Business Technology

Monday 23 April 2018

Conquering the complexities of the space race from an historic building on Dublin's northside

Tech is booming - the only issue is that startups and the big boys all want to be in Dublin's Silicon Docks. Can Patrick Walsh of Dogpatch Labs entice them across the Liffey. Adrian Weckler meets him

Patrick Walsh of Dogpatch Labs in the CHQ Building
Patrick Walsh of Dogpatch Labs in the CHQ Building
Patrick Walsh M.D. of Dogpatch Labs with Jayne Ronayne CEO of 'KonnectAgain' in the CHQ Building.
The breakout area at Dogpatch Labs in the CHQ Building.
Adrian Weckler

Adrian Weckler

Got a tech startup? Need to be close to the Silicon Docks to get the best talent? You have a problem. Rent and availability of office space in the docklands around Dublin 2 and Dublin 4 have reached a crisis point. Local firms say there is none left to rent, while giants such as Google and Facebook have hoovered up whatever they can to hedge against future shortages.

So where can a young tech company with prospects go?

One alternative is a co-working space. This is the equivalent of a serviced office but without the dismal decor and David Brent co-workers.

Unfortunately, Dublin is very poorly serviced by such spaces. While we have incubators and accelerators coming out of our ears (at the last count, there were over 30 around Ireland), there's a gap for decent, sector-specialised joint working facilities.

This is where Dogpatch Labs, until now a quasi-accelerator, sees an expanded opportunity.

Originally brought to Dublin three years ago by the Irish partner of Polaris Partners, Noel Ruane, the facility - which is under the new ownership of ex-Paymins founder Patrick Walsh and former banker Mervyn Greene - is taking a step up by tripling the amount of office space on offer.

This is being done by moving from its spot beside Google on Dublin's Barrow Street to the other side of the Liffey, where it now inhabits a large chunk of the IFSC's CHQ building.

The venture that helped spawn Instagram and Squarespace and which launched homegrown stars Intercom, Logentries and Coderdojo has also changed its business model from one of strategically invited startups to a full-blown commercial working space for tech startups. There are no equity positions, programmes or regimes: you pay for your space.

The idea, says co-owner Patrick Walsh, is to further increase the amount of tech-focused working space that San Francisco does well.

"Ireland is great for accelerators and incubators, but most of them only really cater for startups that have a kernel of an idea and maybe one or two people," he says. "There's a real lack of facilities for startups in the next phase, those that are ready to start scaling. These startups need proper working space somewhere centrally located with a community around them."

This is where Dogpatch Labs fits in, he says. The refurbished 13,000 square foot facility is located a stone's throw from the South Silicon Docks in one of the oldest industrial buildings in the country, CHQ.

It's kitted out with high-end tech specs, meeting areas and even an external 'member's zone', where investors and others can drop in to coalesce.

A further area in the vaults, planned for renovation sometime this year, would add an additional 7,000 square feet.

"We're trying to facilitate companies that are trying to scale," says Mr Walsh. "Companies that have funding and need somewhere to work."

Former director Noel Ruane, who says that he will remain "involved" with Dogpatch despite detaching Polaris Partners from formal oversight of the facility, says that it is ready to enter a new phase.

"Unfortunately, there don't seem to be many others in Dublin to rival Dogpatch," he says. "When we arrived here in 2011, the overall startup system here was a fledgling one. Now it's quite a different ecosystem. It's burgeoning. And I'd like to think that Dogpatch has been a seminal influence on that. Just under 40 companies have come through in little over three years at Dogpatch and they have raised almost $100m. Take just three of them - Boxever, Profitero and Logentries - and you can see 200 people employed by the end of the year."

Polaris, though, is adapting its own investment strategy to focus more directly on startups. That means handing the reins over.

"Our sense right now is that Ireland needs a broader open source space for Irish and international teams that come here," says Mr Ruane. "They can come into Dogpatch because they like the flexible nature, creative environment and co-working communities with like-minded teams."

The Labs' pricing structure is fairly straightforward. It's €350 per desk per month with a normal minimum of three months' occupancy. For that, you get a 10-gigabit connection into the office, meeting spaces, Skype booths, power and as much coffee as you can drink.

