Ultimate Ultimate

An update to this post regarding Pitt's chances at the recent Ultimate Open Nationals, Collegiate Division:

Pitt got knocked out in the quarterfinals by the University of Colorado (nickname:  Mamabird), 12-7.

Carleton College, the little school from Northfield, Minnesota, won the national title, its second in three years (and it was the runner-up last year).  Carleton beat the University of Wisconsin (the Hodags) in the final game.

Interested in Ultimate in Pittsburgh?

Check out the Pittsburgh Ultimate website.

And for young Ultimate players, there is a great summer camp:   "Camp Spirit of the Game."

Pittsburgh in China

The Pittsburgh Technology Council's Audrey Russo offers this glimpse of Shanghai while on tour with a PTC group, and some lessons for Pittsburgh:

After eight days, many conversations from multiple perspectives, including people who have lived through the Cultural Revolution, I worry about how Pittsburgh can compete. The good news is we have innovation developing here. In China, we have not seen pervasive innovation. But, we have seen every major multinational corporation building shared services (and not just call centers), manufacturing and a growing biotech and digital media sector.
Southwestern Pennsylvania needs an aggressive plan. For the Pittsburgh Technology Council, we are going to develop an international plan to serve the best interests of our members. We cannot ignore China. We cannot pretend we were once mighty and will rebound. We must greet this opportunity with the same pace China is building their cities.

That reminds me of something I wrote last Fall:

The only firms in town that I hear about really kicking down doors with new business, new customers, and new hires are selling to -- China. That's not just Westinghouse. Every time I turn around in my own neighborhood I'm listening to tales of business trips to China. That's where the money is.

What should Pittsburgh do about that? Stop obsessing about nonstop flights to Paris. Figure out a way to increase nonstop flights from PIT to the West Coast -- Seattle, San Francisco, and Los Angeles. From there, it's easy to hop on a flight to Beijing or Shanghai.

Steel City Innovation Blog Debuts

Over at the Pittsburgh Business Times, Malia Spencer is blogging at "Steel City Innovation."  Onto the blogroll it goes!

It's been a while since a paid reporter in Pittsburgh focused sustained attention on regional innovation.

Welcome to the blogosphere, as they say ....

Radio Waves

The strange but compelling psychology of radio was on rare display this week as the new non-jazz format for WDUQ was announced.  Tony Norman said it best:  Jazz on DUQ wasn't much.  It was old-style, smooth jazz (and as other friends of mine have said, pretty boring), but DUQ was an oasis in a local radio dial of otherwise numbing comformity -- WYEP and college stations excepted.  And it paid homage to the city's jazz history.

I call this "strange but compelling psychology" because radio is one of those things that people of a certain age mostly treat as a quintessentially *local* thing -- even though radio is, quite literally, sounds that come out of a machine.  And there is no reason to suppose, objectively speaking, that those sounds come from nearby.  But maybe you recognized the voice -- it was someone you know, or a friend of a friend.  Maybe that voice knew things about your town that only a local person could know.  The accent, intonation, and jargon might have been comforting and familiar.

Sometimes, a great story comes out about the role that local radio plays in a community that has nothing else to go on.  KXI- FM in Joplin, Missouri, for example.  Increasingly, though, radio localism is a mirage.  The economics of local radio just don't work any longer.  The fixed costs are steep (and copyright owners are working hard in Congress to increase the royalties that music broadcasters must pay).  Local revenue can be hard to find.  Take Pittsburgh "Bob-FM," 96.9 on the no-longer-a-dial FM band.  If you listen to the bland corporate rock that "Bob" plays, occasionally you'll hear a voice -- the vestiges of a DJ -- making Pittsburgh jokes and references.  That sort of sounds like a local station.  But "Bob" (WRRK), while owned by local firm Steel City Media, is actually a national satellite service.  "Bob" is everywhere.  Check out "Bob," for example -- in Boise Idaho, 96.1, with the same slogan ("We Play Anything") and a website that looks for all the world like a close cousin of WRRK Pittsburgh.  The trademarks -- the Bob FM in a red box -- are identical, except for the call numbers.  It's one stream of music, bounced off a satellite or through an Internet connection, or some of both, coming out of radio devices all over the country.  There are Bob FM stations from coast to coast.  But it's all the same thing, the same sound, with a little local flavor thrown in for effect.

