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2022 Fire Awards, Career Achievement: Rich Lunak, Innovation Works – The Business Journals

When it comes to being involved in the tech startup world, Rich Lunak has just about done it all.
From launching a health care startup out of college and selling it to a major firm to leading a seed-stage investor program and establishing an incubator/accelerator, Lunak has made a big difference in the western Pennsylvania innovation ecosystem. And now he is ready to move on from his direct role in the local startup scene.
After serving as the longtime president and CEO of Innovation Works Inc., one of the region’s largest seed-stage investors of local startup companies, Lunak announced this past spring he is ready for retirement. By year’s end, he’ll vacate his desk at IW’s offices on the North Side after leading the organization since January 2005.
During his tenure at the organization, IW noted that Lunak’s leadership has played a key role in the creation of 20,000 local jobs from startups that have taken investments from IW, funding that has surpassed tens of millions of dollars over the years.
Lunak also pioneered the launch of several incubator and accelerator programs underneath IW’s management to better foster and cater to the diverse needs of tech startups that are making products or solving problems with software, hardware or biomedical research (or all three).
It’s for these efforts and others that Lunak has been given the Career Achievement award as part of the inaugural Pittsburgh Inno Fire Awards program, an effort that aims to recognize and celebrate the local startup community and its accomplishments.”
I’ve been fortunate enough to be part of some great teams, and they’ve accomplished some good things,” Lunak said. “I just hope I’m leaving the City of Pittsburgh, our region and our region’s entrepreneurial tech community in a better place than it was when I joined.”
Lunak’s career with IW postdates his experience in launching a startup: Automated Healthcare.
Born in Pittsburgh, Lunak grew up in Ambridge where, upon his graduation from high school, he estimated that about two-thirds of his neighborhood was unemployed amid the declining steel industry.After earning a degree in electrical and computer engineering from Carnegie Mellon University, Lunak went on to work at Westinghouse Electric Corp. as an engineer. It was when Lunak was tasked by Westinghouse with bringing automated forms of technology like robotics and IT systems into industrial settings that the idea of Automated Healthcare was born. Surely these same types of repetitive yet highly accurate tasks accomplished by robots and IT systems could be useful to other applications, Lunak theorized.
“We were probably young and crazy enough at the time to think we could actually start it,” he said.
And so he took a pitch of using this concept as it might be applied to pharmaceutical distribution centers and hospitals to Ben Franklin Technology Partners (IW is the local member of Ben Franklin, which is managed by the state Department of Community and Economic Development).
He walked out with an initial investment of about $90,000 to buy an off-the-shelf and previously used robotic arm. He, alongside two others, then designed the software and system needed to have this robotic arm correctly pick and fill prescription drug orders, using a barcode system similar to the ones used by vending machines.
Lunak said Automated Healthcare used that initial system to convince its first set of customers and other investors to further back the product financially. It worked.
“In a lot of ways I think it was a really good idea at the right time,” Lunak said. “Health care was going to an environment where cost containment pressures were even heavier than ever on providers, and we had a product that helped reduce costs and improve quality, so we competed very well in that environment.”
The startup’s triumph wasn’t necessarily the main objective, however, according to Lunak.
“We didn’t even think about this company being successful and that there might be a financial return,” Lunak said. “It was, ‘Oh, my God,’ I get to work with my best friend, show up every day in a pair of T-shirts and shorts — how cool is that — and work on robots.”
Soon enough, though, the business took off and continued to grow. As a result of its success, San Francisco-based health care services company McKesson Corp. bought Automated Healthcare in 1996. Lunak stayed on with the company for a few years and joined its corporate operating team, where he led five autonomous-related business units serving more than 13,000 customers with a combined employee count of about 1,800 people.
Following his time at McKesson, Lunak ultimately landed at the helm of Innovation Works. He said he enjoyed the corporate environment offered by McKesson, one in which he was heavily involved in day-to-day decisions relating to his prior business, but ultimately he missed the feeling of being able to make independent determinations involving his own company.
“I woke up and realized it was no longer my company; I wasn’t having as much fun,” Lunak said. “When I got contacted by a recruiter to look at Innovation Works, my initial reaction was: ‘Innovation Works, why would I want to do that?’”
But he gave it some thought, and the more he did, the sooner he realized that some of the most fun of his career was during the early days of launching and building his own company.
“[The job] became really attractive, and then once I got into it, it’s really a wonderful place to work because we work day in and day out with people who want to change the world with their ideas,” Lunak said. “If that doesn’t charge your batteries in the morning, I don’t know what does.”
Lunak’s impact on the region’s startup ecosystem goes nearly unrivaled among those who work in the tight-knit community.
