||Why the Irish Approach to Startup Success Includes Canada
||Friday, November 02, 2012
||Nov 06, 2012
A black T-shirt is mounted in a large frame on a brick wall. It shows a man – a sort of stick figure – running, with flames shooting up from his head, which he is starting to cover with his hands as he desperately flees. Beneath him, in large letters, reads, “STAY CALM AND F—KING PIVOT."
The T-shirt sits above the desk of Gary Leyden, director of an accelerator called LaunchPad, which is housed here in Dublin, Ireland at the National Digital Research Centre (NDRC) just steps away from the Guinness factory. It is an environment that would be familiar to anyone who’s worked in the startup scene in Silicon Valley, Toronto or anywhere, really: long tables arranged in open-concept format, with posters showing off prototype logos and lots of room for laptops, tablets and old-fashioned pen and paper. The only thing missing, at least on this day, are the entrepreneurs – the people who need to know how to pivot when their path to building a successful company takes an unexpected turn.
“It’s normally a lot busier,” explains Amy Neale, communications and program manager at the NDRC. “They’re all at the Web Summit.”
Across town, the annual conference which has turned into one of the European tech industry’s largest is playing host to more than 150 startups in the main exhibit halls, where they do their elevator pitch before live audiences and get instant feedback from the judges, Dragons’ Den-style. But the Web Summit, despite the thousands who attended it last month, is only a few days. LaunchPad, on the other hand, is where a selected company founders will go through a 12-week mentorship program that is designed to maximize their potential to generate revenue and make them “investor-ready” for the next stage of raising money.
LaunchPad and the NDRC are just a few of the examples of how Ireland, which has been among the European economies most battered by the worldwide recession that began in 2008, is trying to rebuild itself by betting big on tech startups. And they’re not just hoping for local success stories; they want to lure more Canadian firms to set up shop in Ireland too. The government and its agencies are selling a great lifestyle, a highly educated population and considerable sums of money to make Dublin the kind of technology cluster that Toronto has been maturing into for years. Canada is an important market for Ireland, where exports have grown by more than 10 per cent over the last three years.
This week Enterprise Ireland (EI), the government’s trade and technology arm, will be visiting Toronto with more than 25 startups to meet potential investors and customers. The Web Summit will have been long over by then, but for Ireland’s best and brightest startups, it’s still showtime.
Mission: create the Irish 'Open Text'
Quick: What’s Ireland’s biggest technology company? If you’re not sure, you’re probably not alone. Although Canada has RIM (despite its recent difficulties) and software giant Open Text, Dublin’s burgeoning tech scene, which locals like to describe as the “Internet capital of Europe,” has yet to produce an organization that would be mentioned in the same sentence as Microsoft, Oracle, Apple, or Google. It’s Kevin Sherry's job to try and help change that.
Sherry is EI’s head of international sales and partnering, and he would like to see 10 Irish companies set up an office in Canada next year. He also hopes to see more success stories come out of all the investment EI is making in its young entrepreneurs. Last year the organization put money into approximately 90 new firms, each at a level of up to 350,0000 Euros, and expects that number to reach more than 100 in 2012. The only catch? Startups need to be good enough to attract matching levels of investment from outside venture capitalists. There are other programs, all aimed at different tiers. You might get 20,000 Euros for a brand-new venture that moves through something like LaunchPad, for example, before moving up to the bigger leagues and bigger VCs.
Perhaps the biggest challenge Sherry and EI face is not necessarily finding people with good startup ideas or giving them resources to improve their odds of succeeding, but convincing the world at large that Ireland isn’t sinking into a financial abyss. There are several people from the local tech scene who will talk about the economic woes facing the country as a whole and “the other economy” – by which they mean the tech sector – which they say has continued to grow.
“It’s been a painful crisis but in terms of our competitive position, we’re doing pretty good,” he says. “We don’t have blinders on here. The biggest rate of decline was in 2009. We’ve been in recovery since 2010.
Changing possibly negative perceptions about the country’s stability is important not only for wooing VCs for Ireland’s locally-born tech startups, but also for wooing Canadian entrepreneurs that might consider starting their company there. Just over a year ago, EI launched the Overseas Startup Fund, which provides 10 million Euros to international founders. According to Nagmeh Reilly, who oversees the fund, the cash is only part of the deal.
“We’re not selling Ireland based on money. It’s about the ecosystem. It’s all the support we give them,” she said. “If it’s a good enough startup they’ll find the money anywhere.”
It’s also the beauty and benefits of the Emerald Isle, where half the population is under the age of 30, the bars stay open late and there are access to good postsecondary schools like Trinity College, which is talked of with nearly the same reverence as the University of Waterloo is by tech firms in Canada. Startups in Dublin say Canadians shouldn’t underestimate the value an organization like EI could offer.
“They understand the needs of small businesses, and they have a great network. They open a lot of doors,” said James Lawn, CEO of Polecat. The firm’s MeaningMine software provides virtual market research services for oil and gas companies. “They have good ties into the schools.”
Polecat is still in the early days of making its name, but other EI alumnus include Intuition, which was first established in 1985 and provides e-learning courses to financial services firms to more than 1.5 million users worldwide. Niall Darby, Intuition’s COO, said EI’s history of trade missions and running events helped win some important early customers and assisted with setting up its Canadian office near Bay and Bloor Streets in Toronto earlier this year.
“They really helped us get in front of people in important markets, like insurance, for example,” he said.
That support is important because, like Toronto, the big money does not often come from the cautious venture capitalists in Ireland itself. You can get seed money through government money and angel investors. You might get Series A funding. Once you’re ready for the big time, however, entrepreneurs in either country will still need the United States. The question may be whether Ireland can become as good a finishing school for technology entrepreneurship as Toronto is starting to be.
“We’re trying to create potential scaling companies, and that requires nurturing the right kind of leadership,” Fisher said. “Not just leadership for management, but leadership for growth.”
In other words, the ability to pivot.
(By Shane Schick, Editor at Large for IT World Canada)