Pittsburgh as a Startup

https://medium.com/startups-and-investment/pittsburgh-as-a-startup-7afe48bc96d6#.9tonkiccm

by joeyespo • 10 years ago

99 84 10 years ago

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minimaxir• 10 years ago

[deleted]

melling2• 10 years ago

"Extremely poor weather"

It's not Silicon Valley weather. How much worse is it than Boston or New York, other startup hubs?

keiferski4• 10 years ago

Not sure if that's a rhetorical question or not, but: Pittsburgh is warmer than Boston but gets less sunshine, and slightly colder than New York and (also) gets less sunshine.

cracker_jacks• 10 years ago

The difference is that Boston and New York have transportation hubs that makes it easy to get around to many other places in the East Coast. Pittsburgh is a few hours drive away from any other major city in the area.

crispyambulance• 10 years ago

The weather doesn't matter.

Pittsburgh is a perfectly fine place to take an idea and create a business around it. There is access to talent, office space, manufacturing space, vendors, services, customers, and other industries. It ALSO has an airport, internet access, roads, electricity and running water. All of these are relatively low in cost as is real-estate if you want to live in a house.

What might be an issue is getting regular visitations from VC's. VC's don't have much presence there, but will fly in if sufficiently motivated. That said if you don't need regular meetings with VC's... Pittsburgh is pretty awesome.

At some point, people have to start wondering how miraculous it is that start-ups can deign to exist in such a comically expensive place as the Bay area.

doktrin5• 10 years ago

Pittsburgh can't be a startup hub due to its extremely poor weather alone. (and that's harder to disrupt!)

That strikes me as an odd line of reasoning. It seems fair to say that Pittsburgh can't surpass the Bay Area for any number of reasons (due in part but not principally to weather), but it seems a stretch to argue that it can't be a startup hub simply due to some mildly cold winters.

London, Boston, NYC, Berlin, Stockholm - none of these places are renowned for their great weather. Neither for that matter is SF proper, with its notoriously shitty summers. Seems to me like talent and money converge for plenty of reasons that don't involve local weather conditions.

keiferski4• 10 years ago

As a Pittsburgh native, it's been exciting to see the city develop over the past decade.

One of the things that nearly everyone seems to forget about Pittsburgh is that is was once one of the single largest business and manufacturing cities in the country, if not the world. Some of the world's richest men lived and worked in Pittsburgh, including Andrew Carnegie, Andrew Mellon, H. J. Heinz, and George Westinghouse, to name a few. Nikola Tesla spent some time here, as well. Many streets are named after industrialists, which adds a unique flavor.

If anything, Pittsburgh's recent rise is a return to success.

Isamu2• 10 years ago

It is exciting, and I have mixed feelings.

For instance, there is a lot of new development down along the Strip. I don't see how this won't end up eventually pushing out many of the old-Pittsburgh businesses that make the Strip awesome for everyone, replacing them with higher-end stuff. Rather like how the enormous cobblestone plaza in front of St Stanislaus Church in the Strip was asphalted over since my student days. But I get it, it was uneven, it had an old trolley track, nobody wants to maintain cobblestone.

So yeah, I would like to see Pittsburgh continue to develop, I just hope people are not in a hurry to displace what makes it cool.

keiferski4• 10 years ago

I'd agree, overall it's a mixed bag. The new-ish Bakery Square complex (which is home to Google) is pretty hideous.

