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Top tips for Irish business, rock stars and innovators

Silicon Valley venture capitalist Richard A Moran says innovators who have an idea and construct a company around it will help rebuild the Irish economy: here he lays out some 'bullets' to pump air into the tyres of our businesspeople

Any Irish person employed by Facebook or Google or Twitter in Dublin, no doubt, has a good job and is the envy of the neighbourhood.

Working at any of these companies should mean you are at the cutting edge of cool new technology. It does not, however, mean that lucky person is an entrepreneur or an innovator. Entrepreneurs create companies and those companies are already created. Ireland needs to create more companies through innovation and execution around good ideas.

Innovators and entrepreneurs are the new rock stars. The book about Steve Jobs sold way more than the book about Keith Richards in spite of the real life stories of sex, drugs and rock 'n' roll in Keith's book.

Ireland has always had lots of the real rock stars: I want to help Ireland develop the other kind of rock stars -- the innovators who have an idea and want to build a company around it. The people who will help build an economy.

As someone who has listened to hundreds of Irish entrepreneurs give "pitches" in the hope of attracting investors, my reactions have varied greatly. I have been astounded with the passion of the innovator; I have wondered if the presenter is speaking English; I have delighted in the knowledge that a big idea came out of an Irish college; I have noticed that a lot of Irish men have had broken noses; and I have been impressed with the energy and focus of so many.

Most importantly, I have seen and heard Irish entrepreneurs undersell their ideas and their capabilities.

With these 'bullets' I hope to pump more air into the tyres of Irish entrepreneurs. Ideas should get funded based on the strength of the innovator and the idea. They should not get rejected based on the presentation skills or the naivete of the innovator.

Entrepreneurs need to be storytellers. When giving a pitch to investors or describing your new idea to your neighbours, these are the factors to keep in mind, especially for the Irish.

No excuses for being Irish. Don't say anything like: "I know you are not accustomed to investing in Irish firms."

In fact, do the opposite. Play up the Irish. Throw a poem in there if you want. The Israelis boast of their ability to be tough to their advantage. Use your Irish heritage to convey being a visionary and being tough at the same time. And always play up the gateway to Europe deal.

What is it? Have you developed a piece of hardware, software, a refrigerator or a cold fusion machine? Too often, a founder will be so excited describing the inner workings of a thingamajig that I can't place it in the context of what I know.

This is the ideal time to tell the story of the idea, how it came to fruition and how it turned into a product around which a company can be built. If you cannot explain what it is simply, you have a problem. If I cannot understand what it is, you have a problem. Never be embarrassed to just say what it is.

People get backed, not technology -- think of it like American Idol or Teen Idol Ireland except you are not singing.

The idea is important but the entrepreneur is the filter through which the idea will be viewed. The question will be asked: "Is he/she backable?" The question is not "is the product backable?"

Never underestimate the importance of the "show" to be put on and be prepared for it. If you can tell a good story in an investor presentation, you can tell one that will attract employees and customers too.

Create an equation, If you give me millions, I will return -- make it easy to understand where and how any investment money will be spent.

Investors are like entrepreneurs; they are dreamers and want to visualise a place and a team toiling away in a loft somewhere in Ireland. The equation should also include a return on an investment. Investors don't care about percentages; they care about multiples. As in, an investment will return four per cent is of no interest. Instead, the message is an investment will return four times your money.

Always show a hockey stick, fib if necessary. There is always a page of financial projections and the line of progress should always be up and to the right. It's okay if year one is projected to be a loss, year two might about break even, year three should be about €3m, year four €12m followed by infinity and beyond. You are selling optimism and hope there will be a big return.

Simple is better, very simple -- you may not even get enough time for the elevator speech so it is important to create metaphors, analogies and simple statements.

Think "as PayPal is to eBay, we are to xyz". Or "our company is like Zillow for rugby jerseys". Or "our product will eliminate the need for lawn mowers".

Explain how you plan to make money -- unless you are Twitter, having traffic with no revenue isn't an equation for success. Internet traffic does not necessarily equate to revenue. Your Mum being proud of you does not equal revenue. Customers who are willing to pay for something is what generates revenue. Be sure to explain how the great idea will 'convert' to revenue or you won't get any investment.

Say nothing crazy. "We will replace Google" or "we are the next Facebook" or "Apple is worried about us" will get you credit for gumption but probably not any money. Aspirations are good and disruption of a market is even better but pick your spots. Big statements and metaphors will help an audience know what you are thinking but don't make the audience think you are clueless.

Never say there are no competitors. Repeat, never say there are no competitors. There are always competitors and you need to know who they are. Somewhere around the world someone else is working on the cure for toenail fungus or virtual currency in poker games. To insist on the 'no competition' theme could make people wonder, "If it is such a great idea, why is no one else working on it?"

Demos are not necessary -- investors will assume that whatever it is, it works. Too often I have seen apologetic entrepreneurs fumble with cables and internet connectivity only to end up looking forlorn because the demo doesn't work. Unless it is a demo that replicates X-ray vision or time travelling, describe it in such a way that the audience is dying for a demo -- that you can show later. Demos don't get funded, entrepreneurs do.

Tombstones and Pedigrees -- the logos of where the team formerly worked and where they went to school does matter. It may not be fair but it does matter. Highlight all the brands and colleges that people will know. If there is nothing that anyone will recognise, have an alternative good story that highlights some aspect that makes it easier to make an investment decision.

Innovators build economies. Ireland needs to build an economy that is not based on outsourced jobs from elsewhere. Ireland needs to build its own companies through innovation which, in turn, will build the economy.

In the meantime, remember that blind squirrels do find acorns.

Richard Moran is a partner in Irish Technology Capital and the CEO of Accretive Solutions. He is the author of six books, the latest being 'Sins and CEOs'.

Sunday Indo Business