A Chef Speaks

My "Too Many Chefs?" post attracted a long thread of comments, which included a lot of notes about the Pittsburgh Technology Council. The PTC responded, at the end of that thread, but it's a long thread, and I don't know how patient everyone is. Why not give the PTC its own platform? So here's the comment, reproduced in full.


The conversation you sparked with your “Too Many Chefs?” query has turned into a lively and even impassioned one. But I fear that in the midst of all the passion, certain statements have been made about the Pittsburgh Technology Council that just have no basis in fact. Allow me to clear up some of the misperceptions.

First and foremost, the Pittsburgh Technology Council is not chartered as an economic development organization. It is a trade association, and as such, its mission is to provide the services that its member companies require to help them be successful. In addition, the services that the Council offers are not arbitrary or frivolous. They reflect the feedback and suggestions that are solicited from member companies on an almost constant basis. In fact the top two Council services that its members find most valuable include: 1.) advocacy and government relations and 2.) educational and informational events, programs and forums.

With respect to the first item above, over the last two years the Council successfully derailed $170 million in proposed new state and local taxes. The Council achieved this through aggressive public policy and lobbying efforts. It did this by engendering a more complete understanding among our key elected representatives of the difficulties imposed upon our region’s entrepreneurs by the stifling business climate. The Council’s efforts resulted in legislation that expanded the state’s R&D tax credit, reformed the state’s net operating loss provisions, retained the Delaware holding company provision and rolled back proposed new city taxes.

The second item above seems to run counter to an anonymous blogger’s assertion that the Council’s rigorous schedule of programs is a somehow a misplaced service. Why, then, would the Council continue to get high satisfaction ratings and high attendance (more than 13,000 for all of 2005) if this service was not deemed valuable. And someone please explain how using “attendee satisfaction” and “number of attendees” would not be the appropriate measure for a service that most member companies say they want or need.

There are several other services that a significant percentage of the Council’s members have indicated they find useful. And three out of four Council members are likely to recommend membership in the Council to other non-member companies.

In addition, it is imperative that I make clear that although the Pittsburgh Technology Council receives occasional grant awards for specific projects from both the state and federal government, this in no way should be construed as the Council’s only means of support, as was implied by another anonymous blogger. On a pie chart illustrating 2005 revenues for the Council, government grants do not even show up as a sliver.

Finally, the Pittsburgh Technology Council was erroneously characterized as being an umbrella for other organizations. In fact, the Council is a separate 501(c) 6 private non-profit trade association organized with a single mission to help technology companies succeed.

I would be glad to share how the Council does this at more length with anyone that contacts me directly at (412) 918-4247.

Kevin Lane
Pittsburgh Technology Council


14 Responses to "A Chef Speaks"

Anonymous said... 5/08/2006 11:25 AM

I went to graduate school in Pittsburgh and have since lived in DC for five years. Pittsburgh needs more blogs like this to encourage this type of discussion, as the local media strikes me as inadequate. The newspapers don't seem to properly contextualize local issues within broader economic/societal framework, and what I've seen on the television stations doesn't qualify as serious journalism.

Anonymous said... 5/09/2006 10:39 PM

While the measures that Mr. Lane provided may show that the Council's programs are valued by its members, the number of organizations serving the tech sector in Pgh that have been created since the Council formed 20+ years ago is a measure of the number of times that they missed their market's needs.

Some of the discussion was centered on the relevancy of the Council to technology entrepreneurship. From what's been discussed and reported elsewhere, tech entrepreneurship in Pittsburgh has 4 key challenges: 1. insufficient risk capital, 2. insufficient experienced entrepreneurs, 3. insufficient management talent for emerging companies, and 4. lack of clarity of where budding entrepreneurs should go for support. It would be interesting to know how the Council measures itself versus these key challenges. The belief is that they don't measure well on these, and hence they are mostly irrelevant to tech entrepreneurship in Pittsburgh.

Anonymous said... 5/10/2006 10:20 AM

misleading response by Lane.

umbrella or affiliated...same thing...they pay most of their administrative costs and overhead with government subsidies taken in through their affiliated organizations.

Anonymous said... 5/10/2006 5:20 PM

The real issue with the Tech Council isn't whether their members are satisfied, it's whether that spending 45% of their expenditures on events is the most effective way to "help technology companies succeed." Again, it's a misplaced service guided by a poor choice of metrics.

Anonymous said... 5/10/2006 9:20 PM

How many entrepreneurs or people who have worked at young tech companies actually work at the Tech Council?

