On a rainy morning on the North Side, Innovation Works and EY hosted a panel discussion with RoadRunner Recycling CEO and founder Graham Rihn, iraLogix Chief Strategy Officer and cofounder Joe Hipsky, and BlueTree Venture Fund leading founder Catherine Mott. The speakers looked back at their years in Pittsburgh’s startup scene and shared the highs and lows of running a business in a challenging economy.
Economic impact of the pandemic
Running a waste management company during the pandemic was sometimes complicated, Rihn said. Virtually signing contracts was no problem, yet by trade, there were aspects of his business that relied on physical interactions. But what most impacted RoadRunner Recycling, and a lot of other businesses, has been the rising inflation that has come with the pandemic.
“In 2022, inflation has had a very large impact on the waste industry,” Rihn said. “We have battled that all year.” Per the company, that impact includes heightened fuel and landfill tipping charges, and higher costs for recyclable materials.
On the one hand, the company ended the year with $20 million secured in a Series D extension round led by Fifth Wall, which followed a $70 million Series D led by General Atlantic. On the other hand, this didn’t prevent Rihn from making a round of layoffs in early March, which he attributed to the economic conditions that have hurt a number of other venture-backed Pittsburgh tech companies.
RoadRunner Recycling wasn’t the only company that had an eventful month. iraLogix, which raised a $22 million Series C back in July, had been a client of Silicon Valley Bank. By now, you know the story: On March 10, following a whirlwind few days of financial ruin, the bank suddenly shut down. Though the federal government ultimately announced it would guarantee the deposits at risk regardless of whether they were insured, Hipsky recalled a stressful few days in the immediate aftermath of SVB’s collapse.
“Watching SVB evaporate in 36 hours, where we had all of our money, was fun,” Hipsky told the crowd. (Yes, that was a joke.) “We tried to get money out [but] we were too late.”
What had concerned him most about the prospect of not reclaiming that money was making payroll just a few days later. Hipsky said he spent most of that weekend drafting several different proposals to the company’s investors explaining the situation. The Biden administration’s decision that Sunday meant Hipsky’s statements were no longer necessary.
“I ripped it up and threw it away because it didn’t matter anymore,” he said. “Then it was just four wires across three banks later, and we made payroll.”
Lessons in entrepreneurship
On the subject of near misses and full-on regrets, at Mott’s request, both Hipsky and Rihn shared what they’d learned from their time in the business world.
Hipsky said that he tries hard not to dwell on regret and just tries to see mistakes as opportunities to learn what to never do again. Rihn, on the other hand, explained that most of his regrets are about the things entrepreneurship can require you to miss.
“There’s this unfortunate reality of owning a business where you often find yourself thinking if you’re being there for family and friends enough,” Rihn said. “If there’s anything that’s ever lingering in my heart, it’s usually just thinking about who I haven’t responded to, phone calls, and who I haven’t texted back.”
Technical.ly heard from a handful of local startup leaders that Pittsburgh companies were less likely to bank with SVB. Some preferred digital-first options like Brex or Ramp, or traditional — and local — banks like PNC. Thoughts on this? Email email@example.com.Atiya Irvin-Mitchell is a 2022-2023 corps member for Report for America, an initiative of The Groundtruth Project that pairs young journalists with local newsrooms. This position is supported by the Heinz Endowments.
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