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April 2016  
  
 _(This is a talk I gave at an event called Opt412 in Pittsburgh. Much of it
will apply to other towns. But not all, because as I say in the talk,
Pittsburgh has some important advantages over most would-be startup hubs.)_  
  
What would it take to make Pittsburgh into a startup hub, like Silicon Valley?
I understand Pittsburgh pretty well, because I grew up here, in Monroeville.
And I understand Silicon Valley pretty well because that's where I live now.
Could you get that kind of startup ecosystem going here?  
  
When I agreed to speak here, I didn't think I'd be able to give a very
optimistic talk. I thought I'd be talking about what Pittsburgh could do to
become a startup hub, very much in the subjunctive. Instead I'm going to talk
about what Pittsburgh can do.  
  
What changed my mind was an article I read in, of all places, the _New York
Times_ food section. The title was "_Pittsburgh's Youth-Driven Food Boom_." To
most people that might not even sound interesting, let alone something related
to startups. But it was electrifying to me to read that title. I don't think I
could pick a more promising one if I tried. And when I read the article I got
even more excited. It said "people ages 25 to 29 now make up 7.6 percent of
all residents, up from 7 percent about a decade ago." Wow, I thought,
Pittsburgh could be the next Portland. It could become the cool place all the
people in their twenties want to go live.  
  
When I got here a couple days ago, I could feel the difference. I lived here
from 1968 to 1984. I didn't realize it at the time, but during that whole
period the city was in free fall. On top of the flight to the suburbs that
happened everywhere, the steel and nuclear businesses were both dying. Boy are
things different now. It's not just that downtown seems a lot more prosperous.
There is an energy here that was not here when I was a kid.  
  
When I was a kid, this was a place young people left. Now it's a place that
attracts them.  
  
What does that have to do with startups? Startups are made of people, and the
average age of the people in a typical startup is right in that 25 to 29
bracket.  
  
I've seen how powerful it is for a city to have those people. Five years ago
they shifted the center of gravity of Silicon Valley from the peninsula to San
Francisco. Google and Facebook are on the peninsula, but the next generation
of big winners are all in SF. The reason the center of gravity shifted was the
talent war, for programmers especially. Most 25 to 29 year olds want to live
in the city, not down in the boring suburbs. So whether they like it or not,
founders know they have to be in the city. I know multiple founders who would
have preferred to live down in the Valley proper, but who made themselves move
to SF because they knew otherwise they'd lose the talent war.  
  
So being a magnet for people in their twenties is a very promising thing to
be. It's hard to imagine a place becoming a startup hub without also being
that. When I read that statistic about the increasing percentage of 25 to 29
year olds, I had exactly the same feeling of excitement I get when I see a
startup's graphs start to creep upward off the x axis.  
  
Nationally the percentage of 25 to 29 year olds is 6.8%. That means you're .8%
ahead. The population is 306,000, so we're talking about a surplus of about
2500 people. That's the population of a small town, and that's just the
surplus. So you have a toehold. Now you just have to expand it.  
  
And though "youth-driven food boom" may sound frivolous, it is anything but.
Restaurants and cafes are a big part of the personality of a city. Imagine
walking down a street in Paris. What are you walking past? Little restaurants
and cafes. Imagine driving through some depressing random exurb. What are you
driving past? Starbucks and McDonalds and Pizza Hut. As Gertrude Stein said,
there is no there there. You could be anywhere.  
  
These independent restaurants and cafes are not just feeding people. They're
making there be a there here.  
  
So here is my first concrete recommendation for turning Pittsburgh into the
next Silicon Valley: do everything you can to encourage this youth-driven food
boom. What could the city do? Treat the people starting these little
restaurants and cafes as your users, and go ask them what they want. I can
guess at least one thing they might want: a fast permit process. San Francisco
has left you a huge amount of room to beat them in that department.  
  
I know restaurants aren't the prime mover though. The prime mover, as the
Times article said, is cheap housing. That's a big advantage. But that phrase
"cheap housing" is a bit misleading. There are plenty of places that are
cheaper. What's special about Pittsburgh is not that it's cheap, but that it's
a cheap place you'd actually want to live.  
  
