StartUptown's organic magic for rising companies
Dale McNutt in his office Uptown in a section of a former Elks Lodge, which he developed into space for business startups.
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In 2006, Dale and Jeanne McNutt downsized their graphic design business so drastically that it was just the two of them in a 12,000-square-foot building at 1936 Fifth Ave., Uptown.
Ms. McNutt had already become active in the Uptown Community Action Group; her husband began looking for tenants.
What a difference six years make.
Today, their site is the headquarters of StartUptown, an incubator and shared workspace nonprofit that houses nine startup companies in the neighborhood that lies strategically between Oakland and Downtown.
Mr. McNutt said he "could fill three spaces this size right now" with startups that need crannies and month-to-month rents. At the junction of that demand is his desire to help fill Uptown with young workers. StartUptown is home to as many as 40 to 45 workers on any given day.
The "co-working" space is about the size of a professional basketball court. A loft runs the length of one side, and 10-foot-tall windows line the other. Work space is separated by shelving filled with acrylic paints, books, artifacts and art. Abstract snippets of conversation rise and fall in a surprisingly quiet environment.
Masks hang on the walls, plants sit atop pieces of architecture and door-sized panels covered in refrigerator art lean against the floor of the loft. There's a shared copier, but that's about the only thing this space has in common with the typical office.
Les Gies, StartUptown's website designer who also has outside clients, said the co-working atmosphere is "an organic magic of fields colliding."
"There might be a conference call in the kitchen," said Joel Reed, vice president of business development for the Oakland-based Pittsburgh Technology Council.
"And someone on the phone will ask, 'Is that a dog barking?' " said Luke Panza, director of marketing for NoWait, a company that designed a computer application for restaurants to manage waiting lists and text customers when their table is ready.
Near NoWait's work space is a couch that the McNutts' chocolate standard poodle, Jersey, sometimes lounges on. "And we have a soup kitchen across the street," Mr. Panza said. "You would not have these things in a Cranberry office park."
Within the next few months, StartUptown is expected to expand into the former Paramount Studio Film Exchange, an 8,500-square-foot building on the Boulevard of the Allies. It is a project of the Upstart Collaborative, a development venture of Mr. McNutt; Rick Schweikert, who sold the buidling to Alexander Denmarsh, a photographer; Bernie Lynch, a development specialist and a principal with Strategic Development Solutions; and architect Page Thomas.
The group is negotiating to buy a third and fourth building in the vicinity.
"We're serious about building a campus in Uptown," Mr. McNutt said. "We think we can create an ecosystem of startups."
In the spring, the StartUptown received a $250,000 grant from the county to renovate the Paramount. Its long-range plans are to develop a 12-building campus for co-working startups in social innovation and technology.
So far, StartUptown has nurtured 19 startups, some of which have grown enough to spin off. One, CareerImp, was recently bought for $3 million by the Professional Diversity Network in Chicago.
"A success story, but our loss," Mr. McNutt said. "Our mission is to retain these startups for a longer time to contribute to the support" of new ones.
NoWait has no intention of leaving after just getting $2 million worth of good news, in the form of a venture capital investment by the local firm Birchmere Ventures.
"StartUptown is our headquarters. We really like the community here," said Robb Myer, NoWait's CEO. "This investment just helps us expand rapidly and get into more markets. We have 30 restaurants in Pittsburgh but hundreds of restaurants all over the U.S. and Canada."
Mr. Panza said he thinks social innovation entrepreneurs can grow to become the educated equivalent for Pittsburgh's future that steelworkers were for its past.
During most of the 20 years when the McNutts had graphic design employees in their building, Uptown had no cachet and many people weren't comfortable working there, Mr. McNutt said. The neighborhood was and still is largely industrial, long on parking lots and pocked by blight.
But innovation entrepreneurs are by nature less daunted, he said.
Because of its location and potential, the McNutts committed their lives to Uptown when they bought their building in 2002. They renovated part of it to live in. The original part of the brick structure was a house. An addition was built by an Elks Lodge. The building has also been a funeral home, a film production company and a chiropractic college in its 100-plus years.
Ms. McNutt is now the executive director of Uptown Partners, a community development and advocacy nonprofit.
Uptown's fortunes are reversing in part because of investments like theirs. New housing in the former Fifth Avenue High School and the Shanahan building, and expectation of development around the Consol Energy Center are transitions that will make even more enticing the prospect of being between Oakland and Downtown, said Carolina Pais-Barreto Beyers, vice president of Urban Innovation 21.
UI 21 -- a nonprofit with offices in the Hill District -- grew out of the Keystone Innovation Zone, a state designation with funding to nurture technology businesses that locate near universities. UI 21's mission is to connect people to opportunities they wouldn't otherwise have, said its president, Bill Generett.
"The KIZ was started to help tech companies," he said, "but one of the things we work to do is make sure it also creates benefits for the community at large."
UI 21 anticipates providing 80 paid internships to small businesses in the innovation zone this year. It draws from Carlow University, the Community College of Allegheny County, Duquesne University and Point Park University. Approximately half of the student interns are black and 60 percent are women, Ms. Beyers said.
In the past three years, StartUptown companies have had 19 interns, received $142,000 in grants through the Keystone Innovation Zone and $121,000 in tax credits. A startup with tax credits can sell them to a big company and get cash to expand.
"The innovation economy is our story," Ms. Beyers, a Start Uptown board member, said. "It creates synergy. It drives economic growth. As we bring density of this kind of employment, pretty soon we will see more auxiliary businesses" such as cafes, dry cleaners and markets.
Key to this business growth strategy is a co-working environment like the one at StartUptown. Co-working density is a way to build business without high startup costs, Mr. Reed said.
Some startups consist of two guys with laptops, he said. "They need spaces that fit their budgets. Co-working also helps accelerate ideas, and it can accelerate the tech community here to be as vibrant as in other regions."
The McNutts' building became a co-working incubator by default.
They found the first tenants through a project of the Sprout Fund, a Garfield nonprofit that supports artistic and environmental projects. The owners of Nocturnal, a business that promotes and supports the underground arts' scene, were looking for a home "and we said, 'yes,' " he said.
Then came Nick Pinkston, founder of startups that include Hack Pittsburgh, a membership collaborative of do-it-yourselfers who share skills through workshops. Hack Pittsburgh remains at StartUptown, and Mr. Pinkston -- who now works in San Francisco -- remains on its board.
"Nick stumbling in was how it all blossomed," Mr. McNutt said. "He was here for about two and a half years, and in that time we filled up the place."
Ms. Lynch said she was enthused to learn about the plans for a campus, "which is why I got involved, to help get funding" for the Paramount's renovation. "But by November, I had moved in" as a tenant.
"I fell in love with what Dale's been able to create here. It's a multisector mash-up of people who wouldn't otherwise be together. I've always believed that the distance between Oakland and Downtown should be really special."
First Published September 2, 2012 12:00 am