Lifestyle

Friday 25 July 2014

Silicon Valley goes green

Prophetic, progressive and profit-hungry – we meet the Irish techies chasing the dollar in Silicon Valley.

Silicon Valley
Barry O'Sullivan
Niall Keane

'Innovation in California is at its absolute peak right now," said Bill Gates in a recent article in 'Rolling Stone' magazine. Last year, there were 25,000 start-ups in Silicon Valley, most of which he branded "silly". Nonetheless, venture capitalists invested some €10bn to help them grow.

Although it takes less than an hour to get from one side of Silicon Valley – just south of San Francisco – to the other, it is the unparalleled epicentre of technological innovation. It is the embodiment of the American Dream, where two men who got turned down for jobs at Facebook went on to create a company called WhatsApp before selling it to Facebook for €16bn only five years later.

"People here can do anything," says entrepreneur Elon Musk, who recently was given €1.3bn by NASA to send his rockets up to the International Space Station.

Referred to as "Mecca" by techies, Silicon Valley can be likened to Hollywood, except much, much richer. Most people come here to become household names. They are fearless, confident, wildly optimistic and completely unabashed in their pursuit of success. Here you can cover yourself in body paint, then bring your pet to work, drink a cocktail made by a robot or eat a banana with a QR code on it.

Not everyone is happy with the outrageous success that the Valley is experiencing, least of all the laid-back left-wing community, whose members are appalled by the extortionate rents, sanitised streets and buses destined for Googleplex clogging the morning rush-hour streets.

But there's not much anyone can do to stop it. Silicon Valley is booming, and Irish entrepreneurs want a slice of the American pie.

The most high-profile of these are Patrick (23) and John (25) Collison from Limerick, who raised €60m in Silicon Valley for their online payment company Stripe, which is now valued at around €1.3bn.

They sold their first company, Auctomatic, for €3.2m when they were only 17 and 19. According to the brothers, though, they are "just getting started".

"There are around 50 Irish companies in the Bay Area," says Enterprise Ireland's US West Coast manager Nick Marmion, who is based in Mountain View, about 40 minutes drive south of San Francisco.

"Irish companies are really innovative and have massive potential. In order to be successful in Silicon Valley, they have to adopt an open approach. Here, people are hugely collaborative and they don't mind sharing what they are doing.

"By nature, we are more insular and afraid of such a concept, as we think people will steal our idea. But that's not how it works. If you have an idea, act on it quickly and get people on your side. If you don't, an amazing opportunity will pass you by," he says.

Weekend magazine travelled to the US Pacific coast to chat with top Irish entrepreneurs about life and times in Silicon Valley.

Barry O'Sullivan, Investor, Dragon on 'Dragon's Den' and CEO of Altocloud

County of Origin: Cork

"I moved to the US from Cork at the age of 25 after selling my car in return for a one-way ticket and have been working in tech companies ever since.

I started off as a design engineer with telecommunications multinational Nortel and took on assignments in New York, Boston and Paris. After 18 years I moved to Cisco where I looked after multi-billion dollar divisions and a globally-based team of 4,000 people."

Barry started his educational path with a degree in electrical engineering followed by a Masters in computer science at the University of Limerick. He also completed an MBA at Santa Clara University in the heart of Silicon Valley.

He is one of the founding members of the influential Irish Technology Leadership Group (ITLG), a non-profit organisation comprising of Irish-American technology leaders who connect Ireland with Silicon Valley.

"In March this year, I launched a software company called Altocloud," Barry says. "It's a hugely exciting project and we plan to transform the way we use call centres forever.

"Companies spend over €215bn on call centres worldwide, so it's a massive market. But it's not fun to call them. You have to wait on the phone for ages, then listen to the same song over and over again, then repeat yourself to different people. It's very frustrating and it's something we all have to do.

"Altocloud created an app that speeds things up so quickly that by the time you talk to a customer service agent, they already know your problem. You can then use chat and video for a swifter transaction.

"We currently employ 10 people in Ireland and Silicon Valley. The brains of the company are in Galway, while operations are here," continues Barry, who worked in the call centre technology industry for so long, he felt he had to fix it.

