Ep. #1046 - Growing Your Local Tech Industry
In today’s episode of Startup Hustle, let’s talk about growing your local tech industry. Matt DeCoursey talks to Kara Lowe, president and CEO of KC Tech Council, on the how-tos. Learn what the tech brain drain is all about and how serious it is right now. And gain tidbits of wisdom on how tech founders can help foster their local technology ecosystem.
Covered In This Episode
The tech industry is experiencing a brain drain of tech talent. Listen in to understand what you can do to resolve it for your business.
Hear Matt and Kara discuss the biggest challenges the KC Tech Council is trying to solve. They also talk about how you can grow your business and where to find the right people despite the talent shortage.
What are you waiting for? Tune in to this Startup Hustle episode now.
- The Kara Lowe backstory (02:31)
- Kara’s biggest challenge to solve right now (04:43)
- The brain drain of tech talent (06:54)
- The actual situation in the US and Kansas City when it comes to tech talent (11:28)
- No one-solution-fits-all to the workforce shortage problem (13:22)
- Progression path to creating a tech company (14:48)
- Hiring new talent, especially for early-stage startups (17:46)
- Why is it difficult to find tech talent these days? (20:10)
- Access to capital (22:38)
- Increasing tolerance of risk (26:47)
- The problem with traditional lending and banking system (28:39)
- Kara’s take on tech debt and funding (31:38)
- Creating opportunities to support local tech companies (31:38)
- The nature of the “game” has changed (33:42)
- How to get the right results (35:41)
- The “right time” myth (37:49)
- Where to find people for your tech startup (41:19)
The words “talented workforce” refer to people. And people are highly individualistic, you know, it kind of takes me back to my marketing background where you’re looking at demographics, but also think about psychographics.– Kara Lowe
I always like the idea of global citizenship. And whenever, I think, if entrepreneurs go where things are plentiful, and wherever that is, that is how they succeed.– Matt DeCoursey
There are ways where we have been extremely successful, and we have the founders and the exits to prove it. But I think that you know, there’s absolutely work to do in terms of just creating more connective tissue between the different key players.– Kara Lowe
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Following is an auto-generated text transcript of this episode. Apologies for any errors!
Matt DeCoursey 00:00
And we’re back! Back for another episode of Startup Hustle. Matt DeCoursey here to have another conversation I’m hoping helps your business grow. No matter where you are, or what you do, you have a tech industry in your local community. The real question that so many of us have to answer is how do we grow that? There are so many answers to that question. There’s maybe not a right answer. We’re going to explore that and try to figure it out today. With that, today’s episode of Startup Hustle is powered by FullScale.io. Hiring software developers is difficult, and Full Scale can help you build a software team quickly and affordably. We also have the platform to help you manage that team. Visit FullScale.io to learn more. Here, we say, if you’re not aware, that’s my company. And we love talking to Startup Hustle listeners, so reach out; let’s see if we can find some solutions together. With me today, I’ve got Kara Lowe. Kara is the president and CEO of the KC Tech Council. She made me say KC. If you don’t know what KC is, it’s Kansas City. We’ve got listers all over the world, so just want to make sure. But with that, the KC Tech Council works on so many different advocacy things stuff that Kara is going to explain a lot better than me. If you want to learn more about what they do, scroll down to the show notes and click the link that says KC Tech Council, or just type into the browser. It’s all up to you. Without further ado, Kara, welcome to Startup Hustle.
Kara Lowe 01:28
Hey, thanks, man. Glad to be here.
Matt DeCoursey 01:29
Yeah, I’m glad you’re here, so this is going to be an interesting discussion today for some tech. And yeah, well, with that, you know, let’s get that started with a little bit about your backstory. And yeah, I know there’s a whole lot to unpack with the subject and your job and all these different things. So yeah, let’s hear about it.
Kara Lowe 01:51
Well, you know, there isn’t a major in college called how to grow a tech industry. So everybody comes from somewhere. But I, my three lines, tend to all be about Kansas City. KC, as you gratefully abbreviated for us. So I’m from Kansas City, born and raised. I went to the University of Kansas and then Jaywalks. Yep, that’s right. That’s right. A tough week for us, Jayhawks. Yeah, we’ll come right back. But I, upon graduation, immediately started going to work. For some of Kansas City’s largest events, I worked on the country club plaza and ran our art fair and lighting ceremony. And just loved being in the thick of things within this community. It’s a community I love and was raised in. And since then, I’ve kind of continued to grow my role; I’ve got a marketing background. And then, about seven years ago, I was approached by the then-president and CEO of this organization to see if I could come on and kind of help grow the organization. Which is tasked with, of course, growing Kansas City’s tech industry. I jumped at the opportunity but not without a little hesitation, having not really had much of a technology background. But having had, I think, the right background and knowing how to understand Kansas City, its corporate community, and also its civic community and educators. And those are all the kinds of key ingredients that we’ll touch on later, and how to really grow a thriving tech industry. So I started out at KC Tech Council in 2016. I was named our president and CEO in May of this past fall, 2022. And it’s been quite a ride. And we’ve grown a lot as an organization. And we’ve watched a lot of really interesting growth happen within Kansas City’s tech industry in that time. So it’s been a great journey.
