Sunday 28 December 2014

Old-fashioned values drive €100m Irish tech start-ups

Published 15/06/2014 | 02:30

Patrick Collison, co-founder and chief executive officer of Stripe Inc., right, speaks at the Bloomberg Next Big Thing Summit in San Francisco earlier this month.
Patrick Collison, co-founder and chief executive officer of Stripe Inc., right, speaks at the Bloomberg Next Big Thing Summit in San Francisco earlier this month.
Oisin Hanrahan of Handybook

WHEN Rathcoole's 28-year-old Oisin Hanrahan bagged a €22m investment round on Wednesday to fund the growth of his online handyman-booking service ('Handybook'), it garnered less media attention than it might once have.

It seems that we are becoming used to young Irish entrepreneurs landing multi-million euro funding deals in the online services boom.

This year alone, Irish or Irish-led (US-based) tech start-ups have landed well over €100m in investment funding. That's a lot of capital placed into the hands of a few Irish geeks.

Granted, few funding rounds match the heights of January's massive €60m investment (reportedly in exchange for under 10pc of the company's value) into Limerick brothers John and Patrick Collison's online payments firm, Stripe.

But others have been trying. Intercom, Trustev, Kwikdesk, Cleverbug and Boxfish are just some of the homegrown companies that have stepped into the path of serious cash investment in the tech space over the past year. Others, such as Storyful's Mark Little, have gone a step further, cashing in on their firms to the tune of many millions.

So is this just the start of a new gold rush among Irish tech entrepreneurs?

And can it last?

Anyone who thinks that it's all part of some conspiratorial tech-fuelled bubble may not be paying close enough attention to the individual projects being funded.

Last week's Irish megabucks funding recipient, Handybook, is a brilliantly simple, effective, attractive online service that brokers house-maintenance workers (cleaners, plumbers, handymen) with ordinary people who need to order something done within their home. Visit the site (Handybook.com) and I defy you not to want to use one of its services straight away.

"It's as simple as Hailo or Uber," Hanrahan told this newspaper. "The only other way to do this is to respond to ads on Craigslist or similar services. It's not US restricted, either so we'll look at other countries in time."

Critically, the company's revenue is growing at a rate of 10pc per week.

"We are now seven times bigger than we were at the beginning of the year," Hanrahan told me.

Although Hanrahan's story is a common one in Silicon Valley, it still takes many here by surprise.

For example, Hanrahan dropped out of Harvard to start the company. ("Deferred" is the term he prefers, telling me that he "hates unfinished things" and that "the OCD side" of him is minded to return to complete the course.)

To the conservative Irish mind, this might seem like madness: drop out of the most prestigious university in the world? And yet it has proven to be the right thing to do. Tech is not like law or medicine where the same opportunities – more or less – will be around in three to five years' time.

The time to focus on Handybook, just like Uber, Airbnb or the plethora of other disruptive tech services, is right now. Someone else will surely do it if Hanrahan doesn't. This is because we are currently in the middle of a web services boom in online services where decent ideas that are well executed have a real chance of becoming large businesses in a very short period of time. But those opportunities may not be there in 18 months.

And it's not just 'having the idea', either.

"Probably the most important part of our business is actually the customer service," said Hanrahan. "If you can't really please people when they use us once, they just won't use us again."

This is one of many key differences between this boom and the original dot com boom of 2000. That period saw investors throw money at ideas with little or no execution.

Today, the companies attracting investment cash don't just have good ideas for an online market that is five times the size of what it was in 2000; they also have properly executed business models with old-fashioned standards, such as thorough customer service, thrown in.

With over €100m in the funding coffers for the first six months of the year, can Irish companies make it €200m?

We may not have another Stripe coming through just yet, but the pool of successful start-ups here is getting bigger and bigger.

Sunday Indo Business

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