The Blog of Burgher Jon

I’ve had a couple questions on whether I saw the article in the Post-Gazette from Monday.  Yes, I have.  In the article P-G writer Erich Schwartzel paints a picture of a city that can spin up start-ups (he credits the universities and Innovation Works/AlphaLab for this, but then can’t hang on to those startups.  These firms escape to the “coasts” (predominantly the left one) to get funding.  Schwartzel mentions recent Kleiner Perkins portfolio company Lockerz as an example of a company that moved to be nearer to VC funding.

The article is, I think, a valuable read if you are not familiar with how tech companies mature, but love Pittsburgh and want to know about a problem that we are facing.  If you are familiar with the way technology companies mature, you may find much of the article painfully obvious.  I would humbly submit that a better place to start would be a few old posts on what makes up a startup ecosystem (posted below).  Once we have a better understanding of Pittsburgh’s startup ecosystem we can identify the things that we do well and publicize them / find companies that can leverage them.  It’s also from this position of understanding that we can identify the things we do poorly (which includes finding local growth-phase VCs) and focus on doing them better / luring companies that do them well to Pittsburgh.

• Recapping and Learning From the NYC Startup Ecosystem Debate – In late April / Early March there was a discussion amongst several bloggers in / around NYC about how the NYC startup ecosystem compared to the Silicon Valley system.  I took the opportunity of this post to look at WHAT people were arguing about and determine how an ecosystem could be evaluated.
• A Thesis on Creating a Startup Ecosystem Report Card – I proposed an actual report card for evaluating a startup ecosystem.  Someday when I have the time (or if someone else does I’d be happy to support it), I’d love to build a Wiki that kept track of Pittsburgh’s most valuable resources in each category and also a running score (driven by a public vote).  I think this would be valuable to the Pittsburgh ecosystem.  Realistically though, I won’t be in a position to do it for a while, since I am not presently spending most of my time in the Burgh.
• LA Startup Scene On the Move – This is a look at another non-Silicon Valley startup ecosystem that has been growing and maturing.  I (similarly to the NYC post) used the opportunity to look at what people consider important in an ecosystem.

Bram has a fantastic post over on the comet on the apparent thoroughness with which Luke is approaching leasing the parking garages.  It’s good to see, its a decision that Pittsburgh will be living with for the rest of its life.  I’m not going to spend a bunch of time going through the details (mostly because I don’t know them), Bram’s your guy for that.  Conceptually though, leasing the parking garages has 3 primary benefits:

1. It ties city revenues to a business model instead of a taxation model.  If parking rates are going to be raised (and the next two points have to do with that), then it should be a corporation that does it.  Corporations have experience in identifying and valuing a market, governments do not.  A corporation will be able to do the appropriate market research to determine which garages and parking areas can sustain what levels of price increase.
2. Raising rates will create fair competition with PAT.  It always amazes me how people seem surprised that PAT does so poorly when bus trips are only half (or so) as cheep as monthly parking passes!  It was not fair to have PAT compete with government subsidized parking rates.  Give both a fair value and then see which one customers prefer.
3. There doesn’t seem to be any other way to fund the pensions.  As far as I’m concerned increasing the funds in the pension fund must happen.  If you don’t think we should lease the parking garages, you better have another solution in your back pocket.  Right now we are in a very dangerous cycle of debt (not unlike someone who lives in a house they can’t afford) because we have this looming debt that we are missing critical things just to make the minimum payments on.

We can argue about the details all day and night, but my temptation is to trust them to people with more time.  I will continue to support the leasing of the garages conceptually, unless someone can challenge those three points.

I recently wrote a post on the ridiculousness of a Fox News “Exclusive” that showed that pedophiles had “found a home on Wikipedia.”  That article continued on about how school children were given access to the pedophile filled Wikipedia!  It was complete ridiculousness, dangerous considering many nontechnical people will misinterpret, and the kind of article that encourages many people to completely ignore Fox News.  Unfortunately, the Post-Gazette published a similarly irresponsible article this morning about PA House Bill 2479.  A quote below:

In other countries, citizens are required to have their papers available for police to review. In Italian cities, people are routinely stopped and asked to prove their legal status. I lived there for four years and was never approached. Others were regularly stopped, asked questions and embarrassed in public. Perhaps American officers have better judgment, but I saw that light-skinned speakers of English didn’t attract the attention of the carabinieri like dark-skinned speakers of North African languages did.

