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Optimism in Dublin start-up scene: Pub Summit 2011 report
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Despite the rain, and economic collapse, Dublin seems to be the place to be at the moment. A long line of entrepreneurs and investors queued in the rain to get into last night's heaving Pub Summit 2011. Inside, the focus was on B2B and social business, and the people spoke about the latest and greatest startups.
"This place is about to rock," says Eoghan Jennings, ex-CFO of Xing (revenue last year was circa €55 Million). Jennings, who spent his career outside Ireland, is betting on Dublin as the startup location of the future. Perhaps his most compelling reason is that Ireland is the only English speaking economy in the Euro zone, at a time when large international VC firms are unwilling to invest directly in non-English speaking companies.
Jennings is starting up Bootcamp, a seedfund and acceleration project in Dublin in 2012. He will be entering a vibrant market for investors. In the last 12-18 months many accelerator programmes gave launched. According to Drew O'Sullivan of 4th Level Ventures, Ireland's mix of public and private sources means there is more seed funding available than else where in the EU. Pearse Coyle, of Corporatespinouts.com, believes "things are definitely going up. There is a huge groundswell of grad level entrepreneurs".
In one corner of the Pub Summit I spoke with Ben Hurley, the head of the state funded incubator NDRC. Hurley warns that the biggest challenge is getting ideas into a fit state for seed funding. "It's allot harder than most people think". There is a high failure rate, and only the fittest survive. Despite this, there is a buzz of optimism at Pub Summit 2011.
I spoke with Connor Murphy, founder of Datahug. His company is attracting significant funding from European and US investors, and the future looks bright. But it wasn't always this way. Back in 2002 Murphy left college and started a social network called J1Summer with a team of five friends, working in his parents loft. Although the site had 200,000 users within three months, he had no experience or connections to help him exploit that. Now the communities are not only visible, but assessable.
Dublin's startup community is solidifying at events like Pub Summit 2011. Daire Hickey and co-founder Paddy Cosgrave started Pub Summit, and the F.ounders and the Dublin Web Summit events, to join up the niches in the tech sector and allow everybody from developers to marketers to meet. In Pub Summit's second year the venue is, literally, packed. The far larger Web Summit, on 10 June, will bring Irish startups in contact with international tech giants, but most importantly with veteran Irish entrepreneurs like Ray Nolan of Hostelworld, Chris Horn of Iona, and Jerry Kennelly, founder of Stockbyte. These are the emeriti of the Irish startup scene.
And their audience at the Web Summit will be largely optimistic, despite the economic downturn. Ireland's tech startups seem to see themselves as distinct from what has been happening to the rest of the economy. Gary Mullan of Prosperity Recruiting ran a survey of salary levels and found that digital types, unlike pretty much everybody else in the Irish economy, have kept up their salaries to pre 2009 levels. Industry leaders are still hiring and raising salaries in Ireland, and Irish startups are making an impact.
Ireland's most promising startups seem to share a focus on B2B and on social media and social commerce. Connor Murphy of Datahug says that B2B is where the money is. Business is playing catch up as users see the power of consumer offerings like Facebook and Twitter and demand better internal services. For example, Datahug provides businesses with a way to analyse their communications across the enterprise, and show useful links, much as social networking has done for teens since the early 2000s.
In May this year an Irish startup called CarTrawler, that serves the car rental industry, sold a 50 percent stake for somewhere between €40m-€50. Mark Little, a former news anchor on Irish national TV, recently signed ABC news and the New York Times as clients for his Storyful news filtering service. Karl James, CEO of the social commerce provider Owjo.com, says the Irish startup scene has been a major asset to Owjo. "Dublin is cosmopolitan, has a fond place in American hearts, is a low red tape zone for startups, and its small enough that everybody knows everybody". And timing works in Irish startups favour too: the economic downturn has brought professional costs down, and office space is cheap.
But Ireland has not properly embraced failure. Bankruptcy lasts 12 years, and there is too much red tape in winding up a company. This is a problem when inexperienced entrepreneurs try to leap the valley of death between completing their first late stage prototype and securing their seed funding. That is why, on 10 June, entrepreneurs will huddle into the RDS venue in Dublin for Web Summit 2011 to listen to the masters.
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