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Pittsburgh tech sector reports flourishing activity and jobs, hiring

A gathering of CEOs and local and state leaders assembled in the Innovation Works lobby on Technology Drive this month to celebrate the strength of its portfolio and announce new companies and hiring.

IW invested in its 100th company last year and attracted more than $100M in follow-on investment from private and other sources in 2007. Since its inception in late 1999, IW has invested more than $35M and its portfolio companies have gone on to raise $425M in follow-on financing.

“Pittsburgh was once a flyover for executives from other cities,” noted Rich Lunak, president and CEO of IW. “No more. Fifty-five out-of-town VC firms have invested in local companies in the last three years.” The phone is ringing as well as executives from cities like Cincinnati, Cleveland and St. Louis call to learn more about IW’s successful model for tech-based economic development.

While jobs and the economy may be lagging locally and elsewhere, the region's venture capital sector is the fastest growing in the state. “Jobs are created by entrepreneurs who take risks, work late at night and get up every day and make it happen,” said Dennis Yablonsky, secretary of the Pa. Dept. of Community and Economic Development.

Yablonsky also announced that the state has helped to lure an IT company to Pittsburgh and another will expand operations here, creating 152 jobs thanks to state grants and loans of $907,200.

Technology consultant TechAssist of Washington, D.C., plans to move its national operations center to 11,000 sf at the National City Bank Building, Downtown. The move will create 96 positions in engineering, sales and marketing and administration.

Credit/debit card manager CardWorks considered moving to New Jersey but instead was coaxed by the state to stay and expand 57,500 sf in Station Square's Commerce Court. CardWorks will hire an additional 56 people in the next three years.

Another IW company and Pop City 2008 Tech Company to Watch, Knopp Neurosciences, received $10 M in a series B funding round from out-of-town investors Saturn Management of Boston. The money will help with clinical trials as the firm grows its staff from 14 to 18.

Writer: Deb Smit
Source: Dennis Yablonsky, DCED, Rich Lunak and Terri Glueck, Innovation Works


Thar Technologies receives unprecedented $1.9 M to develop a greener biodiesal

Harmarville-based Thar Technologies received a significant $1.9 M federal grant for the development of a greener biodiesal production process that, if successful, could set a new standard for biodiesal production across the country.

A world leader in the development of supercritical fluid chromatography (SFC) systems used for pharmaceuticals, chemicals, food and electronics, Thar will use its SFC technology to develop a more environmentally-sound, less costly biodiesal that avoids the use of toxic hexane.

The EPA classifies hexane, which is used to extract oil from oilseeds, as a hazardous air pollutant. “Cost-effective biodiesal for mass production is finally on the horizon,” says Lalit Chordia, Thar CEO. “This process will set multiple standards for zero to little pollution in the environment.”

Chordia also says that because the process will use less energy than the current biodiesal production processes and have a greater yield, Thar’s biodiesal will ultimately stand on its own without the need for a government subsidy. “That says a lot,” quips Choridia.

“This is a really significant investment in our region. The federal government rarely ever gives a grant out this large,” notes Nathaniel Doyno, executive director for Steel City Biofuels. “This technology presents significant opportunities to overcome some pretty big barriers to biodiesal development.”

The Advanced Technology Program of the National Institute of Science and Technology is funding the research. If all goes as planned, Thar will construct a biodiesal plant to pilot the new development process prior to bringing the process to full commercialization.

This is good news for the state, which has lagged behind other states in providing more incentives for biodiesal production.

Writer: Deb Smit
Source: Lalit Chorida, Thar Technologies; Nathaniel Doyno, Steel City Biofuels

 


Recession or growth stall? Either way Pittsburgh is inching up

While the country may be heading into a “severe growth stall” or a recession, Southwestern Pennsylvania may avoid the downturn completely and see small but positive growth in the coming year.

PNC Financial Services Group chief economist Stuart Hoffman and Bank of New York Mellon Corp. chief economist Richard Hoey both stopped short of calling for a full blown national recession but warned that the signs of a serious downturn are there. Their comments came during an Economic Forecast Luncheon at the Omni William Penn downtown Tuesday.

