Innovative initiatives attract tech startups to Paducah, help Kentucky-grown companies succeed

By the Kentucky Cabinet for Economic Development

In July, the finalists of 1ST50K, a pitch competition designed to bring software-based businesses to Paducah, gathered at Techfest, an exclusive event that showcased finalists’ demo products. Announced today, the three 1ST50K awardees will receive $50,000 in non-dilutive capital to relocate their startups to Paducah. (Courtesy of Sprocket Paducah)

For evidence of the momentum entrepreneurs and startups are seeing in Kentucky, look no further than what’s happening in Paducah.

The West Kentucky city’s initiatives – fueled by its local innovation lab, Sprocket Inc., in partnership with KY Innovation, the state’s office for entrepreneurial and small business growth – are bringing high-tech startups to the Bluegrass State through inventive means like 1ST50K, a founder-friendly startup competition that incentivizes startups to relocate to the Midwest.

About the 1ST50K startup competition

Launched by Cape Girardeau, Missouri-based Codefi, 1ST50K is designed to draw software-focused companies to rural communities, providing winners with $50,000 in non-dilutive capital to help innovators scale their businesses. This year, Codefi partnered with Sprocket to recruit startups to Kentucky.

In addition to the area’s innovative recruitment strategies, partnerships are underway to lift up homegrown Kentucky companies. To that end, Codefi and Sprocket are teaming up to provide training and resources to local entrepreneurs through the West Kentucky Innovation Challenge, the region’s new pre-accelerator program.

Kentucky Gov. Andy Beshear celebrated these initiatives, which support the state’s mission of developing vibrant innovation communities statewide. 

“The advancements occurring in Paducah are a testament to the fact that Kentucky is a terrific place to start and scale an innovative business, something more and more entrepreneurs are discovering about our commonwealth,” said Gov. Beshear. “These partnerships set the stage for continued economic success in the region and serve our mission of creating high-wage, high-quality opportunities across the commonwealth.”

This cohesive approach of drawing new talent to the state while supporting Kentuckian entrepreneurs is positioning the region for long-term success in the digital economy.

“Partnering with Codefi to launch the 1ST50K Startup Competition and the West Kentucky Innovation Challenge has been one of our best decisions,” said Sprocket Inc. Founder Monica Bilak. “Together these programs not only activate and empower local innovators but also connect us to a larger entrepreneurial community.”

1ST50K lands three new startups in Kentucky

Programs like 1ST50K that recruit new tech startups to rural communities, which comprise most of the Bluegrass State, can help overcome obstacles these areas typically face in advancing their innovation ecosystems.

“In smaller cities, one of the challenges is creating density of companies to grow the digital economy, where there is a critical mass of founders, mentors, talent, investors, and community support for startups to thrive,” said James Stapleton, co-founder at Codefi Foundation on Rural Innovation. “1ST50K helps inject new companies immediately into the community to work alongside local entrepreneurs.”

After 200 applications poured in from around the world – the largest intake since the competition launched – 1ST50K in September announced three awardees who will be relocating their startups to Paducah: 

  • Huntsville, Alabama-based Seamly Systems, which developed software for the fashion industry that enables patternmakers and tailors to create custom-fit digital sewing patterns. The company aims to help usher in fashion’s digital transformation in today’s connected world to increase profits, reduce waste and heighten creativity for fashion businesses of any size.  
  • St. Louis-based Noninvasive Diagnostic Instruments, a health-tech company that developed a cost-effective, convenient and rapid form of blood cholesterol testing for patients and their health care providers.  
  • The final 1ST50K awardee for 2021 is CuddlyTails, a technology platform that matches dog owners with pre-verified and screened neighborhood sitters and walkers. 

While the funding provides a clear benefit for these entrepreneurs, just as vital is the growth-friendly environment that Kentucky – and in this instance, Paducah in particular – offers as they look to scale their businesses.