Pittsburgh more-or-less has the same type of architecture as large parts of New York, specifically huge (previously) empty warehouse spaces. I'd really like to see more old warehouses kept and retro-fitted, rather than replaced with Bakery Square-esque architecture.

doktrin5• 10 years ago

I just hope people are not in a hurry to displace what makes it cool

They probably are, but only because everyone has a different perspective on what things like "culture" and "cool" mean. I personally think tearing down the East Liberty high rise projects was largely positive - but many people disagree.

shas32• 10 years ago

There's certainly a hipster bubble in Pittsburgh around Oakland, Shadyside, -W-e-s-t- East Liberty, Southside, and Squirrel Hill which are the neighborhoods around CMU and U Pitt. The rest of Pittsburgh and the suburban region is pretty rough, though. Personally, I loved North Hills, Mt. Lebanon, and Dormont. But the start-up quality is only present in the neighborhoods abutting CMU and U Pitt. As a non-white, we were sometimes bothered by the extreme whiteness and slight red-necky feel of non-East End neighborhoods.

Edit: as pointed out by comments below, East Liberty.

keiferski4• 10 years ago

Well, I'm not completely sure that I trust your judgement, as you left out the single biggest hipster area of Lawrenceville and also spelled "East Liberty" as "West Liberty," which is an entirely different area.

That said... the extreme whiteness and slight red-necky feel of non-East End neighborhoods.

...is definitely still an issue. It's getting better though, and for the most part anywhere within the city limits is relatively diverse. Pittsburgh's biggest problem is that the segregation is by neighborhood. It's comparable to Chicago, in many ways.

stcredzero2• 10 years ago

the extreme whiteness and slight red-necky feel

Bigotry based on racial, subcultural, and socioeconomic markers? I was born in Pittsburgh and I grew up in that part of the country. All manner of people fit those racial, subcultural, and socioeconomic markers -- good and bad.

As a non-white myself, let me just say this: Most of the time, most people are basically good. However, if you stand out from the crowd, even for reasons you can't help, that small single-percentage of jerks and sociopaths is going to spot you and pay some unwanted attention to you.

The above is contingent on group-think or mob psychology not having taken sway, of course. Those factors change the situation completely.

grillvogel2• 10 years ago

I spent middle school and junior high in a pittsburgh suburb. it was the first place in the country I had ever heard friends of mine expressing overt racism.

rhapsodic• 10 years ago

As a non-white, we were sometimes bothered by the extreme whiteness and slight red-necky feel of non-East End neighborhoods.

Hey shas3, this is serious question, which I'm asking purely out of curiosity. I'm not judging you or trying to embarrass you. Would you consider it okay if a white person were say, for example, about Detroit, "as a white, I was sometimes bothered by the extreme blackness and slight ghetto feel of many Detroit neighborhoods."

dionidium3• 10 years ago

You could say the same about any number of old U.S. cities. Their declines, while dramatic at the core, have been wildly exaggerated. People didn't really leave Pittsburgh or St. Louis or Detroit. They just changed where in the region they lived. The story here is more about a return to urban living than anything.

southphillyman4• 10 years ago

I wonder why Philadelphia hasn't even been considered as a start up hub.

Better weather than Pittsburgh, NYC, or Boston

Nothing on par with CMU.... but Upenn, Drexel, and Princeton are in the area. As are a ton of other schools.

Pretty good size developer base with people working in Telecom,healthcare, education, and finance.

Close to NYC and DC

Affordable even after recent gentrification

Existing start up scene with some examples of local success (duckduckgo)

Much more interesting and hip city when compared to Pittsburgh/Boston

SmellTheGlove4• 10 years ago

As a native Philadelphian who now lives closer to Boston, my perspective - Philly has rampant corruption and I'd be nervous about investing in the city (compared to NYC or Boston). The local talent market is much better suited for healthcare than tech. And what talent there is can easily go to DC or NYC, where there are larger job markets.

At least for me, 10+ years ago when I moved back to Philly after going to college in VA, I lasted less than a year before going to DC where the better opportunities were. My perception is that it is still true today.

My family is still all in South Philly and the close in suburbs so I haven't completely lost touch. I'd totally move back for the right opportunity.

noer• 10 years ago

Philly has rampant corruption and I'd be nervous about investing in the city (compared to NYC or Boston)

Chicago is corrupt as they come and there's a pretty robust startup scene.

southphillyman4• 10 years ago

I'd totally move back for the right opportunity

This. I just think it's a city where "if you build it they will come".

