Rust Valley

I recently wrote about the Alpha Lab incumbator funding several companies in Pittsburgh.  Yesterday, Shimon Rura, a former colleague of mine at Babbledog, sent me a link to the blog at Sonya Labs, one of the Alpha Lab fundees, and specifically, a nice writeup about the state of startup funding here in Pittsburgh.  Sonya Labs write:

“Of all places, I never would’ve expected to build my startup in Pittsburgh. I moved to the ‘burgh from Chicago when Sonya Labs got a seed-stage investment from AlphaLab. It is not so unfathomable that I’m here, though, it actually makes quite a bit of sense. Even Paul Graham, a Pittsburgh native, who is famous for advising that startups go to Boston or Sillicon Valley says so!”

I have read this Paul Graham essay before (and found it frustrating, given where I was living and would be living, but not obviously wrong).  But I had totally missed the fact that Graham is from Pittsburgh.

Graham’s central point is that Pittsburgh has plenty of tech talent and not enough money to create a startup environment.  Specifically, he argues that there are “no rich people”.  I’ve only been here a few days, but that seems obviously wrong.  There may be not enough rich people or not enough rich people investing in high tech companies, but that’s very different from arguing that there are no rich people.

Sonya Labs argues that the presence of good technical talent, combined with lost cost of living make Pittsburgh an almost-ideal startup city.  They spend some time talking about how to make Pittsburgh a more obvious choice to people in other cities thinking about relocating in order to start a business.

When I lived in Albuquerque, I worked with the New Mexico Information and Software Association (NMITSA).  One of the hardest problems we faced was with the idea of how to get more of a startup, innovation economy going in Albuquerque and Santa Fe.  That area had two national laboratories, a decent research university, a metro area of about 500k people, and a bunch of tech-oriented rich people with second homes running around.  But it was much harder to get that kind of economic activity started and running than I thought it would be.

I will be very interested to see how Pittsburgh shapes up in this regard over the next several years.  On the face of it, Pittsburgh has several advantages over New Mexico.  It is a much bigger city than, Albuquerque.  It has more (and better–sorry UNM!) universities.  And there is already a certain amount of start-up infrastructure here.

So what is Pittsburgh missing to make it really take off? Tax policy?  More money?  A few dedicated (crazy?) people?   Anyone?  Bueller?  Anyone?