Pittsburgh: The Unbalanced Startup Ecosystem
The commitment to personal introspection is one of the most difficult decisions one can make in their own life. Beyond highlighting the good points, the act itself forces you to examine the two sides of everything — whether it be the light vs. the dark, the good vs. the bad, and even the functioning vs. the dysfunctional. This process never truly has an ending point and often requires courage with the hope that once you see the entire picture, that there is a chance to make things better than they currently stand.
If you broaden the horizon a bit from personal introspection to community introspection, you’ll come to realize that the process is still relatively the same. Although, in this evaluation, you’re going beyond the realm of self control and into a dimension that has hundreds (if not thousands) of moving parts, personalities and resources. What comes out of the examination process has the potential to be confusing, frustrating, and sometimes hurtful.
In last week’s article (The Disappearance & Re-emergence of the Pittsburgh Startup Scene), I briefly mentioned that our city has had its own fair share of unresolved issues and limitations. And while most people would agree with this statement, very few arrive at the same conclusion as to what is our greatest obstruction might be. With the field in disagreement, I took a deeper dive into the place we call home and discovered an unfortunate truth:
The Pittsburgh Startup Ecosystem is severely unbalanced.
Before I go into the specifics on how and why this is, it is important to learn and understand the number of different players in a typical startup ecosystem along with how the pieces should come together.
The Players:
Entrepreneurs (E) — The pioneer, the risk-taker, and the leader of the entire ecosystem. Beyond trying to solve worldly issues and growing a profitable business, they attract every other player to the ecosystem.
Entrepreneurial Volunteers (EVs) — The ecosystem’s natural support layer for the entrepreneur. These individuals fill in the gaps within the community and are high functioning for short periods of time. They follow the entrepreneurial mindset, but often are spread across the region — from corporate or startup employees, freelancers, or even underemployed personnel looking for their next job. Groups of EVs can take the form of community organizations / resources.
Accelerators / Incubators (ACCI) — Private or non-profit programs that have been established for the startups that help them achieve their business goals in a shorter amount of time through the use of capital, mentorship, and even office space.
Capital Resources (CRs) — Any group or organization that has the potential to invest in the entrepreneurs. This can range from venture capital firms and angel investors all the way to foundations seeking to distribute grants.
Universities (UNI) — State or privately forms of higher education that not only helps students learn about entrepreneurship, but also assists and encourages them to take that leap of faith. Additionally, they also produce the first line of reinforcements for feeding new graduates into the entrepreneurial volunteer class.
Government (GOVT) — Any city, county, or state branch of government that may affect the future landscape of entrepreneurship in a given city. Although they are not depended on for any sort of micromanagement, they often try their best to support the entrepreneurs within their own realm of limitations.
When you pair all of these groups together in an ideal world, you’ll have an ecosystem that looks like this:

What do you notice about the above model?
- The entrepreneur is the center of the system with direct ties to every other player. They are able to form two-way streets with the accelerators / incubators, the capital resources, and feed from the universities, government, and the entrepreneurial volunteers.
- Other players within the system may have direct ties that do not involve the entrepreneur (hence the dotted lines). Depending on the initiative, time of year, and opportunities, many secondary parties could choose to work directly with each other.
For any ecosystem that has still yet to reach its full potential, the model might have a missing or diluted piece from this alignment, but the parties should fit within the system all the same.
I believe this model directly falls in line with Brad Feld’s Boulder Thesis, which beyond explaining the players, has four key components to it:
- Entrepreneurs must lead the startup community.
- The leaders must have a long-term commitment.
- The startup community must be inclusive of anyone who wants to participate in it.
- The startup community must have continual activities that engage the entire entrepreneurial stack.
When you combine the above model with the identified players, you have an ecosystem that can meet all the four components of the Boulder Thesis. And whether it is a 1,000 ft. view or a 100 ft. view, appropriate balance allows it to be self-sustaining.