So much for local.

Listeners who aren't of a certain age, if they listen to the "radio" at all, don't care much about any of this.  There is this Internet thing (a "series of tubes" as a certain Senator once said), and virtually any and every "radio" station  out there is now available on the Web and via an App, not to mention Sirius and Pandora and on and on.  There was a time, not too long ago, when telling people to find their long-lost resources online was rightly perceived as elitist; the Internet was a relatively rare thing.  But it's not, now; the Internet is cheap and ubiquitous.  It's on my desktop.  It's in my car.  It's in the palm of my hand.

So resentment of the format shift at DUQ isn't really about the music, because if you want to listen to jazz, even local jazz, you can get that cheaply and easily.  It can't really be about local radio, because local radio, well, local radio has been mostly a dinosaur for years.  Nostalgia for Pittsburgh's jazz tradition and $2.35 will buy you a cup of coffee at the corner Starbucks.  (No, that other corner Starbucks.)  Resentment of the format shift is howling at the wind of a certain fabric of synthetic community -- culture, "shared" in isolation, electronically -- that has unraveled and that needs to be re-woven.

So what should local jazz nuts do?

Aux barricades!  You can have local culture; you just won't find it on the radio.  But you have to make it, not find it; create it, not remember it.  There was music before radio, after all.  There were listening clubs, live local performances, and music in the parlor.  (Early record companies, after all, *resisted* having their records played on the radio.)   Music was *social* and intensely *local* in ways that radio long diminished.  Even before Bob came along, radio's localism was largely illusory.   Remember the image of Wolfman Jack, broadcasting from a lonely studio way out in the middle of nowhere outside of Fresno.  I grew up listening to Dr. Demento, who broadcast from who knows where (back then, it was somewhere in Southern California).  Carpe diem, Pittsburgh jazz fans!  Angry at DUQ's new owners?  Angry at WYEP?  Angry at Duquesne University?  Sure, withhold your contributions.  That'll show 'em!  (Not.)  No -- do as my favorite radio personality (and quintessentially cosmic guy) Wes "Scoop" Nisker always said:

If you don't like the news, go out and make some of your own.  Make Robert Putnam, the author of Bowling Alone and nostalgia maven for advocates of communitarian culture, proud.

Frisbee Follies

Pitt's Ultimate Frisbee team is heading to the annual national finals in Boulder this weekend, and Pittsburgh's best chronicler of under-the-radar notable stories, Brian O'Neill, is on the case this morning: "Ultimate student-athletes like spring fling" in the Post-Gazette.

But the Pittsburgh angle here isn't just Pitt's unlikely success in Ultimate. Yes, Pitt is ranked #3 among US college teams and #4 overall, which is remarkable, considering that the team was founded only a dozen years ago. (The best of the rest: #2: University of Colorado. Then: University of British Columbia (#3 overall, ahead of Pitt), University of Oregon (#5, just after Pitt, then UC-Santa Cruz, Wisconsin, Iowa, Harvard, and Virginia). But as Brian notes, to win the championship Pitt will have to play through #1 ranked Carleton College of Northfield, Minnesota. As he puts it, Carleton, "the little school."

You may not know about Carleton. It is indeed little: Carleton enrolls about 2,000 undergraduates. (In Oakland alone, Pitt has about 17,000 undergraduates.) Carleton is far better known for its academics than for its athletics. It is an outstanding liberal arts college in a small (20,000 pop.) Minnesota town located about 40 miles south of Minneapolis. (Northfield is also the home of St. Olaf College.) My daughter will graduate from Carleton next month. Yes, I am a very proud father.

Despite its size -- in most college sports it is a Division III school, a minnow among whales when you look at the list above -- Carleton is one of the truly dominant teams in college Ultimate. In 2009, it won the national championship. In 2010, it was the national runner-up.