"It's a great journey. Our objectives are huge. In a nutshell, we want to take over the world. We are here for the long term. This company wasn't created so it can be sold down the line. It's going to be one of those massive global companies, which will be taken public. It will become one of those great Irish-American success stories."

David Smith, Tirna Partners (Consulting service for high-tech and wireless customers)

County of Origin: Dublin

"I'm really enjoying being here. The lifestyle is fantastic so I'm in no rush to dash home. I meet up with Irish people once a month in order to get my fill of Irish banter," says David Smith, who moved here in 2006 with Enterprise Ireland to work in the telecoms sector, where he was helping companies with sales, business and development.

"My green card came through in 2012 through the diversity lottery, which grants up to 50,000 immigrant visas available annually. My wife and I had been applying for seven years until we finally got lucky. Fate leant its hand after the lottery was invalidated due to an error and had to be redrawn. We got in second time round, so clearly it was meant to be.

"I live in Palo Alto, so rents are extortionate. You won't get more than a shoebox for €3,000 a month. Be ready to dish out lots of extra taxes too. If you decide to buy a house here, your property tax is between one and two per cent.

"That means if you own a house, which costs €2m, you pay up to €40,000 taxes – and €2m is at the bottom end of the property spectrum. Property tax goes directly to local schools here, so needless to say, the schools are excellent."

David is a principal and founding partner of Tirna partners, a consulting service for high-tech and wireless companies. "We focus mainly on companies looking for partnerships and funding in the US markets who have proven traction at home," he says. "We have offices in Toronto, Silicon Valley, Washington DC and will soon have presence in London and Dublin."

He also works in marketing and sales with US Market Access Centre, a technology accelerator company that gives international tech companies fast and successful access to the US market. "Thus far we have helped over 1,400 companies from over 50 countries through market entry programs," he says.

"It's a three-month process, where two months are spent working with the company abroad, while the third month is spent in Silicon Valley.

"This concentrated period also allows you to find out if the product isn't going to launch. Very often people have great ideas, but the market isn't ready for them yet. This way they save time and cost.

"I'm seeing more and more Irish people move to Silicon Valley, especially in the past two years. In most cases, they will have raised money at home and gained traction before they made the trip, otherwise it's too tough.

"If you are coming over here though, get your pitch right. You never know who you're going to meet and where you're going to meet them so you have to be able to sell yourself at the drop of a hat. Learn the 'elevator pitch' – popular in the film community – it should last no more than 30 seconds."

Denise Tormey, Founding Partner PlanNet 21

County of Origin: Galway

"I moved to Silicon Valley in order to expand PlanNet 21, a company I founded with four college friends from the University of Limerick back in 1998. We design, grow and support ICT infrastructure solutions for multinational companies and now employ 65 people.

"Interestingly, all of the founding members' parents are entrepreneurs – maybe that's why we all have perseverance and longevity in seeing out our vision together," says Denise Tormey, who moved to Silicon Valley in January 2013.

"We had successfully established offices in the UK and Ireland and created partnerships with global leaders. After 16 years in the industry, I was tantalised by the idea of a new challenge. There is only a certain amount you can do in Ireland. If you want to grow your organisation in the US, you have to be here. It's as simple as that. People want to look you in the white of the eye when they do business."

In the past year she has been strategically aligning the company to new partners. "We have also delivered solutions and services to many of the Fortune 100 clients and signed multi-year framework agreements with them," Denise explains.

"By being here, we are essentially working around the clock. I start work at 6am, which is 2pm Irish time, so I get to work a half-day in Ireland and then a full day here. At midnight, I can be available again for business in Ireland. My clients think it's 'sweet' that we are in the same time zone.

"I'm not here on a cushy number. It's hard work, and you have to be available. It's perfectly acceptable to call people at 7.30am in the morning and arrange breakfast meetings for 6.30am. People here don't differentiate between home and work time.

"If you want to do business here, you need to go to networking events. You could be at events day and night. The warm introduction is vital. You need a contact to introduce you to another potential contact.

"I have three children and they love it here. Though I work more here than I do in Ireland, for some reason I have more time. I get to walk the kids to school, then at the weekends we go surfing in Santa Cruz or up to Tahoe. I even coach football at school, which makes me a soccer mom, I guess. We love it here – it's a fantastic place to raise a family."