Matt DeCoursey 03:39
Yeah, and this, you mentioned a predecessor. This is we’ve had a number of episodes with people from the organization, Ryan, or whoever was a prior guest. And, you know, through going ham, and now and this is the first time you’ve met face to face, but I know that you guys tackle some big stuff. And, you know, what’s the biggest challenge you need to solve right now?
Kara Lowe 04:03
Yeah, I think the biggest challenge and then the other side of that coin is opportunity is workforce, and any tech hub, any tech industry, in any city, and any region across the world, really lives or dies by its workforce, how many tech workers they have, what sort of tech talent they can attract. And that’s really what we place the probably our forefront of our focus on is in growing Kansas City’s tech workforce. And with the kind of change of workforce in the shape of the workforce changing from in-person to a much more hybrid and even remote model. That’s, you know, yet another set of challenges and opportunities. I think that that lies before us as a region and how to grow that industry. But you know, when you ask the biggest, the biggest challenge, that’s it, that’s it. There, if you have the people, if you have the talent, and you can fill the jobs, your limit to growth kind of ceases to exist.
Matt DeCoursey 04:58
There isn’t a market In the United States, so that’s enough software development. No one’s figured it out. Yeah. I mean, well, that’s, and that’s just math. And, you know, for those of you listening to, you know, Full Scale, the company I own, we help tech companies do staff augmentation with our developers in the Philippines. And some of that’s a touchy subject and one that I, you know, much like yourself, I’m sure you get on the weird side and have some conversations about this stuff. And some of them I’m like, you know, for me, I’m just an entrepreneur trying to solve a problem, you know, and, and but it is like, the part of our Matt Watson and I started Full Scale was when we came to realize like, Oh, my God, there’s like, 300,000 400,000, open it jobs in the US. And you’re like, wow, like, wow, and then, you know, some of that and, you know, we mentioned being from the state of Kansas, I don’t know what the current numbers are.
Kara Lowe 05:54
But like three or four years ago, the state of Kansas, like graduated, like three or 400, computer science grads, like, yeah, that’s the thing. And right now, there are about 6000 open tech jobs in Kansas City alone. So that’s just within our MSA, which does, of course, including Kansas and Missouri, for those of you less familiar with the area.
Matt DeCoursey 06:06
So it’s also like the 30 of the biggest cities in the US, right over 30. Like, you get into some of these markets and rankings are really big.
Kara Lowe 06:14
It does. I mean, it’s, we even punch a little bit above our weight and population in terms of concentration of tech talent. We’ve got more technology workers in Kansas City than St. Louis does, which is a larger city than us, than Indianapolis and Nashville cities that are kind of close in population, or if not a little bit larger. So our need is profound in this region. Our region hires a lot of tech talent and employs a lot of tech talent, one in every 10 Working Kansas Citians work in technology. So it’s, and that number continues to grow. So when you have this kind of proliferating need, and in an environment that really needs the workers to continue to grow, and a shortage of the supply, and you hit the nail on the head, you look at the feeder universities, even if you look at all five of our we do this in a report that we put out annually, to kind of talk about that multiple solutions need to happen to fill these jobs, and that they need to be long and short term balanced. If you look at all of the CS computer science programs in Kansas, Missouri, Iowa, Nebraska, even Indiana, and Texas is another big feeder for us. All of those graduates do not total the number of open tech jobs. Yeah, if we captured every single one. And by the way, we’re not after every person. You already have it. You can’t take 100% of a sample space.
Matt DeCoursey 07:35
In this case, we’re gonna say tech talent. Okay, so here’s the reality. It doesn’t. I don’t care for you, the United States, the Philippines, or China anywhere. 100% of those people aren’t good at what they do, either. That’s right. Like, I mean, that’s just the math of it. You know, you Top 10%, Top 20%, Top 50% It’s gonna exist in every market. I mean, and so that becomes another challenge to do the math. It’s a wonky man. It’s tough to fix. And that’s the conversation. Actually, I’m glad you have it more than I do. Because, you know, there are systemic issues that come down to, but if you want to grow a tech business like Well, first off, I’ll throw a couple things out there. So obviously, the talent now a talent, there’s, you know, there’s the pandemic changed out, and in some cases made it worse for places like Kansas City, it’s a double-edged sword. So we would refer to this use this term called Brain Drain prior to the pandemic, where places like Kansas City or really like any smaller market, if not even big markets, had that there was this like suction hose to the west and east coast that just took a lot of the best-talented people and they wanted to go out, and you know what, I am not going to fault him. If you want to be involved in technology, silicon, I’m not going to be. Oh, Kansas City is better than Silicon Valley. No, it’s not. There’s a lot of shit going on. It’s really expensive to live there. Now that said, that’s an additional bet people would move there, they oftentimes I see him come back because they’re like, Wow, that’s $300,000. Your salary didn’t feel like a whole lot, because my rent was $9,000.
Kara Lowe 09:18
Yeah. So there’s you have kids, and you want to, you know, have a yard?
