Goldilocks Principle and get the compensation package “just right.” Let’s look at the pros and cons of some popular options.

Base Salary For most sales positions, some amount of base salary is desirable. If you pay straight commission only, you will likely attract someone who doesn’t need regular income, and that is not desirable. Top-performing salespeople are in demand, and the most attractive positions have stability in the form of base salary. You want this base high enough to cover expenses for the salesperson to live, but not so high that they don’t need to earn commissions. Typical base salaries can range from $36,000 to $72,000 depending on the experience and expertise needed in the position. Draw Against Commission Some companies will offer the salary as a draw against future commissions. This model

is very demotivating to the salesperson and not recommended. No one wants to work hard for a company only to end up owing them money at the end of the month. Commissions Commissions are the holy grail for salespeople and for business owners. Commissions typically mean an unlimited upside for the salesperson. As the business owner, commission structures are great, because you don’t pay them unless you make money, and they incentivize the type of business you want. For example, if you want more new business than repeat purchases, you can give a higher commission on net new sales. Paying per sale—with quick turnaround times on the checks—will drive the instant gratification the salesperson needs to stay motivated. Typically, commissions are a percentage of net profit or total revenue and will vary greatly based on the profit margin of your business. Ranges may include 1 to 10 percent of revenue or 20 to 40 percent of gross profit. The total commissions for top-performing salespeople should equal the base salary. So, if a salesperson who has a $50,000 base is performing well, that person will be earning another $50,000 in commissions. Shared Commissions and Bonuses Shared commissions and bonuses can be ideal for team selling or when the salesperson may not have direct control over the outcome. For example, if the salesperson generates leads, but then turns the leads over to a closer or technical expert, then a commission structure could become frustrating because other people are controlling the salesperson’s income. Shared commissions are ideal for teams, because you can divide up the commission pie based on responsibilities and the behaviors you want to reinforce.

36 THINKING BIGGER BUSINESS // July 2017

Bonuses can also foster cooperation by training, learning the business and growing encouraging everyone to work together to the book of business. However, an experienced grow the whole pie, so their piece becomes salesperson may need higher commissions larger. Bonuses are great and a lower base salary to Shared commissions are for inside salespeople, increase motivation. You customer service and will also want to consider ideal for teams, because recurring revenue produchow the territory and the you can divide up the ers. Options may include product line influence commission pie based lump sum bonuses based compensation. A new on percentages of revenue territory or product may on responsibilities and generated or when producneed higher commissions the behaviors you want tion reaches a certain level. during launch. to reinforce. Creating the perfect Combination compensation package is Packages a process of continuous Usually, a combination of payment strateimprovement. You will want to be very frank gies will drive the best results. You may also and up-front with your salespeople. want to make changes over time to encourage Let them know these packages are subject the appropriate actions as the salesperson to change. The goal of changing plans is grows or the company changes. Combination not to pay your salespeople as little as packages make this easy to do. possible; it is to pay them handsomely for For example, a new salesperson may need the correct behavior. a high base salary and low commissions while

Book Launch & Celebration

Creating a Goldilocks Compensation Package A great compensation plan will include a base salary during the onboarding and rampup time but, over time, the base amount will decrease and the commissions will increase. This ramp-up time should be at least as long as your onboarding process plus your typical sales cycle. Otherwise, your new hires will be under too much pressure to sell too quickly. Sales is a tough job, and getting the compensation right for salespeople can be the difference between a driven and thriving team, and a frustrated and burnt-out group of selfish individuals. Mike Montague is a certified trainer at Sandler Training, where he teaches the behaviors, attitudes and techniques of interpersonal communication needed to be more successful in business. He is a collector of best practices for management, sales and marketing, and he is passionate about empowering ambitious entrepreneurs with options for growth they didn’t know they had. (816) 505-2500 // mike.montague@sandler.com // Twitter: @mikedmontague

SPECIAL GUEST:

Marlys Arnold Come meet trade show consultant Marlys Arnold author of the new book Exhibit Design That Works. The doors open at 5 PM but stop by between 5 & 7 for light appetizers and drinks. Come as she shares new insights for both the experienced and beginning exhibitors. Don’t miss this unique thought leadership event here in the Kansas City Area.

JULY

20 5:00 PM DOORS OPEN AT

1925 Bedford Ave Kansas City, MO 64116

www.exhibitassociates.com/july-20 Search for it on Eventbrite.com