I agree that NYC and DC have more opportunity, but they also are an order of magnitude more expensive. Affordability, proximity, and culture would be Philly's main selling point imo.

moron4hire• 10 years ago

When people ask me what Philly was like, I tell them, "imagine a town where everyone has at least a little larceny in their hearts."

I miss the cheap beer, though. Cheap compared to DC, at least. Things are easily 75-100% more expensive here.

Also miss my old hackerspace. Not enough people have the anarchist+DIY spirit in the DC area to make a viable run out of a true hackerspace. We get corporate sell-out deals like TechShop in Arlington that will charge you an arm and a leg for the chance to prove you know how to run a table saw without killing yourself. Probably because it's impossible to walk in this town without tripping over at least three lawyers.

duaneb2• 10 years ago

Philly has rampant corruption and I'd be nervous about investing in the city

How does this intersect with running a startup? Grifting startups with social media expertise won't go over well.

The local talent market is much better suited for healthcare than tech.

Perhaps for existing workers, but between Drexel, UPenn, Temple, and Penn State, the market for CS talent is great.

And what talent there is can easily go to DC or NYC, where there are larger job markets.

And a terrible real estate market in both locations.

bluedino3• 10 years ago

You need talented expats from "the institution" to create great startups.

Seattle has Amazon and Microsoft.

The Bay Area has em all. Cisco, Yahoo, Adobe, Google, Twitter, Facebook...

hebleb• 10 years ago

But Philly has everyone's favorite company, Comcast! I think the city wage tax is a huge barrier for new tech companies from setting up here. The burbs around Philly aren't bad for jobs though

sgeisenh• 10 years ago

How do you conclude that Philadelphia is a much more interesting and hip city when compared to Pittsburgh/Boston?

I can't speak to Boston, but having lived in Philadelphia, Pittsburgh and a suburb of NY (Fairfield county CT), Pittsburgh has the most accessible cultural outlets. The local art scene is incredible, there is a top tier orchestra, the city is mostly bikable (with more protected bike lanes on the way), there are 3 professional sports teams that are within 20 minutes on public transportation of anywhere in the city. The list goes on. There may be more things to do in NYC than Pittsburgh, but I constantly felt like I had to pick and choose because it was just so expensive.

southphillyman4• 10 years ago

Not a knock on Pittsburgh per say. Philadelphia has all of those things and more. It gets more artists/major concerts, has more highly regarded restaurants, more museums, has one of the bigger malls in the country. Though it's as segregated as chicago/nyc it has larger diversity as well. It's just a larger more vibrant city imo.

exelius4• 10 years ago

Philadelphia is a much more interesting and hip city to live in, but the crime, high taxes and crumbling infrastructure are a killer. The city government is incredibly corrupt, with a lot of the machinery that empowers city councilmen (I'm looking at you, Kenyatta Johnson...) trying to keep outsiders from coming in and diluting their traditional voter base. So there is a sizable segment of city politics that is not only not interested in improving the city, but is actively working against change because improving the city would harm their political interests (and their ability to give no-show city jobs with six-figure salaries to their family members). Chaka Fattah [1] didn't become that corrupt in isolation.

Pittsburgh is literally just happy that you're there, but in Philly there's a sense that newcomers are not welcome. That feeling extends to businesses as well - if you don't hire union workers, expect things like sabotage and picket lines. You can't just go take over an abandoned warehouse and put your startup in it, you have to grease the right palms to get the zoning permits approved, the right union contractors to do the work, etc. All of that costs money that startups who are trying to be lean don't have. There's a lot more pay-to-play present in Philadelphia, which is IMO the reason why it's not a bigger tech start-up hub than it is.

