It starts with believing in Philadelphia…

I ended up in a lively conversation this morning on Twitter about why tech companies are leaving Philly. It started with my comment to Technically Philly about their new feature “Exit Interview“.  I applauded their efforts to look at why companies were leaving the city but also inquired whether they were going to look at how to get them to stay.

Someone I respect responded that the way to get them to stay was more tech companies, that there was not enough in Philly.  As a member of the Philly StartUp Leaders Leadership team, I know better.  There are plenty of tech companies in Philly.  They just do not get the attention they deserve.  The counter was that because there was no Google, Amazon or HP in Philly that we will never be a good tech city.  There will never be a large pool of talent or the competition to keep salaries high.

I disagree.  There is a tremendous pool of talent in Philadelphia.   I also do not think we have to have one of the “big” companies in the area to become a world class tech community.  There are plenty of companies across the spectrum – startup to big – in Philly.  We just have not done the best job getting them the attention they deserve. Which in turn means they do not get as many resources, support or funding.

So how do we fix that? I have some ideas, but  I would really love to hear your recommendations.

My #1 – Start supporting this city and this community in what we say.  The more we continue to talk about what is wrong instead of how to fix it, the more everyone else (meaning the world at large) will believe it.  Until we quit being our own worst enemy and looking down on ourselves.  Until we quit talking about how much better New York, the Silicon Valley or other places are than Philly.  We will never be anything more than we are right now.

To make others believe we are better, faster, stronger, smarter, we have to believe it first ourselves.  And we have to start telling everyone else, all the time.

So what is your #1 solution on how we get Philadelphia’s tech community to be more than it is right now?

11 Comments

  1. I’ve made a living in the technology space for more than 25 years, selling to the manufacturing sector.

    When I first started, I used to sell to GE in Lynchburg, VA where they made televisions (yep, televisions in Virginia). I sold to Sperry and Burroughs here in the Delaware Valley before they became Unisys and pared their product portfolio down to high end supercomputers and postal handling equipment.

    Between here and Washington DC, I sold to more personal computer manufacturers than I can name on two hands, as well as telephone manufacturers, video camera manufacturers, telecommunication switches, servers, and a boatload of other products that are no longer made here in the US, much less the Philadelphia region.

    At first they moved south, to Florida, Alabama and Texas. To lower cost manufacturing environments [translation: non union, lower taxes, lower hourly wages, lower cost of facilities], and eventually, as the Far East became more technologically competent, places like Taiwan, Korea, Malaysia and China became the place to manufacture stuff – stuff that was still being designed here in the Western world. American’s wanted their toys, but didn’t (and don’t) want to pay American wages to have them built.

    Longstanding bastions of technology here in the Philly area, companies like General Electric, RCA and Westinghouse had to adapt or die. Consequently, you’ll still find them here serving the defense, aerospace and medical markets, but their consumer products – the stuff with volume – is long gone – never to return.

    So when you speak of “Tech” I have to assume you’re talking about software or Internet-based appliances. Stuff without a lot of moving parts or a lot of people putting things together.

    The Orpheus story is a no-brainer. Anybody in the media or music business can only be in one of two places – New York or LA, and eventually Wilder could no longer ignore this. There’s clearly a cost to those locations, but when the benefit exceeds the pain…like I said, it becomes a no-brainer.

    Philadelphia remains a hub in the pharma, financial and legal markets to some extent, and tech companies wrapped around these industries would, for as long as that lasts, be wise to keep a solid foothold in the Delaware Valley – somewhere. In the city? That’s a tough sell when you consider things like parking and rents and taxes and the horrendous bureaucracy Philly forces businesses to endure.

    Do I love Philadelphia? Absolutely.

    Do I believe that Philadelphia provides a nurturing environment to start-up tech companies? Not a chance.

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  2. Don hit the nail on the head. The rise of internet enabled business has reduced the need for physical proximity to customers and employees alike. So the decision of where to locate the company is now dictated by the remaining factors, including cost of living, available space, taxes and government red tape. Philadelphia is doing itself no favors on these fronts. Currently, the only reason concrete new businesses have to be in the city is because the decision-maker *wants* to be there. That’s not a long-term recipe for success.

    If we incentivize companies for coming to Philly with lower restrictions, taxes, etc. they’ll flock here. Not an easy solution, but definitely simple.

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  3. Great post as always Gloria.

    My suggestion would be create a collaborative relationship with a “brother/sister” city that already has a growing, vibrant entrepreneurial tech community. Get entrepreneurs from your city engaging entrepreneurs in other cities like Austin and get a dialogue going. What can be learned, what can be copied, what can be inspired by engaging top minds in both markets? Ask questions. Be open to learning from the answers. See how other cities are turning the spotlight on their tech communities and leverage that experience for your city.

    Bottom line, get a conversation going with some people who would be open to helping Philadelphia get to where it wants to go.

    It will be through those conversations that doors of opportunity will open. One thing is for sure…your top tech companies likely could benefit from our top tech companies and vice versa. We just need to put our heads together to get the right conversations happening across the board and I bet some significant Ripples can come out of it.

