Eddie Sandoval embraced entrepreneurship in starting up his Wichita-based blue corn tortilla factory, a business that has captured a national spotlight. It is another sign that the climate for starting small businesses in Wichita and across Kansas is improving and that a new era of innovation is emerging.
Growing up in a working-class home in northern Kansas, Eddie Sandoval seemed destined to demonstrate that the American Dream is no illusion.
He earned a full-ride scholarship to Wichita State University, graduated with a business finance degree and had a prestigious internship waiting for him. Then he sat down with his immigrant parents and told them he was giving that up just to grind corn for a business called Pinole Blue.
“They thought I was nuts,” Sandoval admits.
But it wasn’t just any corn. It was blue corn grown in Mexico, including in the northern Copper Canyon region where his parents were born and raised before immigrating to the United States. Because it is grown at such high elevations, the heirloom corn has a high protein content and has the same antioxidants as blueberries.
What exactly is pinole? It is roasted dried corn that is ground and mixed with spices such as cinnamon, cocoa, chia seeds, agave and vanilla. The powder is dense in nutrients and can be used to make cereals, tortillas or baked goods and can be mixed with beverages.
As a complex carbohydrate, pinole digests at a slower pace, providing energy for an extended period of time. The Tarahumara tribe of Mexico drinks the roasted, ground pinole for stamina, and it has become popular among professional runners.
Sandoval and his family missed having access to pinole. He would bring some home twice a year after visiting his grandparents in Mexico and learned others missed it too.
He began stone-grinding corn in his garage and selling roasted pinole in small plastic bags. Within a few months, he had sold 300 pounds and knew that a larger market existed.
Fast-forward a couple of years, and Pinole Blue has reached $700,000 in sales, outgrown its production facility for a second time and been featured in national publications as well as the television show “Shark Tank.” So many new orders came in following the “Shark Tank” appearance that Sandoval had to hire numerous short-term employees to handle the demand.
“It’s been a wild ride,” he says.
Local officials say Pinole Blue demonstrates that the entrepreneurial spirit is thriving in spite of, and in some cases because of, the coronavirus pandemic that has killed 6 million people worldwide, triggered extensive lockdowns and reshaped how the world does business.
Sandoval “was an entrepreneur that saw an opportunity and chose to go act on that opportunity,” says Josh Oeding, president of NXTUS, a Wichita-based catalyst for startup businesses in the region.
That’s not an insignificant step, he says, because many people have promising ideas but never follow through by creating prototypes and testing how well they work and whether there would be a market for them.
The entrepreneurial boom
Wichita was once known as an entrepreneurial mecca, thanks to the enormous success of Pizza Hut and Rent-A-Center. But that reputation has faded over the years. Recent television commercials touting the city’s entrepreneurial spirit lean heavily on companies created decades ago.
The U.S. Census Bureau began gathering business formation data in 2004. Between that year and 2019, Kansas ranked a lowly 46th in the nation in high-propensity business applications – defined as businesses most likely to generate a payroll.
The state’s ranking improved somewhat during the pandemic, climbing to 35th for the period between April 2020 and October 2021. Business applications jumped 60% in Kansas over that period, which sounds impressive until it’s compared with the national average of 84%. The surge reversed an entrepreneurial slump that had lasted for decades.
“Big changes create big opportunities that entrepreneurs act upon, and COVID was a big ol’ change,” Oeding says.
One example of that is QuickHire, an app that makes it easier for workers in the service industry and skilled trades to find and apply for jobs. Though Wichita-born sisters Deborah Gladney and Angela Muhwezi-Hall had kicked around the concept for a few years, the timing didn’t seem right until the pandemic set in. Shutdowns forced many people to hunt for work to take care of their families.
QuickHire officially launched in April 2021 and within a matter of months landed $1.41 million in venture capital funding from a group of investors that included the KCRise Fund in Kansas City, Missouri; the October Minority Impact Fund out of Leawood; and Tenzing Capital Ventures and Accelerate Venture Partners in Wichita.
Another investor is Rise of the Rest, a seed fund launched by AOL founder Steve Case that targets startups outside of New York, Boston and Silicon Valley. Case’s early professional career includes time spent as director of new pizza development at Pizza Hut headquarters when it was still in Wichita.
Gladney and Muhwezi-Hall are believed to be the first Black women entrepreneurs in Kansas to raise $1 million in seed funding – and two of only about 100 nationwide, according to ProjectDiane, a biennial demographic study offering a snapshot of Black and Latino women founders and their startups across the U.S.
QuickHire is part of the biggest entrepreneurship boom in half a century. More than 5.4 million applications for new businesses were filed in 2021, according to the Census Bureau. That’s a 23% increase over the year before and roughly double the rate of a decade ago.