[1] http://www.usatoday.com/story/news/politics/2016/05/16/chaka...

southphillyman4• 10 years ago

I remember Kenyatta Johnson was fighting for his constituents against gentrification. Or at least that's how he positioned it in the community. A quick google brings this up though [1]. Yikes selling land to specific buyers and he can't remember the deals?

[1] http://www.philly.com/philly/news/politics/20160516_Feibush_...

duaneb2• 10 years ago

Philly is great for a startup! See: duckduckgo, RJMetrics, and Curalate. Good talent, good culture, relatively affordable (though the city is definitely getting more expensive as it gentrifies).

Also, there is stuff outside the city (country, Baltimore, DC, NJ, NYC, beaches), which is really tough to argue for Pittsburgh.

grillvogel2• 10 years ago

RIP Pittsburgh

matt_wulfeck• 10 years ago

If a city/state wants to be a startup it better demolish any semblance of noncompete agreements against employees.

This is an often overlooked feature of California. Skills and talent flowing freely between companies is a benefit to the entire ecosystem and something California did right very early on.

ghaff• 10 years ago

While it's great that California basically doesn't have noncompetes, I'm skeptical that there is such a bright line relationship between the number of startup companies/amount of VC money in California and this fact. Massachusetts has, unfortunately, not been able to change the law in large part because of lobbying by some big employers yet does pretty well on the tech company creation front. (Less than CA but across a broader scope of businesses.)

But, if lack of non-competes are such a big deal, maybe Hawaii will become a tech hub, (Mostly :-))

bluedino3• 10 years ago

The location doesn't matter. Companies will pop up where they are going to pop up. Everyone writes an essay about why their city is so great and you should move there so you can build your company.

Case in point: Salt Lake City/Provo in the 80's

You had companies like Novell and WordPerfect that dominated entire markets. Why Salt Lake City? The weather isn't "great" (unless you like to ski). It's not that large of a metro area, barely over a million people. There are a lot of Mormons (they're the weird people that don't drink caffeine). It's not diverse at all, just a bunch of white Mormons.

But it worked.

ksenzee3• 10 years ago

a) Mormons drink caffeine. I am a card-carrying Mormon, so if you argue this point with me your sources had better be pretty good.

b) Sure, companies pop up where they pop up, but for a city to become a hub for something, you need more than a couple of companies popping up. I wouldn't say Orem was exactly a tech hub in the 80s. You could argue the point better now, judging from the recent BuzzFeed article.

bluedino3• 10 years ago

> Mormons drink caffeine.

I had some friends who were Mormon growing up, they didn't drink caffeinated soda, coffee, tea, and of course alcohol. Is that uncommon in the Mormon world?

server_bot• 10 years ago

I’ve been in Pittsburgh 6 years now - worked in local tech, currently a grad student at CMU. From my perspective, the “grassroots” community is a massive factor in the region’s success. I’ve gotten more out of the active and inclusive tech community then out of proximity to big-name companies or an influx of investors. I’m not saying those things aren’t important or don’t drive the creation of the community I benefit from, but my touchpoint with the tech scene has been motivated and approachable developers (and aspiring developers!).

Example: there’s a local meetup with 2,200 members (http://www.codeandsupply.co/) and weekly talks ranging from programming 101 to effectively scaling a micro-service architecture. They’re putting on a conference in August where I’ll be able to see Richard Stallman, Larry Wall, and Joe Armstrong speak for a $70 dollar ticket price (student price, regular tickets are still only a fraction of what you’d expect).

abglassman• 10 years ago

That's http://abstractions.io/ - I'll be there too as a CFP speaker! They got a dynamite lineup of invited speakers, and the CFP topics are pretty exciting, too.

rexreed3• 10 years ago

No offense as I'm sure there's some awesome stuff happening in Pittsburgh, but EVERY "up and coming" city with an innovation ecosystem can write this very same piece about themselves. See how Detroit, Baltimore, Philly, Raleigh, New Orleans, St. Louis, Indianapolis, Kansas City, Omaha, Miami, etc. etc. etc. all write about themselves. There's nothing here to say WHY a gigantic shift in the way investment capital is being deployed should be redeployed. Why people with talent and knowledge capital should LEAVE their current places of employment and residence to pick up and move to an unknown. Why people with experience and mentorship building substantial and sizable companies should all of a sudden start doing it in places that they aren't already doing it. WHY? Those questions are never answered. And this is why all those cities above keep striving. As they should. But to say that Pittsburgh is doing something special that other cities aren't doing in many of the same ways requires observing what's happening out there.

