One afternoon in 2012, Matt Stewart was in the Children’s Museum of Pittsburgh watching kids play with puzzle pieces. The pieces were part of an exhibit Stewart helped design to teach the building blocks of coding to children as young as four. He soon noticed one young girl taking charge with some puzzle pieces, and showing her classmates how to use them to solve problems. The girl’s teacher told Stewart that the student was usually behind her peers in many areas of learning, but the puzzle pieces seemed to click with her.

Photo/Digital Dream Labs

An idea for a company was born. Stewart and his cofounders, Justin Sabo and Peter Kinney, fellow Carnegie Mellon University graduates, founded Digital Dream Labs in 2012. Today, their first product, Puzzlets, uses puzzle pieces and sensors to control video games and teach skills like logic and sequencing in a hands-on way.

“If you’re on a touch screen, you’re in your own zone,” Sabo said. “You’re no longer here.” At a time when so much technology for kids is screen-based, Puzzlets’ physical pieces invite problem solving and collaboration with parents or peers.

Sabo and his cofounders are part of a small scene of entrepreneurs in Pittsburgh who are creating hands-on educational technology, toys, and games, and in the process are helping to create a cluster of entrepreneurs, designers, and manufacturers that could situate Pittsburgh as a hub of edtech hardware production. The scene is small but seems poised to grow into the type of industry cluster that characterizes maker-oriented Pittsburgh.

Evolving Hardware Industry

In 2012, Digital Dream Labs got a big boost—support from startup accelerator AlphaLab. If they were starting out today, though, they would have applied to AlphaLab Gear, AlphaLab’s newer spinoff. The newer accelerator, in Pittsburgh’s West Liberty neighborhood, is specifically for technology startups that make hardware. AlphaLab Gear funds several “cycles” of 8 to 10 companies a year—providing $50,000 as well as mentorship from hardware experts in exchange for 9 percent common stock equity in the company.

Chris Millard, program coordinator at AlphaLab Gear, said hardware startups were cost-prohibitive until recently. And although some aspects of hardware development are still complicated, it has become more feasible and profitable. Simple sensors are cheaper and more sophisticated, and equipment such as 3D printers can create prototypes of a product quickly, saving many months and thousands of dollars. (Several years ago, one investor said he flat-out did not “do” hardware. Millard said that same investor recently led a $2 million round of funding.)

[pullquote] Clusters can make regions uniquely competitive for jobs and investment in niche industries like edtech or robotics.[/pullquote]

Plus, when it comes to hardware startups, Millard said Pittsburgh has a lot going for it, including hundreds of regional manufactures that will produce small batches, access to millions of dollars of prototyping equipment at nearby TechShop, and a rich pool of talent coming out of CMU, the University of Pittsburgh, and Duquesne University.

Tom Lauwers, founder of BirdBrain Technologies, which makes Hummingbird Robotics Kits, said finding a circuit board manufacturer right outside Pittsburgh was helpful because it let him see the progress in person.

Even more helpful, he said, was tapping into the city’s manufacturing knowledge base. In his early days, he visited 4moms, a robotics company that makes swaying baby seats, and Bossa Nova Robotics, which is building a fully autonomous robot. Both shared invaluable knowledge about warehousing, international trade regulations, and other issues.

The above features—groups of related designers, builders, and idea people plus on-the-ground manufacturing—is a classic illustration of “cluster development.” A cluster is a regional concentration of related industries, according to the Cluster Mapping Project from Harvard University. As they grow, clusters can make regions uniquely competitive for jobs and investment in niche industries like edtech or robotics.

Today, Lauwers is giving the same advice to young entrepreneurs and technologists who are coming to him with the same type of manufacturing questions he once had.

Students use Hummingbird Robotics Kits in a workshop. Photo/ BirdBrain Technologies

Retaining Talent

Despite signs of growth in Pittsburgh, developing hardware is no easy feat, whether designing for kids or not. And the amount of venture capital in the region pales when compared with Silicon Valley.

As Millard said, “It will take some more ‘big exits,’ ” or large acquisitions of tech companies, “to really get Pittsburgh on the map.”

One small company is AE Dreams, which recently graduated from a cycle of AlphaLab Gear. The company’s first product, Turtle Mail, is a wi-fi-enabled wooden mailbox that prints messages and puzzles parents send to their kids from their smartphones.

The idea came to cofounder Alysia Finger about three years ago while she was sitting in her daughter’s room as two electronic toys screamed from across the room, begging one-year-old Aedren to come back and play with them. Sitting there after a long day, Finger noticed how her daughter was content playing with simple wooden blocks, despite the expensive electronic toys’ pleas for attention.

An early play test with a Turtle Mail prototype. Photo/AE Dream

Why, she wondered, did so many companies want their toys to be a distraction for kids? Then it dawned on her. Why not design tools that help kids interact with the world and people around them, not just the toy itself?

Turtle Mail is available for pre-order, and the company is planning to attend one of the country’s biggest toy conventions next year. Finger said other support beyond seed funding would help new companies take flight. Though she said her company wasn’t quite the right fit for it, she pointed to the EdTech Refinery from the Sprout Fund, which pairs technologists with educators to help entrepreneurs refine their ideas.

Digital Dream Labs is selling Puzzlets in Toys ‘R’ Us and online. Still, Sabo said the hands-on-technology-for-children scene is still in its infancy, and he emphasized the need to retain more local talent from the universities.

“Graduates get the fever and they go out to the Bay Area,” he said. “There needs to be a way to retain that talent.”

In the meantime, companies hope their own successes will act as a magnet to talent and help build a stronger cluster down the line.

“It will take companies like ours, who go through the trenches, to able to bring that to Pittsburgh,” Sabo said.