Joe Kiernan, co-founder Frontdesk Anywhere

County of Origin: Leitrim

"We've just moved our headquarters into the heart of Chinatown, right beside the Financial District. It's a hugely historical location. The building we are housed in is made from original bricks from the great fire in 1906. They had to be kept in their original state, so you can still see the fire damage on them.

"There are 20 people working in the downtown office at the moment, but it is growing fast. There will be 35 people working here within the next few months, including two Trinity College graduates," says Joe Kiernan, who came to San Francisco on a J1 visa in 1999.

"After completing my computer science degree in Trinity College, I worked here for a summer, then got the H1-B visa, which meant I needed to get sponsored. But it wasn't problematic because people over here love the Irish and enjoy working with us.

"I met my now business partner, American Thomas Lyle, while I was working as a software engineer and we founded our company Frontdesk Anywhere in 2009. After speaking to hoteliers about a lack of hotel management software for small to medium-sized hotels, we created a cloud-based platform that lets them manage their sales, check-ins, inventory and more.

"We connect to over 145 online travel agents and have systems in over 1,000 hotels in 43 countries.

Around 80pc of the market is based in the US, but we are growing in Asia too. We've just hired staff in Bangkok and are getting significant traction. We're targeting Europe and China and are definitely planning to establish a European HQ in Ireland in the coming years so we can give something back and utilise the skilled staff we have there."

Joe is also a founding member of the Irish Network Bay Area, a network of Irish-American young professionals.

"We have a monthly happy hour, where real business happens," he says. "If you are thinking of moving here, let the Irish network be your first port of call. It's a great way to connect and get insight from people. I will happily meet with people for a coffee and a chat.

"In terms of living here, yeah the costs are as high as they come. There is a lot of money here, so the downside is that artists and bohemians are disappearing, as they simply cannot afford to pay €2,000 a month upwards. People have to live in shared accommodation at best, but it's very pricey if you aren't working in the tech sector."

John McGuire, CEO Game Golf

County of Origin: Galway

"I moved to Silicon Valley in 2010 to revolutionise golf with my product Game Golf, which became available on April 2.

"It's an easy-to-use revolutionary new tracking device for golfers looking to improve their game.

"All you have to do is clip a small plastic disc to the end of your clubs, then clip a small plastic box to your belt. Before you swing, you tap the box with the club and it gives you detailed statistics.

"Since the company launched in January, we are generating revenues of €1m per month and the golf season hasn't even started. We opened the PGA show in Florida, received investment from the PGA and partnered with Graham McDowell and Kelly Slater, the surf champion."

It's been a long journey from Galway, but John McGuire had always wanted to create a multi-sports platform combining his software engineering skills with his background in sports psychology.

"I ran a successful consultancy called Active Minds, where I worked with athletes and hurlers to improve their mental attitude while I was also working as a software engineer for Nortel," he says.

"As far back as 2006 I already had the walls covered in ideas, not dissimilar to what is now Nike + and Nintendo Wii. I always knew I could combine sports and tech, I just wasn't sure how to do it."

He picked the brains of sportspeople such as Keith Woods, Roy Keane, Clive Woodward and Mick McCarthy.

"Then I got funding from Enterprise Ireland and sold a farm I had inherited. Despite not being a golfer myself, I came up with the idea of gamegolf.com.

"In order to grow I knew I had to move to Silicon Valley. There are 60 to 70 venture capitalists in Ireland, while here there are over 700 in Palo Alto alone.

"When I first arrived at the airport in San Francisco, I got chatting to an Irishman at the baggage pick-up area and he offered me a couch to sleep on. I remember thinking to myself, 'I must be insane' when I was sitting in the back of the taxi driving to his house.

"As it turned out, he had a beautiful family and great friends, and I ended up couch surfing with them all for a year on and off. I moved around so I wouldn't get on anyone's nerves."

Throughout the year his idea was gaining momentum, but he had no firm investors. "I was nearly out of cash. I was working non-stop," John says. "I remember calling my wife at one stage and she didn't answer the phone numerous times. I called family members and they informed me she had packed up and moved back to the UK. In my obsession with making the company work, I had neglected my family and they had had enough.

