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Pittsburgh Gets a Tech Makeover

nytimes.com

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Re: Pittsburgh Gets a Tech Makeover

#51

Post by nugget »

tarr11 wrote: post #18
nugget wrote: post #9

Earlier quoted context omitted.

> It's just really hard to get serious VCs to pay attention to Pittsburgh. I'm an angel investor in a few dozen tech startups, about half in the Bay Area and half spread elsewhere around the country. The biggest problem with those outside of the Bay Area is that for lack of a better term "they don't think big enough". A lot of the promising ones turn into lifestyle-type businesses (e.g. a focus on services revenue in…

Interesting, can you expand on services business being lifestyle vs product being venture? I had never heard of that distinction before and usually just thought of lifestyle businesses as slower growing vs faster.

Sure, here's an example - a small startup which occupies an attractive niche, definite market need, product-market fit, and decent traction. The founder developed a software platform in response to market need, but the market also told her that there were opportunities to sell extensive services. Now that the software platform is done and there is a small services team in place, the founder can choose to sell either:

a) the software platform, which might make $20k/year, but you can sell thousands of them without much incremental overhead needed; once integrated, it's also extremely sticky; low customer churn and high customer satisfaction

b) a services package, which might make $50k/year, but for every 3-4 you sell, you need to hire a new employee @ $75k/year fully-loaded overhead cost

Before you say "sell both!" - unfortunately the nature of things is such that, more or less, the founder needs to prioritize selling one or the other. Consciously or not, she is prioritizing the services revenue, and as a result about 90% of new sales are services contracts. I (and the other investors) would prefer that she prioritize software. Even if it makes them unprofitable, it would make for a much better risk-adjusted bet. And this isn't like "it's a much better bet for the investors, because they can diversify risk out in a portfolio, but the poor founder would probably be left with nothing". She understands both sides and says she wants to build up the software revenue, but the culture around her (south-eastern city) is so strongly opposed to it, that the execution has been impossible. This is a classic case of where a smaller PE firm will come in and buy it out for a few million, purposefully cut the services revenue, go hog wild selling software, and flip it a few years later for 10-20x what they paid.

Re: Pittsburgh Gets a Tech Makeover

#52

Post by whopa »

ntsplnkv2 wrote: post #44
whopa wrote: post #30

Earlier quoted context omitted.

https://en.wikipedia.org/wiki/Mount_Davis_(Pennsylvania) - 3,213 ft - highest point in PA https://en.wikipedia.org/wiki/Tejon_Pass - 4,160 ft Tejon Pass is on I-5 in northern LA County, and it is a huge trucking route. The grade is very steep between the Central Valley and the top of the pass, and is fairly challenging for trucks. There is no equivalent to those conditions in PA. Also, if your impression of Tahoe is…

looks like someone has never been to Pennsylvania. Tejon Pass' major difficulty is the grade, and that's about it. PA may not have a highway that matches that grade, but many come close, and there are far more tight curves, typically far worse road conditions, and bad weather season is far more common than in N LA.

My point about Tejon Pass is that it's a steep grade mountain pass with heavy traffic including lots of trucks. There's no equivalent in PA.

Highway trucking will be the first significant deployment of autonomous vehicles. One of the big challenges is Mountain West interstates.

I do agree that the NE US is a proper testbed for bad weather city driving, since no West Coast cities have really that bad winter weather, I'm just objecting to the claim that somehow Pittsburgh captures all the challenging road conditions that autonomous vehicles will encounter.

Re: Pittsburgh Gets a Tech Makeover

#53

Post by shas3 »

bane wrote: post #48

Pittsburgh is a great town. It looks a bit like it was on the barely winning side of a fist fight, but it has lots going for it: - Two big, well funded, well respected schools cranking out talent. CMU is one of the top schools in the world for CS. - Cheap rent - If you want to buy a house, some really beautiful neighborhoods - SEI - lots of cyber security talent - Great food and activities, it's not hard to find plen…

There's a very similarly sized city on the west coast with similar population, etc.: Portland. It is a good illustration of what can help or harm cities.

Portland lacks anchors like the one put down in Pittsburgh by robber barons. Later philanthropists like Vollum of Tektronix in Portland weren't nearly as effective as Carnegie. Silicon Forest turned out to be a bit of a volatile dud compared to Silicon Valley.

Pittsburgh, on the other hand, has great universities in CMU and U Pitt. Portland's equivalents PDX State, erstwhile Oregon Graduate Institute, and OHSU never reached the heights of CMU or UPitt as they lacked the deep and broad foundation of Pittsburgh's universities.

I like both cities, but just on the basis of Shadyside-Oakland-Lawrenceville-etc. and the intellectual atmosphere there, I love Pittsburgh much more.

Disappointingly, in Portland there's no intellectual atmosphere of any sort.

Re: Pittsburgh Gets a Tech Makeover

#54

Post by CydeWeys »

graphitezepp wrote: post #32
mcgrath_sh wrote: post #27

Earlier quoted context omitted.

Pittsburgh also has a lot of underdeveloped waterfront real estate and still has room to develop in a lot of areas within an hour (or closer) drive of downtown. Over the last 20 years, a lot of areas that used to be mills (all along the waterfronts) have become entertainment areas (restaurants, movie theaters, shops, and bars) with mid-sized apartment buildings or town houses that are in close proximity to them. Over…

Getting around by bus is both inconvenient and expensive, public transit needs more funding here.

How's the bike infrastructure? I get around pretty much everywhere in Manhattan and Brooklyn by bike; I only take public transit a few times per month.

