
Carnegie Mellon creates fund to invest in its recent graduates - dpieri
http://www.cmu.edu/news/archive/2011/May/may15_openfieldentrepreneurs.shtml
======
bkrausz
One thing that's always upset me about CMU is how non-entrepreneurial they
are. Google has a large presence there, and most major tech companies fly out
for the job fairs, but startups are few and far between (Meebo and Palantir
were the closest I saw 3 years ago).

I think a lot of it is a byproduct of their location: Pittsburgh is many years
behind the valley on investor terms and incubator programs. As a result there
are few startups there. Valley startups can't really afford to head out to
Pittsburgh to recruit or promote entrepreneurship, especially when Stanford &
Berkeley are a car ride away (ditto with Boston/MIT).

There are many great people working on this problem inside CMU, but it's an
uphill battle. I'm curious what the terms of this investment will be. The
worst thing CMU can do is try to force entrepreneurs to stay in Pittsburgh.
Fix the attitude, then the location will fix itself.

~~~
ecuzzillo
Rich people would never want to live in Pittsburgh for many reasons, including
that the culture of the place is in some ways morally opposed to the concept
of rich people, the infrastructure is poor, the weather is always terrible,
there is never any sun, and the food is terrible (often self-righteously so).

In other words, the cost of living is low because rent is low because there's
no demand because no one wants to live here.

On top of all that, SV already exists, so if you were going to start a
startup, there would be no reason not to start it there. And, once you exited
there, you would have no reason to leave, and especially not in favor of
Pittsburgh, of all places.

Thus, good investors, also known as angels, will never cluster here.

More on-topic, it seems like the CMU fund is going to have a committee of
bureaucrats decide who to fund. Why would that ever be a good idea? I
graduated from CMU and work there now, and if I started a startup and were
offered money by said fund, I would reject it. They'd want me to go to an
'OFEF business workshop.'

~~~
pitdesi
I don't live in Pittsburgh, but completely disagree with your sentiments. I
went to CMU '02, then lived in Shadyside for a few years, miss the place
dearly and own a few properties there (they have appreciated significantly
over the past 5 years... Pittsburgh has been an amazing real estate market
during that time). Part of the reason it has appreciated is that it's doing
exceptionally well during this downturn. Unemployment is 7.4%, almost 2 points
lower than the nations average. San Francisco's is 10%.

Smart young successful people actually do live there, more so than it's
comparison cities... It also has some of the most educated folks in that
bunch- <http://www.pitt.edu/~cbriem/SelectedTables2.htm> You'll see it's in
very good company among the top educated cities. Personally, a lot of my
friends stayed in Pittsburgh and/or moved back after a few years. I personally
was itching to leave many years ago, have lived in many places along the way
and now miss the place dearly/will at some point move back.

There are a number of startups in Pittsburgh now, but not as many as there
were during the .com bubble... there are many more than any other cities of
its size, primarily because there is great talent coming out of CMU and Pitt.
Your argument suggests that there is no reason for anyone to not locate to SV
(which is totally fine, but I think many would disagree)

Here are some of the recent startups: [http://www.quora.com/What-are-the-hot-
software-or-recent-sta...](http://www.quora.com/What-are-the-hot-software-or-
recent-startups-in-Pittsburgh)

and some others: [http://www.quora.com/What-are-some-good-startups-out-of-
Pitt...](http://www.quora.com/What-are-some-good-startups-out-of-Pittsburgh)

Re: food, you must be joking... Murray Ave right by CMU has more fantastic
ethnic restaurants than anywhere I can think of
([http://www.urbanspoon.com/n/23/2226/Pittsburgh/Squirrel-
Hill...](http://www.urbanspoon.com/n/23/2226/Pittsburgh/Squirrel-Hill-CMU-
restaurants)), and Nine on Nine, Eleven, Paris 66, Salt of the Earth, and Bona
Terra would be worthy of Michelin stars in another city, yet they are
reasonably priced in Pittsburgh.

Re: weather you're spot-on... there are less sunny days in Pittsburgh than
nearly anywhere... but it seems to work out OK for Seattle.

If this fund is indeed run by a bunch of bureaucrats it might end up being
crap, as you suggest. Project Olympus at CMU has done some good stuff though,
so I have hope. <http://www.olympus.cs.cmu.edu/probes/>

~~~
ecuzzillo
Yes, it has people with degrees, but no, it does not have many rich people. It
has a few, and if they buy not-too-expensive houses and seem Pittsburghite-
friendly, they are venerated. It did well in the recession because its economy
is based on education and healthcare; this does not make it particularly good
for startups.

Yes, it compares well to other cities of its size startup-wise, but we're
comparing it to SV, which is not of its size, so nevermind.

Yes, there do exist nice restaurants, but we're comparing it to the Bay Area,
and the mean, median, and top 10% quality of Bay Area restaurants is
ridiculously high, so nevermind.

Pittsburgh's weather is worse than Seattle's. Yes, it is #2 to Seattle's #1 on
the country's least-sunny list, but in Seattle, it just rains a lot, and
whether or not it's raining, the air is palatable. In Pittsburgh, it's either
freezing your nose off or making your eyes water with humidity.

The thing about being morally opposed to rich people is an instance of an
observation I've heard from multiple people other than myself: Pittsburgh's
message seems to be, stay here and be one of us, and don't think you can be
any better than us, because we don't think that's possible, and in fact find
the idea offensive.

Which is not exactly a startup-ish sentiment.