    My two cents.

    Ripple On!!!

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  4. Great idea Steve and great post Gloria. Frank – I have to disagree a little bit with some of your points. New York has a high cost of living, high taxes and lots of government red tape – but they do probably have more available dedicated startup space than philly. Yet i think all would agree they have a burgeoning startup scene that has grown dramatically over the last 5-10 years and particularly within the last 5 years.

    So while I agree that we have work to do (as does NY) to improve on all of the points you raise, and that incentives can help to build a critical mass that then feeds on itself, ultimately i don’t believe that is what truly holds us back as the next great startup mecca. I think if we explore what caused NY’s scene to improve so dramatically we can learn some lessons from that, although ultimately we need to pave our own road. But i think a lot of it has to do with the melting pot of putting together tech types with heat seeking missile founders and creative designers and marketers/social media, etc. We need to figure out ways to attract more heat seeking missile founders to Philly as they are the key to building high growth tech companies. Part of that is a better living environment and philly and in particular center city and west philly have come a long way in that regard. But the other piece is convincing them that what they need to build a top tech company is here. But through our universities we get them here (which is a huge advantage over other cities that don’t have the great universities that we do) and it is simply a matter of keeping them here, which should be a solvable problem. I also think more can be done to put startups together with each other. Indy Hall and DreamIt and PSL have shown that good things happen when we put startup types together. We have the science center as well but overall NY has way more dedicated startup co-working/entrepeneur type space with flexible rent terms and i think we could use some more of that in philly to encourage the melting pot. People say we don’t have enough money here but I am not sure i agree with that as i think FRC, Genacast and others would be more than happy to put more money into deserving philly companies and good money will always find the great innovation and entrepreneurs, wherever they are located in my view.

    I also think there is some merit to Don’s comment that we need to focus on the industries already present in philly and how tech can be used to innovate in those industries. So pharma/meds, education, financial services and legal services come to mind. You don’t have to be a life sciences company to provide technological innovation to the life sciences industry, you just need collaboration between former life sciences company executives (and there should be plenty in this area with the recent consolidation and layoffs) and tech types who are true innovators. I think more of a focus on tech innovation on the business side in these industries has more of a chance than the consumer internet which is a pretty competitive field even though it is sexier.

    I think we could do more to embrace immigration in philadelphia and in particular trying to attract immigrants who can contribute to the technology scene. I know the city has a general immigration initiative but maybe a tech specific initiative could help.

    But just my two cents and the biggest thing is to continue the dialogue and put things into action.

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  5. Hi Gloria,

    I think you’ve hit the nail on the head when you write “the more we continue to talk about what is wrong instead of how to fix it, the more everyone else (meaning the world at large) will believe it.” Perception may not be reality, but it certainly feeds the way resources are allocated.

    I can’t speak to the Philadelphia tech community, but I’ve seen the D.C./regional tech community grow up over the last 20 years. DC used to only be a government town, and the rise of the biotech corridor in MD and the AOL/dot.com corridor in Virginia lead to more resources–and more demand for city life (sports, clubs, etc.). You have the city part down well, so I’m guessing the issue may be business climate — and the definition of what a tech company is. (I think Don’s comment about focusing on the industries that are there already makes a lot of sense).

    Understand why companies are leaving (is it a city issue? state regulations or taxes?), where they’re leaving for, and what it will take to attract tech entrepreneurs and tech companies to put down roots in Philadelphia.

    Congrats on sparking a great conversation to have. And, BTW, Happy New Year! –Daria

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  8. Gloria, excellent post, and all very good comments.

    I moved to Philly less than six years ago from abroad. I had no previous perception of Philly (good nor bad), and something that has always been appalling to me is Philly’s sociological phenomenon of low self esteem – I agree, here in Philly people tend to focus more on the problems than in the good things. The good news is that in my six years here I have also perceived an improvement on that front.

    Now, even if we are the best cheerleaders the city can have we cannot ignore realities. As some pointed out Philly is not the most business friendly city (taxes, unions, transportation, crime).

    But even if you decide to stay in Philly, (and there are thousands of tech companies in the region), what makes a city a great technology hub is what makes Philly a great medical/biotech hub: a critical mass of education, innovation, government agencies, non profits, institutions, professionals and businesses, all concentrated in this geographical area, that enables the region to be somehow “self sustaining” in that industry.

    And back to the idea of “big name” tech companies not present in Philly, I think it is both a symptom and cause of why Philly is not a great tech city. Some big names happen to grow in a city and later attract others… some other big names move to a city because they were attracted… it’s part of a cycle.

    And what can we do: I think the city is moving in the right direction in every front and the tech businesses are growing. We are still David trying to fight against Goliaths and hopefully we will reach the critical mass in a few decades (yes, decades). In any case, I think this is an exciting place to start a tech business: precisely because this is not a tech town you can tap on a large market with fewer competitors and a growing “buy local” sentiment.

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