The Pittsburgh Comparison
When we switch our attention from the ideal model to the current Pittsburgh model, you’ll notice that our ecosystem has grown in a different way. At the date of this publishing, our system looks like the following:

At first glance, you’ll notice that it has a unique alignment and that not all players are situated in their respective places to achieve balance. Part of the explanation of why this is can be attributed to the relative newness of modern entrepreneurship in Pittsburgh — but that doesn’t explain all of it.
The other half of the explanation is an incredibly uncomfortable fact:
Even with all of the resources we have in place, Pittsburgh has yet to prove that it is able to consistently produce high growth startups that go on to have appropriate exits, the result of which over time, will feed back into the ecosystem to create self-sustainability.
Keep in mind that this result didn’t come to the surface because of a lack of effort. Between the multiple initiatives from the University of Pittsburgh and Carnegie Mellon University, you’ll come to find that we’re fantastic at getting started down the road to entrepreneurship. Go beyond the two powerhouse universities and you’ll find at least a half dozen more colleges actively feeding our region new startups.
Yet despite having a solid foundation with education, we’ve mysteriously found ourselves without a generation of entrepreneurs that can now lead the pack. Anyone who was willing to be a pioneer in the field of entrepreneurship in the 1990’s or early 2000’s didn’t lead, they unfortunately left town for greener pastures — thus developing a system where the majority of the entrepreneurs within the scheme are 1st time entrepreneurs with limited experience who are unable to maintain equilibrium between building their own companies and community leadership.
And since this is the case, the structure of our ecosystem self adjusted in an oddball way:
- Without a robust pool of experienced entrepreneurs, this group moves from the center of the universe to being a secondary player until we’re able to acquire the missing generation.
- In an attempt compensate, the ecosystem places the entrepreneurial volunteers as the centerpiece instead. Since they are short-term high functioning, they can often handle the leadership responsibility & the weight of the community, but burn out quickly due to the fact they’re unpaid and they have no reasonable way to sustain their own system beyond donating their own capital (social, financial, and/or time).
- During the moments where the entrepreneurial volunteers disappear and are recovering from burnout, the next player that takes the center spot is the incubators and accelerators. And given the fact that they are already self sustaining due to private or state granted capital, they have the ability to take a strong hold on the entire system — controlling the educational programing, arrangements on any offered investment term sheet to the inexperienced entrepreneur, and loosely governing which startups should directly reach the capital resources. The primary success of the community now solely hinges on the ACCIs ability to secure wins for the ecosystem.
- Overall, the model is still able to function, expand, and strengthen but the side effect is that it creates a specific one-track maze that both entrepreneurial volunteers and entrepreneurs must follow in the hopes of achieving any type of success.
And how does this stack up against Feld’s Boulder Thesis components?
3. The startup community must be inclusive of anyone who wants to participate in it.
4. The startup community must have continual activities that engage the entire entrepreneurial stack.
We’re able to carry out half of them.
By now, if you’re still following the unbalanced premise, you may wonder if there is a need to point fingers. Under the assumption that Pittsburgh does have an unbalanced ecosystem, whose fault is it?
The short answer is that it’s everyone’s fault.
I’d bet that if you asked 100 different individuals on whom the primary source of blame should go on, you’d likely get a few dozen answers. The reality is that no one single source should carry the weight of past missteps.
The 2017 Pittsburgh Startup Ecosystem is the result of thousands of choices made along the way from multiple groups that likely extend back to the 1980’s. The act of raising our pitchforks, throwing tomatoes, or pushing individuals in the mud offers no tangible benefit to our city at all. It is far too easy to shoulder the blame on those around us, instead of taking a step back and figuring out the steps that it takes to solve the situation that we’re in. The good news, however, is that all hope is not lost. The possibility of Pittsburgh to readjust itself to a more stable model is within reach.
As for what it takes to move towards a more balanced ecosystem? Well, that is another conversation for another day.
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Thank you for reading! If you’d like to continue the discussion, work with me, or simply want to say hello, you can start the conversation by visiting my website.