IW estimates it has invested more than $113 million across 600 companies since its formation in 1999, the majority of which occurred under Lunak’s direction. And over the past 10 years, IW said 60% of founders receiving investments from the organization have been women and/or a person belonging to a racial minority group.
Lunak also oversaw the launch of AlphaLab in 2008, a now-nationally ranked software-based startup accelerator from IW. The success of AlphaLab led to the launch of AlphaLab Gear in 2013, an accelerator for hardware-based startups. And in the past year following a partnership with Allegheny Health Network, IW launched AlphaLab Health to help bolster the region’s emerging health care and life sciences companies.
Separately from the accelerators, Lunak also directed the raise and full investment of the $24 million Riverfront Ventures fund, an investment group that offers more capital to high-potential companies within IW’s portfolio as well as the larger regional community.
“When I think of Rich’s biggest contribution, it was in building this strong ecosystem to support startups in southwestern Pennsylvania,” Donna Myers, former CEO of software firm Salsa Labs and an IW board member, said. “He has been successful not only in creating a very strong ecosystem for startups within the area, but he has also been a spokesperson for not only startup companies, but for growing companies in the whole Pittsburgh economy.”
For Navid Kazem, the CEO and co-founder of thermally conductive rubber composite startup Arieca Inc., Lunak’s support early on in the company’s timeline proved instrumental to its future success. A participant in the AlphaLab Gear program, Arieca recently closed on a $6.5 million Series A funding round, but it was years prior in 2018 during a pitch competition at CMU that Kazem first saw the type of support a figure like Lunak can offer.
“During that presentation, he was there in the audience and with his warm smile and support, it made me feel great and feel the support of [the startup] community,” Kazem said. “That support early on was what kept us growing to continue at the earliest stages of the company. That’s the most important … someone like him who gives us the confidence that we can do this.”
Starting a company is not easy. … The support that he and a lot of people at Innovation Works gave was very important for a lot of companies to start, including Arieca. … We still have a lot of work to do, but we wouldn’t be here without the support of Rich Lunak.”
After he leaves IW, Lunak said he’ll continue to do work for the various boards he serves on and will remain engaged with some of the region’s startups. In his opinion, Lunak thinks the recent rise in notoriety enjoyed by the local tech scene is only getting started. He’s staying humble on attributing any of that success to himself, though.
“I think our region’s tech and startup community has had a lot of momentum and changed dramatically over the years. It’s sometimes hard to see those changes over a month or a year,” Lunak said. “Fast-forward to today, and last year we had nearly $3.6 billion invested in our startup community and five IPOs and so much momentum. Pittsburgh’s just got a lot of momentum. I think we’ve got an opportunity to be one of the top five tech hubs in the country, right up there with Silicon Valley, San Jose, Boston, Austin, etc. I’m really bullish on the potential here in Pittsburgh and really proud to have played a small part in that growth.”
1987 – 1989: Development engineer, Westinghouse Electric Corp.
1989 – 1990: Software Engineer and Account Manager, Cray Research
1990 – 1996: Entrepreneur, Automated Healthcare
1996 – 2000: VP of Operations/President, McKesson Automated Healthcare
2000 – 2004: Group President, McKesson Automation
2005 – 2022: President and CEO, Innovation Works
2013 – 2022: Founder and Managing Director, Riverfront Ventures
Title: President/CEO, Innovation Works Inc.; founder/managing director, Riverfront Ventures
Family: Leeann Lunak, wife; Grace Lunak, daughter
Education: B.S., electrical and computer engineering, Carnegie Mellon University; M.B.A., University of Pittsburgh
Hobbies: Reading, long walks with his dog, travel, game nights, gardening, time with family and friends
Nonprofit boards: Pittsburgh Technology Council, National Association of Corporate Directors and Pittsburgh Venture Capital Association
Past/present for-profit boards: American Textile Co., Micro Merchant Systems, Trellis Rx, CoverMyMeds, Aesynt, SoftWriters Inc., Kaarta and Othot
Authors: Walter Isaacson, Michael Lewis, David McCullough, Malcolm Gladwell
Startup/inventor books: “The Hard Thing About Hard Things,” “Bad Blood,” “Steve Jobs,” “The Everything Store,” “The Wright Brothers,” “The Double Helix,” “Crossing the Chasm,” “The Accidental Billionaires,” “Einstein,” “Elon Musk,” “The Last Days of Night”
Streaming shows: “Ted Lasso,” “Only Murders In The Building,” “The Queen’s Gambit,” “Sherlock”
Podcasts: “The Daily,” “Up First,” “Pop Culture Happy Hour,” “Conan O’Brian Needs A Friend,” “Sunday Sitdown with Willie Geist,” “The Zane Lowe Interview Series,” “Literally! With Rob Lowe,” “The Ezra Klein Show,” “Hit Parade,” “TechVibe Radio,” “Going Deep with Aaron Watson”
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