Carleton's Ultimate team, founded in 1984, is called CUT, which stands for Carleton Ultimate Team.  I suspect that this sort of focus has something to do with the team's on-field success.

(Pitt's Ultimate team has a clever name: En Sabah Nur, which means "The First One," the real name of the superhero Apocalypse -- in the Marvel Comics universe.)

Here is the additional Pittsburgh angle:  CUT is not only the best college Ultimate team in the nation. CUT also counts a Pittsburgher on its roster. Props to Pete Scheuermann, Mt. Lebanon grad, for making the team (no mean feat in Northfield!), and good luck to CUT in Boulder.

Creating an "Electric" Innovation Ecosystem

At TechCrunch, Mark Suster has a recipe for turning a good regional innovation ecosystem into a great one. Mark blogs regularly at Both Sides of the Table.

Here are the key excerpts. Mark is blogging from LA and speaking to a Seattle audience, so you'll need to substitute Pittsburgh people, concepts, and companies for his references below. And when you do that, you'll hit on some of the things that Pittsburgh has going for it -- and some things (some people?) that Pittsburgh is missing.

So entrepreneurs need to think the same way some VCs do – because markets change, competition changes, innovation & technology cycles move so fast that only by having a few truly outstanding leaders in your company can you sustain any sort of advantage.

And that is precisely my thoughts for Seattle and what I plan to deliver on Thursday night: Which few key community leaders are going to step up and get those neurons properly firing and connected?

My recipe for Seattle or your community:

1. Community Leaders + Organizers
You need a good mixture of both.

2. Passionate Entrepreneurs & Ambassadors
Stating the obvious but you can’t will a region into success. You need to have passionate tech entrepreneurs who want to build businesses locally.

3. Patron Companies
Seattle has something that many communities don’t have. It’s what I call “patron companies” and the local giants are Microsoft & Amazon. When you think about the success that is Silicon Valley, the unfair advantage is not just the huge amounts of available venture capital. When you start a company in the Bay Area you can often get your first biz dev deal done with Google, Facebook, Salesforce.com, eBay, Yahoo! or the countless other successful startup firms.

4. Elder Statesmen
This is where I think the action on connecting neurons has to come from. Jeff Bezos (and executive team) have to recognize that it’s in their best interest to see the community thrive and the benefits to Amazon (not to mention Seattle) are far greater than any negatives of employee flow. Steve Ballmer, Bill Gates and other senior teams from Microsoft need to want to promote local startups. These kinds of connections seldom emerge from middle management who view the immediate threats more than the long-run benefits.

5. Playing to Your Advantages
Every region has its advantages and while not limiting innovation to local themes it seems to make sense to at least consider local advantages. It’s no big surprise that I spend a larger portion of my time in LA working on: disruption of television, performance-based marketing, games & mobile. We have unique skills, teams, experience and regional assets that give us a better chance of success than other regions.

6. Marketing Muscle
It’s great to see an initiative like Seattle 2.0 because every community needs its local tech press to report on companies and run conference. Consider just how much exposure the Austin community gets every year due to SXSW. It’s awesome.

7. Local Angel Community / Recycled Capital
Fred Wilson wrote an eloquent piece on his blog about “recycling capital,” which every regional community should read. The magic that is Silicon Valley is that every tech entrepreneur who has made a bit of money chooses to “recycle” it by investing back into the startup community. There is a long tradition of these and it’s what formed the original angel network groups.

8. Venture Capital
And of course you need a mature venture capital industry. There are several local firms in Seattle like Madrona, Maveron, Ignition and others. But the consistent message I heard was “there’s not enough.” That’s why more VCs ought to be spending time in Seattle. It’s similar to LA in that there are a highly motivated cadre of tech savvy entrepreneurs wanting to create companies and a lack of funding. I’d bet if one is disciplined about investing here you’d see significantly better pricing than chasing deals in the overly competitive Bay Area corridors.

9. Foreign Direct Investment (FDI)
The other message I delivered to the room of entrepreneurs & investors at dinner the other night was that you need to think about equity from outside the region the same way that countries think about foreign direct investment. The inflow of capital can be transformative.