"There's a 40 percent chance that we'll have a recession, but if we have two or three months of job losses, we're in a recession," says Hoffman . The slump, however, may be short lived and the second half of the year may see more robust activity than the first. Southwestern Pennsylvania will stay the course of slow growth although that growth may continue at a somewhat slower pace in certain sectors.

Global and national economic indicators suggest that falling housing prices and credit concerns will take its toll nationally, while Asia and China will continue to grow but at a slower pace, reports Hoey, who offered a general outlook on the global picture.

“By 2009 the U.S. will be back recovering and Europe will be weaker,” Hoey adds. "We're in the 8th inning because of weakness in our economy and other economies (like Europe) will be weaker later."

In Southwestern Pennsylvania, where housing prices never ballooned to outrageous levels and job growth remains well below the national average, the outlook is brighter comparatively, Hoffman says. Unemployment last year fell slightly to 4.4 percent from 4.9 percent and employment should hold steady in the region at 1.14 million.

Pittsburgh should benefit in residential construction, healthcare services, technology and financial services, Hoffman says. Commercial property markets should grow due to several downtown condominium projects and office demand will ease through 2008 allowing the office vacancy rate to creep back and take the pressure off rent growth.

For PNC's economic forecast for the region, click here.

Writer: Deb Smit
Source: Richard Hoey, The BNY Mellon Corp.; Stuart Hoffman, PNC Financial Services


First virtual law firm in the state opens for business on the web

Two Pittsburgh attorneys have opened the first virtual law firm in Pennsylvania, having developed a unique business model that makes it quite unlike any other virtual model in the country.

Delta Law Group was developed by Karl Schieneman and Brian Walters, a Monroeville-based firm that focuses on consumers, innovative project management, web-based legal technology and the use of contract attorneys.

It’s an idea Schieneman has worked with and expanded on since his days as co-founder of one of his faward-winning ormer companies, Legal Network, an attorney-owned legal staffing agency. The biggest benefit of virtual law is that clients can keep close watch on their cases, he explains. “You can go online and use a password to see the work that’s going on, the filings, the strategy, the documents.”

Delta Law Group draws on a network of 20 solo practitioners who specialize in different areas of the law. A client who is looking for help with estate planning, family law or bankruptcy can connect with an attorney who prefers to work in that area. “And we’re extremely efficient and paperless. Everything is done through technology so we’ve been able to substantially reduce the client’s bill,” says Schieneman.

Delta Law uses video streaming for client interviews and online case management tools, a system that helps attorneys who are in court to manage their case load and stay connected with clients.

“There’s no phone tag and clients love it,” says Schieneman.    

Delta Law opened its virtual doors in the fall with five employees who handle the administrative details of the daily operation. And while “virtual” may imply no office space, Delta Law has four locations in Wexford, Greentree, Monroeville and downtown Pittsburgh.

To hear Scheineman's Talkshoe progrm "Making Law Easy," click here.

Writer: Deb Smit
Source: Karl Schieneman, Delta Law Group





Pittsburgh company supports a tiny Himalayan country through a unique CD-ROM stamp

The Kingdom of Bhutan, nestled in the heart of the Himalayas between Tibet and India, is a bucolic, peaceful nation that has abided under the modern radar for centuries.

A predominantly Buddhist country whose national creed is “Gross National Happiness,” Bhutan is preparing for a major political transition this year as its leader, King Jigme Khesar Namgyal Wangchuck, abdicates the throne in favor of his democratically elected son, a 27-year-old Oxford graduate.

What makes this all the more compelling is that a Pittsburgh-based company, Creative Products International, is helping to support this tiny country’s economy through the innovative development of a mini CD-ROM stamp to be released this spring, sure to be another sought after collector’s item for philatelists worldwide.

Bhutan has had a long, colorful history of exotic, prized stamps, explains Frances Todd Stewart, president of CPI. It was her late father, who formed a close friendship with the Bhutan queen-to-be while he attended Oxford University, who suggested stamps as an economic development project for the country.

The late Todd helped the country create several beautiful stamps, including a vinyl talking and 3-D stamp. Todd Stewart is following in his footsteps with a CD-ROM stamp that attaches to an envelope and includes pictures, music and the history of the country, developed and designed by CPI, new product developers and an international custom manufacturer.