Part of that is the buildings themselves. I realized a long time ago, back
when I was a poor twenty-something myself, that the best deals were places
that had once been rich, and then became poor. If a place has always been
rich, it's nice but too expensive. If a place has always been poor, it's cheap
but grim. But if a place was once rich and then got poor, you can find palaces
for cheap. And that's what's bringing people here. When Pittsburgh was rich, a
hundred years ago, the people who lived here built big solid buildings. Not
always in the best taste, but definitely solid. So here is another piece of
advice for becoming a startup hub: don't destroy the buildings that are
bringing people here. When cities are on the way back up, like Pittsburgh is
now, developers race to tear down the old buildings. Don't let that happen.
Focus on historic preservation. Big real estate development projects are not
what's bringing the twenty-somethings here. They're the opposite of the new
restaurants and cafes; they subtract personality from the city.  
  
The empirical evidence suggests you cannot be too strict about historic
preservation. The tougher cities are about it, the better they seem to do.  
  
But the appeal of Pittsburgh is not just the buildings themselves. It's the
neighborhoods they're in. Like San Francisco and New York, Pittsburgh is
fortunate in being a pre-car city. It's not too spread out. Because those 25
to 29 year olds do not like driving. They prefer walking, or bicycling, or
taking public transport. If you've been to San Francisco recently you can't
help noticing the huge number of bicyclists. And this is not just a fad that
the twenty-somethings have adopted. In this respect they have discovered a
better way to live. The beards will go, but not the bikes. Cities where you
can get around without driving are just better period. So I would suggest you
do everything you can to capitalize on this. As with historic preservation, it
seems impossible to go too far.  
  
Why not make Pittsburgh the most bicycle and pedestrian friendly city in the
country? See if you can go so far that you make San Francisco seem backward by
comparison. If you do, it's very unlikely you'll regret it. The city will seem
like a paradise to the young people you want to attract. If they do leave to
get jobs elsewhere, it will be with regret at leaving behind such a place. And
what's the downside? Can you imagine a headline "City ruined by becoming too
bicycle-friendly?" It just doesn't happen.  
  
So suppose cool old neighborhoods and cool little restaurants make this the
next Portland. Will that be enough? It will put you in a way better position
than Portland itself, because Pittsburgh has something Portland lacks: a
first-rate research university. CMU plus little cafes means you have more than
hipsters drinking lattes. It means you have hipsters drinking lattes while
talking about distributed systems. Now you're getting really close to San
Francisco.  
  
In fact you're better off than San Francisco in one way, because CMU is
downtown, but Stanford and Berkeley are out in the suburbs.  
  
What can CMU do to help Pittsburgh become a startup hub? Be an even better
research university. CMU is one of the best universities in the world, but
imagine what things would be like if it were the very best, and everyone knew
it. There are a lot of ambitious people who must go to the best place,
wherever it is. If CMU were it, they would all come here. There would be kids
in Kazakhstan dreaming of one day living in Pittsburgh.  
  
Being that kind of talent magnet is the most important contribution
universities can make toward making their city a startup hub. In fact it is
practically the only contribution they can make.  
  
But wait, shouldn't universities be setting up programs with words like
"innovation" and "entrepreneurship" in their names? No, they should not. These
kind of things almost always turn out to be disappointments. They're pursuing
the wrong targets. The way to get innovation is not to aim for innovation but
to aim for something more specific, like better batteries or better 3D
printing. And the way to learn about entrepreneurship is to do it, which you
_can't in school_.  
  
I know it may disappoint some administrators to hear that the best thing a
university can do to encourage startups is to be a great university. It's like
telling people who want to lose weight that the way to do it is to eat less.  
  
But if you want to know where startups come from, look at the empirical
evidence. Look at the histories of the most successful startups, and you'll
find they grow organically out of a couple of founders building something that
starts as an interesting side project. Universities are great at bringing
together founders, but beyond that the best thing they can do is get out of
the way. For example, by not claiming ownership of "intellectual property"
that students and faculty develop, and by having liberal rules about deferred
admission and leaves of absence.  
  
