Feels like a good chunk of the tech start-up world is descending upon Dublin next week for Websummit, so thought it might be a good time to share my initial impressions after my first six months as a “local”.
There is no question that Dublin has taken a hard knock, and talking around town the feeling is palpable. Following the so called “Celtic Tiger” years, the banks went bankrupt and were nationalized, the construction boom came spectacularly crashing down, again leaving a trail of bankruptcies and unfinished projects, leading to the creation of a nationalized landlord. And, as no Irish person will fail to mention, property prices dropped 50%+ from their Manhattanesque peaks. There was talk about the whole country going bankrupt. My guess is that all these aspects will not be too visible next week: the tech scene is living a different life than the rest of the country, and the added enthusiasm from the summit will completely hide these macro factors I suspect.
I can’t claim I knew much about the tech scene here before moving. Since moving, I think I understand why. The Irish have been methodically building a pretty exciting tech scene brick by brick, but many of the most successful companies have remained low-profile. And while they won’t be screaming it from the rooftops in fear of jinxing it, it is fair to say that over a pint many people will admit satisfaction over the direction things are going in for this sector and share very ambitious visions for the tech industry going forward. It had better be: tech is already 25% of the country’s revenue and growing. I think it is fair to say Ireland has bet the farm on tech. Is this craziness, coming from small bankrupt country on the edge of an island itself on the fringes of a decaying Europe?
Other than the sheer motivation and willingness to try, one thing that makes this vision more than a pipe dream is the incredible proximity and relationship with the US. Not only is it the closest European country geographically (sorry Iceland J) and the language is the same, but 37 million Americans consider themselves to have Irish roots – for context that equates to 8 times the population of Ireland. The Kennedy clan is a well known example, fewer people know that Barack Obama also has Irish roots. This cultural proximity has two important effects: US companies feel comfortable setting up here for their European operations (with a little help in terms of favourable taxation) and Irish entrepreneurs and companies are well received in the US and elsewhere – they have to be selling internationally from day 1 as the domestic market is so small.
However, just being a friend of the US is nowhere near enough. American behemoths like Google, Facebook, LinkedIn and many others now employ thousands of skilled folk here (9 of the top 10 tech companies have operations here in Ireland) but this is only one ingredient in the local mix. Smaller companies like Engine Yard and 10gen are very active in getting the developer community together exchanging ideas and know-how. There are enough good exits in the last few years to show the way, companies like WRI, Fleetmatics, Curam, Havok and Norkom. This year The Now Factory has an excellent exit to IBM. There is a good base of established leaders such as PCH International, Ezetop, Realex and Openet.
I’ll pause there because I can already hear everyone complain: who the hell are these guys? It is not by accident: I would argue many of the more successful Irish companies have been great at finding unsexy, B2B niches and executing extremely well. PaddyPower.com deserves a mention in a category of its own as fantastic success story, definitely tech enabled and a rare great consumer brand. The government is a rare beast in that, mostly, entrepreneurs will consider it a helpful influence rather than a hindrance, although the recent budget caused more than a few complaints over tax treatment for entrepreneurs. Other key ingredients in the mix are availability of talent and capital. Great talent is hard to find everywhere, but Dublin is pretty well served by universities and the scene is now full of foreigners who are discovering it is a pretty cool place to live, as well as Irish nationals that cut their teeth in the US tech scene coming back. As for capital, particularly at a seed stage the density of incubators/accelerators is pretty unique, from Propeller, Wayra, healthxl, dogpatch, NDRC, NovaUCD, Fusion, Launchbox, scalefront and several more. Great local venture firms such as Frontline, Delta, Atlantic Bridge and foreign fund brands like DFJ Esprit, Polaris, SEP, Arch Rock and Highland are all active. Enterprise Ireland provides matching funding. And finally another special mention to Paddy Cosgrove and the WebSummit team of course… looks like an amazing series of events coming up.
Shaking up all the above ingredients together (with those other startup essentials of great coffee shops, hipsters on fixies, converted old warehouses and quality pubs) has resulted in a whole batch of startups which are able to access know-how and talent from some of the best companies in the world, and can also access mentorship and board advice from people who have been there and got the t-shirt. They are proving capable of getting started, getting traction and rapidly accessing the European and US capital markets. A few great examples from the last 12 months are Intercom (financed by Social+Capital), datahug (DFJ and Salesforce), Swrve (Intel), Fieldaware and Trustev (these last two have not announced what I believe to be investments from other brand-name firms). While many of the hundred plus companies getting funded each year will not make it, I am feeling good about my wager that a handful each year will emerge as winners. In the meanwhile, enjoy the craic and a pint or two of the black stuff!