The stamp has already attracted national attention, having been featured on "Where in the World is Matt Lauer?" on the NBC Today Show earlier this year.

“I feel very honored to be part of an experience to carry on my father’s legacy,” says Todd Stewart. “It’s wonderful to think that through this documentary there is a connection between the past and what is happening now as Bhutan moves into a democracy.”

To view the CD-ROM stamp, click here.

Writer: Deb Smit
Source: Frances Todd Stewart, Creative Products International


Image courtesy Creative Products International


$7.5 M economic package from state will create 540 local jobs

Allegheny County has received $7.54 M from the state for 11 economic development projects that promise to create some 540 jobs in the region in the next three years.

The funds will enable three companies to relocate here from out-of-state, says Janel Miller, a spokesperson for Gov. Ed Rendell. The assistance for the 11 projects comes in the form of loans, grants, job training and technical assistance coordinated through the Governor’s Action Team.

The three companies that will move to the region include:

GiftCards.com will create at least 53 new jobs by relocating operations from North Carolina to suburban Pittsburgh. The leading provider of prepaid Visa debit cards has moved its customer service center to a 20,000 sf building in Greentree.

Hussey Copper Ltd., a leading global producer of electrical copper bar for rolling mills, is relocating a production line from Kentucky to Leetsdale, a $1.2 M expansion that will create 25 new jobs. 

Knepper Press Corp. is expanding its local operations and creating 40 new jobs. The commercial printing company is moving its 38,000 sf facility in Oakdale to a new 100,000 sf facility on 11.9 acres in Clinton.

Voyager Jet Center, a leader in private aviation services, will receive the biggest slice of the pie for a $17.7 M, 30,000 sf expansion of its Allegheny County Airport operations that will create 50 new jobs.

The new jobs arrive on the heels of a marginal rise in local jobs in the region for November. The U.S. Dept. of Labor reports that the region added 3,000 new jobs compared to the same period last year, posting a .26 percent growth rate.

For the complete list of local economic development projects, click here.

Writer: Deb Smit
Source: Janel Miller for Gov. Ed Rendell, U.S. Dept. of Labor


First green pediatric office in the region opens in East Liberty

Pediatricians in the East End hope to inspire a green movement in healthcare, having opened the first sustainable medical office in the region for their young patients.

Children’s Community Pediatrics has moved to a new, 5,180 sf office on Penn Avenue above Trader Joe’s, a bright, inviting space that features low-emitting laminate adhesives, a carbon dioxide monitoring system that maintains indoor air quality, a ventilation system that controls office airflow and minimizes exposure to indoor particulates and chemical toxins, high performance insulated windows that let in sunlight and conserves energy and plant and aquarium ecosystems in the waiting room.

The idea was initiated by Keith Somers, a pediatrician who saw the alarming rise in the childhood incidents of asthma, cancer and other environmentally related illnesses and felt it was imperative to promote a sustainable practice.

“As a family we saw the ‘Inconvenient Truth’ and it got us all to be a little more pro-active,” admits Somers. “It allowed me the latitude to pursue this option. My hope is to show the rest of the world and the business community that there’s a lot we can do and ways to spend the money that are affordable and available. Prevention goes hand in hand with what we are doing.”

The office was designed by LEED-certified architects at Pittsburgh-based Designstream Architectural Studios and built by KJ Johnston Ltd. In addition, CCP is collaborating with green experts at Children’s Hospital of Pittsburgh, soon to be one of the first LEED-certified children’s hospitals in the country.

Writer: Deb Smit
Source: Keith Somers, Children’s Community Pediatrics

Image courtesy Children's Hospital of Pittsburgh


Venture Capital Roundup: Nine funded Pittsburgh startups leap into the new year

Nine Pittsburgh start-ups received venture capital funding in the last quarter of 2007 and Pittsburgh’s Innovation Works celebrated a funding milestone of its own.

Eight of the companies are Innovation Works portfolio companies. “The breadth of technologies is indicative of what we see in general,” says Terri Glueck of Innovation Works. “This paints such a great picture of what’s happening and innovative here.”