Matt DeCoursey 09:21
Well, well, let’s talk about that. Because those same people would stay? Yeah, he’s like, Hey, I like it. Here’s my hometown. So my family’s kids went to school for whatever reason they had, and then all this. And so there was this defense mechanism, this, this guard this wall around it, save some of it, and then all of a sudden pandemic happens, and it becomes a very easy thing. And now the tentacles of big tech just kind of spread out. Yeah. Yeah. So you know, get rid of it. But on the flip side of that, though, one thing we noticed that Full Scale was we had a lot of people that, for the prior couple years, were like, No, we’re never going to do it. Now. And then they got it changed. So personally I, you know, I’m just saying that, in my opinion, I always like the idea of global citizenship. And wherever I think if entrepreneurs go to where things are plentiful, and wherever that is how that is, they succeed. And there’s a lot, there’s a lot to unpack there that I don’t even want to get into. There are smart people everywhere, folks, like, look, first off, quit telling yourself that everything has to be local in some regards, like, because it does, and it doesn’t. So look, I think, to grow tech, and you first there’s talent, there’s funding, there’s just like the things that already exist, you know, and Kansas City punches way above its weight for our market size.
Kara Lowe 10:48
It does. Yeah, it does. And I, you know, going back to the brain drain comment, because I think that’s an important consideration. If you isolate it to Tech, we kind of flip and flop there for some years. We actually import more tech talent than we bleed out. There are other years that we bleed out more than we import in. And I think part of that is the boomerang effect of people returning back home. I think part of it is that we do not when you calculate Brain Gain in brain drain, know how the areas in the United States that drain the most tech talent tend to be areas with a high concentration of universities. So Boston, Washington, DC, a lot of these kinds of East Coast cities that have numerous, numerous programs that then educate a lot of tech talent, and then those individuals leave and go elsewhere. So they look like they experienced a significant brain drain. We’re really it’s just a matter of there educating a lot of the folks that are then getting deployed across the rest of the country, Kansas City is in an interesting spot, we do have universities, but we do not have a huge concentration of them within the metropolitan area in terms of just student population, there are good programs, but the scale is not what it is in Boston, certainly. So we don’t suffer from a bleed out of all of these, you know, many, many colleges, we in other words, we rely on imports, we have to, because when I say importing, I mean from universities outside of the region, from people who relocate here. And then to a certain extent, we need to be doing better. And I can talk about H1 B visas and the retention of immigrants that have come across to the United States for education and then want to stay here and work for the companies that they may have interned for a while at those universities. So it’s a balance, and I think it all comes back to there needs to be more than one way to solve the workforce shortage problem. There’s not one. This conversation comes up a lot when it comes to solutions in general, and like, okay, like, I’m not gonna. I don’t want to get into politics here.
Matt DeCoursey 12:42
But climate change is a good example and be like, what’s the thing that’s going to solve it? It’s probably like, 97 things worse and like, and really, when it comes to just solving bigger problems in general, right, there’s usually not a silver bullet that just defeats all of it, right? Because if there was, they probably would have already done it yet. So it’s this collective nature of stuff. And, and you know, some of it, one thing I’ve learned with it, so you’re talking about, like growing the local tech ecosystem, the problem that you have, if you don’t have the technical talent is you don’t build a technical product, which means that you don’t usually technically get funded, which means you technically don’t grow, which means you technically don’t have a business. Yeah, technically Sachs, it technically does. Actually not even technically sucks, it just does suck. So that’s part of the issue that you know, you look at and I think one of the things that and I try not to get too opinionated on this, because I find arguments about these things tiresome. But it is and I’m just like, Oh, God, it’s probably the 80% of people that regardless of what side of the matter blur they’re on, you’re never going to change their opinion anyway. So therefore, I’m wasting my time.
Kara Lowe 14:03
Four to five times, but keep posting those memes guys. Yeah, do it. One of them’s gonna work. Probably one of these days.
Matt DeCoursey 14:08
Most of those memes that you’re looking at are probably influenced by Russian bot farms. So good luck. Yeah. Following right. But, you know, you talked about what I just mentioned, that progression path to creating and building your tech company. You know, the thing I get frustrated with on a local level as I feel like a lot, there’s a lot of pressure on startups and early stage companies to be so hyper local. Yeah. And I don’t think it’s fair because you know, that you’re competing against these global conglomerates that have worldwide employees and what’s the different race and if you’re working in a marketplace where things are plentiful? Yeah. It’s shop local, like you don’t if software availables are readily available and affordable in your market, don’t go to FullScale.io. Right? need our help, right? Get it. But the thing is, with that, on the flip side of that, and you know, they call the law of supply and demand, it is a loss. And we’re like the law of gravity, you cannot defeat it. So the problem is when that supply and demand equilibrium gets all out of whack, you know, because, okay, so we’re in this mess right now. Okay, Facebook’s laying off 13,000 people, that’s gonna give us the tech talent we need. No, it’s not because that guy is just that developer and a guy or gal that just got laid off, or they make as much money as your frickin’ seed round was, you’re not bringing that person in. That’s not. That’s not where that’s happening. So that’s like, that’s not coming downstream. But you know, I don’t know, there’s, there’s, if you can’t afford it, it just everything eventually comes down to math. And if you have to overpay for something, you’re gonna have to under pay for something else, and maybe go without it. So, you know, part of me means, I’ve done this globally, it’s not even globally, like I have literally made a living, chasing opportunity. Like you some, you gotta go to it, you gotta go find it. And if the technical talent isn’t where you need it, you need to either create it, or go find it. Yeah. And there’s not, there’s not, there’s not a way there.