I'd love to see an update to this article with a compare and contrast. With a list of the successes. With comparisons to other cities successes (especially those of similar size and grit). And perhaps some analysis as to why it's happening in Pittsburgh and not other places (if it is indeed happening like that)

cfallin4• 10 years ago

EVERY "up and coming" city [ ... ] Detroit, Baltimore, Philly, Raleigh, New Orleans, St. Louis, Indianapolis, Kansas City, Omaha, Miami [ ... ]

One unique factor about Pittsburgh is its academic presence, in both CS/engineering (Carnegie Mellon) and medical fields (University of Pittsburgh). At least CMU has spawned off a number of research startups, has created a burgeoning robotics community (NREC, etc), and has attracted major tech companies to create offices here: Google, Facebook, Uber, Apple, etc. I'm not sure you could say that about many of the other second-tier cities on your list. Human/intellectual capital is a big part of city momentum.

rexreed3• 10 years ago

I can equally name a bunch of other cities with similarly well-positioned academic instituions. That doesn't make it unique. For example, look at the Research Triangle Park area in North Carolina. Not one, or two, but at least three or four major world-class institutions: Duke, UNC, NC State, Wake Forest, and others. With tons of research and supporting institutions. And a cost of living very comparable to Pittsburgh.

Or how about Philadelphia with Penn, Temple, Drexel, and more? Or Baltimore with Johns Hopkins? And of course, Boston with its concentration of dozens of the top-rated schools in the world (Harvard, MIT, Tufts, BU, BC, and on and on).

So in what way is Pittsburgh unique? It's not -- it's just like many of these former rust-belt cities with world-class institutions and a startup economy that's interesting but not on top.

exelius4• 10 years ago

Pittsburgh is also dirt cheap; there are entire neighborhoods that are essentially abandoned. You can buy a house in decent structural condition for under $50,000. And it's been so depressed for so long that there's an enormous amount of infrastructure that essentially sits unused. Companies can use that to externalize costs, which makes it very attractive IMO.

dionidium3• 10 years ago

It's a factor, but it's not a unique factor. A lot of second-tier cities have elite institutions driving similar growth. Here in St. Louis we have Washington University (and, perhaps more important, its medical school). Unsurprisingly, much of the startup/tech activity here is centered around the school (both geographically and intellectually).

The story is the same in any number of other old U.S. cities.

Animats• 10 years ago

Pittsburgh should have been the automatic driving hub. CMU was very active in that area. But although there's some automatic driving work there, it's not the center of that activity.

It's a center of industrial robotics activity, but doesn't get much press for it.

ckinnan• 10 years ago

Last I heard, Uber's self-driving research base is in Pittsburgh. http://techcrunch.com/2015/02/02/uber-opening-robotics-resea...

biswaroop• 10 years ago

One word: bicycles [1].

In summary, make it the most bicycle and pedestrian friendly research city in the world, and wait for founders to turn into investors.

[1] http://paulgraham.com/pgh.html

rdl5• 10 years ago

Biggest things I'd do for Pittsburgh (I'm from Philadelphia originally, but I think that's a lost cause):

1) Fix non-competes (state law; maybe fix state wide, or just in the city?) -- parity with California

2) Make life as easy as possible for founders (city and state regulations about employment, etc. should be simple and minimal up to 50-500 employees)

3) Try to get earmarked visas for founders

4) Promote Pittsburgh in China/India. Both for founders and to convince parents/families/etc. of potential hires that Pittsburgh is a great place to live and work.

