Kitaro: Place Matters.

Kitaro connects companies with the best cities for their expansion projects based on customized data analytics.

I have spent the last five years working for Louisiana’s Department of Economic Development. It was my job to recruit companies to invest in the state and thereby create jobs. We wanted to attract the best companies in order to provide the best opportunities to Louisianians. However, I realized that Louisiana, and most other communities, faces tough challenges even before competing on the basis of our suitability for a particular company project. The challenge is two-fold: for one, a community must approach a company at the exact time when it is considering to grow or expand. Yet, there are no clear indicators to track which company may be in an expansion mode. Second, every company manages expansion projects differently; some assign it to a specific person within the company (from CFO, HR, to CEO), while others outsource it to a site selection consultant. As a result, communities spend a significant part of their budgets on speculative marketing initiatives in the hopes of being in front of the right person, from the right company, at the right time. Needless to say, most of the marketing campaigns have a relatively low success rates. The average cost for an expansion project that a community had the opportunity to compete for is around $10,000—the cost of winning an actual investment is considerably higher, if it’s tracked at all.  

At the same time, we know that a company that wants to expand and locate in the right community must assess a variety of factors—from workforce availability, real estate options, and quality of life. However, based on my research and my conversations with companies that were looking to expand, there simply is no system to compare locations based on the specific company needs for an expansion project. Companies have to dedicate substantial resources to find, collect, and interpret the data they need in evaluating locations. The result is that most companies will only consider a few well-known cities, eliminating other options to their own detriment and to the detriment of most cities and states like Louisiana.

Kitaro solves the problems of communities and companies by connecting companies with expansion projects with the cities and states most suitable for their projects. For companies, Kitaro provides an easy-to-use algorithm that scores each US city according their defined needs. Once a company has determined its preferred cities, Kitaro easily and anonymously connects the company with the respective cities’ economic development organizations (EDOs). The objective is to connect the company with the city to determine if and how a city can accomodate the company’s expansion project. In order to attract a large number of project, Kitaro provides services to companies for free.

For EDOs, Kitaro is the only platform that allows them to respond directly—and for free—to company inquiries. In addition, an EDO is able to bid for targeted projects for the opportunity to submit a proposal when its city was not shortlisted. This enables a EDO to strategically select projects that align with its community growth strategy.

Kitaro is the first web platform that applies the principles of a two-sided marketplace to the field of economic development. In the same way that Airbnb, Kayak, and Toptal matches users with rooms, flights, and talent based on user-defined criteria, Kitaro matches companies with cities that match their specific needs. We believe that this will also enable us to accurately measure the relative importance between factors (tax, workforce, education, etc.) in a company’s location decision. We want to enable communities to make the right investments in order to increase their competitiveness for private sector projects.

Kitaro is primarily a web-based platform and therefore inherently a tech product. Both EDO and company users interact with Kitaro and each other through the web.  Beyond its form, Kitaro is also a technology or data-based system. We use a number of software products to retrieve, store, and manage our data. Without the significant progress we have witnessed in software and data store, we wouldn’t have been able to build Kitaro.

In the next two weeks, we will launch the second version of Kitaro. This version is a critical improvement of our fist iteration in terms of its user experience and product. Based on the traction, revenue and potential investment we expect to generate, we will look to hire a Chief Technology Office and Chief Data Officer. That will allow the CEO to focus more time to raising Kitaro’s public awareness. Ultimately, we aim to bring 50 new corporate projects and 14 paying clients to the platform within the next 12 months.

We believe that a sustainable city must respond to the needs of its current and future citizens by offering the right housing, transportation, and services. But city must also provide the right jobs for its citizens. That means it will have to attract the right companies that fit with a city's vision for itself. That's where Kitaro comes in. Instead of, or in addition to, competing for the big projects (see Amazon HQ2), cities need to attract the companies that embrace the same values as their citizens. Today, we spend too much business development and not enough on place improvement.

As a solution, Kitaro is entirely web-based. As such, our outreach will be primarily through the web (Email, LinkedIn, and other social media). Communication between companies, Kitaro, and EDOs will also be facilitated over the web. More specifically, EDOs will be able to find projects on the Kitaro platform, while companies will be able to submit their information through the platform as well.

We are currently in a pilot mode but expect to launch our second version this month (July). As of today, we a have waiting list of four EDOs looking to sign-up with Kitaro the moment we make our packages available for purchase. With these four initial subscribers, Kitaro will indirectly be serving over 4 million people (all citizens represented by the respective EDOs).

This year we estimate to sign up 14 EDOs as paying member while having 46 companies use our services.

In year three, we expect to have over 400 EDOs on our platform and over 8,000 companies submitting their projects on our platform.

More importantly, we expect that our first adopters will be those EDOs whose cities get often overlooked by companies even though that they terrific communities that would welcome the right private sector investments. To quantify, each new expansion project typically creates 50 jobs. Just in year one, that could mean that Kitaro benefited over 2,000 employees (46*50)!

As a platform, Kitaro needs to attract two user segments: companies in expansion mode and (EDO). I believe that my network in economic development is  key in attracting the EDOs. As for companies, I have recruited consultants who specialize in uncovering expansion projects. These consultants will refer their projects to Kitaro for a commission. Once Kitaro becomes an established source for projects, I know that EDOs will dedicate less of their resources to "business development" and more to different initiatives that have a demonstrable impact in making their communities more liveable for their citizens and more attractive to companies.

Kitaro charges EDOs for the opportunity to compete for a corporate project. EDOs will be able to "buy" a package of projects. With over 850 EDOs in the US and over 2,000 EDOs globally, the market for Kitaro is highly targeted and lucrative since it is relatively unrealistic that EDOs will ever cease to exist. Barring any major economic collapse, we estimate that companies will continue to expand and grow geographically, which will ensure a consistent base of projects that Kitaro can collect and offer to EDOs.

Kitaro will be a success only if we achieve two things: financial sustainability and meaningful impact in economic development. I believe Solve can help us achieve both of these goals by putting us in touch with the individuals and organizations (see listed organizations in response below) that have unique insights in how to grow a tech company and how to maintain focus on a company’s mission.

While I am confident that our initial growth tactics will enable us to demonstrate meaningful traction, I know that scaling Kitaro will require significant public awareness. Yet, in order to gain wide public awareness we need to focus on delivering a unique and excellent user experience while also staying true to our core mission around prosperity through sustainable growth. I know that Solve can help us in getting our message out to the right stakeholders through partnerships and alliances that are mutually beneficial.