KIRSTY STYLES UNCOVERS EUROPES BEST KEPT SECRETS

DUBLIN#STARTUPIRELAND

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KIRSTY STYLES UNCOVERS EUROPES BEST KEPT SECRETS

Kirsty Styles, senior reporter, Tech City News@kirstystyles1

DUBLIN#STARTUPIRELAND

aving just become the

rst country in the world to put gay marriage to a successful public vote, its

clear Ireland is growing up.The proud Celts, whose road signs

and rst names give a hat tilt to a long history, boast one of the oldest surviving global cultures. But the Republic of Ireland as a nation has still not reached its 100th birthday.

And the past three decades have been real rollercoaster years for this young democracy.

While Irelands become the go-to EU destination for tech multinationals, including Intel, IBM and Google, along with banks and big name consultancy rms, the Celtic Tiger suffered a near-fatal blow during the 2008 global nancial crash.

THE CRASHProperty speculation spiralled and created a bubble, with Irish bank debts nally amounting to some 300% of the countrys GDP, which was followed by economic depression, unemployment pushing 14% and European and IMF bailouts.

The party, centred in the International Financial Services Centre on the North Wall on Dublins River Liffey, or the biggest tax dodge in Europe, so called by one of the citys vibrant startup community members, had come to a painful

hangover of an end. Its testament to the community

spirit of the locals that some 80 million people worldwide, the Irish diaspora, still state some connection to a country their family may have left generations before. Many descendants of Irish immigrants have gone on to lead some of Americas most successful companies.

And so like a battered creature rising from the ashes, the great and good at home and abroad were convened in 2008 for the inaugural Global Irish Economic Forum for a bit of soul searching: what went wrong and what should Ireland do next?

Now working under the governments annually-reviewed Action Plan for Jobs, the whole country seems to be buzzing with energy, initiatives and a collaborative can-do attitude in order to build local companies, create 100,000 jobs by 2016 and regain its global trade status. Public body Enterprise Ireland, an equivalent to UKTI founded back in 2003, is leading much of the work, a lot of which is being done via public and private sector collaboration.

In what might be a global rst, Dublin appointed an independent commissioner for startups last year, a role outlined in the #bestplacetostart report, which was published by the Dublin Chamber of Commerce and Dublin City Council under the Activating Dublin banner in 2013.

The citys rst startup commissioner is serial entrepreneur Niamh Bushnell, who had been out in New York since 1998 starting businesses and mentoring others, having set up her rst company in Dublin two years earlier.

With 16 years building the startup scene Stateside under her belt, Bushnells new role, which is funded by the DCU Ryan Academy for Entrepreneurship, is to celebrate the startups that already exist in Dublin, promote the world-class startup ecosystem and demonstrate the key role that tech multinationals are increasingly playing too. With the combination of these three things together, I knew this was the right time for Dublin, she says.

GROWING UPGoogle, which founded its Irish subsidiary in 2003, has just bought a piece of the nations history with its purchase of the Bolands Mill, situated at the opposite end of Barrow Street to its existing Gasworks of ces at Silicon Docks. Any taxi driver worth their salt will be quick to tell you tales of this buildings role in the beginnings of the new Irish republic when it was reputed to be the headquarters of the 3rd Battalion of Irish Volunteers led by Eamon de Valera during the 1916 rising.

Nearly a century later and this place is yet again playing host to scenes that

H

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5Theyre in Dublin for the talent, the

ecosystem, the can-do attitude, the fact that

were English-speaking and our connections

with the States

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may change the countrys history.Theres been three waves of tech

investment coming into Ireland, from mainframe companies, to PC and now internet, says Paddy Flynn, head of Google Irelands startup programme, with the latest wave welcoming new tech brands including Airbnb, Zendesk and New Relic.

Ireland is not without its own success stories, which include billion-dollar Apple supply chain rm PCH International, but this high level of Foreign Direct Investment was just one aspect of the countrys risky strategy pre-crash and with such big names above the door, it can feel like a large part of Ireland, and Dublins story. Bushnell is keen to emphasise that within a two-mile radius across the city, there are also some 2,000 startup companies.

Irelands very favourable corporation tax rate of 12.5%, likewise, has played at least some role in bringing the worlds largest companies to Dublins docks, and can also shoulder some of the blame for the countrys bad state during the nancial crisis. But the closing of the infamous Double Irish tax loophole in January may yet again be a sign that the Irish economy is growing up.

When you talk to the companies and people whove been here for a long time, they know they could leave and get a good tax rate anywhere, Bushnell says. Theyre here in Dublin for the talent, the ecosystem, the can-do attitude, the fact that were English-speaking and our connections with the States.

Now the government, startups, multinationals and VCs are nally working together with a community objective, Flynn explains. Googles Adopt a Startup programme, for example, sees local rms receive 90 days mentoring from the digital giant, while the company also runs events and supports a whole host of learning initiatives across the country.

Flynn is also leading the charge on ensuring his employees, who are 70%

foreign nationals, engage with the local startup ecosystem. Weve always had people leaving Google to found or join startups and this is all part of Googles chance to integrate with the wider community, he says.

But with a total population of just over 4.5 million people, Irish startups are facing an issue around scaling that even help from Google might not easily solve. In Ireland, you have to think global very quickly, Flynn says. Consumer technology is more dif cult to scale here, without having the necessary numbers of users, so companies typically migrate to the US, where the population is more homogeneous and the business model is better known.

