Friday 19 January 2018

Latest crop of tech wizards have clearer view of future

Explosion of internet traffic has paved way for global distribution of products and ideas

COMETH THE HOUR: Paddy Cosgrave, the main mover behind the Dublin Web Summit
COMETH THE HOUR: Paddy Cosgrave, the main mover behind the Dublin Web Summit

Tom Lyons and Roisin Burke

Tech firms often want to be in university towns in order to be close to the best talent

Brian Caulfield, a tech veteran and partner at venture capital fund DFJ Esprit, recalls his first start-up in 1992. It was an anti-fraud software firm for credit cards called Peregrine which he sold in 2000 to Cyril McGuire's Trintech.

On the balcony overlooking Dublin's teeming Web Summit in the RDS full of thousands of technology entrepreneurs, Caulfield thinks back to how much more difficult it all was setting up a tech firm 20 years ago.

"We were incredibly naïve in 1992," the serial entrepreneur said. "Back in those days you might need €5m to build out a product but now a simple B2B (business-to-business) software company can get going for €50,000."

The rise of the internet, Caulfield said, made globally distributing new products much easier, making it little wonder such a diverse array of companies were attracted to the Paddy Cosgrave founded Web Summit.

Elaine Coughlan, founding partner at Atlantic Bridge, a technology venture capital fund, is also excited about the ability of Irish start-ups to scale up. She and her team have had a seriously intense summit, meeting with 50 companies in one day alone and enjoying the "sensory overload" of engaging with so many talented and hungry entrepreneurs.

"There's a generation now of Irish serial entrepreneurs like those behind Swrve [a mobile app optimisation platform set up by the founders of Havok] who have been through several successes," she says.

"The IPO window is extremely hot and for some of the bigger companies in Ireland it is an option. What's important is to scale up with an international management team and a focus on big global markets."

"We think this generation see what's possible and are not afraid to go for it."

Iain MacDonald, chief executive, of Skillpages, an online "Golden Pages for the Facebook age" for sourcing skills and expertise, is also enthused by the Web Summit, even after spending hours networking late into the night over beers.

"It's been great, an incredibly effective way of interacting with two types of people – our peer companies and the investment community," he said.

"I was in San Francisco at Tech Crunch Disrupt in September – one of the biggest events of its type. Web Summit upstaged it in terms of the number and quality of attendees and speakers," he said.

Barry O'Dowd, emerging Business Director with the IDA, takes a different approach to the summit. Its about selling Ireland, not products, getting investment into the country, rather than a company.

In 2010, the IDA took the decision to target fast-growing start-ups in America and convince them to pick Ireland as their route into Europe.

The IDA, he said, has taken for example 20-seats in Polaris Venture Partners backed business incubator Dogpatch Labs in order to have a location ready to go for overseas entrepreneurs.

"It is just enough to let them hit the ground running," O'Dowd said.

"The key thing for these guys is that Ireland is a place where you can deliver a business model," he added. "VCs (venture capitalists) want to know that you are setting up in a place where you can execute on what you say you will do."

O'Dowd said companies like Riot Games (which employs 100-plus); Indeed.com (a recruitment firm which employs 100) were two examples of how companies could start small in Ireland by hiring experienced local multinational leaders before ramping up.

He defended the IDA from its critics who claim too many hot-tech companies are going to Dublin and not into regional cities.

"It is true to say that in this space a lot of the companies are only interested in big cities Berlin, London, Paris or Dublin. Cities are competing against each other but we have got good companies into Cork, Limerick and Galway too. Tech firms often want to be in university towns in order to be close to the best talent.

Web-publishing platform Squarespace is another example of this gradual approach to investing in Ireland.

It started in Dogpatch Labs only six months ago with a handful of people before moving to a serviced office when its numbers hit 50. Now it's trying to find its own office to house 100 people.

Jesse Hertzberg, chief operating officer of Squarespace, explains how his company ended up in Ireland.

"We are an urban company, based in Manhattan, so it was always going to be Dublin or another European city," he said. "I came here for the first time on February 2 and within three or four months we were ready to go."

Sam Chandler, the founder of Nitro, a document productivity company, announced 50 new jobs in Dublin on Wednesday. "We're going to build a real operation here that won't be just about sales and support. It will have every function in our business."

His Cavan-born chief operating officer Gina O'Reilly said: "Twenty years of foreign direct investment in technology gives Ireland a unique climate that is powerful. This isn't a flash in the pan, so people are prepared to invest more."

O'Reilly admitted that the low numbers of women in tech could be discouraging, but said that Nitro was 35 per cent female, ahead of industry norms.

"People like Sheryl Sandberg, the chief operating officer of Facebook, had helped raise the issue of the need for more female leaders in tech. "Women in leadership roles bring complementary skills to the table that are needed in good companies," she said.

Adam Berke, the president of AdRoll, an online advertising retargeting firm, said his firm planned to create 100 new jobs in Dublin.

Berke said Ireland's economic downturn hadn't turned him off. "We were founded in 2007 and took in our series A money three weeks before Lehman Brothers went bust. We have a history of building in a tough economy so we know we can do it."

Like other overseas firms Berke said he'd picked an experienced Irish multinational executive to lead his team, in AdRoll's case Marius Smyth, former Head of UK & Ireland small and medium business sales at Google.

For Caulfield, the real success of Ireland's tech sector will be if Ireland can build its giants. Two of his investments – Movidius (a cutting edge mobile company) and DataHug (a business relationship software firm) both had that potential.

"The challenge now is how to lift yourself above the rest of the noise (on the internet)," Caulfield said.

"People know much more and ideas propagate faster than ever before. The quality of Irish start-ups is better and the number is higher. The deals we are doing in Ireland stack up against those anywhere in Europe."

Sunday Independent

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