Civic Networking

A friendly correspondent emailed me yesterday for clarification of the following comment:

If IP and the Great Lakes Urban Exchange and the Rust Belt Bloggers Network come across as a bunch of outsiders trying to fell trees in their own forest, then the movement is a non-starter, amusing to its own members and to no one else.

This was my brief, preliminary response:

The short version of the point is that the community organizers and urban visionarties need to engage the enterprise builders -- the venture capitalists, the lawyers, the investment bankers, and the technology developers. In my opinion, community organizing as such can never overcome the inertia that grips development efforts in Pittsburgh and elsewhere.

Am I right, or am I off base? Clearly, community organizers in some places are trying to forge an independent path. If they're succeeding at the community level, is that success spilling over into the economic development domain? So that we don't all look only at Great Lakes/Rust Belt communities for benchmarks, take a look at the impressive Imagine Miami, an interesting civic networking resource.

The Revolution Will Be Networked

It's not a revolution, but progress in Pittsburgh does proceed, one node at a time. It's not political progress, but -- here and there -- economic development progress.

Innovation Works has launched AlphaLab,

AlphaLab provides funding, free office space, expert business advisors and services through an intensive six-month program in Pittsburgh. AlphaLab helps companies rapidly develop their technology, gain user feedback from early alpha or beta releases and move toward successful commercial launch. . . . The application deadline is March 31, 2008.

I'm not wild about the name of the project, for reasons that become clear when you run a Google search, but the core of the idea is terrific. This baby belongs to Jim Jen at IW, who has the right background and outlook for this enterprise.

Relatedly, in recent weeks I've learned about Pittsburgh Equity Partners, a venture fund that is looking to fill an important gap in the Pittsburgh capital landscape: Entrepreneurial companies that have outgrown the resources of F&F, seed, and angel funding but aren't ready for larger venture investments. PEP is run by Ed Engler, founder and chairman of Summa Technologies and GP in Summa Venture Works, and Steve Robinson, of Robinson Venture Works. PEP is the current evolutionary stage of the Pittsburgh Angel Fund, with sponsorship by the Commonwealth and the involvement of IW, PLSG, and other players around town. Here's some history.

Competition in capital markets is a good thing. Investors in entrepreneurial markets measure deals by primarily by level of risk rather than primarily by level of return. Pittsburgh needs more of these folks, and it needs more of them to be visible players in the economy of new firms. The banking mentality, which expects every deal to pay out a return discounted by some level of risk, doesn't suit the entrepreneurial environment.

Last but not least, I'm late to the party celebrating Bill Toland's update on IntoPittsburgh and the Pittsburgh Diaspora from last Friday's Post-Gazette. Bill has some excellent info and links about projects to connect grassroots economic developments initiatives in the so-called Rust Belt, including the Pittsburgh Diaspora and IntoPittsburgh (search this blog's archives and Jim Russell's Burgh Diaspora for more information on IP).

What might be called the "rustroots" movement has a challenge. How do we take it out of the blogosphere and out of column's like Bill's (where it gets flattering coverage but is nonetheless marginalized by the paper itself), and how do we connect it to real economic momentum? If IP and the Great Lakes Urban Exchange and the Rust Belt Bloggers Network come across as a bunch of outsiders trying to fell trees in their own forest, then the movement is a non-starter, amusing to its own members and to no one else.

IP has to follow the money, to borrow a phrase from a different time and a different context. Grassroots activism needs to connect, in specific ways, to folks who not only are of like mind but who are of better economic standing. We have to persuade them to put their money where our mouths are.

Jim Jen at IW and Ed Engler at PEP are two of the people in Pittsburgh who get that connection, which is why I've assembled these items in this one post. If others like them stand up and are counted, then IP will have something to show for itself.

Entrepreneurs, Be Careful

Here's the full text of a short Pop City story today about what looks like an interesting enterprise that wants to support entrepreneurs. I'm quoting the full text because the buildup is really intriguing -- and the payoff is eye-popping. You have to see both.

Pittsburgh-based Ad-Base Group’s unconventional approach to the business of venture capital seems to be working.

A “one stop shop” for entrepreneurs, Ad-Base Group made the Inc. 5000 list of fastest growing companies in the country in 2007. Last year Ad-Base added six employees to its growing staff of professionals, bringing the total to 36; revenues also jumped $1.3 million for a total net revenue of $17.5 million for the year.