Accipter Systems, Inc. received $300,000 to developing Wi-Hy, a next generation wireless system that will eliminate network dropouts and provide a more reliable network for the military, emergency crews, surveillance and public safety personnel.

Alertek was awarded $300,000. The new technology is a University of Pittsburgh spinout and will improve safety in the mines and on construction sites by providing an audible alert at the first sign of infrastructure under stress.

Cognition Therapeutics received $200,000 to help develop small molecule therapeutics targeting the toxic proteins that cause the cognitive decline associated with Alzheimer's disease and other degenerative diseases of the human brain.

Coventina Healthcare Enterprises received $320,000 as it continues to produce a therapeutic warming system used in the research, treatment, rehabilitation and management of pain related to injury, aging and disease.

Impact Games, makers of the internationally popular game Peacemaker, has received $250,000.

Pertuity received $300,000 to develop its product, Dare to Compare, an online financial comparison tool that helps users compare their financial status, plans and strategies with others.

ShowClix received $150,000 for development of a live music search engine and online ticketing company connecting musicians, venues and show promoters with millions of live music fans. The website combines an open, live music database with an online ticketing platform, giving show promoters, musicians and venues an easy, affordable way to promote their shows and sell tickets to music fans who search for, track and share live music on the site.

The Pittsburgh Life Sciences Greenhouse has invested $100,000 in ParentPlus. ParentPlus is positioning its first product, FertPlus(R), as a way to increase the efficacy of fertility treatments and at the same time provide a lower cost alternative to expensive and highly publicized conventional treatments.

Writer: Deb Smit
Source: Terri Glueck, Innovations Works, Tim O’Brien, PLSG


Community Connections Awards $1 M to Pittsburgh 250 Community Projects

Community Connections announced $1M in grants to 100 regional and grassroots organizations and artists as the city gears up to celebrate Pittsburgh's 250th anniversary.

Some 540 submissions were received from across the region and the competition was stiff as a panel of regional leaders, including representatives from all 14 counties, selected 12 compelling initiatives that received $50,000 each as Regional Community Connections Projects and 88 grassroots projects that received about $5000 each.

Four examples of projects that received $50,000 for activities in 2008 are:

  • Civil Rites: Oral Histories of Two Generations of Pittsburgh Artists: the August Wilson Center for African American Culture will collect the work and personal stories of local artists in a multimedia presentation that will coincide with the Center’s dedication.
  • Good Neighbor Days: Family Communications, Inc. will commemorate the 80th anniversary of the birth of Mister Rogers with an educational campaign and five-days of family-friendly activities at regional cultural and educational venues.
  • Roadside Giants: The Lincoln Highway Heritage Corridor will engage students at technical and career schools in Bedford, Somerset and Westmoreland counties to create enormous public art sculptures along the historic Lincoln Highway, a route that mirrors the one travelled by Gen. John Forbes and Col. George Washington in 1758.
  • With The Pittsburgh Signs Project, Pop City's own Jennifer Baron will
    create "Pittsburgh Signs: 250," a full-color book documenting and reflecting on signs from the fourteen counties in the region that will celebrate the
    unique visual culture of Southwestern Pennsylvania.

“Regional Projects are indicative of the character of our unique region,” said Cathy Lewis Long, a co-chair of Pittsburgh 250 Community Connections. “From the expansion of outdoor recreation opportunities to mobile educational laboratories, these important initiatives planned for 2008 represent the hopes and desires of citizens in Southwestern Pennsylvania at this moment in time.”

Community Connections is a cooperative effort of The Sprout Fund, a Pittsburgh-based nonprofit organization, the Pittsburgh 250 Community Connections committee, and Pittsburgh 250 Inc., the lead agency coordinating events and activities for the 250th celebration.

To see a complete list of funded projects, click here.

Writer: Deb Smit
Source: Cathy Lewis Long, Pittsburgh 250 Community Connections and Dustin Stiver, The Sprout Fund


Green Building Alliance paints the town green with $448,000 in innovation grants

The Green Building Alliance is keeping Pittsburgh green this season.

This month the GBA announced $448,000 in product innovation grants for the commercialization of new products to support the fast growing green building market in Pittsburgh.