When the seed funding was announced, the sisters called their location an asset.
“Wichita has a budding economy and established ecosystem that lends well to any entrepreneur looking to start a business,” Gladney says.
(Courtesy photo)
New avenues of opportunity
The Pinole Blue and QuickHire stories are proof the entrepreneurial spirit is vibrant in Kansas and the Midwest, officials say. Those innovators recognized a need or an opportunity and seized upon it, tapping into a burgeoning startup ecosystem to help transform their ideas into realities.
As the world grapples with a new way of doing business in the post-pandemic era, the landscape is ripe for new ideas, new products and new ways of doing things, observers like Oeding say. Old obstacles have vanished, new avenues of opportunity have opened.
Now is a particularly good time to tinker with novel ideas in the garage or home office, Oeding says, test them with friends to see if there might be a market for them and make connections with other entrepreneurs. Like a snowball rolling downhill, the more this kind of activity occurs, the more momentum it creates.
KCRise has widened its investment area from the Kansas City area to all of Kansas and western Missouri because it sees so much entrepreneurial opportunity in the region.
“There’s no question that there’s a massive amount of engineering talent there (in Wichita), which is historically one of the harder things for startups to find,” says Ed Frindt, general partner at KCRise Fund. “Just the technical talent that’s in Wichita is really, really amazing.”
Another attractive component about Wichita for venture capitalists is the entrepreneurial ecosystem that is in place.
“It’s just a tightknit community” that works together well, Frindt says.
He’s also impressed with the work of NXTUS, which last year mobilized more than $850,000 in capital for various ventures and linked 75 different startups with community assets. That kind of synergy, Frindt says, creates a vibrant environment for entrepreneurs.
Dealing over Zoom
What’s happening more and more in Wichita and other parts of Kansas isn’t just a fad, Frindt says.
“We’re a financial return-focused fund, and we’re investing in a place like Wichita because we see opportunity,” he says. “Companies in Wichita, in Kansas City are just more capital-efficient. The talent that they tend to land is a little stickier, it’s a little more loyal than engineers that are jumping around in San Francisco from job to job.”
Historic barriers that stymied entrepreneurial efforts in the nation’s heartland have crumbled, Frindt says. Before the COVID pandemic, Midwestern entrepreneurs had to go to Silicon Valley, the East Coast or a few other major cities to meet with venture capitalists. But geography no longer matters.
“Investors will now do deals over Zoom,” Frindt says. The ability to meet remotely “leveled the playing field. And then once a firm does one deal in this region, they’re going to meet more people and they’re going to want to do another deal.”
Thanks to the emergence of remote employment, Oeding says, “you could start a company and have 100 employees and not one of them might be in Wichita. You could start a company that sells to the globe and not anyone in Kansas buys your service or your product. So when people ask, ‘Is Wichita a good place to start a company?’ You can start a company wherever you want.”
Starting up from the middle
Wichita has one of the fastest-growing angel investment groups in the country, Oeding says, and blossoming corporate accelerator programs.
“Some of your larger local companies are leaning in on how to partner with startups and become paying customers,” Oeding says.
NXTUS programs such as NXTSTAGE have also caught the attention of venture capital funds. The program’s first event was a pilot competition that connects entrepreneurs from around the world to prospective customers. A second venture, NXTSTAGE Customer Traction Cohort, was an eight-week accelerator designed for local early stage companies needing to dial in on their product-market fit, boost customer acquisition, accelerate revenue and identify ways to make their products scalable.
Just as restaurant chains often test new concepts and menu items in America’s midsection because the demographics closely reflect the nation as a whole, Frindt says, startups are drawn there for the same reason.
“The customers are here,” he says. “Something like 40% of the Fortune 500s are in the middle of the country. That’s what we’re banking on is that the big corporations can be cornerstone customers for B2B [business to business] software companies in cities like Kansas City and Wichita because they’re there in their own backyard.”
Paradoxically, some of the characteristics of Wichita and Kansas that are touted as benefits for attracting talent in other industries – availability of talent and a lower cost of living – can be seen as negatives in the tech sector.
“Those are all true,” Oeding says. “But I get tired of talking about those because they’re like a proxy for ‘low population and wage growth.’ The counter to telling the world how cheap the talent is in your communities is that the people that live in your community are being told to leave because they can make (more) money somewhere else.”
The need for more
Another Wichita-based entrepreneurial success story, Voltage, landed $6 million in seed funding from various sources, including GV, formerly known as Google Ventures. Voltage has become an industry leader in developing Bitcoin infrastructure that helps individuals and businesses use the cryptocurrency in their applications and services.