But what is often not talked about is that those investments lead to 8-10 board meetings every year of which it would be hoped that the “outside the region” VC would attend 6-8 of them in person. I think a series of brand ambassadors should find out when these VCs will be in town and organize evening events for them the night before so they don’t do a fly-in, fly-out visit.

10. Time
And finally, it’s clear that to really build a regional community you need time. LA and Seattle are in the second (or third) major wave of technology innovation. We have all of the 2nd-time entrepreneurs from Overture, CitySearch, MySpace, etc. on to their next companies and that produced Demand Media, a public company who even with a slight recent reduction in share price is still trading at $1.3 billion.

His full post is here.

In-Sourcing Professional Services: The Rust Belt's Future?

Again the orbits of my several professional and blogging lives converge:  The New York Times has a long feature this morning on global law firms that are "in-sourcing" some of the services they provide to Wheeling, WV and Dayton, OH, locating non-partnership-track lawyers there and paying them a fraction of what their high-end partnership-track colleagues are making in glamour cities like New York and Washington, DC.

Here's the full Times piece.

The trend, if we can call it that, has several upsides:  Underemployed lawyers have access to decent jobs in communities that are pleasant and affordable.  Regional law schools (Pittsburgh has two, Morgantown has one, Cleveland has two) can look to a job market that is in many ways more attractive than the "BigLaw" firms that occupy prime real estate Downtown.  [More attractive because those BigLaw firms hire from a national pool, including elite schools, not just locally.]  Clients of these firms have access to high-level legal services at more reasonable prices.  Low-cost communities looking for new business and a shot in the cultural arm can attract big companies (which may put underused office or warehouse space back into circulation) and  younger families.  In a lot of ways, this looks like the law firm equivalent of the Return-to-Youngstown story of Revere Data.

It's difficult to predict what happens when Wheeling and Dayton spin themselves forward by several years.  Are the lawyers who took these gigs going to be satisfied with their professional choices?  With their geographic choices?  Will this lead to a longer term economic development benefit to those cities?  Or is this short term PR that benefits the firms and leaves the lawyers (and their families, and the cities) holding the bag?

Perhaps we'll see a partial migration of these folks, over time, back to the larger Rust Belt hubs.  Cleveland and Pittsburgh are are home to legacy global megabrands of the law, firms that are more apt to think of themselves as rivals of Orrick (which has its origins in San Francisco) and WilmerHale (Boston and DC), the firms profiled in the Times, than as competitors of the in-sourced /out-sourced staff in Wheeling and Dayton.

Which would mean, I suspect, that Orrick and WilmerHale may be training the next generation of low-cost competitors to Pittsburgh's biggest firms.

Pittsburgh's Hub

It is an article of faith among both Pittsburgh traditionalists and most Pittsburgh reformists that Downtown Pittsburgh is one of Pittsburgh's gems and must, at almost all costs, be preserved.  Downtown is sort of the Primanti's sandwich of regional economics.  For all of its obvious flaws, you can't really call yourself a Pittsburgher unless you're willing not only to stomach it, but praise it.

Like some others who have recently come out of the sandwich closet, I am no Primanti's fan.

And I wonder, out loud, about Downtown Pittsburgh's centrality to the region's economic health.

I'm prompted here by the newest "Next Page" musings by Bob Firth, he of Bob's Maps, about the interminable failings of the Port Authority and the public transit system that it administers.  Not surprisingly, Bob has a fix.  Surprisingly, to some (and to me), the fix makes Oakland the hub of Pittsburgh's transit universe.  Take a look at the core, if you will, of Bob's vision for the future:

. 
That map doesn't make Oakland *the* hub of Pittsburgh.  It makes Oakland *a* hub of Pittsburgh.  A key node, if you will.  And skeptics will note, rightly, that Oakland-as-node privileges the better-off neighborhoods just to its east.  I don't see Homewood on that map, or the Hill District, and Uptown comes off as flyover territory.