The company started out in 1986 as Computer Comfort and evolved from a tech-based company into an early-stage, technology incubator and investment company in 2007, explains Josh Lucas, marketing coordinator. Unlike the typical investor that provides promising companies with funds, Ad-Base Group goes an extra step, assisting entrepreneurs with a shopping list of services to get them off and running: administrative, financial, marketing, advertising, legal, engineering and development support. And all at less than half the normal cost, says Lucas.

“We’re a non-traditional venture capital company,” Lucas explains. “Our unique business model gives the entrepreneur the resources to jumpstart their dream.”

In exchange, Ad-Base assumes control of the company’s intellectual property. Most recently Ad-Base added Inspira to its portfolio, a Pittsburgh-based IRA management software company. [Bold added!]

Talk about burying the lede! The first time I read that next-to-last sentence, I just about fell out of my chair. The next-to-last sentence reads like companies have to assign their IP to Ad-Base in order to secure their services and support. Ouch! Holy indentured servitude! On reconsideration, I have to assume (or at least I have to hope) that this isn't the case. I hope that "control" means that Ad-Base offers legal counsel that helps its portfolio companies license and otherwise exploit their IP.

Lesson: If you're an entrepreneur, get clear on ownership of IP *before* signing up with any firm that wants to "help" entrepreneurs!

Does Göttingen Have a Steelers Bar?

I like the tone and spirit of today's P-G commentary titled "Germany on the Mon," though the piece disappoints for failing to refer, à la Heine, to the (in)famous Göttingen sausage. With that gustatory amendment, clearly Göttingen is a town after Pittsburgh's brat-loving heart. These are Diasporans in the making:

So what happened in Germany to bring about the "win-win" that Pittsburgh's economic development personnel and internationalists have been seeking in Germany for more than a decade? One of Pittsburgh's most recent business converts, Sycor Americas Inc., together with its German parent company, Sycor GmbH, hosted the "Göttingen meets Pittsburgh" conference to tell its business colleagues, government leaders and friends why Pittsburgh is such a great place for its American headquarters and why it chose Pittsburgh over other cities.

I only wish that One of America's Great Newspapers had the resources to assign a beat writer full-time to Pittsburgh's connections to international markets. In all seriousness, I nominate: China Millman.

Pittsburgh 2.0 Update

I've added a couple of names to the slowly-expanding roster of Pittsburgh 2.0 volunteers at the left: Jim Berardone, major domo of the Product Strategy Network, and Mike Woycheck, co-founder of Pittsburgh Bloggers and proprietor of Wear Pittsburgh. You, too, can get on this list! Commit to a pay-it-forward ethos and become part of the group of Pittsburghers who want to share the wealth hidden in the region's tacit knowledge networks.

I like the whole idea of WearPittsburgh so much that I think that the t-shirts should be the unofficial uniform of the Pittsburgh Diaspora and IntoPittsburgh.

If you're in Pittsburgh on Friday (that's this Friday, February 22), don't miss the chance to meet some of the region's finest bloggers at Blogfest 13. That's at Finnegan's Wake, the now-traditional home of Pittsburgh blogfests. Note the info and instructions here. Hoist a Guinness for me; I'll be trekking through the Middle West this weekend.

Infrastructure

Comments on last week's sushi post ended sort of as I hoped they would, with some simple observations on what Pittsburgh really might do to attract new development. It's all about the infrastructure, wrote Bram: At the grand, dreamy level, a transit cluster among Pittsburgh, Cleveland, Buffalo, and Detroit would help. At the more pedestrian level, it would be a good idea rebuilding connections between Downtown and the Hill District and the Bluff/Uptown/Soho.

Those ideas were responses to my comment, which was:

Pittsburgh has deep-seated economic problems that can be cured -- if they can be cured, and that's a very big "if" -- only with sustained growth. It is doubtful that Pittsburgh's growth can come entirely or even largely from within -- from local material and knowledge resources, local investment, local labor. What will it take to bring those resources, investment, and labor from outside the region? "Sushi" is a semi-serious proposed answer to that question.

Commenters dissed sushi, though I did hear privately from one Silicon Valley entrepreneur who agreed with me: Sushi is da bomb. (How did he find the post?)

I'm happy to leave sushi on the "semi" side of the "serious" line here, but bullet trains and maglev aren't answers either. I don't want to host another debate about this (look through the archives, and do the same at Null Space), but I suspect that the maglev reference was, like sushi, semi-serious. And as much as rebuilding the fabric of Pittsburgh's central neighborhoods would be a good thing, I doubt very much that it's more than a very modest start.

Infrastructural improvements are, however, a good place to look. What are genuine hooks for attracting economic development and growth to Pittsburgh? (And, as Harold Miller points out, for nurturing the firms that are already here.)

