The Destination Pittsburgh By Jill Krasny
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Biotech, self-driving cars, and robotics? The Steel Belt city is the best-kept secret east of Silicon Valley.

STARTUP NEIGHBORHOODS

► The old factories and warehouses dotting the Allegheny River make up Robotics Row, where Edge Case Research—which, among other things, tests self-driving-car software—works out of 19th century stables.

► Boutiques and craft breweries have taken over Lawrenceville’s vacant storefronts in this once blue-collar neighborhood. Grab a coffee at Caffè d’Amore in Upper Lawrenceville on your way to RE2 Robotics, 4 a robotic arm manufacturer. Farther south, Toll Gate Revival sells reclaimed industrial objects near Uber’s Advanced Technologies.

► With more than 500 employees, Google’s 2 presence in Bakery Square, site of a former Nabisco factory, looms large in East Liberty. Startup accelerators AlphaLab and AlphaLab Gear reside here, as does language-learning app Duolingo, recently relocated from the Shadyside neighborhood.

WHO TO KNOW

You’re no entrepreneur until you’ve been hit by “a two-by-Frank,” Carnegie Mellon’s Mawhinney jokes, referring to Frank Demmler, 13 who takes credit for more than 500 companies, some 10,000 jobs, and $1 billion in investment capital. A managing director at Riverfront Ventures and a VP at Innovation Works, Demmler is a local startup whisperer.

Small businesses that create 25 new jobs or increase staff by at least 20 percent in three years receive a $1,000-per-job tax credit.

Source: Job Creation Tax Credit Program

In 2016, there was an 8% increase in VC funding for Pittsburgh companies, while VC funding dropped 32% nationally.

Source: Innovation Works and Ernst & Young

RED FLAGS

Poor Airline Access Direct flights 1 to the West Coast are rare, which deters some key venture capitalists from making the schlep.

Fewer Angels Initiatives like 99 Tartans and Innovation Works help facilitate seed investment, but they aren’t enough. The investor community isn’t as developed as those in Seattle or Austin. “We are talent rich and capital poor,” says Mawhinney, who warns, “We’ll reach a plateau if we don’t get risk capital.”

Rust Belt Bias Lack of awareness about the city is its biggest hurdle, says Chris Olsen, a Duolingo investor. “Once people show up, they tend to stay. But people are skeptical of the reputation that this is the Rust Belt.”

RECENTLY FUNDED STARTUPS

$1 BILLION Argo AI 11 (self-driving-car software)

$93 MILLION Petuum (enterprise A.I. software)

$25 MILLION Duolingo (language-learning app)

RECENT BIG EXITS

$400 MILLION Health care services provider CECity to Premier (2015)

$275 MILLION Robot-assisted surgery technology firm Blue Belt Technologies to Smith & Nephew (2015)

$40 MILLION Restaurant app maker Nowait to Yelp (2017)

WHO TO KNOW

A superconnector who’s watched “the hardware scene explode,” Ilana Diamond 7 has an eye for talent. As managing director of AlphaLab Gear—Innovation Works’ hardware startup accelerator—she mentored smart headset maker Maven Machines, ran consumer electronics company Sima Products for 16 years, and served on the board of the Consumer Technology Association, which hosts CES. “Pittsburgh has a huge edge in making physical products because we have the manufacturing expertise,” says Diamond, an asset to early-stage startups in the business of making things.

WHO TO KNOW

Dave Mawhinney 9 is connected to power players like Craig Markovitz, founder of Blue Belt Technologies, and Robb Myer, founder of Nowait. But before he joined Carnegie Mellon as executive director of the Swartz Center for Entrepreneurship and its Donald H. Jones Center for Entrepreneurship, he co-founded mSpoke, a content-recommendation engine acquired by LinkedIn in 2010.

More than $687M was invested in tech companies here in 2017.

Source: Innovation Works and Ernst & Young

COMPANIES TO WATCH

► After the autonomous car software startup Aurora Innovation (founded by Google, Uber, and Tesla veterans Sterling Anderson, Drew Bagnell, and Chris Urmson 3 ) was sued by Tesla last year for poaching at least a dozen engineers, the stealth startup raised $3.1 million (and paid an out-of-court settlement).

► CM grad Sophia Berman 10 found inspiration in the truss bridge—a heavy-load-bearing superstructure—for the Trusst Lingerie bra she co-created with 3-D technology for fuller-busted women, now backed by Innovation Works.

► With $96 million in funding, the founders of 4moms—roboticist Henry Thorne and venture capitalist Rob Daley—continue to put a high-tech spin on baby gear, including the MamaRoo, 6 an electronic infant seat that replicates a parent’s rocking movements.

TALENT PIPELINE

► Google, Uber, 14 Facebook, and Ford have outposts here, drawing tech talent from all over the country. A year after game designer Jack Tsai relocated from Los Angeles to work in Facebook’s new Oculus Research Lab, he co-founded his own Pittsburgh-based virtual reality studio, Stitchbridge, in 2016.

► Carnegie Mellon and the University of Pittsburgh churn out top talent in robotics, biotech, and computer engineering. Pitt’s Medical Center sets the bar for medical research, while CM’s Robotics Institute laid the groundwork for self-driving cars, prompting a 2015 talent war between Uber, Argo AI, and Aurora Innovation.

WHERE TO TALK SHOP

► Googlers flock to the Ace Hotel, housed in a former YMCA in East Liberty, for Fourth River Mules 12 and ping-pong. Split a family-style steak at the Ace’s Whitfield, the brainchild of Pittsburgh native Brent Young.

► Investors woo founders in Heinz Field’s 300 Level Suites at Steelers 8 games, though billionaire Thomas Tull’s owner’s box is the one to get. Weekday Penguins 8 games at the PPG Paints Arena are a cheaper alternative, where founders can gab over animal-free Impossible Burgers at Burgatory. 8

► Last year, Erin Gatz and Louise Larson 5 launched STEM makerspace Prototype in North Oakland, where “feminists of all genders” work on projects, network, and take workshops on laser cutting.

This was the No. 1 city in the U.S. for job openings in 2017.

Source: Glassdoor

ILLUSTRATION BY JAMES TAYLOR; SPREAD FROM LEFT: ISTOCK; COURTESY COMPANIES (7); GETTY; COURTESY COMPANY; GETTY; COURTESY COMPANIES (5); ISTOCK