Innovation Works

by Paul Ruggiero

AlphaLab Gear, a program of Innovation Works, is a hardware and robotics startup accelerator. The mission of Innovation Works is to increase the success rate of the region’s technology-adopting companies through direct investment, business assistance, and infrastructure development. In early 2013, Innovation Works applied for a grant from the Henry L. Hillman Foundation to support AlphaLab Gear, with the goal of creating the nation’s leading agile hardware accelerator.

Innovation Works sought to leverage southwest Pennsylvania’s strengths in manufacturing, investing, and technology.

In one of Pittsburgh’s premier rock concert venues, more than 650 tech-hungry investors, entrepreneurs, and business professionals sidle to their seats, careful not to spill coffee on their expensive suits. As the lights dim and the giant screen on stage begins to glow, it’s easy to imagine Steve Jobs strutting out to introduce the Next Big Thing. But less than a year earlier, many of today’s presenters had little more than an idea.

This is Demo Day, the culmination of the AlphaLab technology startup accelerator program. AlphaLab has guided twelve cohorts of software entrepreneurs from the back of a napkin to an auditorium studded with venture capitalists. On this particular Demo Day in spring 2014, the software entrepreneurs of AlphaLab are joined by the very first class of hardware entrepreneurs from AlphaLab Gear.

Both AlphaLab and AlphaLab Gear are programs of Innovation Works, southwest Pennsylvania’s largest seed-stage technology investor. Since 2007, the AlphaLab program has helped more than 80 software startups use agile innovation, an iterative product development technique, to create market-ready software applications in cycles of just 20 weeks.

Bob Starzynski, director of business development at Innovation Works, says that in 2011, companies making physical products started asking for the AlphaLab experience. “We didn’t know if the whole idea of agile innovation really applied,” says Starzynski. “Does iterating a product quickly still work with making a physical product?” With cheaper three-dimensional printing, wide availability of off-the-shelf hardware components, and the advent of maker spaces that enable individuals and small businesses to access very expensive fabrication equipment, the answer seemed to be yes.

But physical products take more resources than software to develop.  Therefore, after receiving a grant from the Henry L. Hillman Foundation, Innovation Works doubled down on AlphaLab Gear, introducing a 40-week program and an investment of up to $50,000 for each company—twice the time and money it previously provided to software startups. It also partnered with TechShop Pittsburgh, a fabrication studio and learning center, and Startbot, a local robotics investment firm helping companies to scale up from prototype to production.

In October 2013, Gear’s first eight companies converged on the program’s 10,000-square-foot work space in East Liberty. The open facility, which includes garages, offices, and a cavernous common room, encourages the Gear companies to collaborate.

Dick Zhang is the co-founder and CEO of Identified Technologies, a Gear startup that makes flying robots to collect data at large or dangerous industrial sites. He valued the fraternal bonds with the program’s other CEOs and founders, especially when his project would hit a wall. “At early hours of the morning,” says Zhang, “people will drop whatever they’re doing, come over to your office, and suggest ideas on how to get past whatever’s challenging you.”

Zhang, who formed Identified Technologies at the University of Pennsylvania, says he and his cofounders didn’t hesitate when offered the chance to move to Pittsburgh, a prominent locus of manufacturing, robotics talent, and industry. “If you’re trying to create and manufacture something,” he says, “arguably Pittsburgh and western Pennsylvania is the best place in this country to be.”

Gear entrepreneurs hail from around the United States and even Puerto Rico. AlphaLab Gear requires its alumni companies to stay in Pennsylvania for five years, in the hope that the program’s monetary investments will take root and stimulate the local economy.

Startup funding isn’t enough, though. “These companies aren’t going to be successful if you just throw money and office space at them,” says Starzynski. That’s why AlphaLab Gear coaches its entrepreneurs on every aspect of developing their products and their businesses. The program’s experts also help the companies to connect with local suppliers, manufacturers, and investors. “Mentorship really is the foundation of the whole program, and it takes all different forms,” says Starzynski.

Jayon Wang, cofounder and CEO of LifeShel, a maker of cell-phone-based personal safety products, agrees. “Initially, you have a great product and a lot of passion,” he says, “but you don’t necessarily know how to bring it to market.”

Untested hardware startup accelerators like AlphaLab Gear need a little help, too. Starzynski says the Henry L. Hillman Foundation’s “stamp of approval” on the Gear program helped to nudge other financial and strategic partners off the fence. The foundation’s grant partially funded Gear from 2013 to 2016. “One of the most important things,” says Starzynski, “is the ability to generate metrics in those three years to demonstrate the success of the program.”

Demo Day represents the first big test for the eight Gear companies. After the presentations and applause, the audience mingles with the Gear alums to learn more about their products, including a small-scale carbon-fiber part maker, a food temperature monitoring system, a Bluetooth-enabled electronics prototyping circuit board, a wood-working robot for the home hobbyist, and a customized gift delivery service. Herb Gilliland, sporting a yellow hard hat and sunglasses, hands out vouchers for user-customized baubles from his company’s three-dimensional toy-printing kiosks. Gilliland, software lead for PieceMaker Technologies, says that AlphaLab Gear levels the playing field for hardware startups and provides a critical safety net.

Even AlphaLab Gear’s backing is no guarantee in the hyper-competitive technology field, cautions Starzynski. “We don’t expect all of our companies to be successful,” he says, “but we want to help them beat the odds.”

After ten months of late nights and ten nerve-wracking minutes on stage, AlphaLab Gear’s first entrepreneurs are taking business cards from millionaires. It appears that they have beaten the odds.