"I had been in the US for three months without coming home. The next day I was on a plane to the UK. I convinced my wife and two kids to come to Silicon Valley. It was total lunacy on my part."

A week later he got a €1.7m investment from former Facebook executive Chamath Palihapitiya. Luck finally played its part.

"That meant we could rent a house and I could work. By the time we launched in January this year we had raised €8m. Now the dream is real – we want to be the number one digital sports platform on the planet. We want to be the Facebook of social sport.

"We have our highs and lows. Every day is a battle, but for me I'm most happy about the fact that my two daughters get to grow up in a culturally diverse environment that is hugely optimistic."

His advice to those thinking about setting up in Silicon Valley? "Stay in your 9 to 5," he laughs.

Niall Keane, CEO, SynergySuite

County of Origin: Dublin

"Uprooting your wife and two children to here wasn't a decision we took lightly," says Niall Keane, CEO of SynergySuite, a cloud-based software company that offers solutions to large hospitality chains. Luckily, the decision paid off.

"The magnitude of the market here in the US can't be overstated. At home, a chain may have 50 to 60 outlets, but here they have thousands. So if you are selling a product to quick-service chains in particular, it's a natural progression to establish a market presence here.

"Our clients include Bewleys, KFC, Omniplex and many of the leading pub and fast food chains in the UK and Ireland. We provide them with a system to manage their business online so they can monitor sales and staff, do their inventories and look after purchasing from the comfort of their iPhones or iPads.

"We track sales in real time from the point of sale and find out if anyone has their hand in the till or how much product is being wasted. It's a little bit like Big Brother, but staff know the system is in place. Nonetheless we have seen every scam in the book."

A whirlwind trip in June last year as part of Enterprise Ireland's 'Silicon Access' programme, which helps fast-track early-stage Irish tech companies, enabled Keane to lay the foundations for the move. An elimination process begins in Ireland and then the best companies are selected to come to Silicon Valley and receive mentorship and support.

But it is not without its obstacles. "There is a lot of red tape. I qualified for an L1 visa, which is valid for up to seven years, while my family received L2 visas. The process is pricey, so people thinking of moving to the US need to be aware of lawyers' fees, which can be over €4,000, while visas cost over €2,000.

"Despite the fact that you may bring glowing references from home, they don't mean anything when you want to rent a house, lease a car or even open a bank account early on. They all require a credit check upon arrival. In the US you are a ghost in the credit system.

"I opened a bank account in June when I first came over and put money into it each month, so that way the banks could see a pattern of income. Only that way did I get a US credit card.

"Of course we miss home, but there is such an international mix of people here and no end of dinner invites, so you feel very welcome. The Aer Lingus flight direct to San Francisco is great for saving time too.

"The scale of the market and opportunity in the US is huge. It's incredible. In Ireland you think in terms of creating a €10m business – here they think in billions and you soon understand why. If you can make it here, chances are you'll make it elsewhere too."

Philip McNamara, MD Voxpro USA, entrepreneur, founder of StartApp competition and founder of Mai Tai Ireland

County of Origin: Galway

"Just like many before me, I came here with the desire to be the next tech billionaire," says Philip McNamara, who moved to the US over three years ago.

His objective was to pitch a platform that scans barcodes from products and tells you where you can buy them. "It eliminates the process of going to a shop only to find it's been sold out," Philip explains. "I thought retailers would love the idea and spent two years fine-tuning it. As it turned out, retailers didn't want to give out their data.

"I ended up staying here after taking a job as managing director of US operations at Voxpro, an Irish business outsourcing company. Though my background is in software engineering, I moved onto the marketing side of things.

"Luckily, I had a green card from a previous stint in San Francisco, so I didn't have to go through the process. But because I was gone for years, I didn't have too many contacts over here and had to start afresh. I was the president of the Irish Kite Surfing Association so I decided to connect with people via the sport.

"That's how I came across a kitsesurfing camp for entrepreneurs called Mai Tai, which has events across the globe in places including the Easter Islands, Richard Branson's Necker Island and also Hawaii."