“The green market represents a significant economic opportunity for western Pennsylvania and the entire state, which ranks second in the country in the number of LEED certified buildings,” says Rebecca Flora, executive director of the GBA.

The grants include collaboration between private sector companies and university teams located in Pa. Recipients include:

  • $100,000 for Ductmate GreenSeam II product development, which will help to reduce duct leakage, a project of Ductmate Industries and the University of Pittsburgh.
  • $100,000 to environmentally and economically assess the production and field performance of insulated concrete forms, a project of Tegrant Corp. and the University of Pittsburgh.
  • $81,564 for improved production of pigment as a byproduct of the treatment of coal mine drainage in the region, a project of Iron Oxide Recovery, Hedin Environmental and the University of Pittsburgh.
  • $81,062 for the development of a process simulator for green product decision-making, a project of Burt Hill and Penn State University.
  • $45,736 for sustainable, affordable, low-temperature water system to heat and cool a neighborhood of buildings, a project of Geothermal Energy Systems and CMU.

Writer: Deb Smit
Source: Rebecca Flora, Green Building Alliance


Dancetown Fitness System the latest retirement home craze, check it out!

State-of-the-art technology developed in Pittsburgh has retirees and seniors across the country tapping their toes and sashaying for fitness.

The fitness software was developed by local entrepreneur Jeff Pepper, president and CEO of Dancetown, who designed the program with the help of health caregivers. Pepper says he wanted to help people in retirement homes connect with each another. “There’s always of the danger of isolation. You end up losing touch with family, friends, work that makes your life meaning.”

Dancetown displays footwork on a computer screen and invites participants to follow along with the steps, a fitness system that stimulates the brain and enhances physical, mental and emotional health, explains spokesperson Dawn Jackman Biery.

It’s a slow motion version of “Dance Dance Revolution,” a game that pits players against computer directed dance steps, but plays Oldies and begins at a beginner level and moves into steady paced dancing. The fitness program may be offered as a class by a trained wellness coordinator, self-directed or as a competitive game against others.

Dancetown was launched at Country Meadows in Bridgeville, Longwood in Oakmont and 100 sites across the country. “We did a trade show in Orlando and it was huge,” laughs Biery. “We had an 87-year-old legally blind woman dancing at level 2 to “Walking After Midnight by Patsy Cline.”

Dancetown is a division of Touchtown Inc., purveyors of software that manages inhouse television for retirement communities. “It’s a giant step forward in our long-term commitment to serving the senior community,” Pepper says.

To view Dancetown in action, click here.

Writer: Deb Smit
Source: Dawn Jackman Biery, Jeff Pepper, Dancetown

Image courtesy of Touchtown Inc.

Minority Network Exchange offers unique local networking opportunity

Vernard Alexander was ruminating over the closing of the Crawford Grille in the Hill District when an idea came to him.

For years, local jazz lovers regularly met at the Grill, a place of community, attracting top musicians from as far away as New York City. When the Grille moved to Station Square, it became too pricey and inaccessible for many of its regular patrons.

Alexander saw its departure as an opportunity to give something back to the neighborhood where he grew up. “When that historic place closed, it laid the groundwork for me to start some type of organization,” says Alexander. “I wanted to build a community of entrepreneurs who would get to know one another on a personal and professional level, my own version of the Chamber of Commerce.”

Last year Alexander formed the Minority Network Exchange, an organization that strives to connect minority business owners and entrepreneurs to one another in fun, creative ways, be it a golf outing, horseback riding or a murder mystery network mixer. The goal is exposure for businesses that would normally slide under the radar, he says.

“One of the barriers I’ve found is that there hasn’t been a lot of interest from people who are well-established,” says Alexander. “If you’ve been successful and have had your doors open for 10 years or more, that’s the kind of people I want to be mentors to others.”

And make no mistake, all minorities are welcome, he adds. “If 100 Russian guys show up, great. Everyone can help each other.”

Writer: Deb Smit
Source: Vernard Alexander, Minority Network Exchange



Image courtesy of Vernard Alexander

The Heinz Endowments announces new president

The Heinz Endowments has named Davidson College President Robert Vagt as its next president.