Also, I imagine the winters there can be harsh.

Re: Pittsburgh Gets a Tech Makeover

#55

Post by graphitezepp »

smaili wrote: post #3

The author seems to place most of the credit for the recent 'boom' on CMU for its rich history in the Machine Learning and Robotics fields. So my question is, what happens when other top universities begin to catch up or even possibly dethrone CMU? Would Pittsburg still continue to attract talent and businesses?

It would be folly to not mention Pitt and their place as a top tier medical institution as an aside. It's not just CMU and comp sci making PGH what it is today.

Re: Pittsburgh Gets a Tech Makeover

#56

Post by graphitezepp »

CydeWeys wrote: post #54
graphitezepp wrote: post #32

Earlier quoted context omitted.

Getting around by bus is both inconvenient and expensive, public transit needs more funding here.

How's the bike infrastructure? I get around pretty much everywhere in Manhattan and Brooklyn by bike; I only take public transit a few times per month. Also, I imagine the winters there can be harsh.

As much as I love it here, we got our share of problems. Winter is rough and so is the biking situation, due to bridge related reasons. However the city is very good at dealing with the bad weather and the current powers that be have been doing a lot to make infrastructure more bike friendly.

Re: Pittsburgh Gets a Tech Makeover

#57

Post by ssharp »

nugget wrote: post #9
pesenti wrote: post #8

I lived in Pittsburgh for 17 years. I bootstrapped a company out of CMU, grew it to $25M/year in revenue and sold it to IBM. Pittsburgh is a great place to start a company, lots of tech talent, lots of support and exposure in the community, cheap rent. And it is today a much more enjoyable place to live than 20 years ago (great restaurant scene, bike paths, revitalized downtown). There are two big drawbacks: finding…

> It's just really hard to get serious VCs to pay attention to Pittsburgh. I'm an angel investor in a few dozen tech startups, about half in the Bay Area and half spread elsewhere around the country. The biggest problem with those outside of the Bay Area is that for lack of a better term "they don't think big enough". A lot of the promising ones turn into lifestyle-type businesses (e.g. a focus on services revenue in…

It seems like the midwest much prefers B2B software and health industry-focused startups. I'm assuming because they become profitable much faster and don't need the explosive growth and capital needs of moonshot SV companies. Fewer unicorn exits drops the EV of an investment, so you can't take as many risky bets.

I'd guess the medical startups are largely because of Cleveland Clinic and UPMC.

Re: Pittsburgh Gets a Tech Makeover

#58

Post by autokad »

ta201707 wrote: post #36

Last year I was going through a long and grueling job search after taking time off for family reasons. I was based in the midwest after living around the country over the past decade for my recent three jobs. It was the first time I felt totally untethered and able to look at any US locations for a new job. I work in scientific computing and machine learning, so there were various employment hubs to consider. Knowing…

i grew up in pittsburgh, and had to leave because there simply wasn't a job for me - (most of the cmu startups threw my resume in the trash as soon as it wasn't cmu) though that was a long time ago and things have changed.

however, the numbers still show slim pickings. search glass door or any job posting website, you will find that philadelphia (not a tech city) has ~5x the amount of positions available. NYC has 15x. a lot of people retort about per capita openings, but I don't think that matters as much as people think. people do have geographic preferences but also apply to many other cities, and CMU graduates more engineers than pittsburgh has data scientist openings.

as you said, sure you have a 'lower' cost of living, but the jobs in pittsburgh pay significantly less.

pittsbugh is not a walk-able city, its one of the least walk-able ones that I know. Its almost 100% certainty you will need a car if you live/work in the city, and if you normally get around without a car, moving to pittsburgh and needing to buy/upkeep a car will wipe away most of those cost of living savings.

traffic and parking in pittsburgh is a nightmare. you can be in a car and see the building you want to get to, but not make it within 30 minutes.

Re: Pittsburgh Gets a Tech Makeover

#59

Post by z1mm32m4n »

bane wrote: post #48

Pittsburgh is a great town. It looks a bit like it was on the barely winning side of a fist fight, but it has lots going for it: - Two big, well funded, well respected schools cranking out talent. CMU is one of the top schools in the world for CS. - Cheap rent - If you want to buy a house, some really beautiful neighborhoods - SEI - lots of cyber security talent - Great food and activities, it's not hard to find plen…

> Some parts of the city are really beautiful and nice places to be, lots of great parks and so on

It's hard to understate this point. Compared with San Francisco, Pittsburgh is much more visibly green. There are trees everywhere, grassy areas abound, and the city itself is nestled in green hills.

San Francisco is full of concrete. The Bay Area is still really brown from the recent droughts. There are certainly people who can overlook this and live perfectly contently. But in Pittsburgh, I don't have to give up the greenery for a city life.

Re: Pittsburgh Gets a Tech Makeover

#60

Post by thearn4 »

ntsplnkv2 wrote: post #38
thearn4 wrote: post #2

As a Cleveland native, I look at Pittsburgh somewhat jealously as a city that is achieving what Cleveland has been slow to do over the last 30 years: find a post-industrial midwestern identity.

Football rivalries aside, Pittsburgh and Cleveland would do well to partner more often. Both are very similar cities, they have more in common with each other than others in the rust belt.

Rather than settle football rivalries, I kind of wish Cleveland would just ditch the Browns and offload them to another city already. But for good this time. Their stadium is occupying probably one of the best spots on the Lakefront, and is entirely wasted there.
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