~~~
keiferski
Comparing a town with ~300,000 people to a metropolitan area to a major city
like SF/Bay Area isn't exactly a fair fight. Obviously SV is going to be
better at almost everything. Compared to almost any city its size, Pittsburgh
is awesome as far as cost of living, culture, education, and food go.

And your sentiments about the culture here are a bit off. It's definitely much
more blue-collar than SV, which may be why you get that impression. But it's a
far cry from being anti-ambitious.

~~~
ecuzzillo
The whole point is that you can't compare a town with 300k people with a blue-
collar culture to the Bay Area. It's not even close to as good for startups.
Why is this controversial?

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jwuphysics
> CMU spin-offs represent 34 percent of the total companies created in
> Pennsylvania based on university technologies in the past five years.

CMU has helped Pittsburgh rebrand itself from a coal-mining, steel-working
town to a technological hub. I'm glad to hear that they want to continue the
trend.

~~~
schmittz
As I am in this year's graduating class, I was immensely excited to hear this
news. Carnegie Mellon's greater fostering of entrepreneurship through
initiatives such as this and the relatively new Engineering and Technology
Innovation Management program (masters program with classes in Tepper, one of
the top graduate business programs, and a required internship at a startup)
will prove very fruitful. If we could just also get Google Fiber to come to
Pittsburgh, it would be possible to start to see another great
entrepreneurship hub form.

~~~
nicpottier
What does Google Fiber have to do with it?

Just curious, as the internet access was plenty fast at CMU 15 years ago when
I was there, so I can't imagine it is worse now. And of course these days you
host virtually (hah) everything in EC2 or the like, so local bandwidth should
never be a limiting factor.

Perhaps I'm just sensitive on this topic since I've been using an (at best of
times) 100k connection in Rwanda starting a software company here.

~~~
schmittz
It's average now, slightly better than a base Comcast connection, but that's
about it. (I can compare directly since I lived on campus two years and off
the last two). I suppose it would depend on what you were doing that would
make it matter whether Google Fiber was important or not, but certainly for
running large scale things, especially simulations from cloud based sources,
Google Fiber would be massively appealing. I'd argue that the effect of ultra
high speed internet on a large population base isn't predictable and could
only be a positive for the region in terms of drawing developers et al. Also,
thank you for laughing at your pun instead of crassly saying "pun not
intended."

------
Hawramani
This reminds me, I have had an idea for advancing science through investing in
graduate students and I would love to get some feedback on it.

How about creating a foundation that gives grants to students to support them
while they get a Masters or PhD in two branches of science?

My assumption is that encouraging people to get high degrees in two or three
branches of science will help bridge the 'specialization gap' that now exists
between the branches. People on this program will be able to apply one area of
science to another, which may create amazing applications.

How many people are there who have a PhD in biology _and_ a PhD in computer
science? What about PhD's in mathematics and robotics?

I would apply immediately to anything resembling this.

~~~
tentonwire
There are interdisciplinary PhD programs that are now gaining popularity. For
example, I work on protein structure prediction in my graduate program, which
involves lots of programming, robotics algorithms, machine learning, HPC, etc.
as well as biochemistry, statistical thermodynamics, and molecular biology. If
I were to drop out right now, I could find employment as anything from a
software developer to DNA sequencing technician.

~~~
Hawramani
These are a pretty good start. What I had in mind is an organization that
gives long-term grants for many areas of study. Of course, any returns on this
kind of investment would be ten to fifteen years away, which would make it
hard to find anyone to support it. And worse, we do not know if a we can have
a good return on this kind of investment.

------
ziadbc
There are several comments here concerned that CMU might want to keep their
startups rooted in Pittsburgh. However, they have a Silicon Valley campus
<http://www.cmu.edu/silicon-valley/> which seems to demonstrate that they have
some interest in supporting those who want to be in the valley.

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eljaco
Glad to hear this - I hope other schools follow along in their footsteps. This
is a good way to both invest in graduates, and improve the money problems many
schools are facing (though, this is more of a long term result.)

------
ajaimk
Georgia Tech (my college) recently announced a similar thing. Basically a
Y-Combinator for students and alumni. More details at flashpoint.gatech.edu
(Website doesn't launch till tuesday, so you'll have to be patient)

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joshu
Might actually be more efficient than begging for alumni donations. I would
have let CMU put some dollars into my latest thing.

------
spottiness
I heard President Cohon talk about it in today's commencement ceremony. That's
great news!...to me :) (I'm a CMU alumni, CS School)

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bvi
I'm wondering whether this fund excludes those in need of H1bs.

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bugsy
So this is yet another scheme where bankers grab ownership of fledgling
companies at a massive discount because the visionary founders don't yet
realize their company is worth far more than is being offered. Meanwhile press
releases go out making it seem like it is some sort of non-profit charity that
is doing good and the investors philanthropists.

~~~
hugh3
Hey, if you think these companies are being bought up at massive discounts,
why don't you go to Pittsburgh and put your money where your mouth is? Invest
'em in yourself, at twice the going rate, and I'm sure the founders will be
happy to take your money.

