Pittsburgh startups, advocates may risk 'accelerator fatigue'

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Going into a boot camp held by East Liberty startup accelerator Thrill Mill last month, Mark Visco's business plan to use college students' online data to narrow their interests into career paths was already more than a year along.

However, just two weeks into the program, a few blunt words of advice convinced him to reassess his model in a way he said caused "drastic" improvement over the course of a weekend.

The changes were enough to help his company, MeshNet, win Thrill Mill's $25,000 Business Bout business plan competition and give Mr. Visco the financial muscle necessary to hire developers and go from concept to product.

The incubator was the ideal place for what he was trying to do, said Mr. Visco, who had been steered toward the boot camp through a co-organizer of a University of Pittsburgh startup event. "We are young, ambitious entrepreneurs looking to disrupt, which seems to go with Thrill Mill's energetic flavor," he said in an email statement.

In a city with more than a dozen private and public programs designed to kick-start business ideas or grow emerging startups to prosperity, entrepreneurs seeking guidance could find themselves in a head-spinning search for the right fit.

Conversely, incubator and accelerator programs seeking the best entrepreneurs for their models could get lost in an increasingly growing shuffle of organizations vying for the same pool of talent and investment dollars.

Among the 19 incubator or accelerator programs listed on LaunchPGH.com, an Urban Redevelopment Authority database of resources for Pittsburgh entrepreneurs, there's a sense of synergy, according to Thrill Mill founder Bobby Zappala.

After launching the incubator in 2013, Mr. Zappala said he and officials at South Side-based AlphaLab would often discuss companies they encountered that might fit better at each others' programs.

Thrill Mill's first pitch competition during September's Thrival Innovation and Music Festival featured only its own companies, but Mr. Zappala has invited all the city's incubator and accelerator programs to participate this year. Even the festival date was chosen to avoid running too close to AlphaLab's Demo Day, which draws investors from across the globe twice a year.

In his opinion, the more robust the offerings become at Thrival, the more the festival and the city's brand as an innovation center will grow.

"I think you need to consolidate opportunities to bring investors into the city, I don't think you need to be exclusive," said Mr. Zappala. "With Thrival, our goal is to continue to work with other incubators and give them a chance to promote companies and an opportunity to pitch to investors."

Mike Matesic, founder of Oakland-based Idea Foundry, said collaboration today doesn't exclude the chance of heated competition in the future.

Founded in 2002, Idea Foundry features accelerator programs and an Idea Transformation Fellowship program for businesses focused on entertainment and education technology, health care and life sciences, social enterprise, and initiatives surrounding water technology companies.

Companies are accepted to programs throughout the year and are assessed to determine whether their idea is the best fit as a startup that can receive up to $10,000 in financial aid, as a product ready for licensing or if entrepreneurs should go back to the drawing board. Companies determined to be "investable businesses" are steered toward the Idea Transformation Fellowship, where they receive hands-on assistance and are eligible for up to $100,000 in funding.

Mr. Matesic said it's not unusual for the organization to either steer ground-level entrepreneurs to incubators such as Thrill Mill or to work with a growing startup that has just graduated from South Side-based accelerator AlphaLab.

Still, spirit of cooperation aside, he said things could change quickly if the environment shifts to one with too many programs wooing the same investors.

"That's another problem with so much noise in the system. Every day there is a deal to be made, so why would you make an investment decision when there is another deal tomorrow? For companies waiting on an investment, that's a kiss of death," said Mr. Matesic.

Calling the concept "accelerator fatigue," Terri Glueck, AlphaLab director of community development and communications, said a proliferation of programs across the country has made it more critical than ever for Pittsburgh programs to clearly define their missions.

AlphaLab, a state-funded economic development initiative geared toward early-stage tech investments, introduced the AlphaLab Gear program specifically to promote robotics and hardware businesses. Although that program is currently one of less than 10 in the country, AlphaLab itself was one of the first of its kind when it was created in 1999. By 2012, there were an estimated 1,250 similar programs, according to the Athens, Ohio-based National Business Incubation Association.

The organization's challenge, said AlphaLab program manager Aaron Tainter, is to make sure each new class features businesses with strong models designed to resolve urgent concerns.

"We're not looking for similar verticals to what we already have ... we're looking for unique technologies attacking specific areas and working to affect big problems," he said.

For entrepreneurs, connecting with programs that provide aid outside of funding could be the best choice.

Downtown-based BHiveLab, an accelerator program spun out of ad agency Brunner three years ago, was an attempt to help employees commercialize digital marketing technologies created in-house. Today, outside companies are accepted to the program and receive technology platforms to build new products, office space, business mentorship and -- most important -- access to Brunner's roster of international clients.

Recognizing that some companies need only a few weeks of help while others require more than a year of assistance to get off the ground, chief digital officer Rick Gardinier said BHiveLab offers an option beyond the typical monthslong program.

"We wanted to make sure we cast a wider net and gave people opportunities to present ideas they couldn't present at other programs," Mr. Gardinier said.

Even as companies such as Brunner add to the mix of options, Mr. Matesic said the region remains in a sweet spot where the number of programs available fits the number of entrepreneurs needing services.

However, he said the concern going forward is that accelerator programs not outpace the number of innovators, and that incubators and accelerators find companies that will help them remain in business.

"My concern is in the next 10 years will we take what we have accomplished as a region and grow it to the next level without slipping," he said.


Deborah M. Todd: dtodd@post-gazette.com or 412-263-1652.

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