Entrepreneurship Re-Cap

Since I posted a note and an op-ed last November about Pittsburgh high tech entrepreneurship, I've had a lot of meetings and conversations with people who are directly involved with the marketplace. I want to record a few observations, that is, things that I've heard a lot and from a wide variety of people. Some of them prompt some questions. Here's an initial list. I'll save a few for a later post.

1. "Pittsburgh has a "too many cooks" problem when it comes to tech strategy." I heard from a number of people that personal history gets in the way of forward economic progress in Pittsburgh. There are egos, and historical associations and present commitments, that are obstacles to success. I'm not sold on this idea. Can you name an economically vibrant urban area that isn't filled with big egos and complicated histories? I wonder whether the "too many cooks" concern is an excuse more than a real obstacle.

2. "Pittsburgh suffers either from too many strategic visions of success, or too few." I'm not sold on the idea that the region needs an integrated strategy, partly because I have a hard time imagining what it might be, and partly because I have a hard time imagining that some relevant group of people could agree on it. I do think, though, that everyone in this space needs to be able to use the same vocabulary. My own preferred starting point for that vocabulary is the vocabulary of risk. Who can take it, who should take it, who has taken it, and when.

3. "Pittsburgh doesn't think broadly enough." Whether Pittsburgh really does or not is hard to say, but I do agree with the assessment that Pittsburgh -- and by "Pittsburgh" I refer to investors, entrepreneurs, university resources, and members of service industries -- should be assessing tech strategy/ies and particular industries, markets, and investment opportunities in global terms, not just in regional or even national terms. One local firm put it to me this way: The difference between a Pittsburgh-area venture capitalist and a Silicon Valley venture capitalist is that a Silicon Valley VC instinctively and immediately looks at a new business proposition in terms of global markets. A Pittsburgh VC looks at a deal in terms of its regional potential. I don't know if that's right, but that's what I heard.

4. "Pittsburgh has plenty of early-stage private capital -- which isn't in the market right now." This a big argument in favor of continued public funding of early-stage investment. The private market got scared off after the bubble years (that sounds very plausible), so without public support, there wouldn't be nearly enough early-stage money locally (also very plausible). Even if this is true, though, I tend to think that investors and those who work with them need to work on strategies for bringing private early-stage money back to the market, and keeping it in the market. It's a bad idea to make public funding an important permanent feature of innovation policy. See "risk," above.


4 Responses to "Entrepreneurship Re-Cap"

Anonymous said... 4/12/2006 11:11 PM

How much does weather have to do with the problem? If you've got capital, why wouldn't you want to live somewhere like Silicon Valley? Sometimes the most plausible answers are the simplest.

Mike Madison said... 4/13/2006 6:23 AM

FWIW, I've never heard "weather" as an explanation for Pittsburgh's sluggishness. As someone who grew up in the SV and worked there, personally I think that weather is overrated as a basis for the region's appeal. Don't forget (as Californians sometimes tend to do) that the ground shakes . . . violently . . . and unpredictably . . . and massive wildfires break out occasionally. There's a lot of money in Pittsburgh. It just isn't always invested here.

Amos_thePokerCat said... 4/13/2006 10:36 PM

Some of the results of PIT's high tech entrepreneurship is just bad luck/choices. Fore bet the farm on ATM, instead of IP like Cisco. Ops. Billion $ mistake by Marconi buying them. CMU was close to DEC during the 70's and 80's. Where is DEC now? Compaq?

Really the only big PIT high tech entrepreneurship success story is Free Markets. Well, for now, the long term depends on if Ariba hollows out the staff, or not. Pretty funny, the face of FreeMarkets, Glen Meakem, had absolutely nothing to do with PIT until he started a company here. It seems to ignore point #1, and #2.

Of course, Meakem has odd ideas like hub airports being critical, and no ring roads being good urban planning.

Mark Rauterkus said... 4/14/2006 1:58 PM


I've got something to say about too many cooks at my blog.

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Pittsblog 2.0 is written by Mike Madison, a law professor at the University of Pittsburgh. Send email to michael.j.madison[at]gmail.com. Mike also blogs at Madisonian.net, on law and technology. Chris Briem of Null Space drops by from time to time.

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