Wednesday, October 13, 2010
Fueling Startups: Highlights of the Pop City EventEntrepreneurs are critical to healing what ails many cities today, says Ann Dugan.
As the founder of the Institute for Entrepreneurial Excellence, at the Katz Graduate School of Business at Pitt, Dugan helps entrepreneurs get new ideas and companies off the ground, including startups that address challenging issues such as crime and poverty.
Imagine what Pittsburgh could accomplish if we empowered the region to get behind a culture of thriving startups, suggests Dugan.
It was on that note that the moderator of the Pop City event on "Fueling Startups" launched an intense and informative discussion on how to create an entrepreneurial community in the region that retains young people after graduation. The forum attracted a full house and some of the most forward-thinking leaders in Pittsburgh to The Cabaret at Theater Square in the Cultural District.
The Art of the Long View
First of all, the region needs to approach the problem with patience, says Deeplocal CEO Nathan Martin. Getting people engaged and creating community is a process that takes time. A self-described apostle for Pittsburgh, Martin's company is creating some of the most innovative social tech in the world--from Pickupalooza to Gumband and RouteShout.
"We need to change the culture (in Pittsburgh) and our idea of what is an entrepreneur," says Martin. Just back from Portland, a city teeming with good restaurants and a vibrant, young working population, Martin believes it can happen here if we give graduates good reasons to stay. "We need to play for the long game, not the short game."
Brendan Calder of the Rotman School of Management at the University of Toronto, agrees with Martin. Like Portland, Toronto is a cosmopolitan city filled with young graduates who stay. One reason may be that Canada has more relaxed immigration polices laws in comparison to the U.S. Another is that the Rotman School, with its new entrepreneurial center, is helping to brand Toronto as an attractive place for entrepreneurs.
"Toronto has allowed many high rise condos to be built downtown, which attracts and houses lots of young people," says Calder. "There's also strong support for the cultural arts, venues like the Bell Lightbox, which features new films daily."
Everything starts with culture agrees Rich Lunak, CEO and president of Innovation Works, the single largest investor of seed-stage technology companies in the region and one of the most active in the country. IW played a key role in assisting highly successful startups such as ShowClix, ALung and ModCloth.
Several years ago, IW created Alpha Lab, an intense 20-week program that runs twice a year. The program creates a diverse community of aspiring companies in the South Side that work on software, entertainment and Internet-related technology. Alpha Lab has attracted 350 applicants from 30 states and 7 countries, says Lunak. One of the companies, Shoefitr, won the online global pitch contest in This Week In Startups.
"We're looking for the next Google, Intel or Microsoft," he says. "By and large a lot of companies struggle. We have to crack that code a lot better or we risk being less competitive in the world."
Incubators are a great place to try out new ideas, says Lenore Blum, founding director of Project Olympus and Probes, programs at Carnegie Mellon that build community and provide support to enable talent and new ideas get to commercialization. Of the 60 projects that have cycled through Project Olympus, 30 have become companies. Several, such as ReCAPTCHA and Dynamics, have been wildly successful.
Carnegie Mellon has some of the best technological resources on the planet, says Blum, but too many grads are leaving after college for places like Silicon Valley. Blum has asked these grads why they are leaving.
"It's not just for the money," she says. "If they start something in California and they fail, everyone says, great, you learned something. Pittsburgh is little risk adverse."
But the momentum is building. Deeplocal is one of the companies behind it with breakfast meetups called Waffle Wednesdays. Held on selected Wednesday mornings, it brings investors and entrepreneurs together to share stories and show off gadgets over java and waffles.
Beyond the great ideas and the due diligence, there's the other big issue: money and the difficult challenge of the first loan, landing a round of seed funding to start the wheels turning. The panel offered several suggestions to entrepreneurs, especially those who don't have connections to deep pockets:
• Don't underestimate the value of a small loan. Search out small pockets of money such as the Sprout Fund and Bridgeway Capital or Idea Foundry.
• Start young when you have more time, can take risks and afford massive losses. You don't have as much to lose.
• Support tax credits that reduce the barriers and make it easier for angel investors to invest and create incentives for entrepreneurs.
• There are lots of great organizations in Pittsburgh. Take advantage of them. Get involved, network, and learn as much as you can about your community.
At the end of it all, many in the audience say they were inspired and encouraged by the discussion.
"It was refreshing to be in a room surrounded by hundreds of people who understood this predicament," says Alicia Bekeny, project manager for a Pittsburgh social venture, TerraShift. "Hearing the panelists discuss their professional paths and projects further helped me to approach entrepreneurship not as a risk, but as an exciting voyage. It's good to know others are going the same way, too, and brought extra compasses and maps."
Article Courtesy of Pop City