Tuesday 23 April 2019

Daire Hickey: Irish entrepreneurs must think big

Eoghan McCabe and Des Traynor of Intercom, its $1bn market value makes it Ireland’s first and only unicorn Photo: Johnny McMillan
Eoghan McCabe and Des Traynor of Intercom, its $1bn market value makes it Ireland’s first and only unicorn Photo: Johnny McMillan

Daire Hickey

Last year, Intercom raised $125m to become Ireland's first, and so-far only, unicorn. Started in 2011 with a base in both Dublin and San Francisco - and backed by Social and Capital, a US venture firm - they have paved their own path. Eoghan, Des and the team are to be commended. They sought out the advice of true experts in the field, investors with a track record of backing credible entrepreneurs, had a vision, built product, and hired an incredible team.

Similarly, the Collison brothers, starting in San Francisco, managed to attract investment from Sequoia and Founders Fund, the firms behind Apple, Google and Facebook. Now Stripe is worth over $10bn.

Movidius, started in Ireland by Sean Mitchell and David Moloney and backed by Atlantic Bridge and DFJ, sold to Intel for $400m. Logentries founded by Trevor Parsons and Viliam Holub, with backing from Polaris' Noel Ruane and a base in both Ireland and the US, sold for $100m in three short years. And Voxpro, headed by Dan and Linda Kiely, sold last year to Telus international for $150m. I could go on and on.

Each is a considerable exit, and there are dozens more, but what sets these companies apart is a global outlook, a drive and ambition that not all companies and entrepreneurs have. How do we nurture our entrepreneurs and create more?

Having spent the past few years in New York, and previously at Web Summit, I've been lucky enough to have met some incredible entrepreneurs and investors. I've seen first hand the key difference between Irish entrepreneurs and their counterparts in the US or even Israel. Our biggest problem is that so many of us don't think big enough and we don't back ourselves.

You'll never hear an Irish person say: "I'm building something quite revolutionary here, it's actually my second company, I sold the first for so much..." and so on, but you'll hear plenty of US entrepreneurs talk about their visionary and revolutionary widget.

Many Irish entrepreneurs are too polite, almost tripping over themselves to apologise for having an idea, never mind a vision. Thinking they're not quite at the level to enter a bigger market like London, New York or San Francisco.

While graduates of Stanford think nothing of reaching out to Peter Thiel, Facebook's first investor , despite having never met him, or Andreessen Horowtiz partner Mark Andreessen, we Irish demur. Instead we look to local entrepreneurs, or worse still, their father's mate down the rugby club whose smartest investment was his SSIA account. To truly move the needle, entrepreneurs have to get out of their comfort zones, replicate the success of others and look a lot further afield.

Many Irish investors, particularly the indigenous funds, are backed by people with little experience of building global technology businesses. They're the exact opposite of the Anglo bankers - more likely to bet conservatively and safely, looking for projects that are immediately profitable rather than investing in risky technology.

These guys, and they're mostly guys, are looking for the three-year business plan, and would favour slow, measured growth over investing in real technology with a serious product roadmap.

One quick look at Dragon's Den will give you a good example of the calibre of investors we have. Many are lacking in truly global experience and have such big egos as to feel their support alone is enough to warrant 20-40pc of an entrepreneur's company. Is this the calibre of investors we have in Ireland or is it just lazy casting?

Living in New York, I meet the many Irish who've travelled abroad, it's allowed me to realise that, by and large, they are a smart entrepreneurial bunch. We're hard-working and those that do persevere do well. Whether that's Greg Turley, Colm Lyon or Mark Little. There are many examples of entrepreneurs who thought a little bigger and were rewarded. Similarly there are investors like Bill McCabe, Noel Ruane, Brian Caulfield and their ilk who are willing to back entrepreneurs who think outside the box.

All of this is not to say that there aren't incredible companies out there, that do think bigger - there really are. Voysis is a complete voice AI platform, Pointy provides local stores with a way to make all of their inventory visible online, Cainthus is facial recognition for cows, allowing farmers to get a clear picture of their animals' health and wellbeing, and there are dozens more from Profitero and UrbanVolt to Teckro. But what they do all have in common is that vision, desire, and determination. They generally have investors with an international outlook and have operated as global companies from day one. They think bigger.

While entrepreneurs need to think bigger and push themselves - and investors need to loosen the purse strings a lot more - the Government too has a role to play. The scatter-gun approach that Enterprise Ireland plays is admirable in some ways, giving an opportunity to so many, but it doesn't necessarily serve us well. The support and funding should be more focussed on a smaller number.

Similarly, the IDA has done a fantastic job of attracting not just the Googles and Facebooks to Dublin, but the next generation of companies from Qualtrics to Consensys. But this is not a government problem, and no tax incentive will change the number of jobs in startups or the number of unicorns Ireland produces.

It's not about investors, or talent, or even our geographical positioning - this is a psychological problem, a problem of mindset that pervades our entire society.

No excuses though, we all need to think bigger.

Daire Hickey is managing partner with 150Bond, a strategic advisory firm based in New York

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