War Stories: Pittsburgh needs to quit talking to itself

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War Stories: Pittsburgh needs to quit talking to itself

Thursday, June 08, 2000

By Matt Miller, COO, Internet Venture Works

"Why Pittsburgh?"

I hear that a lot. And I am really tired of hearing it.

Matt Miller, COO, IVW

Since co-founding Internet Venture Works (with offices in Pittsburgh and Boston) we've been running an exciting, often frenzied race to build our business.

Ours is a unique strategy, focused on taking traditional brick-and-mortar (BAM) businesses and transforming them into new-economy companies -- what we call a dotBAM.

It's all typical Internet start-up stuff.

We've been raising money. We've been hiring extraordinary people who can help bring successful traditional businesses and brands online. We've been analyzing investment opportunities. We've been networking with analysts who offer connections to other strategic partners in the industry. All this while steering the course toward our goal of becoming the leader in transforming undervalued traditional companies into strong, New Economy businesses.

Internet Venture Works
IVW builds Internet Companies by bridging online opportunities with offline brands. Established in 1999 and headquartered in Boston with facilities in Pittsburgh, IVW works with investment firm J.W. Childs to identify strong traditional companies with big Internet potential that have not been fully realized.

In the last eight months of crisscrossing the U.S. networking, fundraising, recruiting and fact-finding, we've shopped our "Pittsburgh" company to a very diverse group of people who represent the New Economy.

We've met with heads of venture capital firms in Boston, CEOs of Internet start-ups in Silicon Valley, market analysts in Connecticut, senior partners and executives from investment banks and private equity firms in New York and potential employees and possible strategic partners in Chicago, Austin, Seattle, even Miami.

And almost without exception, each one of them, either tactfully in introductory small talk or directly, in the midst of a substantive exchange, pose the same question:

"This is great. But why are you guys in Pittsburgh?"

The first couple of times we encountered this genuine bewilderment, our co-founder, Rob Frasca, who has deep entrepreneurial roots in Pittsburgh, and I played it straight. We pulled out our quips and factoids on the fair city of Pittsburgh as an Internet Hub, tossing them out casually as if to say,

Why, you're not aware that western Pennsylvania is an emerging technology center? CMU... Marconi Communications (formerly Fore Systems)...Vitac...FreeMarkets. Heard of them? Well, then you've most definitely heard of Pittsburgh. Surely you've read about all of the initiatives that are underway to turn Pittsburgh into the new Silicon Valley?

And off we'd go.

This "you-must-not-be-in-the-tech-'know'-if-you-don't-know-Pittsburgh" strategy soon proved less than adequate.

We started to think maybe the outside world wasn't wrong after all. "Pittsburgh: Internet Hub?" You know, the new Pittsburgh we hear about from the mayor's public relations office, at Chamber of Commerce breakfasts and in the local media. The one that's serving up a bold, new breed of entrepreneur? Well, these people have never heard of that Pittsburgh.

In fact, they've heard very little about Pittsburgh at all. A great sports city maybe, but certainly not an Internet Hub.

Pittsburgh, it seems, may be talking to itself. It is entirely possible that there has been too much focus on the "internal" component of building a New Economy friendly environment and not enough on the external components.

It's not just the "internal" Pittsburgh process for helping new-economy businesses develop and survive that is important. Entrepreneurs do need to know how to exploit the help that is available and make it work. This can be difficult, I know. I spent several weeks just trying to get someone from the mayor's office to return my phone call. When I finally did get a call and a subsequent meeting, I was promised follow-up communication. I never heard from them again, and that was in January.

What is missing here is an external focus. Pittsburgh needs to be on the radar screen of the global New Economy. If entrepreneurs (and this translates into money and employees) are going to flock to Pittsburgh and flourish, we need to be recognized by the people and organizations that can make that happen. These include the major investment banks, analysts and venture funds, from across the country and around the world.

My advice to the entrepreneur:

If you can figure out how to get access, use every possible internal resource you can within Pittsburgh to help grow your business.

Do not think that this alone will put you on the map! In order to be really successful, you will need to make sure that you get "in front" of the significant players in the investment banking and venture funding industry.

My advice to Pittsburgh:

Don't kid yourself. When senior Managing Directors from Goldman Sachs, Merrill Lynch, Morgan Stanley, and CS First Boston all ask "Why Pittsburgh?" then the message is that we are not where we need to be. These are the organizations that provide funding for the New Economy, either directly or indirectly. It is funding that creates opportunity, hires people and builds businesses.

As a region, Pittsburgh needs to get these outside organizations to stop asking "Why Pittsburgh?" We need to spend a little less time talking to ourselves and more time talking about ourselves.

The pace and expectations of operating in the New Economy can be incredibly challenging, as many in Pittsburgh well know -- and I wouldn't trade that in for anything. I want to be part of something I believe to be vital and integral to our future. After all, building this company is something I want to tell my grandkids about someday.

I am proud that Internet Venture Works is one of Pittsburgh's finest. Here in Pittsburgh we have a unique tradition of entrepreneurship -- an upstart mentality rooted in success and solutions -- not process and status quo. Our success stories speak for themselves. Galt Technologies, Lycos, WiseWire, BeFree, the list goes on. And I believe that this same tradition is reflected in our own company culture and reinforced through all the local talent that has joined us to help build the IVW dream. It says a lot about our strong commitment to grow and develop and stay in a region that's so vital to our success.

Why Pittsburgh? Why not?

Earlier War Stories

Sanjay Chopra of Online Choice on finding investors sometimes means finding yourself.

Dave Nelsen of CoManage on the physical challenges of managing in the New Economy