The demand for that infrastructure will only intensify as Bitcoin and cryptocurrency in general increasingly become part of the global marketplace, says Graham Krizek, Voltage’s founder.
“There’s a lot of comparisons between the crypto space and the early internet,” Krizek says. “We’re just really trying to create that base layer of the tools needed to go and start creating all these other things on top of it.”
Wichita was an appealing place to start the company for several reasons, Krizek says.
“A lot of other people are building companies now” in Wichita, he says, “It’s just a great ecosystem that’s very willing to help each other.”
Because workers can readily work remotely now, he says, they’ve been able to attract talent from around the world.
When asked what Wichita and Kansas need to do to take the next step to being a significant
center of entrepreneurship and innovation, executives had a simple answer: more.
“A lot of that infrastructure is there,” Krizek says. “We just need more people to come here and build companies. If we just can convince more people to come to start companies around Wichita, it’s only going to increase and become more of a tech hub.”
Even as innovation reshapes the post- pandemic world, however, certain truths about how to build a successful business remain timeless, Oeding says: Find good mentors, be creative in how to attract customers, and be willing to make changes as obstacles and opportunities arise.
‘You proved me wrong’
Pinole Blue has checked all of those boxes along its journey.
One of the first people Sandoval talked to about his idea of launching a business selling pinole was Kate Kung-McIntyre, a senior educator in the W. Frank Barton School of Business at Wichita State. Kung-McIntyre believes in Pinole Blue so much she’s on the company’s board of directors and joined Sandoval and business partner Kyle Offutt in their “Shark Tank” presentation.
“This wouldn’t have existed if my professor wouldn’t have believed in me,” Sandoval says, “because even I thought she was crazier than I was” to believe in the idea.
Buoyed by that support, Sandoval drove down to the Mexican border during Christmas break of his senior year and brought half a ton of blue corn back to Wichita.
“We’re just roasting and grinding in my garage and we’re putting these little brown lunch bags with a little stamp on them and going into these Hispanic stores and seeing how many people recognize it,” he says.
He would sometimes take his father on sales trips or delivery runs in those early years “just so he would understand that there is demand for something like this.”
He entered the Shocker New Venture competition with Offutt and won the $10,000 grand prize.
“I was, like, ‘Whoa, this is for real,’” Sandoval says.
One of the first loads of corn used to launch his business full time came in a 2,000-pound tote bag. Wondering how he could get that huge bag onto a rented trailer, Sandoval stopped in the parking lot of a Home Depot to consider his options. A construction crew happened to pull in with a skid-steer loader. He asked them for a favor, and they loaded the massive tote bag onto his trailer for $20.
“It was awesome,” Sandoval says. “Part of being an entrepreneur is how you have to think on the fly like that when you’ve got a problem.”
Another example of that came when pandemic-driven shutdowns in March 2020 closed all of Pinole Blue’s accounts. They had just made 200 pounds of green tortillas in anticipation of St. Patrick’s Day. They decided to cut the tortillas into chips and donated them to The Lord’s Diner, which provides a free meal every day to anyone who wants one.
“That’s when it occurred to us: Let’s try to sell food. We didn’t have any restaurant experience, but people still need to eat. And we made it work. It kept us going.”
Almost as an afterthought, they shot a TikTok video.
“I didn’t know what this digital platform was, but I decided ‘Let’s make a video on it,’” Sandoval says.
That first video reached 400,000 views, and interest on TikTok has grown from there.
“That’s where we became a viral brand,” Sandoval says. “That’s where people really got to know us.”
Pinole Blue didn’t even have an e-commerce site set up when they shot their first TikTok video, but requests for orders began pouring in so they had to create one. Now the bulk of their sales are online. A percentage of the company’s sales is donated to the Tarahumara tribe, and Pinole Blue sponsors Tarahumara runner Lorena Ramirez, who has competed in ultramarathons – 100 kilometer races – and is the subject of the 2017 Netflix documentary “Lorena, Light-Footed Woman.”
The company has benefited from an abundance of exposure, from local media to national outlets such as BuzzFeed, Midwest Living and now “Shark Tank.”
Pinole Blue was also named an award winner in the grains category in the 2022 Good Food Awards competition in San Francisco, which draws thousands of competitors. All of this success has convinced his mother and father that maybe his decision wasn’t so crazy after all, Sandoval says.
“She tells me all the time, ‘You proved me wrong.’”
A version of this article appears in the Summer 2022 issue of The Journal, a publication of the Kansas Leadership Center. To learn more about KLC, visit http://kansasleadershipcenter.org. Order your copy of the magazine at the KLC Store or subscribe to the print edition.
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