Kara Lowe 16:15
Those seem to feel very like, right, very straightforward, right? Well, it’s either it goes back to long term, short term, if you’re creating it, that’s going to take longer to correct. And you have to have a sense of realism around the maturity rate, just like you would on problems today.
Matt DeCoursey 16:27
That needs to be right, right. Don’t have time to incubate, and you talk about even like the graduate thing. Okay, I’ll tell you right now, every client prospect that reaches out, they all want senior people. And that’s a problem if you don’t have senior experience. And the problem is, those are the experiences, you have to get experience. Right. And there are only so many people in that bucket right now. And then everyone’s like, I don’t know, it’s a zero sum game. And the Brain Gain or drain thing, as you described sounded very kind of zero sum ish. If you lose as much as you have I spend as much as I earn. Right? Did I save any money?
Kara Lowe 17:06
Do you think there’s pressure on startups, and especially earlier stage startups to hire that new talent? Because they can’t afford it?
Matt DeCoursey 17:15
Is that fair? Yeah, I run into it a lot. Because once again, I like all my statements. Okay, you’ve mentioned reality. Two of my three books have the word realist and the title. Okay, so how, What world do I operate in? And yeah, I think some of it is just accessibility, because the so here’s the, here’s the typical path there is to get graduates from college, they may be an intern, or working somewhere and the early stage company as a buyer, because those, they are affordable. But they never keep them. Right. Because the moment that you get any experience, I think it was an ice cube that said big bank, take little bank. And it’s true, though. So the like, I talked to founders, these aren’t even people that I’m not just speaking on, like, a Full Scale as clients. These are just like my peers and like, I can’t keep people and the second they get experience. They go work at Garmin or Cerner, which are local tech powerhouses in town and Cerner now sure. Yeah. Sure. Okay, well, that’s a pretty big company.
Kara Lowe 18:22
That’s pretty big, I mean, even more opportunity.
Matt DeCoursey 18:25
Well, that’s the thing, though. And then back to this, this, this one, realism. So look, at this point, you’re, you’re you’re coming in your mid 20s, you’re, you’re, you’re gonna have a life partner. At some point, you’re probably going to have a kid. And now you have to go home and sell this opportunity at home. And you’re like, so I can go work at a startup that may or may not make it. Yeah. Or here’s Globo Corp, offering me a big salary benefit. Maybe? I don’t know. You got it. Yep. And so that reality comes in, you can’t fall. I never fault anyone for taking advantage of the better opportunity. Like I’m not I’m not picking on the decision making because I would probably take the better opportunity myself. The flip side of that, though, is what I did find is there are a ton of people that don’t want to work for Facebook because they don’t find any passion. And will be lost in a massive employee roster. Or the building of some of the things they’re like, Yeah, I don’t, because I literally talked to founders in Silicon Valley when I was at TechCrunch. Many years ago. It’s like, you gotta have a hard time finding people. Like actually, it’s not as bad as you think because people don’t want to work at Facebook.
Kara Lowe 19:36
Yeah. And there’s no proximity winning in those days, either. I think it goes back to you know, we’re talking a lot about talent and workforce as if it’s an I think, what’s the it’s a foundational element. Well, and it’s not it’s not a monolith, either. When you look, I mean, the words talented workforce refer to people and and people are highly individualistic, and you know it kind of takes me back to my marketing background where you’re looking at demographics, sure, but also think about psychographics. And people are wired in different ways where maybe you’ve got a senior person who is burnt out on the corporate of it all and wants to go and kick it around at a startup.
Matt DeCoursey 20:16
And then vice versa is usually made with some money, they’ve saved some money, time, they can feel like they take a risk.
Kara Lowe 20:20
Right, right. And then sometimes they’re on a vision quest. I mean, sure.
Matt DeCoursey 20:24
But engineers and software engineers are overwhelmingly type B personalities. And that personality type favors consistent Low risk, low risk. Yep. You know, like some of that instability and okay, if you’ve been listening to the show, or you have a start up, that isn’t usually how most startups are strapped.
Kara Lowe 20:43
Now, they’re not known for their long and straight routes, their journeys.
