Pittsburgh Startup Scene: Mayor on Venture Capital Challenges
TechCrunch Spotlights Pittsburgh's Transformation
This week, TechCrunch is focusing attention on Pittsburgh, Pennsylvania, featuring interviews, profiles, and an event with the city’s departing mayor, the President of Carnegie Mellon University (CMU), and emerging local startups.
For much of the last decade, the city formerly known as the heart of the Rust Belt has been actively reshaping its identity, moving beyond the legacy of deindustrialization experienced in the 1970s and 80s. World-renowned universities, including Carnegie Mellon and the University of Pittsburgh, have been instrumental in this shift.
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Mayor Peduto on Pittsburgh’s Evolution
Prior to tomorrow’s event, TechCrunch interviewed Bill Peduto, who served as Pittsburgh’s Mayor since 2014, overseeing a significant period of this transformation. The Mayor discussed his initiatives over the past six years, concluding with his departure from office in January.
Mayor Peduto will also participate in our City Spotlight event on Tuesday, June 29, 2021. He will be joined by Karin Tsai, Director of Engineering at Duolingo, and Carnegie Mellon University President Farnam Jahanian. Registration for this free event is available here.
Fostering the Startup Community: A Conversation with Mayor Peduto
What initiatives is the city undertaking to support startups?
Mayor Bill Peduto: Over the past seven years, the city has actively partnered with industries like autonomous vehicles, robotics, artificial intelligence, and predictive analytics. We’ve integrated startups into city government and granted access to public spaces to facilitate their expansion.
Through collaboration with our universities, we’ve successfully attracted international companies to Pittsburgh, including Bosch, Tata, Google, Facebook, Intel, and Amazon. These companies have spurred parallel advancements in the tech sector. Pittsburgh is now an innovation center attracting professionals seeking career growth in specialized fields.
The Diversity of Pittsburgh’s Startup Landscape
Many companies emerging from CMU operate in robotics, automation, and self-driving car industries. However, the startup community is remarkably varied. While robotics and autonomous systems have gained global prominence, other sectors are fiercely competing for a share of Pittsburgh’s economic activity.
Pittsburgh gained recognition as the first city globally to host autonomous rideshare services through partnerships with Uber, Aurora, and Argo AI. However, CMU had already been testing autonomous vehicles on city streets for a decade prior. Our key advantage lies in our ability to cultivate talent locally, rather than needing to attract it from elsewhere.
Retaining Talent in Pittsburgh
Historically, a challenge has been retaining talent, with individuals and companies often relocating to New York or Silicon Valley. Has this trend changed? What steps have been taken to encourage people to remain in Pittsburgh?
Local government must prioritize creating a desirable living environment. Quality of life is crucial for building a thriving 21st-century urban economy. We’ve focused on enhancing amenities, providing ample open spaces, and fostering a vibrant social scene. Young people desire community. Pittsburgh previously lacked these elements due to deindustrialization and disinvestment. We’ve worked diligently to rebuild them, supporting local businesses like restaurants, theaters, and performance venues as integral components of both our cultural landscape and economic development strategy.
Legacy Industrial Cities and Startup Ecosystems
What benefits does being a former industrial city offer when building a startup ecosystem, particularly in light of Detroit’s experience?
The benefits depend on the specific company. Many long-standing companies within Pittsburgh have successfully diversified, adapting to global trends and becoming competitive. Others remain tied to past successes. Cities like Pittsburgh and Detroit take pride in their industrial heritage and leverage it for future growth.
The Future of Fossil Fuel Companies
Do fossil fuel companies recognize the need to transition towards greener alternatives?
The response varies by company and leadership. In Pittsburgh, many companies are actively exploring opportunities in green hydrogen, with universities and established energy companies leading the charge.
The Impact of Covid-19 on Tech Community Decentralization
How will Covid-19 impact the decentralization of tech communities in the long term?
The key is decentralization from the coasts to cities offering a compelling environment. We are competing with cities like Charlotte, Austin, and Nashville. We are not primarily focused on competing with New York, San Francisco, or Boston. We believe we can effectively compete with any region boasting strong research and development fueled by education and medical industries.
Challenges for Pittsburgh Entrepreneurs
What is the biggest obstacle facing entrepreneurs in Pittsburgh, and what is the city doing to address it?
Access to venture capital remains the primary challenge, particularly at early stages. We’ve successfully convinced coastal investors that companies don’t need to leave Pittsburgh to thrive. However, increased venture capital investment would accelerate growth across all industry clusters.
Attracting Venture Capital to Pittsburgh
What specific steps is the city taking to attract venture capital?
We’re fostering a partnership with universities, hospitals, and our local VC community. The city provides essential support. Our corporate and philanthropic communities are also key partners. Together, we created the Pittsburgh Innovation District, a direct result of a Brookings report. This district is a structural partnership between city and county government, philanthropic organizations, universities, and UPMC, designed to attract both startups and the funding they need.