Consider the possible effects of a law requiring police in Pennsylvania to check the legal status of anyone of whom they have “reasonable suspicion.” Consider my son’s baseball team, which is well-coached by a Latino and a Jewish American and whose players belong to families of various ethnic backgrounds. We come together weekly to enjoy the national pastime.

Imagine one Saturday the kids are playing and the police have a reason to be in the parking lot. Two officers approach and ask each parent who looks Hispanic for his or her papers (assuming the process would unfold like that in other countries and that the white and African-American parents would not be asked).

We watch this, as do the children. What does this teach them? When the police leave, what remains?

This is crazy.  The Italian law is not the same as the Pennsylvania bill and in the Pennsylvania bill, the officer would have no right to ask any of the people in the parking lot for their papers unless they were being stopped for another reason.  So I suppose if they had all broken the speed limit on the way to the ballpark then a cop might be able to ask only the latinos for ID.  The moral of that story for me, is that if you speed to baseball games in a tight enough formation that the cop knows that all of you are speeding, perhaps you shouldn’t have children.  Another gripe, why point out that one of the coaches is Jewish?  Do we expect this bill would lead to Jews being harassed about papers?  I hate the line “assuming the process would unfold like that in other countries…”, WHY would you assume that?  The entire text of the bill is available online, why don’t you read it before you write an article in the Post-Gazette?

Don’t get me wrong, I HATE this bill.  If it comes to a vote, I intend to write my state representative and tell him so.  There are SOOOO many reasons to hate this bill; it distracts police officers and other officials with a task for which there is already an entire department of the federal government, it encourages racial profiling, it requires people to carry ID, it gives subjective power to police (who should always be as limited as possible by “the book” to prevent corruption and abuse) and it attempts to build bigger government.  There are so many reasons to hate this bill, that it pisses me off that a Post-Gazette editorialist had to invent some.  He wasted a perfectly good space in the Post-Gazette by creating an article that HB2479′s defenders can easily refute.

Market analysis is one of the most critical things any organization can do; small businesses and startups especially.  Market analysis essentially involves the product of two critical numbers.  First, the total size of the market.  Second, the portion of that market that is practically attainable.  This second number is the more critical of the two, but people frequently lose site of it.

The best example I’ve come across in recent weeks is a bar in Pittsburgh.  If you started a bar in Pittsburgh how/where/what would you start?  If you’re like most people you would walk to the strip district or station square or the southside and get drunk off the number of customers lined up around the corner on a Saturday night (pun intended).  You’d figure that you should set up a bar that caters to the Friday and Saturday night crowd in the Southside or the Strip and you’d probably at least get some of that business.  You might succeed that way, you probably wouldn’t.  The problem with your logic was the “probably at least get some of that business” bit.

“Probably” is a dangerous word in any market analysis.  What you should think seriously about is where you can find a 100% figure for the second number, then see how large you can make the first number.  This usually means identifying a new market and claiming it.  There are countless examples of this, but today’s season-specific one is Piper’s Pub.  The pub was able to build a line around the corner, just like the bars in the strip and station square.  In fact the place has been packed almost every day for the last two weeks.  The difference?  Happy hour starts at 7am instead of 7pm and the football is played with feet.  Piper’s has cornered the market on world cup soccer (and when that’s not in season, rugby and cricket too).  Sure, they run a decent business on Friday and Saturday night, but they make a killing in the mornings and early afternoons.  All because they found a more then large enough market that they could get nearly all of.

The Pirates play the Chicago White Sox tonight.  It’s not the most exciting match-up ever.  I should say it wasn’t the most exciting matchup ever until it was announced that Pedro Alvarez would be starting at third base.  I don’t have time to cover this in detail, but I thought it was worth reposting the image above on this occasion.  Here’s how I explained the interpretation of the image from the original post….

What’s really exciting is just how far he can hit the ball though, we’re talking Stargel far here. Rumor has it that he hit batting practice OVER the pond outside field 1 at Pirate City. I was curious, so I grabbed a google shot of Pirate City and another one from PNC Park. I made a line that represented a homerun right down the line, over the pond. I then made a hash mark at first base (click the picture to blow it up, look close). Copied the line, pasted it on to PNC Park and resized it so the hash mark touches first base. By this (admittedly crude) estimation I have him knocking the ball not just in to the Allegheny, but in to the DEEP waters, over the kayakers for sure.