Innovating To Support Entrepreneurs

By Rich Lunak, IW CEO

In a recent meeting with one of the founders Innovation Works (IW) supports, I was asked “What’s new at Innovation Works?” When I described several new initiatives we’ve been working on this past year, the founder seemed surprised at the level of activity and scope of our work. As I thought about this reaction, I realized that in IW’s efforts to focus media attention and stories on the region’s startups, we have likely under-promoted our own efforts to support the region’s startup community. This is an effort to share more details about our ongoing efforts to advance the southwestern Pennsylvania startup community and highlight what we’ve been working on.

I try to lead the IW team in the same fashion as the tech companies my co-founder and I successfully scaled. As a group of ex-entrepreneurs, investors, and tech operations execs, the IW team applies the same values around being “agile” and “innovative” as we espouse to the startups we support. By my estimation, the IW team has conceptualized, tested, and launched approximately 25 major programs/initiatives in the past 15 years. These are similar to launching new products/services in a startup in many ways — requiring us to test these concepts with our target audience, iterate the ideas, and raise the funding needed to support the initiative. We’ve raised around $50 million to launch and support these unique programs — all during a period when the state ultimately cut IW’s primary funding stream in half, which makes our efforts all the more remarkable. (Please note that these funding reductions occurred around a decade ago, prior to the current leadership in Harrisburg.)

The attached graphic shows a list of some of the major programs we’ve launched over the years. These include programs ranging from AlphaLab and Startable to Riverfront Ventures and the International Hardware Cup.

So this brings me to what we’ve been up to in 2020–2021. Here is a brief description of some of the major projects we launched this past year — while shifting our programs to operate virtually and struggling with the same pandemic-related issues that all businesses faced.

• In collaboration with Allegheny Health Network, we established AlphaLab Health, a healthcare and life sciences accelerator that supports early-stage tech startups in their efforts to bring innovations to market and navigate key risk points of scientific, clinical, and commercial development. This initiative is important for several reasons: it engages a large diversified healthcare company to work with startups, it helps to rejuvenate Suburban General Hospital and the Bellevue community, and it can fill critical missing gaps the region’s life science startup community. This program was more than 3 years in planning and secured more than $5 million from partner organizations.
• IW, the state and a regional foundation stepped up to support our region’s vulnerable early-stage technology companies get through this pandemic. IW’s COVID Resiliency Fund helped catalyze critical funding rounds necessary for companies to avoid employee lay-offs, continue important research and development programs, and extend their cash runways. In four months, IW invested $2 million into 49 companies — nearly a year’s worth of seed investments were made in such a short period of time. This was done while keeping all other programs in full swing.
• In 2020, we formalized more than a decade’s efforts on diversity, equity and inclusion and launched our On-Ramps to Entrepreneurship effort. This included the launch of a formal surveying process, giving companies the opportunity to anonymously provide demographics about their founders, owners, and leaders. From those responses, we found that 60% of IW’s investments over the last 10 years have gone to startups with a founder or leader who is a woman and/or person of color. By asking our company leaders to share how they identify, IW gained valuable insights into who we are supporting now and how we can best ensure our programs are accessible to entrepreneurs from every background far into the future. We also identified challenges women and people of color experience when pursuing tech and entrepreneurial endeavors and combined both existing and new efforts to help address these gaps. Over the coming years, we think these efforts will help to make Pittsburgh’s entrepreneurial community more equitable and inclusive.
• From programs to develop teen entrepreneurs (Startable) to help for innovative manufacturers (Scalable), we shook up and revamped our programs at every level of entrepreneurship to make the tools of innovation accessible to every facet of the southwestern PA community.

This is not an exhaustive list, but it does highlight some of the more substantive initiatives we’ve been busy launching this past year. We’ll continue to experiment and find ways to improve. For example, in 2021 we’ve already launched a new reverse pitch investor event to experiment with better ways to connect startups to funders. The first iteration involved 23 VCs that recorded video pitches and generated 46 investor introductions to our portfolio companies.

IW is not an organization that’s standing still — it’s dynamic and constantly looking for ways to have a greater impact on the companies we serve and help Pittsburgh’s innovation ecosystem accelerate. Not everything we try succeeds, but we’re always looking for ways to meet the needs of the founders we’re privileged to serve. As we always say: we succeed when our partners succeed.

Best regards,

Rich