In fact, one of the most effective things a university could do to encourage
startups is an elaborate form of getting out of the way invented by Harvard.
Harvard used to have exams for the fall semester after Christmas. At the
beginning of January they had something called "Reading Period" when you were
supposed to be studying for exams. And Microsoft and Facebook have something
in common that few people realize: they were both started during Reading
Period. It's the perfect situation for producing the sort of side projects
that turn into startups. The students are all on campus, but they don't have
to do anything because they're supposed to be studying for exams.  
  
Harvard may have closed this window, because a few years ago they moved exams
before Christmas and shortened reading period from 11 days to 7. But if a
university really wanted to help its students start startups, the empirical
evidence, weighted by market cap, suggests the best thing they can do is
literally nothing.  
  
The culture of Pittsburgh is another of its strengths. It seems like a city
has to be socially liberal to be a startup hub, and it's pretty clear why. A
city has to tolerate strangeness to be a home for startups, because startups
are so strange. And you can't choose to allow just the forms of strangeness
that will turn into big startups, because they're all intermingled. You have
to tolerate all strangeness.  
  
That immediately rules out _big chunks of the US_. I'm optimistic it doesn't
rule out Pittsburgh. One of the things I remember from growing up here, though
I didn't realize at the time that there was anything unusual about it, is how
well people got along. I'm still not sure why. Maybe one reason was that
everyone felt like an immigrant. When I was a kid in Monroeville, people
didn't call themselves American. They called themselves Italian or Serbian or
Ukranian. Just imagine what it must have been like here a hundred years ago,
when people were pouring in from twenty different countries. Tolerance was the
only option.  
  
What I remember about the culture of Pittsburgh is that it was both tolerant
and pragmatic. That's how I'd describe the culture of Silicon Valley too. And
it's not a coincidence, because Pittsburgh was the Silicon Valley of its time.
This was a city where people built new things. And while the things people
build have changed, the spirit you need to do that kind of work is the same.  
  
So although an influx of latte-swilling hipsters may be annoying in some ways,
I would go out of my way to encourage them. And more generally to tolerate
strangeness, even unto the degree wacko Californians do. For Pittsburgh that
is a conservative choice: it's a return to the city's roots.  
  
Unfortunately I saved the toughest part for last. There is one more thing you
need to be a startup hub, and Pittsburgh hasn't got it: investors. Silicon
Valley has a big investor community because it's had 50 years to grow one. New
York has a big investor community because it's full of people who like money a
lot and are quick to notice new ways to get it. But Pittsburgh has neither of
these. And the cheap housing that draws other people here has no effect on
investors.  
  
If an investor community grows up here, it will happen the same way it did in
Silicon Valley: slowly and organically. So I would not bet on having a big
investor community in the short term. But fortunately there are three trends
that make that less necessary than it used to be. One is that startups are
increasingly cheap to start, so you just don't need as much outside money as
you used to. The second is that thanks to things like Kickstarter, a startup
can get to revenue faster. You can put something on Kickstarter from anywhere.
The third is programs like Y Combinator. A startup from anywhere in the world
can go to YC for 3 months, pick up funding, and then return home if they want.  
  
My advice is to make Pittsburgh a great place for startups, and gradually more
of them will stick. Some of those will succeed; some of their founders will
become investors; and still more startups will stick.  
  
This is not a fast path to becoming a startup hub. But it is at least a path,
which is something few other cities have. And it's not as if you have to make
painful sacrifices in the meantime. Think about what I've suggested you should
do. Encourage local restaurants, save old buildings, take advantage of
density, make CMU the best, promote tolerance. These are the things that make
Pittsburgh good to live in now. All I'm saying is that you should do even more
of them.  
  
And that's an encouraging thought. If Pittsburgh's path to becoming a startup
hub is to be even more itself, then it has a good chance of succeeding. In
fact it probably has the best chance of any city its size. It will take some
effort, and a lot of time, but if any city can do it, Pittsburgh can.  
  
  
  
  
  
  
  
**Thanks** to Charlie Cheever and Jessica Livingston for reading drafts of
this, and to Meg Cheever for organizing Opt412 and inviting me to speak.  
  
  
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