That Dogpatch Labs landed where it did in CHQ is part design and part serendipity.

The owner of CHQ, former Coca Cola chief executive Neville Isdell, bought the building in 2013 for a knockdown €10m.

Just a few years previously, the Dublin Docklands Development Authority had spent a whopping €45m redeveloping the building in anticipation of a boutique, upscale Celtic Tiger shopping centre. But it failed to deliver, with many units remaining empty. That left Isdell and his brother, former Morgan Stanley executive Mervyn Greene, in charge. With not enough happening in retail interest, the two set about thinking of other purposes. It wasn't long before they spotted the crunch on office space happening for tech firms just across the river on the South Docks. They tested the water and found strong interest.

"This is one of the most unique and beautiful Georgian industrial buildings in Ireland," says Mr Greene.

"And because of the way it's originally laid out, it fits perfectly with what some new tech companies are looking for. Facebook, for example, had their Christmas party here, renting out the whole Atrium."

Explorations with official agencies and some big tech interests ensued and Mr Greene thought that they had bagged a single big tech tenant. "At one point, we had strong interest from a major tech company in taking a large area of the whole building," says Mr Greene, who declined to name the "famous" tech company.

"It was at a fairly advanced stage but unfortunately it fell through."

But the experience left him with the idea that it would suit a tech working space in the medium term. So he continued with a 'change of use' licensing switch that converted his planning permission from retail to offices.

Several major refurbishments later, he and new partner Patrick Walsh met Polaris's Noel Ruane and the new home for Dogpatch Labs was formalised.

Growing startups are quickly filling the facility. Pat Phelan's highly-rated anti-fraud startup Trustev has several desks here, as does Jayne Ronayne's alumni-focused KonnectAgain.

"The main thing is working around other young startups, which is really great," says Ms Ronayne. "We're a young team ourselves."

And what of the location? Will ambitious startups, whose star staff want to be mixing in the same spaces as hotshot peers from other tech firms, be willing to move across the river? (While this sounds fussy, it has proven to be an issue for some small to medium-sized tech firms trying to hire top staff.)

"Ah, it's a stone's throw," says Mr Walsh. "You have the bridge literally outside the front door and places like [venture capital firm] Frontline Ventures just across the way."

Mr Greene agrees. "Most people think of the Silicon Docks as being the South Docks but there's a big spread to the north docks too," he says. "This whole area is becoming a fused fintech zone."

Noel Ruane says that while sensitivities over specific locations can be a reality for ambitious tech startups, it's only one part of the equation.

"We were fortunate because after the US success, the Dogpatch Labs brand was so strong from the beginning," he says.

"We've found that it's been a magnet of attraction itself. People are interested in the people around them and it's still in the city centre. In many ways the refurbished CHQ space is a lot like the Barrow Street space we were in.

"I don't think there's a material difference between CHQ and Barrow Street, especially as most Google staff stay in-house for food and coffee because they have it all self-contained."

Despite now being a 'pay as you play' facility, part of Dogpatch Labs' mojo is in the kind of company it attracts. To this end, Walsh and a committee of like-minded tech entrepreneurs "curate" applicants.

"Although we tend to focus on funded companies seeking to scale, there's no one sector," says Mr Walsh. "Right now we have companies from gaming to financial tech and several in between. I have an ad hoc advisory group that includes Noel and Karl Aherne from Wayra. They help us make decisions on which companies would make a good addition."

While there are approximately 80 people in Dogpatch Labs at present, Mr Walsh says that an "ideal" number is between 120 and 150. But there's a backlog, he says.

"If we said yes to everyone, we'd be full by now," says Mr Walsh.

As for Noel Ruane, his step back from Dogpatch doesn't signify any waning interest in investing in Irish startups.

"Oh no, we're only getting started in Ireland," he says. "We recently announced an investment in [Bill McCabe startup] Novaerus, which we're very excited about.

"We have another company which we haven't announced yet.

"We've invested $60m between commitments and reserves here. It's been phenomenally successful for us. Most of our companies are growing at 300pc per year."

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