-- Prime the Uptown corridor for development. It's too late in the day to suggest restoring (light) rail service along Fifth Avenue, but with UPMC taking over Mercy Hospital, there are players in town with good economic reasons to invest in the area.

-- Find outside investors willing to put money into local businesses, that is, to compete with local firms. Right now, I'm talking with a friend who invests in small manufacturing enterprises. He's not based in Pittsburgh, but he's intrigued by my general description of the strength of manufacturing here.

-- Build out Pittsburgh 2.0, a social infrastructure for the economic development community. Since putting my line in the water at the beginning of the year, twice I've been contacted by or on behalf of what are now called "C-level" folks who are interested in relocating to Pittsburgh and starting or running companies here. I've passed them on to local lawyers, C-levels, and ED folks who, feedback sez, have been extremely helpful at getting them plugged in. And I'm just a law professor; imagine the kind of impact that someone in the economic development community could have if they publicly adopt a "pay it forward" strategy for Pittsburgh. While I'm at it, note the upper left column of this blog. Feel free to send me your contact info, so that I can add your name.

Critique those, and add your own.

Sushi and Pittsburgh 2.0

The Post-Gazette's new restaurant reviewer, China Millman, has thrown herself into the position over the last six months. She has academic cred (Harvard) and food cred (the Le Cordon Bleu program at the Pennsylvania Culinary Institute), and she's an enthusiastic and fun writer.

With her piece today on Pittsburgh sushi, she (unknowingly) steps into Pittsburgh 2.0 territory.

How? I've been told many times here that high quality sushi is high on the list of the amenities that would-be relos look for when thinking about Pittsburgh v. any larger West Coast or East Coast market. Jokingly, I've said to friends that if the Pittsburgh Technology Council, the Life Sciences Greenhouse, and Innovation Works really want to make the Pittsburgh region friendly to tech investors and entrepreneurs, they should invest in a sushi chef with a national reputation.

Maybe I should stop joking. Today's review of the best of Pittsburgh sushi makes the area sound like a sushi lover's paradise. There's Sushi Tomo in Ross. Kiku in Station Square. Chaya in Squirrel Hill. Umi in Shadyside. The article gives addresses, phone numbers, and website URLs.

Don't take too much from the locations. Ross? Station Square? Any sushi lover knows that the best sushi is often found in out of the way places. When I worked in San Francisco, the legendary Kabuto Sushi opened at Geary near 15th -- hardly the center of the City's restaurant scene.

But China Millman's piece is so enthusiastic that it's striking. I've heard from lots of friends here that there is no good sushi in Pittsburgh. I've been inclined to believe them; they tend to be people who've lived in places known to have fine sushi (New York, Japan, San Francisco, Los Angeles). I checked chowhound.com, and it has some upbeat reports there about Little Toyko and Umi. But the foodies aren't uniformly happy even there.

Two questions for discussion:

Am I on the right track in my semi-serious suggestion about sushi as a Pittsburgh 2.0 magnet?

And is China Millman right? Is sushi in Pittsburgh an undiscovered treasure?

Gotta Business Plan?

I got an email over the weekend letting me know that applications for the 2008 EnterPrize Business Plan Competition are being accepted. Here's the gist of the message:

EnterPrize is Pittsburgh’s premier business plan competition for technology startups. This year, we [the Pittsburgh Technology Council] will host eight workshops and three networking events, beginning February 20 with a workshop, “Developing the Idea” taught by Chris Allison. Through three phases of competition more than $80,000 will be awarded. Participants will get plenty of feedback through a coach and comments on their plans from judges and will have many, many networking opportunities to meet potential funders, advisers and peers.

The goal of the competition is to help stimulate economic growth in southwestern Pennsylvania and support local technology entrepreneurs.

Here is the link to all of the relevant information about the competition, including a contact for questions: http://www.pghtech.org/Events/enterprize.asp

EnterPrize is divided into two categories – new business and existing business. What defines a “new business?”

· The team has an idea for an innovative product or service with which they intend to start a company.
· The company does not exist.
· The company is nothing more than an idea.
· They have no employees (founders are acceptable).
· No money has been raised.
· The company is not incorporated. (NOTE: If it is incorporated, its only purpose was to create a shell – the company is not conducting any business).
· The company has not experienced Substantial Business Activity:
o Payment of wages or salaries
o Receipt of research grants, development contracts or other sources of revenue
o Receipt of equity or debt financing from outside the Founder’s immediate family
* Founder’s activities, such as research, prototype development, establishing beta sites (other than for paying customers), licensing necessary technologies, will not be considered Substantial Business Activities.