Matt DeCoursey 20:48
Okay, so we talked about tech talent. Yeah, speaking of which, finding expert software developers doesn’t have to be difficult seems like a good time to mention that, especially when you go to FullScale.io, where you can build a software team quickly and affordably. Full Scale is a platform that helps you define your technical needs, and then see what available developers, testers, and leaders are ready to join your team FullScale.io Learn more, by the way, I think that technology companies would be good at spotting tech talent. I did not, it is difficult, and that’s hard. Well, that’s another thing to say you talk about, like opportunity cost, right? And getting the wrong people and then you talk about like the interns or whatever. Like if you’re if your entire tech company locally has a team of inexperienced interns, I probably need to get paid? Well, because some of that, yeah. See, it’s I think the team dynamics your best to like find out oh, man, it took me out. I’m finally gonna get much better.
Kara Lowe 21:50
Yeah, just saying as an entrepreneur, I mean, that’s true across, you know, every every piece of your life pretty much.
Matt DeCoursey 21:58
Okay, so next, I want to talk about access to capital. Yeah, because it is. That’s the most popular subject. Oh, I bet that’s why I get sucked into that. And I say sucked into that, because that’s what everyone wants to talk about. Yeah. First off, there’s money everywhere. People never actually make an effort to go find it. Yeah. Like if I talk to one more person that tells me they couldn’t get funded. And I’m like, Well, how many people do you talk to? Do I talk to like, six. I’m like, Okay, you’re like 94, short of average. For people I talk to, they get funded. But for real, that’s the thing.
Kara Lowe 22:45
And, you know, there’s, you know, that’s a hot topic here in our hometown, I’ll tell you, there’s money all over the town, there’s money, I’m sure wherever you’re out, I’m sure it just may take, it takes maybe a different shape, systematically than it does on the coast where there might be kind of more of these tried and true resources that is that are basically better known than they are in canceling. I mean, we are still in some ways emerging as a hub. But to grow tech startups there. There are ways where we have been extremely successful, and we have the founders and the exits to prove it. But I think that, you know, there’s absolutely work to do in terms of just creating more connective tissue between the different key players. And when it comes to tissues.
Matt DeCoursey 23:25
Great, as a great way to put that, because that’s what I see. That needs to be fixed. And this town, because I Okay, so I’m in the middle of this, because obviously, the show puts me in front of a lot of people, and a lot of people listen to it. 2 million, almost 2 million downloads last year, thank you everyone listening, we know you have an infinite number of choices about what you can pay attention to. So thanks for paying attention to what we’re doing. With that, I get a lot of outrage from people that are in the PE family office from one side, and then you have the startup founders. And it’s interesting because they’re both trying to figure out how to get in front of each other. And that connective tissue is a really good example. Because there needs to be some kind of grit. So I think if you want to grow tech, you need to have an open and honest ecosystem around that. Now, when he talks about Silicon Valley, everyone says that it’s a good example, because there is a level of sophistication that exists on the investor side. So what I found is that investors don’t write checks to things they don’t understand. So there’s more people that have put themselves in a position of understanding some of the things that they are doing. So it’s very difficult to get a check from someone that doesn’t understand what you do or understand why it’s important to where it’s valuable.
Kara Lowe 24:43
Do you think that problem befalls like the family office kind of guys more so certainly than a investment bank, which probably employs different subject matter experts on different topics? Or is it just that too broad of a brush?
Matt DeCoursey 24:56
I mean, it is a little broad of a brush. I mean, I’m thinking I’m gonna apply this more to the family office. Because you know, in a lot of these markets, you’re gonna find more people and an okay family. I don’t like to leave things undefined. A realist definition of a family office is usually as an organization that is usually created by wealthy people who are a number of wealthy people that are taking their wealth and putting it into their own little fund that can do whatever it wants, however it wants, usually not restricted by charters or different things. And some of those people also usually employ pretty sophisticated people to understand what’s going on. But on some level still might not get it, you know, so some of that’s that locker there. And then I think the thing that frustrates me, and this is where I guess people off care, my city doesn’t need another fucking matching fund. Let’s open the door to these things. Like you’re only going to invest in me if someone else likes the house like, right, and I just see too much of that. And it’s like, do you want to play or not? Because it’s and that’s the thing that’s and then now we can talk about the banks? Sure. I don’t want to go to another event for startups where 10 banks are trying to get me to open an account. All 10 of them would not give me a loan, if I wanted to, if I made it right. But guess when they will give me a lot when I don’t need it? Yeah, it’s the same thing with the funding thing. And like, like, look, and I’m not trying to pick on the things. I think that, like a matching fund sets a specific purpose, but at the same time, it’s not necessarily opening and it’s not like, you know, I don’t know, I think.
Kara Lowe 26:43
So bottom line the solution, because I want to pitch about problems, but create some more things that how like, seed level funding well, and I think it all comes back to tolerance of risk. And, you know, in terms of matching funds, and on the bank side, too, it’s, it’s it’s all about. It’s all about increasing our tolerance of risk. And I think, a lot easier said than done.
Matt DeCoursey 26:58
Thanks. I’d like legitimate restrictions behind it, you know, meaning like they just can’t, right. So part of giving me an example. So Full Scale has invested over $2 million, and services in exchange for equity and local startups, all of them here in our hometown. With that, we wanted to basically grow the company, we wanted to talk to a couple banks, not one of them give us $1 of asset value for any of that equity that we owned, and they and they couldn’t, they literally can’t recognize it. And I had one I won’t name who one CEO said to me, I would much rather take this as collateral than a truckload of bolts. Because like so they’re stuck in this weird, intangible thing. Now I have a local startup founder here who’s working on solving some of us. And there are some things that CDFI I’m not even sure what that is. I can’t remember what that stands for. But some banks are moving some funds sideways into things that don’t have the charter restriction outside of.
