The Real Deal

A long-time friend of Pittsblog wrote me yesterday to suggest this post:

What are the top three entrepreneurial companies in the Pittsburgh region that folks think are the real deal, with job creating potential and wealth creating potential of 100+ jobs and $10M plus in annual revenues?

The 100+ employee threshold and the $10M revenue numbers are arbitrary. What my friend and I are trying to get at, however, is whether folks think (i) that there are more real prospects for sustainable success locally than there were, say, five years ago, and (ii) there are more prospects than ever that can attract and sustain successive rounds of formal and informal private investment -- as opposed to economic development investment via a government-affiliated or subsidized entity.

Post your nominations, justifications, and reservations in the comments. I'm especially interested in hearing from folks in the economic development and investment spaces. Anonymity and pseudonymity are permitted, so long as the comments are on topic and civil.


8 Responses to "The Real Deal"

Bram Reichbaum said... 1/12/2008 11:27 PM

Alcoa, Bayer, UPMC. Gut reaction.

Anonymous said... 1/13/2008 3:52 PM


While your question is interesting, your parameters of $10M+ revenues and 100+ don't do anything to filter the list down to 3 or so. EVERY company that receives an INVESTMENHT from an economic development organization has the POTENTIAL for $10M+ revenues and 100+ jobs. Put together a list of the companies in the portfolios of Innovation Works, the Life Sciences Greenhouse and Idea Foundry, and you have your list.

Your comparison with 5 years ago is not helpful either. 2002 was not a period of success in any region of the USA. So, yes, it's better than five years ago.

What's your definition of sustaining success? 3 companies that have created 300+ jobs and 30M+ revenues collectively????? That's already being done, and was done before too.

My belief is that the region's entrepreneurial activity is light-years better than 10 years ago and 5 years ago. But, it's nowhere near the point yet where it is a major driver of the local economy. It's on a good upward track.

Mike Madison said... 1/13/2008 5:19 PM

Neither the question nor the metrics are mine.

It's interesting that you don't suggest better metrics, and it's equally interesting that you don't nominate any companies.

Specify your own definition, then name three companies that are the "real deal" in the Pittsburgh region right now.

Anonymous said... 1/13/2008 5:21 PM

Really not qualified to pick the "gazelles" but I think nuclear power is one of the core industries to watch here. Sad that it still seems non pc to talk about it's potential since the region seems to have core advantages in this field.

Anonymous said... 1/14/2008 12:32 AM

For entrepreneurial companies: Plextronics. Cohera Medical. Tiversa. MedSage.

For companies that could hire in larger doses than the startups (say, an average of 100 per year over several years), look to the established companies:
Medrad. Westinghouse. Respironics. UPMC. Vocollect.

Anonymous said... 1/14/2008 9:59 AM

Hi Mike,

Anyone with a critical eye that looks at many of the companies invested in can say that despite the possibility of success for each, there are some that are much more likely than others to grow into real companies -- to become the Medrad, Respironics, McKesson Automated Healthcare, or Vocollects that are employing hundreds and generating hundreds of millions of revenue.

My top candidates: Plextronics, Cohera, Cellumen, and the slightly more established Precision Therapeutics. Renal Solutions would be on the list had it not been acquired (and still could reach the large scale status that everyone hopes for).

By the way, anyone who wants to place bets on every one of the portfolio companies of econ devt orgs as to them reaching 100 employees or $10M, I will happily take any and all wagers. While the region must support many more startups, IMHO we also have to recognize those with highest potential and concentrate our efforts on helping them succeed.
(One selection tip -- those who acquire other companies in their market and consolidate them here (as Medrad, Respironics, and FORE Systems did) demonstrate that they are not quick flip companies and here to grow a durable company.

Anonymous said... 1/14/2008 5:03 PM

I fully agree with the selection tip and recommend that you use it as a criteria for identifying sustainable companies. It's not so useful for identifying early stage companies.

Either the company needs to be acquiring others, or building new businesses like Vocollect with its healthcare business unit. When the opposite happens - outside companies acquire Pittsburgh companies - growth in Pittsburgh is eventually stunted as business management talent is located elsewhere, and new business and new product line decisions get implemented elsewhere. Companies acuiring or building new biz units here demonstrate a desire to build a durable company here in Pittsburgh.

Unfortunately, we only have had a few companies like these in the last 10 years. Hopefully, there will be many more in the next 10 years.

I would add ANSYS to this list of durable companies. A rock solid performer for years that doesn't get enough recognition.

I also agree with the other tip from the above blogger: we need to have a concentrated effort on the highest potential companies. In short, there should be 2 efforts: one on startups, and one on startups with the best prospects. The one size fits all ends up with support that doesn't really help the best prospects.

jim_pettler said... 1/28/2008 4:39 PM

Hi Mike,

The federal government's telework mandate along with OMB Memorandum 06-16 offer significant opportunity for BitArmor to serve the government sector by enabling a more secure mobile government workforce.

Following the highly publicized theft of a Dept. of Veterans Affairs laptop, OMB released Memorandum 06-16. This memorandum addresses the lack of security controls when information is removed or accessed from outside an agency location.

M-06-16 advises departments and agencies to "know their baseline of activities." In additional to reasserting the importance of NIST guidelines, OMB recommends departments and agencies take four actions. Recommendation number 4 reads:

"Log all computer-readable data extracts from data bases holding sensitive information and verify that each such extract has been erased within ninety (90) days or that its use is still required."

This recommendation is a topic of conversation at ACT/IAC [American Council for Technology / Industry Advisory Council - "an objective, professional and ethical forum where government and industry leaders can collaborate on addressing common issues towards a shared vision"]. Federal data stewards (including those at DOD) and IT analysts are at a loss as to how to fulfill the direction to verify extracts have been erased.

At FOSE 2007 (Federal Office Systems Exposition) I spent 2 days asking security vendors if they provided or knew of a solution that could satisfy the recommendation to verify extracts have been erased. The vendors to whom I spoke were as puzzled about the OMB recommendation as the government end-users.

Telework is a mandate, mobile data security is a must. BitArmor DataControl could solution needed to securely enable a vast mobile government workforce.

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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] Mike also blogs at, on law and technology. Chris Briem of Null Space drops by from time to time.

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