Rich people would never want to live in Pittsburgh for many reasons, including that the culture of the place is in some ways morally opposed to the concept of rich people, the infrastructure is poor, the weather is always terrible, there is never any sun, and the food is terrible (often self-righteously so).
In other words, the cost of living is low because rent is low because there's no demand because no one wants to live here.
On top of all that, SV already exists, so if you were going to start a startup, there would be no reason not to start it there. And, once you exited there, you would have no reason to leave, and especially not in favor of Pittsburgh, of all places.
Thus, good investors, also known as angels, will never cluster here.
More on-topic, it seems like the CMU fund is going to have a committee of bureaucrats decide who to fund. Why would that ever be a good idea? I graduated from CMU and work there now, and if I started a startup and were offered money by said fund, I would reject it. They'd want me to go to an 'OFEF business workshop.'
I think you are being unreasonably hard on Pittsburgh. Recently it has become a great place to live. Areas like Shadyside are thriving with young people and great new restaurants and bars are opening every month.
Pittsburgh knows how it has and continues to benefit from the legacy of the enormously rich people it has produced over the years. I have never personally felt that the city is morally opposed to the concept of rich people.
I moved to Berkeley from Pittsburgh within the last year, and basically picked Berkeley over SF for the food, but...
the food in Pittsburgh really isn't that bad. I feel like you are judging all of Pittsburgh's food based on the popularity of certain grease laden places. But, Pittsburgh's food is really actually above average for a city of its size. It's above average in basically all aspects, except the weather. It's still not San Francisco, but, seriously, have you been to Cleveland or Buffalo? Exactly.
The Indian food in particular is about as good as any, especially at India Garden when it is half-off from 4PM-6PM (or 4:30PM - 6:30PM?) and so absurdly cheap that it is worth dealing with the surly servers. Taste of India is even better and doesn't have the mean servers.
Point Brugge in Point Breeze is great, and way cheaper than what you would pay for the same quality food in SF. Same with Legume. The Sharp Edge Beer Emporium has a beer list as good as any bar in the USA. Spice Island Tea House in Oakland is wonderful. Rose Tea Cafe in Squirrel Hill has really good authentic Taiwanese food (make sure to order the right things, Taiwanese Chunk Chicken and Beef with Hot Peppers is probably where to start).
Pittsburgh also has this absurdly good and cheap red sauce Italian place in Verona. Reservations are basically required as they are always full. http://veronavillageinn.myupsite.com/ I mean... Eggplant Parmigiana as good as any for $9.49 and it comes with soup and salad! It is absolutely my favourite restaurant in Pittsburgh but totally unknown to the college/young professional market.
I don't live in Pittsburgh, but completely disagree with your sentiments. I went to CMU '02, then lived in Shadyside for a few years, miss the place dearly and own a few properties there (they have appreciated significantly over the past 5 years... Pittsburgh has been an amazing real estate market during that time). Part of the reason it has appreciated is that it's doing exceptionally well during this downturn. Unemployment is 7.4%, almost 2 points lower than the nations average. San Francisco's is 10%.
Smart young successful people actually do live there, more so than it's comparison cities... It also has some of the most educated folks in that bunch-
http://www.pitt.edu/~cbriem/SelectedTables2.htm
You'll see it's in very good company among the top educated cities. Personally, a lot of my friends stayed in Pittsburgh and/or moved back after a few years. I personally was itching to leave many years ago, have lived in many places along the way and now miss the place dearly/will at some point move back.
There are a number of startups in Pittsburgh now, but not as many as there were during the .com bubble... there are many more than any other cities of its size, primarily because there is great talent coming out of CMU and Pitt. Your argument suggests that there is no reason for anyone to not locate to SV (which is totally fine, but I think many would disagree)
Re: food, you must be joking... Murray Ave right by CMU has more fantastic ethnic restaurants than anywhere I can think of (http://www.urbanspoon.com/n/23/2226/Pittsburgh/Squirrel-Hill...), and Nine on Nine, Eleven, Paris 66, Salt of the Earth, and Bona Terra would be worthy of Michelin stars in another city, yet they are reasonably priced in Pittsburgh.
Re: weather you're spot-on... there are less sunny days in Pittsburgh than nearly anywhere... but it seems to work out OK for Seattle.
If this fund is indeed run by a bunch of bureaucrats it might end up being crap, as you suggest. Project Olympus at CMU has done some good stuff though, so I have hope.
http://www.olympus.cs.cmu.edu/probes/
Yes, it has people with degrees, but no, it does not have many rich people. It has a few, and if they buy not-too-expensive houses and seem Pittsburghite-friendly, they are venerated. It did well in the recession because its economy is based on education and healthcare; this does not make it particularly good for startups.
Yes, it compares well to other cities of its size startup-wise, but we're comparing it to SV, which is not of its size, so nevermind.
Yes, there do exist nice restaurants, but we're comparing it to the Bay Area, and the mean, median, and top 10% quality of Bay Area restaurants is ridiculously high, so nevermind.
Pittsburgh's weather is worse than Seattle's. Yes, it is #2 to Seattle's #1 on the country's least-sunny list, but in Seattle, it just rains a lot, and whether or not it's raining, the air is palatable. In Pittsburgh, it's either freezing your nose off or making your eyes water with humidity.
The thing about being morally opposed to rich people is an instance of an observation I've heard from multiple people other than myself: Pittsburgh's message seems to be, stay here and be one of us, and don't think you can be any better than us, because we don't think that's possible, and in fact find the idea offensive.
Comparing a town with ~300,000 people to a metropolitan area to a major city like SF/Bay Area isn't exactly a fair fight. Obviously SV is going to be better at almost everything. Compared to almost any city its size, Pittsburgh is awesome as far as cost of living, culture, education, and food go.
And your sentiments about the culture here are a bit off. It's definitely much more blue-collar than SV, which may be why you get that impression. But it's a far cry from being anti-ambitious.
The whole point is that you can't compare a town with 300k people with a blue-collar culture to the Bay Area. It's not even close to as good for startups. Why is this controversial?
In other words, the cost of living is low because rent is low because there's no demand because no one wants to live here.
On top of all that, SV already exists, so if you were going to start a startup, there would be no reason not to start it there. And, once you exited there, you would have no reason to leave, and especially not in favor of Pittsburgh, of all places.
Thus, good investors, also known as angels, will never cluster here.
More on-topic, it seems like the CMU fund is going to have a committee of bureaucrats decide who to fund. Why would that ever be a good idea? I graduated from CMU and work there now, and if I started a startup and were offered money by said fund, I would reject it. They'd want me to go to an 'OFEF business workshop.'