“Paducah is the perfect place for building a business based on the confluence of design, fashion and technology. The success of the National Quilt Museum and AQS Quilt Week in Paducah, and Paducah’s School of Art and Design, demonstrate the strength and commitment of Paducah’s business community towards all three of these sectors,” said Susan Spencer, Seamly CEO and founder.

Spencer, a senior computer scientist in global network design, management and security, said her reasons for applying to 1ST50K extend far beyond the funding.

“Simply receiving money is not, by itself, extremely helpful for business development,” she said. “I was quite impressed with the quality of questions and breadth of knowledge presented by the panel of judges during my pitch day at Paducah, and look forward to their mentorship.”

Fellow awardee Dr. Bernard Miller, founder of Noninvasive Diagnostic Instruments, shared a similar sentiment regarding the region’s supportive environment. A top-level clinical and translational physician and scientist with 20-plus years’ experience, Dr. Miller’s mission is to disseminate medical and scientific knowledge that improves patient care at all points of delivery, from patients and physicians to health care providers and insurance organizations.

“1ST50K will provide the environment needed to accomplish the fundamental growth goals we have for our company,” said Dr. Miller. “The rich environment in Paducah will allow us to provide quality health care solutions to people who need it the most.”

In addition to these two awardees, Sprocket and Codefi will select a third company to join the cohort in the coming weeks. Ultimately, the inclusion of three innovative startups stands to spur high-quality job creation and investment in Paducah’s digital economy, which means greater opportunity for area residents.

Growing innovation with Kentucky roots

While 1ST50K is helping Kentucky reel in startups, the West Kentucky Innovation Challenge is helping Kentuckians launch their own technology companies.

This pre-accelerator program invites domain experts with industry experience trying to solve broad-based problems to compete for the opportunity to participate in a six-month education and mentoring program.

These experts then lead local startup founders through development and customer validation of a software product and business model using high-tech prototyping. Founders who successfully validate product feasibility and business viability are invited to pitch their businesses to a new angel investor network for up to $100,000 in seed investments.

Not only is this approach unique, but it provides access to resources typically unavailable for rural-based companies, Bilak said.

“The West Kentucky Innovation Challenge is very different from many small business support programs. It pairs local industry problem solvers with highly skilled technical expertise, something cost-prohibitive to most budding entrepreneurs, particularly those in smaller, rural communities,” Bilak said. “Those participants then become subject matter experts supercharged with software developers and successful mentors. The ability to get a viable product to market increases dramatically.”

Four local entrepreneurs are currently completing the initial cohort of the program and plan to launch their businesses this fall. The technologies that are being developed include:

  • A software-as-a-service (SaaS) platform to provide geo-based planning and management tools for certified organic market farmers;
  • An e-commerce platform that provides a first-ever international network of used heavy equipment parts resellers;
  • A SaaS platform that allows local first responders, social service agencies, and schools to connect and provide efficient and organized services to temporarily homeless children and adults; and
  • A SaaS platform to provide business and logistics management services to Amazon resellers.

In January, the pre-accelerator program will expand and 10 companies will be created across the region.

Powering innovation across the Commonwealth

The mission to advance Paducah’s digital economy serves as a microcosm for the overarching mission of driving innovation statewide, a mission overseen by KY Innovation. Housed within the Kentucky Cabinet for Economic Development, the group established six KY Innovation Hubs across Kentucky, an approach that is building vibrant, regional innovation clusters throughout the state and growing the overall economy.

This 120-county effort modernizes Kentucky’s support for entrepreneurs and high-tech, high-growth-potential startups by leveraging each region’s unique strengths. One such hub is Paducah-based GroWest Kentucky, which Bilak leads.

The hubs unite universities, established companies and industry sectors, entrepreneurs, business accelerator and incubator programs and many other public and private entities to best serve business founders across the commonwealth.

For more on these efforts and ways Kentucky can help entrepreneurs thrive, visit

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