Pittsburgh Mayor Invoice Peduto speaks about Duolingo’s IPO and attracting enterprise capital to Metal Metropolis – TechCrunch
https://techcrunch.com/2021/06/30/pittsburghs-locomation-puts-a-convoy-twist-on-autonomous-trucking/Pittsburgh is known as the Steel City, but these days the city is turning to startups instead of steel. Mayor Bill Peduto has led this role since taking office in 2014. He spoke recently at TechCrunch’s City Spotlight: Pittsburgh event where he outlined the opportunities and challenges for entrepreneurs considering starting and running their businesses in Western Pennsylvania .
This is a trend in the United States as cities turn to small businesses like tech startups again for renewal and inspiration. But, as Peduto points out, there is an urgent need for more venture capital. The region is also struggling to retain and recruit talent, as was CMU President Farnam Jahanian, who spoke at the same event.
Peduto is stepping down from office in January 2022 after losing to Ed Gainey in his party’s primary campaign.
Below is a transcript of the main topics discussed in the interview. The questions and answers were easily edited.
What do you say to entrepreneurs looking to move to Pittsburgh?
First of all, I would say: Find a city that can provide you with the talent to have a pipeline.
Andrew Carnegie settled on the banks of the Pittsburgh rivers knowing he could source iron ore from Minnesota and coal from West Virginia and use the rails in the rivers to export his business. So when creating and searching for a city, be careful with where the talents are already so you don’t have to worry about getting the talents to the place.
Those riversides are still here in Pittsburgh. But the real iron ore and coal are now called Carnegie Mellon University in the University of Pittsburgh. As we manufacture all of these and other engineers, our goal is to create a city with the quality of life of a city that people want to stay in for a price of living where people can own their own homes. And a city where it’s small enough to get something done; where you don’t have to get caught up in the city bureaucracy but are big enough to notice the world.
You will find that these cities exist across the country, but not on the coasts. Instead, it’s cities like Nashville, Charlotte, Austin, and Pittsburgh.
Nobody would deny that Pittsburgh has the talent and quality of life. It’s a beautiful city. I’ve been there a couple of times myself and I love it. But what is missing?
Part of this is the psychological belief that investors must move a company from the coast to the coast in order to guarantee their success. What they are doing is adding to all the additional costs that have nothing to do with the technology. You are wasting money on everything from renting to buying groceries. The belief that one must be physically located in California or New York drives many venture capitalists to look elsewhere when a great idea is discussed.
Another missing part is the critical second phase of funding. Pittsburgh relies on its economic development structure in place to get many of these startups off the ground. And I’m not just talking about angel investors. There are a number of different ways to fund businesses that we didn’t have a few years ago for this critical second wave of funding. There is a lack of entrepreneurs. And investors and VCs miss the opportunity to join an early-stage company in Pittsburgh after getting started. And without that second round of funding, many of these companies will die by the wayside instead of making it to a critical point.
What do you say to entrepreneurs with a great idea and good business who have to leave because there is no VC funding?
That’s the hard part. Luis von Ahn of Duolingo had the opportunity, and probably a lot more money, to leave Pittsburgh than to stay in Pittsburgh and achieve his vision. He did it partly because he was proud to be part of this city. Part of the area that we have to compensate for if we cannot keep up dollar for dollar with another part of the country is returning to this quality of life. It goes much further than just being able to afford a house. It is the real life that you will be given when you choose to live in this realm. It’s a better lifestyle for many people than in saturated coastal areas.
I’m an outsider. And I’m not going to pretend I know Pittsburgh like a local journalist. I live north of Detroit. And I see a lot of parallels between Detroit and Pittsburgh, Columbus and Austin, Nashville and all these cities that are becoming start-up hubs, but sometimes that growth just feels on the surface. In your opinion, what makes Pittsburgh hope that this growth will continue for years or decades?
It is so that there is a whole ecosystem around it now. We didn’t have that ten years ago. So someone who would come to Pittsburgh to work at Google would have no way of staying in Pittsburgh to get on in parallel. And then continue on a career path that will enable them to have a very successful career without leaving Pittsburgh. There is now a strong structure around cleantech.
We’re in renewable energy, which surprises people when I say this, but there are more jobs in Allegheny County, where Pittsburgh is in renewable energy, than coal, gas and oil combined. The energy industry has changed, and in Pittsburgh – and with the Biden government’s commitment to investing in areas that would otherwise lag behind – this is an opportunity to begin. In each of these different sectors that I talked about earlier, advanced manufacturing, robotics, and artificial smart life sciences, there is an expanded field instead of the focused field.
That’s a big difference that I’ve observed. Fortunately, I’ve been involved in the expansion for over 30 years. So what I would tell people, and why it is different now, is that you no longer come to Pittsburgh to do a job and then go and go somewhere else. People come to Pittsburgh and they stay. They start their own business or find unlimited parallel advancement as they continue to climb the ladder.
Let’s get to Duolingo. They just filed a public proposal and we were fortunate enough to have an interview with one of their directors before the quiet period. What are your hopes for Duolingo going public, and how will that change Pittsburgh?
Well, first of all personally, as a friend of Luis and watching him and his team expand exponentially. I couldn’t be more proud of him to see him expand – with the idea of developing right here in Pittsburgh.
I think the first part of it is the realization coming from the tech industry itself – that a company of this size, a billion dollar company, born as a public company in Pittsburgh, can grow and rise. Second, it brings top talent to the city. Third, it is a company that is committed to making the world a better place, not only through its current technology that enables us to learn a language, but also through that company’s commitment to a fair and available one Investing in education for everyone around the world where education can be used to create a better society. That makes everyone from Pittsburgh proud.