Kara Lowe 27:59
So do you think you would have that issue where you’re going to banks, I presume, presumably, within the Kansas City area, if you had gone outside to a different market? Would that have existed? Or is that just an issue across the board, Silicon Valley Bank sbb.com, and my money back and that’s the thing is like, because they actually don’t operate the same way that a bank does.
Matt DeCoursey 28:10
So the problem is, is the traditional lending and banking system set up to leverage against property? And software companies don’t have tangible property, not real property, but it should be because if I spent $4 million dollars building the code that generates the revenue and Watson I’ve talked about that a lot, we actually had, you know, backlog cars that had a $450 million acquisition. And we were honoring our CEO, we brought that up, and we’re like, Yeah, but I bet a bank wouldn’t even give me a loan. No, no. Yeah. So but think about how wacky that is, someone will come pay for like that kind of money for your company, but you’re not a worthy lending candidate.
Kara Lowe 29:02
Well, and by the way, that to a certain extent that that real property kind of conversation even happens within our enterprise companies between maybe a CFOs office and a CIOs office where you want to make a significant capital investment on something that you can’t actually see feel touch or wrap your arms around that’s a tougher sale.
Matt DeCoursey 29:21
2023 and beyond because the most valuable companies in the world don’t have.
Kara Lowe 29:26
Well, I think we learned a big lesson about tech debt in real time over the holidays with Southwest and what happens when you don’t make those capital investments and that I mean brutal brutal stuff but but that is a great case study for you know get ahead of your tech debt get ahead of those those capital investments and that kind of goes more on the on the enterprise level company conversation. But it applies.
Matt DeCoursey 29:49
What’s your take on the funding like what are you finding because banks are out like, not even a thing like I’ve had choice words with some of them for wasting my time. Yeah. Like, why, like don’t listen, don’t waste my time. Yeah, you know, and then the fun thing is real. And there really is, from my experience, it’s mainly local, there really is a desire between the family. So the problem is that I just met with someone about this recently, and people like to call me because of my candor, which some people love, and some people hate, it’s just my opinion, if you don’t like it, move on. Right. But with that, I’ll give you an honest take on it. And I’m talking to someone that at PE family finds that I can’t get deal flow, why you’ve locked yourself behind for hallways worth the doors, right? To make yourself inaccessible, because you’re afraid that you’re going to have to come through a couple bad deals on the way to the good ones. That’s not how it works. You don’t get to go to the casino and roll the dice and win every single time like you got to fold now and then you gotta move on whatever but they’re almost afraid to be annoyed. Yeah, with deal flow and then complaining, they don’t have it.
Kara Lowe 30:58
Well, interesting to me, here’s kind of my take on it is in the tech council we really focus on we work with a lot of companies that have have exited their startup stage that are certainly you know, scaled up in Canada, we’re doing a lot of hiring and really have a presence here. So do a lot of our big corporations. What’s interesting though, is I’m asked to speak a lot at events and things and panels that include the startup and funders and founders community basically. So the interesting thing I hear is, I hear the same kind of complaint from different communities that if you put them all together, it’s like y’all want the same thing. So a lot of times founders will complain about that.
Matt DeCoursey 31:46
Well, I can’t get customers in Kansas City, I have to start outside of Kansas City, in order to prove it, to those with you can’t get customers local, you probably change customers.
Kara Lowe 31:49
Well, and then I, you know, on the deal flow side, I’ve heard that too. There just isn’t enough concentration here, there just isn’t enough going on. And then on the corporate side, I also sometimes hear that there’s more of a desire to work in the, you know, the very wild world of corporate procurement to get those large scale customers and to have more corporates, and more enterprise companies be more participatory, in the startup ecosystem. So my take is, I think we’re all coming to the table wanting the same conclusion, it’s the challenge of who’s going to be the most risk tolerant to help us start taking steps toward that conclusion. And I don’t think the onus should always be on the founders. And I think that’s where it gets put, because they lack the power in those equations. I mean, that’s just the nature of the beast. I also, you know, think that part of this can be solved with creating more of, as I said earlier, that connective tissue, whether that’s the opportunity to have these spring conversations, and not to put a kind of happy Midwestern gloss over it, like, ah, we just, you know, are KC proud, we’re gonna love watching these companies grow in our own backyard and having more of these realistic conversations of All right, well, the nature of the game has changed. If the nature of the workforce game has changed, I think the nature of the funding game has also probably changed post pandemic to what are the opportunities that we can take as a region? And this applies to any tech industry in any region? What are the opportunities maybe unique to your to your ecosystem that you can utilize to kind of get a step ahead in this new climate of, you know, there’s a lot more companies that operate in a hybrid kind of structure, is there more access now to, to funds outside of outside of your region, your own backyard, because of the more hybrid nature and the more kind of interconnected, less geographically disposed? I don’t know. But I know that it’s changing. And I also know what I keep hearing from these different factions. And that I think there’s a role that an organization like the one I run, can play in helping to create more of the connective tissue. I can’t get into a, you know, family office head and say, Here’s, you really need to be more risk tolerant, because we think it’s good for the ecosystem. But what we can do is create opportunities to have realistic conversations.