STEPPING STONEFounders of customisable 3D printing startup Love & Robots, sisters Aoibheann, Emer and er Kate ODaly are already looking outside their home country for success. Part of Googles startup programme, they are targeting the UK and US with their full stack ecommerce, design, making, selling and shipping platform. Ireland is too small, Aoibheann says.

Likewise, Jayne Ronayn, who came out of University College Cork and founded KonnectAgain, a startup that uses LinkedIn APIs to help people and companies build better alumni networks, says shes already examining options in the Valley. Ireland is no comparison to the States, everything happens much faster there and the investment community is much better. People are open to investment at an earlier stage, rather than needing lots of customers or revenue.

Paul Hayes, CEO at Beachhut PR and big personality of the startup scene in Dublin, believes its much easier to raise 100,000 in Ireland than it is in the UK. But if you need more than 100,000, London is far superior.

He also says Irelands tax offers for startup investors dont match up to the EIS and SEIS relief schemes offered in

the UK. And Bushnell agrees. I would love to see something similar to offer to investors sitting on the sidelines, she says. Theres no shortage of people with money who would invest in great startups coming out of Ireland. There are many different people in the community pushing this and Im con dent its going to move.

But, that said, on top of R&D innovation vouchers and government match funding for small businesses, policymakers have just unveiled a new 10m fund to support startups, focused on local regions, along with a tax refund programme for entrepreneurs investing in their own company.

In the decade from 2003, the average number of companies raising venture capital each year grew from 50 to 150, according to the Irish Venture Capitalist Association. They also saw funds raised by SMEs increase from 200m in the rst ve years, to an average 275m annually in the second. For 2013 to 2018 the IVCA estimates that the capital required to fund SMEs is 1.5bn but says private sources of capital are in short supply.

Enterprise Ireland is still the largest VC investor in the country, with many in the startup community identifying a maturing, but not-quite adequate private investment market. Having been the CEO of the governments Digital Hub innovation space in Dublin, Edel Flyn, whos now leading private co-working space Gravity, one of a growing number of collaborative of ces, is keen for the private sector to take the lead. This is where it needs to ip - the success of the US in growing and scaling startups is that they have the freedom to innovate.

LEADING THE WORLDOne innovative answer to this may well be found with the Lucey Fund, a funding startup headed by homegrown investor Ian Lucey. An inverse of the so-called clone factory model, where they take 90% of your company and the CEO is gone in 18 months Lucey

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supports would-be entrepreneurs with the technical team to build their product, taking around 10% of the company in exchange.

Ian Lucey explains the work he is doing with a radiographer to create a WhatsApp for hospitals. Doctors have started using text messages to get x-rays over to other teams in seconds rather than days. But, for obvious reasons, theyve been told to stop texting, he says.

ACCELERATORSLike the Lucey Fund, HealthXL is turning the accelerator model on its head to help healthcare providers innovate in a typically stale industry. Its not a problem with funding, explains Vesselina Tasheva, who also founded Silicon Drinkabout in Ireland. Accelerators dont work in healthcare.

Having spun out of IBM in 2012 with a view to creating a traditional accelerator programme for health innovation, the company pivoted last year and now matches big companies with startups who can solve their problem, whether thats with clinical trials or heart care. It can take upwards of seven years for a big health company to do a deal or collaborate with a startup - we can take than down to seven months.

Tasheva moved over to Ireland from

Bulgaria and calls Dublin the perfect location. Youve got easy access to anywhere in the EU and its only ve hours to Boston. She also campaigned hard with YesEquality to see a yes vote in the marriage equality referendum. Dublin is leading the world on this - no one has ever done this before.

Dublins Web Summit has grown up in this increasingly con dent climate, seeing the number of attendees increase from 400 in 2010 to more than 22,000 heading there last year from 100 countries. Back for its fth outing, Web Summit will welcome 800 speakers from big brands like Facebook, to new kids on the block Slack and Stripe, plus more left- eld companies like GitHub.

But far from operating in a bubble, key actors across Ireland are now keen to ensure the wealth created by a tech boom is shared across the country. The Startup Gathering will be hosted across ve days, ve cities and ve industries this year, bringing entrepreneurial events to Irelands second city, Cork, home of Apple in Europe and Dr Dres Beats headphone business, along with Galway, Limerick and Waterford. With 15,000 visitors, organiser Marika MacCarvill says she expects this to be the largest distributed startup event in the world.

Dublin has recovered very well - but we need to ensure the whole

country recovers, she says. We want Ireland to be the best place in the world for startups both homegrown and international and our goal is to make Ireland the global startup hub by 2020.

OFFICE SPACEAs ever, with startup success comes property price issues. Private rents dont yet match London, but then again, neither do salaries in Dublin. And commercial rents are soaring, giving rise to a growing number of co-working spaces for startups to set up home.

Were de nitely trying to do something about this before it becomes a real issue, Bushnell explains. Thats why her of ce has joined with Patrick Walsh, CEO of Dogpatch co-working, and Edel Flynn from the new Gravity workspace to create the Dublin Startup Space Initiative to tackle this issue.

Our startups are just as strong as London, our multinationals are stronger, our ecosystem has the same infrastructure but theres much better organisation in London, Bushnell says.

She concludes: Weve been less organised in that big way but we want to be, could be and should be. Its great that the attitude here is: lets just get on with it.

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