5) Encourage CMU/Pitt/etc to do some kind of "part time study" or something so students can start startups, particularly those on student visas. Maybe model it on how waterloo does their coop program

6) High speed Internet in as many houses/offices as possible; deregulation, inviting Google Fiber, etc. Possibly allow someone to run gigabit multi-family dwelling Internet without having to cover ever region of the city

7) Focus on hard science/robotics/etc. as a cluster, vs. media, social media, finance, etc. A cluster has higher effective size and density.

dbcurtis2• 10 years ago

non-competes came up the last the Pittsburgh was discussed here. That is certainly a biggie. The state could pass a law and have done with it, but also, startups could be coached to drop non-compete clauses from their hiring offers. And of course, hires could cross that section out before accepting -- and be willing to walk away if that doesn't work.

rdl5• 10 years ago

It's not usually the startups having non-competes which are the problem -- it's the previous bigco employers of people startups want to hire, or people who want to found startups.

joekrill• 10 years ago

Just curious: why do you think Philadelphia is a lost cause?

rdl5• 10 years ago

Too close and too inferior to NYC, DC (so great stuff just goes there instead -- Philadelphia would be ok relatively if it were in the midwest or south). Odd mix of expensive (city taxes and other costs) but lacking redeeming value. It's not Camden or Baltimore, but not great. UPenn, while a solid standalone university, isn't as integrated into a startup culture as even CMU, and certainly not as much as Columbia/NYU, themselves vastly less so than Stanford.

Legacy infrastructure, corruption, costs.

Lots of big biotech/pharma/etc. companies to sustain it and crowd out tech -- sort of the same problem as NYC (finance) and DC (Government).

rwhitman• 10 years ago

All of Pennsylvania in general is highly undervalued. I spend one or two weekends in PA every month and am always puzzled by how little attention and investment there has been in the state during the last few economic booms.

PA is littered with top notch universities from corner to corner. It's culturally and historically richer than almost anywhere else in the US. You have a lush, green resource-rich landscape as far as the eye can see (and definitely no water scarcity). Absurdly affordable housing with a surplus of incredible historic architecture. Walkable colonial-era villages and small tightly clustered cities with intact historic shopping districts. Endless square footage of unused warehouse spaces. Huge beautiful parks including old growth forests, mountains, rivers. Fairly decent mass transit in the Philly area at least, (and a lot of legacy transit infrastructure ready to spring back to life at some point).

I'm not just talking about Philly and Pittsburgh either - so many smaller "rust belt" type cities in PA with so much to offer that are just completely overlooked. Like the entire Lehigh Valley for instance. Harrisburg is actually a really cool city when you get to know it - very diverse, lots of smart people there, excellent breweries and a lot of economic growth.

Plus we often overlook the fact that Pennsylvanians largely founded the SF Bay Area in many ways - look at the map of the SF Bay and you'll see the markers of PA everywhere. (hint the street grid of San Francisco is named after Philadelphia's)..

I think the main things that have held back PA is 1) it's been overshadowed by NYC 2) property taxes are absurdly high 3) it's still got a rust belt stigma to shake..

But otherwise for tech folks if you've never been it's really worth checking out

dionidium3• 10 years ago

It's culturally and historically richer than almost anywhere else in the US.

I love Pittsburgh. But cities like Cincinnati and St. Louis and Nashville deserve a seat at that table, too. In general, the rust belt gets a bad rap. It's full of old, interesting cities that are packed with cultural institutions and fascinating history. They deserve a lot more attention than they get.

bsder• 10 years ago

Yet a lot of the tech startups seems to leave Pittsburgh once they reach the next level. (I seem to remember some vintage clothing startup thing as being the most recent casualty).

People might want to figure out why.

Pittsburgh as a Startup

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