But even granting those important qualifications, consider the relative economic weights of Oakland and Downtown.  To be brutally reductionist:  Oakland might be characterized as the best of Pittsburgh's future:  research and development and education (the students who are helping to make Pittsburgh younger) at Pitt, CMU, and UPMC; Downtown might be characterized as the best of Pittsburgh's past:  banks (what banks Pittsburgh has left, anyway), law firms (Pittsburgh's largest are now global brands more than Pittsburgh assets), and a cultural scene that owes most of its vibrancy to decades-old philanthropy.  Pittsburgh's future depends, conceptually, on leveraging the assets of Oakland.  Investment in Downtown is investment in keeping a legacy infrastructure alive.

It's easy to come up with significant exceptions to that broad-brush portrait, so consider it a rough, working hypothesis, which I throw out here to provoke reaction. 

How do we think differently about economic development strategies in Pittsburgh if we put Oakland at their center, and Downtown at the periphery?

More on Removing Barriers

Some follow-up thoughts regarding barriers to innovation and entrepreneurship in Pittsburgh.  See this post for a first cut.

The Obama Administration came to town the other day on its "Startup America" listening tour, titled "Reducing Barriers."  The PG carried a pre-event report. Pop City published the only post-event summary that I could find online. 

Those reports highlighted three areas of concern -- at least, areas of concern that the federal government might do something about.  As Pop City wrote them up (the * notes):

* Improve access to funding by better facilitating translational research funding to help commercialize federally-funded research, reauthorize the SBIR program and use existing Small Business Assoc. to commit $2 billion of SBIC matching contributions to catalyze new early-stage investment.

[Colleagues of mine who were there took down these additional suggestions regarding SBIR/STTR:

• Reauthorize the SBIR/STTR programs
• Provide seed funding for early, not only late stage, companies (through seed grants and SBIR/STTR)
• Have SBA eliminate fees and increase loan guarantees, and evaluate its loan program requirements
• Work towards uniformity in language (i.e. definition of micro/small business) across different federal agencies]

 * Improve the patent system ensuring a steady stream of innovative products. The U.S. Patent Office is committed to hiring 1500 examiners this year to facilitate the patent process, said Teresa Rae, deputy director of the U.S. Patent and Trademark Office.

* Establish a federal immigration policy that facilitates significant international talent attraction, integration and retention and is more progressive on visas.  The "StartUp Visa Act" is the beacon here.

* Create a tax credit for angel investors.

[My colleagues' detail:

• 22 states have a tax credit offered for angel investors and individual high net worth individuals, make PA the 23rd state to do this
• Offer other tax incentives for investing in high risk early stage companies (currently, 60% of all VC funds are invested in Boston and Silicon Valley)

[My colleagues' additional notes, not included in the Pop City list:

• Create more flexibility in using federal grants (currently, most federal research grants cannot be use for translational research and commercialization, only for pure research)
• Liberalize university tech transfer policies; IP CAN be assigned from universities to companies
• Universities that incentivize innovation (MIT, Stanford, Oxford (UK), and others) assign IP to IP holding companies that can make money, then send percentage of profits on licenses directly to fund Tech Transfer offices (TTOs).
• Focus federal funding on this region.]

[And one more idea recorded by my colleagues:

• Create a clearinghouse for information relevant to all start-ups (ranging from mom and pop shops to high tech companies) on how to navigate federal, state, and local programs and process, as well as rules and regulations. Doing this by industry would be most helpful.

OK.  Well, no.  There are some good ideas and some misleading ideas.  

On visa reform for immigrants who want to bring talent and capital to innovation industries in the US:  this would be a good thing.

On streamlining support for small businesses:  this would also be a good thing.  Too many federal agencies deal with small businesses of different sizes, with different requirements, and different definitions.

On patent law:  patent reform may be a good thing for a number of reasons, but there is little evidence that problems in the patent system are hampering US competitiveness, or US innovation, or -- and this is the part that matters most at the regional level -- regional development.  The core problem in the patent area is not that American researchers and R&D units don't produce innovative products.   The core problem is too many so-called "innovations" are subjected to patenting.  That clogs the patent system, slows it down, and makes it expensive -- unduly slow and unduly expensive for the inventors who have produced genuinely innovative things (including innovative processes) and who can and will really benefit from patent protection.