Definition of an Existing Business Category:

· The company is less than three (3) years old.
· The company has less than twenty (20) employees.
· The company has less than $1 million in annual sales.
· The company has raised less than $500,000 in capital since its inception.
· The company is experiencing Substantial Business Activity:
o Payment of wages or salaries
o Receipt of research grants, development contracts or other sources of revenue
o Receipt of equity or debt financing from outside the Founder’s immediate family
* Founder’s activities, such as research, prototype development, establishing beta sites (other than for paying customers), licensing necessary technologies, will not be considered Substantial Business Activities.

Some of PTC members who have participated in EnterPrize over the years include: Vivisimo, Plextronics, Agentase, ALung Technologies, LogicLibrary, RemComm, Staffing Direct Business Solutions. Many of these companies are very active in the Council … speakers at events, Tech 50 finalists, etc.

Pittsburgh's Start-Up Culture

Jefferson Provost is blogging again at The Q Function. He has a terrific post up today, prompted by a NY Times piece on the Seattle economy: Does Pittsburgh have a Spin-Off Culture? A taste:

People often ask why Pittsburgh, with it’s great universities, isn’t
seeding more startups. Maybe it’s because an essential missing component is a
large pool of large tech companies to employ university engineers and scientists
after graduation, until the stars align properly for them to start their own
ventures.

Innovation and Robert Morris University

The huzzahs for tech/higher ed collaboration in Pittsburgh usually emerge from Oakland, home of the rocket scientists at Pitt and CMU. But as most Pittsburghers know, there are many other high caliber colleges and universities in the region. Duquesne, for example, often feels slighted in tech development conversations.

So I was especially intrigued the other day to receive a press release from Robert Morris University that starts off as follows:

Robert Morris University’s Center for Applied Research in Engineering and Science (RMU-CARES) has received two grants from Pittsburgh-based Innovation Works to fund the development of a new manufacturing process and the creation of a device to aid in the care of homebound individuals.

The first grant, for $50,000, is to design and build a robotic work cell for Penna Flame Inc., a Zelienople company that provides flame hardening, a process that renders the surface of machine parts more resistant to wear. Currently, Penna Flame utilizes a manual process in which each tooth of a gear is individually heated with a 2200-degree Fahrenheit flame. As with other manual processes, problems arise with operator fatigue and consistency and quality. The manual operation will be eliminated and replaced by an automated one using industrial robots.

The second grant, for $25,000, will be utilized to design and build three prototypes of a unique device dubbed The Memory Minder. Triggered by a sensor, the device will provide recorded messages in response to the needs of the individual user. The Memory Minder delivers customized messages set by a caretaker, nurse, family
member or the user. The device can deliver several timed messages throughout the day with personalized messages from familiar voices that are critical to an individual’s care.

I hope that I'll be hearing more about RMU's partnering with Innovation Works. The press release came to my in box from longtime Burghosphere contributor and new RMU Director of Public Relations Jonathan Potts, he of The Conversation and the Dead Tree Blog.

George Lakoff at Pitt this Friday

My colleagues at the Pitt Law School are putting on a conference this Friday (February 8) that may hold broader interest, and it's free and open to the public.

The conference is titled “The 21st Century Brain: Why It Matters for the Academic and Political Worlds.”

The keynote will be delivered by George Lakoff, the Berkeley linguist with an affection for metaphor. Professor Lakoff earned popular fame a few years ago with “Don’t Think of an Elephant: Know Your Values and Frame the Debate,” which talks about language and politics. My guess is that this Friday's presentation -- 12 noon at the law school -- will be less about politics and more about linguistics and metaphor. It should be provocative nonetheless.

Lakoff will be joined by an all-star lineup of legal scholars, linguists, and rhetoriticians, including Ed Rubin (Dean at Vanderbilt Law), Steven Winter (Wayne State Law), Barbara Johnstone (CMU English), Scott Kiesling (Pitt Linguistics), Pascual Masullo (Pitt Linguistics), Andreea Deciu Ritivoi (CMU English), and my colleague George Taylor, who is organizing the event. A full lineup and schedule appears at the PDF invitation, which is online here. The conference gets started at 10 am.

That PDF also gives instructions on RSVP’ing for the event (register here — it’s free, unless you're a PA lawyer and want PA CLE credit, and then it’s all of $50).

The law school is located at the corner of Forbes and Bouquet in Oakland, across Forbes from the O (or for the less gastronomically inclined, across Bouquet from Panera).

Out of Step?

I was out of Pittsburgh for most of last week, and now that I'm back, I'm feeling out of sync, whipsawed among Pittsburgh's past, Pittsburgh's present, and Pittsburgh's future.

