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Start-ups find favor in 'risk-averse' Pittsburgh
Sunday, August 07, 2005

On a good day, Hooman Radfar is staying in town.

Steve Mellon, Post-Gazette
Jason Putorti, foreground, is founder and CEO of Novaurora, a Downtown design, marketing and technology firm. With him are, from left, creative director Michael Capone, marketing director Ron Cygnarowicz, and senior designer Gerry Tonti.
Click photo for larger image.
The 25-year-old entrepreneur and Upper St. Clair native is among a small but growing group of young tech turks who are thumbing their noses at Pittsburgh's old-fogy reputation and trying to take advantage of the city's low-cost of living and close-knit networks to build start-up businesses. Every day -- even the good days -- are a challenge, Radfar concedes.

"We're trying to do something that is going to impact this area and this country in the longer term," said Radfar, the CEO of Clearspring Technologies, a three-man staff of 20-somethings camped behind computer screens and creating advanced software for the Internet. But, "It's very difficult to do something very forward-thinking in this area."

Pittsburgh isn't the Silicon Valley or Boston, established high-tech communities that embrace risk and new thinking and where venture capital is easier to come by. Though he's tempted by the coasts, says Radfar, a flip-flop wearing, Red Bull-drinking graduate of Carnegie Mellon University, for now he's staying put in Pittsburgh and has set up shop in a second-floor office above his father's Dormont medical practice.

He joins other young entrepreneurs such as Jason Putorti, 22, from Niskayuna, N.Y., the founder of Novaurora, a year-old marketing and tech-services firm Downtown. Mike Dickey, 26, a CMU dropout from Lancaster who sold his first company to an iGate Corp. subsidiary in 2000, recently landed $750,000 of private capital for his second start-up, Downtown-based BeatBox Technologies.

Cousins Sarah Madia, 29, and Molly Wetmore, 30, founded Peek-a-Baby, a Web-based day care monitoring system, last year in Pine with Wetmore's husband, Ryan, 32, and their friend Ken York, 29. It's hard, they say, but they can't imagine launching a company anywhere else.

In a city that for years has been wringing its hands over a brain drain and trying to devise ways to lure and keep young professionals, some observers say grooming young tech whizzes and their blooming companies is a step in the right direction.

At Innovation Works in Hazelwood, a nonprofit that nurtures tech start-ups, about 25 percent of CEOs under its wing are 35 and younger, according to spokeswoman Terri Glueck. At another tech incubator, the Oakland-based Idea Foundry that focuses on companies still in the "idea" stage, 50 percent of its company chiefs are under 35.

Among that group, 80 percent are in their 20s, said Michael Matesic, the Idea Foundry's managing director.

For the younger entrepreneurs in their first start-up company, a big city that thinks and acts liken a small town can be both a help and a hindrance.

In some cases, the local community has opened its arms and wallets. One example is the North Side-based biotech firm ClearCount Medical Solutions, which reportedly has been quietly raising money from private and public sources. Another is College Prowler, the Oakland-based college guide book service founded by 25-year-old Luke Skurman: it received $500,000 from retired FreeMarkets Inc. executive Glen Meakem. Skurman also is a CMU graduate.

In Pittsburgh, big money is harder to come by than business mentoring from successful entrepreneurs, Matesic said.

"Pittsburgh's a small town," he said, noting the large numbers of fledgling companies in more established tech hubs such as Silicon Valley. "We don't have 1,000 of them a day, and [here] they'll get the attention that they might not get in other cities."

Still, Matesic acknowledged, the same people who are willing to advise don't necessarily want to part with their money -- especially to a 20-something with big ideas. In Silicon Valley or Boston, he said, "They want them to be young."

Exactly, noted Radfar, who laments that Pittsburgh was "behind the curve," particularly its excitement for the unknown.

The past few months have been crazy for Radfar and Austin Fath, 25, Clearspring's chief technology officer. The pair have been zipping back and forth between Pittsburgh and the West Coast, taking in the Silicon Valley scene, talking to investors, meeting with researchers and other tech veterans, and getting advice on how they should forge ahead. That's a very different culture, Radfar said.

"You're in a risk-averse area here," he said. "There, the community is far more adventurous."

Jason Putorti, 22, disagrees. He tried Manhattan and found it overwhelming. Pittsburgh's coziness brought him back to launch Novaurora.

"It's the big fish in a small pond thing," Putorti said of his time studying and working in New York City. "There are a lot of talented kids. I didn't know where to get started."

After a stint working at College Prowler, Putorti founded Novaurora. Instead of the back-biting, cutthroat, competitive environment he expected, some of his competitors "just wanted to help." He points to a partnership with large Downtown advertising firm Giant Ideas and its founder and CEO, Bryan Ward.

"Bryan Ward is an entrepreneur and recognized the spirit in me," Putorti said.

Housed in sleek, minimalist offices in what Putorti calls the city's "creative quadrant," Downtown, Novaurora survives on revenue from customers such as the Sewickley Spa and Blattner Brunner and has no plans to seek money from outside investors.

"The cost of living is lower, the cost of doing business is lower, I was just able to leverage my clients and just go here," Putorti said.

Radfar also has been blessed with good advice and values the investments from the Idea Foundry. He said he also has applied to other local economic development groups for assistance, though he believes that the existing support system is overworked. "It's part of our business strategy to stay local," Radfar said. Pittsburgh "was at one point the epicenter of commerce, up until the 1980s," he added.

From the entrepreneur-focused centers and programs at local universities to company-building groups such as Innovation Works and the Pittsburgh Digital and Life Sciences Greenhouses, mentoring programs and self-organized support groups are local life jackets for budding business owners.

Radfar is an active member and advocate for Helping Entrepreneurs to Learn from Peers, also called HELP. Last month he joined a small contingent of start-up heads to pitch the Allegheny Conference on Community Development on how it could better assist growing companies.

But Sarah Madia and Molly Wetmore say Pittsburgh offers them more than enough support. Their biggest worry is setting a launch date for their new company, Peek-a-Baby. It's been pushed back to sometime in the fall as they work out technical kinks.

There was never a thought for these native Pittsburghers to build a company anywhere else. "It's an interesting place," said Wetmore. "With so many technical things -- it's an untapped market."

Plus, Wetmore added, she loves the North Hills and she is near her family, which has formed a network of investors for Peek-a-Baby. And even before its official launch, the start-up is rounding up customers the old-fashioned way -- by word of mouth.

At Clearspring, Radfar also is using his local connections to find customers for Clearspring's software. "I'm a Pittsburgh native and CMU grad, and I've gotten a lot out of the city," Radfar said. "We're willing to give it a shot."

First published on August 7, 2005 at 12:00 am
Corilyn Shropshire can be reached at cshropshire@post-gazette.com or 412-263-1413.