On tax credits and other tax incentives for investors in high-risk companies (some sort of tax advantage for "angels" and others exists in 22 states):  This is a terrible idea.  It's a race to the bottom; it hands near-term real tax benefits to high-net-worth individuals -- who among all of the people in todays' economy who might benefit from tax breaks are least likely to need them -- in exchange for the possibility, maybe, someday, of future financial benefits to the broader economy; and it sends exactly the wrong message about opportunity and reward to the region as a whole.  VC funds are concentrated on the coasts for a variety of reasons.  Tax relief for angels is not one of them.  California's tech economy is mostly thriving -- despite a high state income tax, a screwed-up state property tax system, and a public sector (particularly schools) that is in desperate straits, financial and otherwise.

On federal funding:  The Pittsburgh region already receives hundreds of millions of dollars in federal research funding annually.  Close to $1 billion of federal money flows into Pitt and CMU alone, each and every year.  There are a lot of challenges and barriers associated with figuring out how to make useful products out of some of the basic science funded that way, but lack of research funding is not one of them.  Lack of clarity in federal policy regarding tech transfer offices is not one of them.  I have heard complaints for years from Western Pennsylvania lawyers, investors, researchers, and entrepreneurs that TTO policies and practices at Pitt, and to some degree, at CMU, are burdensome and bureaucratic.  If there are problems in the research-to-commercialization pipeline, they aren't federal problems.  They are local problems.

On an information clearinghouse:  That's a great idea.  Why wait for the federal government to build it?  Crowd-sourcing works wonders for material like this.  Anyone ever heard of Wikipedia?  How about a wiki of innovation and small business support information?

On what wasn't said, apparently:

The federal government doesn't have much of a role to play in dealing with the two biggest barriers to regional economic development.

One barrier is state law labor and employment law.  Pennsylvania still follows the common law rule that treats noncompetes as legal, so long as they are "reasonable" in length, geographic scope, and range of employment.  California law, as many people know, treats noncompetes as presumptively illegal in all but a small handful of cases, and several other states have employment law rules on noncompetes that are nearly as liberal as California's.  PA should change its law, perhaps not all the way to the California end of the spectrum, but to make noncompetes far narrower in scope, and limited primarily to truly high value employees with truly specialized training and knowledge whose development really matters to employers.  (In recent years, I've heard of noncompetes being used and enforced against hair stylists and truck dispatchers.  That's ridiculous.)   In most areas of the economy, the change would improve labor mobility -- which would help small businesses get off the ground.  If you want to start a business, you need money, and you need employees.  PA law should make both of them easier to get.

A second barrier is complacency.  As I move around the region's economy  to describe my law school's new "Innovation Practice Institute," I hear a lot of excitement and enthusiasm building around the idea that lawyers can be trained to enable innovation, and to partner with innovators and entrepreneurs, rather than act as (expensive) brakes and barriers.  At least I hear that frequently among researchers, innovators, and entrepreneurs.  Sometimes, I hear it among lawyers and among economic development consultants.  In some other quarters, I hear quiet comments:  What's wrong with Pittsburgh's innovation ecology -- just the way it works right now?  Aren't there lots of lawyers doing this stuff?  Isn't there lots of assistance for innnovators?  Lots of opportunities to showcase their ideas for prospective investors and partners?  Doesn't Pittsburgh already have, in a manner of speaking, the best of all possible (innovation) worlds?

From my point of view, the question answers itself.  But the solution lies in ourselves, not in our government.  Perhaps the best thing that the federal government can do -- often, not always -- is get out of the way, so that we can get out of our own way.

A final note for this long post:

Pittsburgh is an amazingly innovative place.  There is no shortage of innovation here, no shortage of ideas, and no shortage of innovators.  What Pittsburgh needs more of is the will to move innovation *quickly* into the commercialization pipeline.

More on that later.