Easy Pickin's

A story this week in the “Austin Business Journal” features Silverton Partners and their recent success with moving Pittsburgh incubated start ups down to Austin. Hey, that’s the great thing about America and the capitalist system: mobility as a component of economic advancement.  But by using “Pittsburgh” as a stand-in punching bag for its self promotion, the ABJ got me thinking: why does Silverton have multiple successes luring Pittsburgh bred high tech to central Texas?

To level set, as best I can tell, Silverton has done this twice.  Once with a company named BlackLocus and another with Insurance Zebra.  Let’s acknowledge that two data points make a line but not a long term trend.  Silverton has had a couple winners this way and being smart they are making public relations hay with the story.

Both companies came through Pittsburgh’s South Side-based Alpha Labs organization.  Obviously Alpha Labs is in business to nurture and grow technology centric companies.  But according to their own Web site, helping the Pittsburgh region grow the number of those companies is also a goal.  This from the Web site:

“Do we have to stay in Pittsburgh after the program ends?

Companies are expected to remain in the Pittsburgh region after the end of their program. Our goal is to help you build a successful technology company while adding to the critical mass of flourishing tech companies in the region.

We believe that Pittsburgh is a great place to build a company and after your experience at AlphaLab, we're confident you'll agree.”

Hmmmm, seems like Alpha Labs track record is spotty.

I’ve got a couple of concerns.  First I have to question Alpha Labs work.  C’mon, Silverton wasn’t the only smart guys in the room when the “beauty contests” were being staged in front of VCs.  [Both BlackLocus and Insurance Zebra presented their business plans at nationally recognized conferences for venture capitalists.]  I have a hard time believing that folks at Alpha Labs didn’t know they had a couple of startups in their midst with good prospects for “events” such as a sale or a public offering.  Where’s the vision at one of Pittsburgh’s top incubators?

But I also have to question the work done by one of Alpha Labs sponsors, Carnegie Mellon University.  I have a dog in this hunt for a lot of reasons.  CMU is a bedrock of Pittsburgh’s growing innovation reputation.  My baby brother, as well as his wife, are CMU grads.  And I contribute annually to CMU’s gift giving campaign.  [For full disclosure, I’m a Pitt alum and it is the love of my life.]  So it pains me to see that CMU has done a less than stellar job of not only keeping its talent in Pittsburgh, it also has not pulled its weight in term of local economic development, in my humble opinion.  Stanford doesn’t let their incubated companies stray too far from the Bay Area.  Heck even the University of Texas has been wildly successful in retaining startups in Austin.  But CMU?  They’ve practically acknowledged defeat in Pittsburgh with their new Silicon Valley campus.  From the looks of it, that West Coast beachead is a one way street out of Panther Hollow for the sunny shores of San Francisco Bay.  [Albeit next to the 101.]

There’s a good piece in a recent CNN online edition written by a Harvard MBA student telling Boston powers-that-be why so much Boston area talent heads to New York or Silicon Valley upon graduation.  Dated March 18, 2013, authored by Jon Lai, and featured on CNN.com or “Fortune” magazine’s Web site, the piece could be a list of issues any American city faces, other than New York, San Francisco and to a lesser extent, Austin with its currently high “cool” factor.  Retaining talent and their output is not easy.  But Pittsburgh needs to get better at it.  BlackLocus is but one example of what happens when it goes right.  By the way, they were bought early on by the Home Depot Corporation.  They are now a software development center for Home Depot.  That development center could have located anywhere.  It should have been Pittsburgh.  It’s now another feather in Austin’s cap.  Don’t make the pickins so easy next time.