Matt DeCoursey 34:15
I could do that. Is that what I should be doing? Yeah, you should be doing that. And we also are really not Kevin, that’s like, they’re calling for advice. And I’m kind of doing that. Yeah, but I don’t know. It’s also like, I don’t know, it’s all you can do is all you can do. So we’re answering the question of growing a local, you know, tech everything. Now with that, I mean, I think it’s fair to say that if we want to grow our local tech companies, we need to support them being national and global, absolutely so you can’t thrive. It’s okay. If anyone listening can tell me a publicly traded company that only operates in one city and one city alone.
Kara Lowe 34:58
Tell me because that’s yeah, I mean, they could be there.
Matt DeCoursey 35:00
I mean, technically, maybe, but I say, operates, they may have all their employees in one area, but do they have customers everywhere? And that’s the thing. So like you got to kind of get national and global to survive locally. There’s a symbiotic relationship there. That’s interesting. So, all right, so I quoted Ice Cube earlier. Let’s go the other direction. And I’ll quote Elvis, a little less conversation and a little more action. Maybe.
Kara Lowe 35:31
So that means the podcast is over.
Matt DeCoursey 35:35
Picks out part because Oh, God, I tell you, I run into sloth. It’s like, tuck tuck, tuck, tuck, tuck, tuck, and Nyland. So, yeah. So like, take some action people, like, you know, you want to get out there, you want to talk to people? Like follow up? Yeah, like, follow up, just try to make something happen.
Kara Lowe 35:53
Right? Right. I mean, that that onus is on every single member of that equation, right. And it’s not just on the founder to go and go and have 100 conversations. It’s also on, you know, anyone who participates in your tech ecosystem to help companies grow. It is about what you know, walking the talk, and being more participatory and looking outside of what your normal structure has been. This is who we always talk to, this is where we find comfortable. Yeah, I mean, that’s where change happens is kind of what disruption is.
Matt DeCoursey 36:23
Yeah. But that really is a thing. And you know, that’s I am, you’re never going to, like really fix that problem. Because there’s just a lot of entrepreneurs out there. And there’s a lot of busy people out there. But yeah, I mean, I think that’s a good place to start.
Kara Lowe 36:41
Like, yeah, it’s hard to identify why entrepreneurs if you don’t allow yourself, see them in the wild.
Matt DeCoursey 36:47
Oh, they’re out there. Man, not a lot of things. I hear I am all these years later. And I really do run into a lot of people that seven years later are still telling me about the startup. They’re the same one. Yeah, but they’re going to start out. Why aren’t you doing it? Well, it’s not the right time. In my book Balanced Me, I literally have a section called the right time myth, I’m gonna break breaking news people, the right time never counts. Right? Time is a myth. You’re telling yourself and waiting for the right time. 99% of the time, you’re just telling yourself that as an excuse for why you’re not doing it, jump in the pool, jump and build mics. I mean, it helps to have the materials or most of the materials, you need to build the wings before you leave the cliff. But I’ll tell you that nothing will make you either find the stuff you need or build the wings faster than the impending doom of hitting the canyon floor. That’s right. Put some pressure on yourself, like get out there and do it. Like there isn’t a right time. There’s no such thing as a business without problems. There’s no, like, where are the easy businesses, Cara?
Kara Lowe 37:53
Because I want to sign up for all of them. Oh, gosh, I don’t know.
Matt DeCoursey 37:56
I mean, I don’t exist.
Kara Lowe 37:57
I think let’s just here’s the easy business here. You and I are rewinding time, 40 years ago, and starting something that we knew was going to be successful. Those are the only ways into an easy business.
Matt DeCoursey 38:05
I don’t know if that’s easy because I feel like the mechanics of that are remarkably more difficult and probably more complex than anything else we can imagine. We have to think I was just thinking of like that old Superman movie where he flies back against the world’s rotation and like stops time. So yeah, where are you super one woman will go with the super woman she could do?
Kara Lowe 38:27
Oh, yeah, she would have figured it out. Probably.
Matt DeCoursey 38:30
With a lot less hassle and irritation and yeah. All for that. I mean, yeah, like I said at the beginning, absolutely. The answer to this question is going to be different and different markets. You know, I mean, if you’re in Sioux City, Iowa, I think he might have a complaint about access to an ecosystem or something like that. You for all, I know that I’ll probably get a comment. That’s probably the world’s fastest growing.
Kara Lowe 38:56
Yeah, startup city, who knows, but got great peers in Iowa who are doing great things. But here’s the thing though, the internet’s made the world really small man, I got 200.
Matt DeCoursey 39:01
And I have almost 300 employees that are literally on the other side of the world, but you don’t have communication problems.
