Setting up shop on the prairie

Om Malik over at Business 2.0 writes about how the geographic spread of broadband is making it far easier for entrepreneurs to set up shop far away from Silicon Valley, in places such as Kansas and Oregon. One company he talks to is Kozoru, which is developing a unique new search engine that we wrote about back in September.

Here’s what Kozoru CEO John Flowers, who once headed a San Francisco company, told Malik about not starting a business in the valley, after his “entrepreneurial itch” re-merged.

Some potential investors encouraged him to head back to the Valley and tee up again. But one day, as he was looking out the window of his spacious three-bedroom house, Flowers had an epiphany: He could launch his company right there in Overland Park. The reason? Sprint had totally wired the town. “What I needed for this company was lots of bandwidth,” he says. “And we were sitting on a sea of fiber.” For the cost of two 1.5-megabits-per-second T-1 connections in San Francisco, Flowers bought 10 times as much bandwidth and started building his startup, called Kozoru. It doesn’t hurt that the cost of living in Overland Park (population 149,000) is about half what it is in Silicon Valley. “I went through $13 million in venture funding with nCircle in 18 months,” says Flowers, 34. “Here I have $3 million in funding, and it’s going to last a lot longer than that.” Flowers says Kozoru, now with 14 employees, expects to have its product completed by mid-2005.

Malik also talks to Matt Wells of search engine Gigablast, and Rick Ellis, creator of blogging and publishing tool pMachine.

The story disappears behind a subscription wall after the first few paragraphs. But you can still access it for now in Google’s cache.