In Portland, I had a snack at Voodoo Doughnuts ("The Magic is in the Hole!") and realized that I need to dial back my obsession with the local "Cupcake Class." I browsed Powell's Books and was reminded of the observation that if Pittsburgh is "one of America's most literate cities," it's because Pittsburghers borrow books. Pittsburghers surely don't support independent bookstores. Sign of utopia? Or sign of the apocalypse?

Stuck in the Newark Airport for an extended period last Thursday, I bought and read most of H.G. Bissinger's fabulous and troubling Friday Night Lights, about the American pathology that we call high school football. This morning, the college decision faced by a local high school superstar is front page news in the Post-Gazette. Will it be top school number one, or top school number two, or local underdog number three? It would be refreshing to read that Jeannette's Terrelle Pryor is deciding between MIT and Caltech, with local underdog Carnegie Mellon still in the running. But this is a football issue. Nowhere in the P-G's report will you find a glimmer of the notion that this high school senior is deciding where to get an education. Fortunately, Terrelle Pryor seems to have some wisdom about him, and he is surrounded by advisors who genuinely seem to have his best interests in the fronts of their minds. But it's a long and risky road from Jeannette to pro ball, and even if he makes it, an NFL career is itself usually a fleeting thing. In some ways, and more ways than Pittsburghers might like to acknowledge, Pittsburgh today is uncomfortably like Odessa, Texas.

Closer to my usual interests, the PG this morning carries an upbeat report about growing exports by local manufacturers. "[T]he value of exports from the Pittsburgh area increased 20 percent from 2005 to 2006 -- the 14th largest jump among U.S. cities and a better year-to-year improvement than New York, Miami, Chicago, Los Angeles and Orlando, Fla.," writes Dan Fitzpatrick, following Harold Miller's more detailed report on this topic . Is this really good news? Or is Pittsburgh growing manufacturing exports at precisely the time that more globalized economies in the U.S. are moving away from export dependency? I always appreciate a "glass half full" view of Pittsburgh's regional economy, but I worry about hints of creeping nostalgia. It's a good thing that manufacturing never went away in Pittsburgh, because when times get tough (as they are getting now), manufacturing will help see Pittsburgh through. That's a ground for optimism. But it can also be an excuse for not innovating and diversifying the economy.

Pittsburgh nostalgia plays a big role in Chad Hermann's Post-Gazette elegy for hard work. It's no surprise that the piece is perfectly crafted:

To give our best effort in that great, tedious, persevering work of getting things done, a 250-year-old Pittsburgh needs leaders of wealth and ideas and influence who are willing -- we already know they're able -- to make a real difference. Which is to say, leaders who are willing to care deeply about something other than themselves, their next election, or their next annual report. We need the public service of true public servants, not the lip service of cynical self-preservationists. We need to summon the pride and courage and fierce determination of all the generations of Pittsburghers before us who, when told they could not possibly do any better, vowed that they would, and did. And we need to demand, starting right now, more than just the simple, numbing mediocrity we've come to expect, and to accept, from our leaders.

So true, yet so self-evidently romantic, nostalgic, and ultimately indeterminate. When I first moved to the Pittsburgh region and started to read and talk and learn about its history and its potential, I thought much the same thing. "The people" need to expect more of themselves, and "they" will extract more value from the extraordinary raw resources that the region possesses. I had more than one conversation with colleagues that was premised on the question, "How do you change the psychology of a city?" Relucantly, and finally with determination, I've come to the conclusion that you can't. The Pittsburgh region is determined to be dominated by big institutions, to expect the worst from change and the best from the magic bullets masquerading as economic solutions, and to be risk-averse and hierarchy-obsessed. Not that there's anything wrong with that; Pittsburgh's social and cultural stability over the decades owes much to those traits.

If my diagnosis is correct, however, then if growth is in Pittsburgh's future, that growth won't come from within. It won't come from hordes of existing Pittsburghers realizing that they've erred by placing their trust in Luke Ravenstahl and Dan Onorato and Jim Rohr. It will come from new Pittsburghers realizing that Pittsburgh can succeed, both locally and globally, by making its government and its symbolic central economic planning irrelevant, or at least benign. Pittsburgh faces a regional version of Clay Christensen's Innovator's Dilemma. So long as Pittsburgh works really hard and focuses on what it has always had the potential to do really well, it is doomed to failure. As Cher said to Nick Cage in Moonstruck, "Snap out of it!"

There. That was better; I've written something provocative enough that almost everyone can disagree with it. I'm back in sync for a while.