Kara Lowe 39:09
Right. Well, and I mean, it goes back to even a question of how important is it to have a cluster around a geographic area anymore? Is that changing?
Matt DeCoursey 39:18
I don’t think it matters. I think that tech is so much different. If we’re truly talking about tech, it’s a global thing. It’s like the whole premise of tech and software. Like why do we have the cloud? If we don’t I mean, if it wasn’t intended to like matriculate? Yeah. Then why don’t we just go back to local servers, because we only need it locally then, right? I’m just saying that and look, it’s not going away, folks. Like we’re trying to make it better. Don’t feel threatened by things like AI and stuff like that. It’s a lot of the things you’re doing the jobs that I can’t find people to show up and do anyway.
Kara Lowe 39:53
I’m sure that’s true. And it will and I think what you’re presenting with Full Scale, too, is more it’s that turnkey. The solution to a problem that we know exists right now. No, we’re also working on ways to be more mindful of that turnkey solution so we have a tech apprenticeship program that has more of a 12 month runway to finding talent rather than a 12 year maturity rate with some of the really great work you’re doing in K through 12. But you’re placing a lot of bets that have a long term maturity rate. Well, that’s the thing if you have a 12 year burn rate, good, cool.
Matt DeCoursey 40:24
Yeah, with that, who has a 12 year? Sort of that? I don’t know. I mean, I’m just a supporter of entrepreneurs finding clever ways to find solutions. I will tell you, if you’re telling yourself that you can’t build software unless it’s all people in front of you. I see people do it every day. See, our clients do it every day, meaning like if you’re in if you are in, right, if you’re if you’re the if you’re the lady in Sioux City, Iowa, that has a tech startup, you can find the people you need here, but that’s okay. And because you’re and really in the end, like, like, the whole premise of the stance that I take is that if you do it, right, you have the funds to hire the local people that are plentiful. Go get them. Well, there’s again, get them hired. People like yeah, like, yeah, and I just got to come together. And I’ve always said that people say, what’s your goal as an entrepreneur, I want to build something that’s bigger than you. And as for my dreams and my aspirations that extends far past my hometown, which held a lot of love for my family’s been in Kansas City since 1878. I mean, I don’t know how I get more old school. Yeah. And with that, like, I don’t know, get out there and find it. Now, I do want to go back. So you know, we like to end our episodes. And once again, today’s episode of startup hustles. Powered by FullScale.io. Keep that short, we talked enough about Full Scale and other stuff today. But you know, I like to end my episodes with a little bit of a wrap up, we talked about a lot of things. Congratulations on getting me to talk about all the shit that I don’t like talking about. You’re welcome to your opinion. I don’t like to be in the I like to be in the experience business, not necessarily business.
Kara Lowe 42:17
So I get it, I get it. And I would certainly think as an organization, we’re really big in the experience business. And we function as Kansas cities, the tech industry is the front doorstep. And if we can’t create a great experience for the key players and companies and individuals that are moving that industry forward, and we’re not doing our job, right, so I’m with you experiences everything well, and I think that that’s the thing and like at the KC Tech Council, and there’s a link in the show notes, learn more, if you’re listening locally, go sign up the member, don’t complain about what they’re not doing for you if you’re not going to help support it.
Matt DeCoursey 42:41
Right. So, you know, without it’s a difficult task. I gotta be honest, I couldn’t do your job. And I don’t know if I want to. It’s just meaning like I just that like you’re I say the same thing to Lauren Conaway. It’s just, you know, because I don’t know if I’m capable of it. And so thanks for fighting that fight, because it’s an important fight. And honestly, thanks for not being one sided about it. Because, yeah, global outlook.
Kara Lowe 43:26
I’m a realist, too. I wouldn’t be good at this job. If I were, a lot of people wouldn’t be.
Matt DeCoursey 43:31
And I’ve, I don’t know if the enemy is the right word. But I’ve rubbed a lot of people the wrong way when I started Full Scale.
Kara Lowe 43:39
But can’t you be an aspirational realist, you know, a realist with optimism, and I’m not moving anytime soon.
Matt DeCoursey 43:44
Kara Lowe 44:00
Hey, that implementation is as well, definitely.
Matt DeCoursey 44:03
Well, that is not possible, as actually, I’m a nontechnical founder. So she’s eclipsed me.
Kara Lowe 44:11
Come on, you saw those comments coming down the pipeline?
Matt DeCoursey 44:12
Well, but some of that is, you know, in the end, like if we want to change things in the long term, we can start now. Absolutely. And that’s why my kids are coding because you have to be doing both things.
Kara Lowe 44:22
You have to be doing both things. You have to be laying the groundwork for the long term. We do it in our lives every day. Long-term and short-term can exist at the same time. And that’s okay.
Matt DeCoursey 44:31
And at the end of the show, one of my favorite quotes that I heard from my mentors growing up; said to me, Matt, just got to make sure not to sacrifice the long term on the altar of the immediate because that’s one, and you can do it. That’s true because you gotta have both and with that, thank you for joining me.
Kara Lowe 44:33
Thanks for having me.