Pittsburgh reimagines the business district | Crain's Pittsburgh

Pittsburgh reimagines the business district

  • Pittsburgh, historically the home of the nation's steel industry, is the home to a host of tech startups in recent years. | Crain National photo by Luke Walter.

  • Pittsburgh-based NoWait is among the city's tech startup success stories. | Crain National photo by Luke Walter.

Much like it reinvented itself after the collapse of the steel industry and the decline of coal, in many ways, Pittsburgh has re-imagined the traditional business district. While there are still business hubs geographically concentrated in some of the city’s neighborhoods, they’ve been joined in recent years by a swath of incubators and co-working spaces that have allowed a wide variety of tech startups to get off the ground in the Steel City.

Google opened up shop in Pittsburgh in 2006, and after rolling out its ride-hailing program here in 2014, Uber announced it was locating its Advanced Technology Center in the city’s Hazelwood neighborhood in 2016. The plans call for production and testing of Uber’s autonomous vehicles. Despite its firm footing in the robotics and AI industries, the nickname “Silicon Strip” never quite stuck for Pittsburgh.

“When I first came here in 2001, they told me this was ‘Roboburgh,’” said Audrey Russo, President and CEO of the Pittsburgh Technology Council. But she said it took 16 years, when Uber made its pivot for Pittsburgh to be viewed as a hub for robotics. “No one really understands research,” Russo says, “and that’s what Pittsburgh is good at. If you don’t hurry up and commercialize, you get no notoriety.”

Whether or not it makes headlines, the numbers bear out Pittsburgh’s status as a good place for budding technology.

The Kauffman Foundation ranked Pittsburgh No. 1 among its top metros for Main Street business activity in its 2016 Main Street Metro Trends report. Pittsburgh had 694 established small businesses for every 1,000 firms. And the region has continued to increase its venture capital activity; in 2016, VCs invested $235 million in Pittsburgh technology companies. Between 2012 and 2016, 51 companies exited with proceeds of $7.4 billion, according to the tech council.

Startup growth continues

And the number of co-working spaces in Pittsburgh, which house more than just app startups, continues to grow.  Beauty Shoppe and Ascender in East Liberty, WorkHard in Allentown, and Alloy26 on the North Side are just a few of the larger locally-founded co-working spaces. Each has an eclectic mix of companies, from pod-casting studios to online news organizations to all manner of apps and tech product companies.

The startups to come out of Pittsburgh are not all in one vein, Russo notes. The NoWait restaurant app and 4Moms, which makes baby products, are both recent success stories from the area.

That variety has been a good and bad thing at the same time, she says.

"You have to have a diversified portfolio, and there’s strength in that diversification.”

During visits to Minneapolis, it’s clear their main focus is medical tech and water tech. In North Carolina there’s a big focus on life sciences.

“Those companies all have proximity to each other. What’s interesting about Pittsburgh is we don’t have that kind of physical density. The incubators and co-working spaces are not threaded to one vertical, which to me, is brilliant.”

But it can be hard to market the area without one defining vertical within the tech ecosphere, Russo notes. But the region’s role as a bellwether should be more closely watched on a national level, she adds. She points to the demise of manufacturing as an example.

“Pittsburgh fell apart first. We were the leading indicator for that decline, and slowly the rest of the country started to unravel,” she says. “I think it’s the same thing now: We’re not trying to be Silicon Valley: we’re all marching ahead across a very wide portfolio. It’s our resilience that defines our region and our business sectors.” 

July 18, 2017 - 2:53pm