Vagt, a gregarious, ordained minister who prefers to be called "Bobby," will take charge of the $1.6 billion foundation that has distributed more than $80 million in grants this year, primarily in Western Pennsylvania. He succeeds Maxwell King on Jan. 15th .

“Pittsburgh was part of the attraction, but the principal attraction were the Endowments themselves and their regional focus on quality of life matters,” Vagt says. “I hope to work on some of the tougher issues that affect Pittsburgh.”

Vagt received his undergraduate degree in psychology at Davidson and earned his master’s in divinity from Duke. His extensive experience includes work as a psychologist, prison warden, public finance director and director of health center clinic programs before becoming the 16th president of one of the top liberal arts colleges in the country.

During his 10-year tenure, Vagt helped encourage diversity on campus and eliminated the financial aid debt of needy students, an accomplishment of which he is most proud. He also coined the phrase “Davidson bubble,” a personal and ethical value system, and once had bottles of bubble soap distributed to graduating students where they sat, encouraging them to spread the “Davidson bubble” out into the world.

Writer: Deb Smit

Source: Bobby Vagt, The Heinz Endowments

Image courtesy of The Heinz Endowments


VC Roundup: Five Pittsburgh companies reap investment dollars

Our monthly venture capital roundup reports that six area companies hauled in investment dollars in the past month.

  • Pittsburgh-based Plextronics recently scored another $4 M round of venture capital financing, this time from Austin, Texas-based Applied Ventures, the VC arm of Applied Materials, a global leader in nanomanufacturing technology. The investment comes on the heels of a $20.6 M round earlier this year. (See the Pop City story here.) The infusion will fuel the expansion of Plextronic's product and manufacturing abilities and increase sales and marketing for the future printed electronics industry, says CEO Andy Hannah.

  • In other VC news, Oakland-based speech-training developer Carnegie Speech received $6M from several Philadelphia, New York and Washington, D.C. based investors. The proceeds will help to expand sales and marketing efforts. CS will also open an office in India.  
  • The Pittsburgh Life Sciences Greenhouse (PLSG) invested $115,000 in Innovention Technologies. Innovention is developing advanced robotic devices for use in the medical, industrial military and law enforcement fields. Its first product, HARP, is a highly maneuverable robotic probe able to enter into small cavities within the body and steer around organs.

  • PLSG also funded $150,000 to Applied Isotope Technologies (AIT), an early-stage manufacturer of standards and kits that will measure--in nanograms--the toxicity levels of metals and other poisons in urine and other biological fluids.

Writer: Deb Smit
Source: Andy Hannah, Plextronics: Tim O’Brien and John W. Manzetti, PLSG; Innovation Works; Angela Kennedy, Carnegie Speech


Smith Brothers Advertising's "Top This" Heinz strategy a winner

So many condiments, not enough fun and games.

That was the idea behind Pittsburgh-based Smith Brothers Advertising's campaign to reignite interest in the flagging sales of Heinz Ketchup. It began with the subtle label that spoke from store shelves, “a million french fries can’t be wrong,” and blossomed into the full-blown campaign, “Hungry for Fame?” giving consumers a chance to design their own YouTube Heinz commercial.

The innovative strategy not only worked, it was a nationwide sensation. A tsunami of 8,000 entries poured in. Contestants’ commercials were viewed 7.7 million times on the Top This web site and by August of 2007, Heinz was reporting a 13 percent increase in sales. More recently, a national consumer survey placed Heinz in the number one spot according to the University of Michigan's American Customer Satisfaction Index.

Smith Brothers Advertising won, too, a Creative Media Award from Media Magazine for its clever strategy.

“The Heinz brand’s history with consumers is what triggered the idea,” explains Miles Smith, a partner at Smith Brothers. “It gave everyone a way to tell their ketchup stories and ignited the public’s passion for the bottle that’s hidden in plain sight.”

For those whom didn’t make the final cut, there’s a second chance to proclaim your passion on national television: “Top This Take Two.” Because consuming Heinz’s flagship Pittsburgh-brand should be a compelling experience.

To view the YouTube Heinz finalists, click here.

By: Deb Smit
Source: Miles Smith, Smith Brothers Advertising

Image courtesy of Smith Brothers Advertising

 

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