Founded by professional kitesurfer Susi Mai and venture capitalist Bill Tai, Mai Tai attracts no shortage of high rollers. Forbes recently estimated the net worth of individuals on the last trip to Hawaii at $7bn.

"After networking with 150 CEOs and venture capitalists from across the globe at a Hawaii event, I decided to create a Kitsesurfing camp in Ireland, which enjoyed its inaugural event on Achill Island last year," he says.

"Though small, it generated huge interest and this year's event will be much bigger. We have investors from Ireland, the US, Israel and the UK looking to invest up to €400,000 if they see a great opportunity as part of our Start App initiative. People can apply on Startappcompetition.com. I received sponsorship from Silicon Valley Bank, the IDA and Fáilte Ireland.

"The recipients will be flown to Silicon Valley, given mentorship, car-sharing options and office space among other things. We will host the event from June and will obviously see plenty of kitsesurfing and cycling amongst other activities."

Philip says trying to figure out what will work in Silicon Valley is anyone's guess. "It's like picking a winner in the Grand National six months before it takes place. It's impossible to know what will work. When you think back, people didn't think camera phones were a good idea, or couchsurfing in a strangers' house.

"Competition is fierce over here and you have to be on top of your game, so learn coding. Learn it from the age of five. It will allow you to build your company online. There is so much competition over here, so if you can't build your idea yourself, you are already losing.

"I live right beside the sea so I can kitesurf every day if I want. People don't get sarcasm and the craic wouldn't be the same, but luckily I get to go home four to five times a year.

"Venture capitalists here are just dying to invest in the next big thing. The money is there. All you have to do is come up with an idea for a product we can't live without."

Stuart Coulson, Business angel and mentor, consulting associate professor, vineyard owner

County of Origin: Dublin

"I moved to Silicon Valley in 2005. I work here as a mentor, business angel and consulting associate professor for a not-for-profit social entrepreneurship programme at Stanford University called D School," says Stuart Coulson.

"Basically, I help student entrepreneurs develop and innovate sustainable projects for the third world, like medical devices. It's not part of the curriculum, but they use it as a credit towards a masters."

The success stories are astounding. One of the projects to have come out of D School is the D Light, which has been sold in over 40 countries. It's a low- intensity light founded by business school graduates Sam Goldman and Ned Tozun.

Students at the school also created a brace which treats clubfoot. "Costing just $20, the brace locks the patients feet into a therapeutic position while a light plastic frame allows them to walk and play on their own," explains Stuart. One in a thousand infants suffer from clubfoot.

"The Embrace Infant Warmer, a baby incubator replaces the €20,000 device and is distributed in Africa and India. It's our most successful invention."

The list of inventions is impressive and long. Students even found a replacement for the highly dangerous machete, which is used in Rwanda, so children don't injure their hands while chopping up coconuts.

"We teach students here how to build things," says Stuart. "It's a fun job. Stanford is a great campus. There are 22 Nobel Laureates on the staff as well as four Nobel Prize winners. Some 19,000 start-ups have come out of the college. A lot of the fundamental research and a lot of tech and engineering goes on here."

"Previously I had a few start-ups in Europe, most notably a company called Gradient Solutions, which developed on-line travel booking engines for customers such as Delta, KLM and Virgin," adds Stuart, who sold the company in 2000.

"Then I got involved in early-stage investments, basing myself in Switzerland and the UK before moving to the US."

He now works as a business angel for numerous programmes including Trinity College's student incubator, Launchbox, which runs a three-month accelerator programme for students with early-stage business ideas.

Stuart, who holds a BA from Trinity College as well as an MBA from the University of Geneva and an Executive MBA from Carnegie Mellon University, also owns and operates Papera Ranch, an old-vine Zinfandel vineyard in California's Russian River Valley, producing acclaimed wines.

"This is a great place to be and I have seen an increase in Irish people moving over to Silicon Valley in the last few years for sure," he says. "Pre-2008, people weren't as prepared as they are now. They thought they were much bigger fish at home. Then when they came here they realised things were different.

"Some people do make the mistake when they are building their company of getting so caught up in achieving success that early oversights in terms of distribution of money and who owns what can lead to difficulties later on. So it's important to plan ahead."

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