As a member I find the leadership more into self sustaining bureacracy than focusing on entrepreneurs.

We need a shake up.

Anonymous said... 5/11/2006 12:04 AM

affiliated or related, not umbrella, is more like it... and economic development IS the purpose...according to page 22 of IRS Form 990 they filed for 2004 - which shows the combined financial statements for the Pittsburgh Technology Council, Pennsylvania Technology Council, Catalyst Connection and the Doyle Center for Manufacturing - "these entities share a commom mission of economic development activity in western Pennsylvania and share common management." This report was filed by the Pennsylvania Technology Council, whose stated tax-exempt purpose is listed as "economic development." See www.guidestar.org for further details.

Anonymous said... 5/11/2006 11:07 AM

Just checked guidestar. Thanks for the tip.

The CEO of the Pittsburgh Technology Council only dedicates 2.5 hrs/week to that organization and gets most of his compensation from the related organizations.

Although Mr. Lane claims they are engendering reform in the state's repressive business climate the leaders spend over 90% of their time working for the economic development affiliates--not business climate reform.

Anonymous said... 5/11/2006 8:49 PM

Since most of the attendees to their events are services providers trying to sell you something. If a couple naive entrepreneurs show up and create sales leads-- it make complete sense why they get such high marks from the attendees.

Jerry Paytas said... 5/12/2006 1:12 PM

The "Too Many Chefs" problem has been around for decades and yet is never "solved." But what is the solution? Is it to have only one major economic development organization? I don't think the real issue is how many organizations, but the capability and accountability . Larger organizations may have more capacity to provide programs on a scale that can achieve impact, but the accountability question gets muddled. If one or a few organizations are responsible for everything, then they are really responsible for nothing. Having many small, mission focused organizations could actually improve accountability - but we may sacrifice the capacity to have a real impact.

The answer is somewhere in the middle, with a likely mix of organizations, some larger, some smaller, some with a tight mission focus and others with general or flexible missions. But for each one there has to be the ability to evaluate their performance and reward or penalize them as appropriate. We wouldn't want to have just one restaurant for eating, or one bank that controls all of the money, so why would we want a one-size fits all economic development organization. Some of the diversity reflects the need to customize services and offerings to different kinds of clients.

As for the Tech Council, I am not surprised that some people think they should be doing something different. As long as the Council has customers who want to go to their events and are satisfied with them - they should keep offering those programs. If there are other programs that people want, then the Council has to make the business decision whether to provide that service - or let a competitor do it. I think that the proliferation of many groups offering different kinds of services indicates that the Council has made the business decision not to offer those services and let the market take care of it. They shouldn't be criticized for that. The problem is whether the Council or other public funding is subsidizing a set of services that no one wants or needs. I don't have the answer to that question, but it is a question that in fairness applies to all of our economic development organizations.

Apolitical said... 5/12/2006 3:54 PM

One of the comments mentioned that the IRS 990 reports indicated that the stated tax-exempt purpose of the Tech Council is economic development. I thought that tax-exempt organizations weren't supposed to engage in politics, but executives at the Council have been actively supported, some say even running, Swann's campaign and writing his tax plan. I can see how that might help someone win a spot in Swann's cabinet, but does it serve a tax-exempt purpose?

Anonymous said... 5/12/2006 4:22 PM

Since the Pgh Tech Council is 501c6 they are allowed to lobby. If the executives are using time/resources from the 501c3 affiliates then they would be in violation.

If the assertion above saying the CEO only dedicates 10hrs per month to the Council is true then there might be more to investigate.

Anonymous said... 5/12/2006 5:20 PM

Much of this discussion about the Tech Council stems from the earlier blog entry "Too Many Chefs?" where the issue was is there too many organizations serving tech entrepreneurship, and if true, the problems this causes the entrepreneur.

Mr. Paytas states the Council should not be criticized for choosing to let the market offer the services they chose not to offer. If these other services and organizations are creating a positive return, then they absolutely should be criticized for effectively creating another significant problem. People looked to the Council for services because it was the leader and the obvious choice. But, since they didn't respond to their market's needs, the region continues to have a problem without an obvious solution.

Anonymous said... 5/12/2006 10:23 PM

The formation of all these other groups is a direct indictment of the tech council executives and board. Someone needs to wake up the members of their board to make some senior staff changes or disband the organization.

Sometimes it is just better to start from scratch with new blood.

Anonymous said... 5/15/2006 7:57 PM

New blood at every level would help the Technology Council, but I don't think their board reads this blog.

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