Pittsburgh Mayor Bill Peduto speaks out on Duolingo IPO and Steel City’s appeal of venture capital – TechCrunch
Pittsburgh is known as Steel City, but these days the city is turning to startups rather than steel. Mayor Bill Peduto has led this charge since taking office in 2014. He recently spoke at TechCrunch’s City Spotlight: Pittsburgh, where he outlined the opportunities and challenges for entrepreneurs considering founding and operating. run their business in western Pennsylvania.
It’s a trend across the United States, as cities once again look to small businesses, such as tech startups, to reinvigorate and inspire themselves. But, as Peduto points out, there is a desperate need for more venture capital. The region is also struggling to retain and recruit talent, as echoed by CMU President Farnam Jahanian, who spoke at the same event.
Peduto stepped down in January 2022 after losing to Ed Gainey in his party’s main race.
The following is a transcript of the main topics covered in the interview. The questions and answers have been slightly modified.
What do you say to entrepreneurs who want to move to Pittsburgh?
I would say this first and foremost: find a city that can provide you with the talent to have a pipeline.
Andrew Carnegie settled along the banks of the rivers of Pittsburgh because he knew he could get iron ore from Minnesota and coal from West Virginia and use the river rails as a means of exporting his business. . So when creating and researching a city, look for where the talent is already located so you don’t have to worry about bringing the talent there.
Those shores are still there in Pittsburgh. But the real iron ore and coal today is called Carnegie Mellon University and the University of Pittsburgh. While we are producing all of these engineers and others, our goal is to create a city with the livability of a city where people would like to stay with a cost of living where people can own their own homes. And a city where it’s small enough that you can do something; where you don’t have to get caught up in the city’s bureaucracy, but it’s big enough for the world to notice.
What you will find is that these towns exist all over the country, but they are not on the coasts. Instead, it’s cities like Nashville, Charlotte, Austin, and Pittsburgh.
No one would deny that Pittsburgh has talent and roominess. It’s a beautiful city. I have been there several times myself and love it. But what is missing?
Part of the reason for this is a psychological belief that investors from the coast must move a business to the coast to ensure their success. What they are doing is increasing all the incremental costs that have nothing to do with its technology. They waste money on everything from rent to the cost of food. The belief that you must be physically located in California or New York City prompts many venture capitalists to look elsewhere when a big idea is being discussed.
Another part that is missing is the second critical phase of funding. Pittsburgh has become dependent on the creation of its economic development structure to be able to launch a large number of these startups. And I’m not just talking about angel investors. Companies are funded in different ways that we didn’t have just a few years ago for this crucial second round of funding. Entrepreneurs are absent. And investors and VCs miss being able to get into a Pittsburgh start-up after it starts. And without that second round of funding, a lot of these businesses are dying on the vine instead of reaching a critical point.
What do you say to entrepreneurs with a good idea and a good business but who have to leave because there is no venture capital funding?
This is the difficult part. Luis von Ahn of Duolingo had the opportunity, and probably a lot more money, to leave Pittsburgh than to stay in Pittsburgh and create his vision. He did it partly out of pride in being a part of this city. Part of the area that we have to catch up, when we are not able to match dollar for dollar, with another part of the country is coming back to that quality of life. It goes much further than just being able to afford a house. It is the real life that is given to you by choosing to live in this region. It is a better way of life for many people than they can find in saturated areas of the coast.
I am a stranger. And I’m not going to pretend I know Pittsburgh like a local reporter. I live just north of Detroit and I see a lot of parallels between Detroit and Pittsburgh, Columbus and Austin, Nashville and all these cities that emerge as startup hubs, but sometimes that growth feels like it’s not. than at the surface. What do you see in Pittsburgh that gives you hope that this growth will continue for years or decades to come?
It is that there is now a whole ecosystem around it. We didn’t have this 10 years ago. So someone who came to Pittsburgh to work at Google wouldn’t have the option of staying in Pittsburgh, of having a parallel advancement. And then to continue in a career that would allow them to have a very successful career without having to leave Pittsburgh. There is now a solid structure around clean technologies.
We are talking about renewable energy, which people are surprised when I say this, but there are more jobs in Allegheny County, where Pittsburgh is in the renewable energy field, than coal, gas and the combined oil. The energy industry has changed and in Pittsburgh – and with the Biden administration committed to investing in areas that would otherwise be left behind – this opportunity is here to take off. In each of these different sectors that I spoke about earlier, advanced manufacturing, robotics, and intelligent artificial life sciences, there is a broad domain instead of the targeted domain.
This is a big difference that I have observed. And luckily, I have participated for more than 30 years in its expansion. So what I would tell people, and why it’s different now, is that you don’t come to Pittsburgh to work a job anymore, then go and go somewhere else. People come to Pittsburgh and they stay there. They start their own businesses, or they find unlimited parallel advancement as they continue to climb the ranks.
Let’s finish on Duolingo. They have just submitted their case to be made public, and we had the chance to pre-record an interview with its director of engineering Karin Tsai before the period of silence. What are you hoping for with Duolingo’s IPO and how will that change Pittsburgh?
Well, first of all, personally, as a friend of Luis and watching him and his team grow exponentially. I couldn’t be prouder for him and to see this expansion happen – with the idea of expanding right here in Pittsburgh.
I think the first part is the recognition that comes from the tech industry itself – that a company of this size, a billion dollar company, can be born, grow and continue to grow as a company. public company in Pittsburgh.
Second, it brings the best talent to the city. Third, it is a company that is committed to making the world a better place, not only with its current technology that allows us to learn a language, but this company’s commitment to invest in education at all levels that will be fair and available. to anyone in the world, where education can be used to create a better society. It is something that makes every Pittsburgher proud.