Start-up Ireland

‘You have to be smart, ambitious and a little bit insane – because if you were sane you wouldn’t be doing this.” This is the voice of Jon Bradford, managing director of Techstars, a leading start-up accelerator, speaking at a networking space for entrepreneurs called Startup Grind Dublin.

It's in a packed basement at University College Dublin's Innovation Academy, opposite St Stephen's Green, where the walls are covered with Post-its and scribbled equations. The crowd is a mix of people dressed in smart suits, checked shirts and bright dresses, aged from 20 to 60. Some are veteran investors and some just have an idea. What brings them together is the sense of community behind Ireland's blossoming entrepreneurial culture.

More than 1,500 start-ups registered with Companies Office in July, the highest number for that month since 2007, and Oracle Capital Group recently declared Ireland to be Europe’s most entrepreneurial country. It is estimated that 14,000 new businesses have been established each year since 2008.

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Going global: Pat Phelan. Photograph: Alan Betson

One reason is the funding available from both public and private sources. Initiatives like Enterprise Ireland’s New Frontiers, Telefónica’s Wayra Academy and the National Digital Research Centre’s LaunchPad programme have been nurturing ground-breaking companies, and last year alone was marked by a reported €70 million of so-called angel investment north and south of the Border.

And it’s not just tech firms. Fifty-nine per cent of our businesses are in the retail, services or wholesale sector. Sixty per cent of them employ fewer than 10 people. Forty-two per cent of them have three or fewer employees.

For some the recession has created a focusing effect: people who have lost their jobs or left college with few prospects are creating their own opportunities. Innovative business ventures are being launched by groups and individuals with no experience, bringing fresh thinking to old industries.

Some believe that Ireland’s entrepreneurial culture is reaching a tipping point, that it’s on the cusp of a mainstream breakthrough. Others are concerned that “wantrepreneurs” are jumping on the bandwagon, putting early-stage business resources, like accelerators and incubators, under strain.

Either way, the line between start-up companies and novel business ideas is blurring as “entrepreneur” becomes an umbrella term for anyone who can spot an opportunity with growth potential. But there are far more shared qualities than just being smart, ambitious and a bit mad.

Whatever the industry, entrepreneurs tend to collaborate widely, take risks and learn from their failures. They also know better than to have business cards before a business plan. But, perhaps more tellingly, the most successful ones have a way of provoking the same two reactions over and over: “It’ll never work” and “Why didn’t I think of that?”

DEE O'LEARY
iDME
Best advice: Get up off your a**e and start talking to people

Dee O’Leary’s business breakthrough stemmed from a moment of panic. After her son Liam wandered off from a supermarket in November 2011 she searched online for accessories to help identify lost children. Not finding one, she decided to make her own: a wristband containing emergency details such as contact numbers and medical information.

“It’s easy to have an idea, but the scary thing is making it real,” says O’Leary. “At the beginning I didn’t have a business plan. I sold anything I didn’t need in order to finance it: my car, gym equipment, even the Xbox.

“Myself and my husband had well-paying jobs, but when the economy turned we both lost them within six months. I had our first child around the same time, so the timing couldn’t have been worse. I didn’t wake up and think, I’m going to be an entrepreneur and invent something! I found a need for product I couldn’t find and thought, Why isn’t somebody doing this?”

O’Leary fleshed out a model of the wristband with her husband, Ryan. Prices quoted by Irish textile companies were beyond her budget, so she turned to a Chinese manufacturer. But her instructions were lost in translation: the stock wasn’t what she wanted.

Since switching factories and refining the design, O’Leary has sold more than 20,000 wristbands across six continents. She has also won several awards, including Cork Innovates’ €30,000 business bursary, and is working with Cork Institute of Technology to develop a wristband with tracking capabilities.

But the biggest thrill, O’Leary says, is hearing about the peace of mind she has helped bring to others: parents of children with autism and Down syndrome, and partners of people with Alzheimer’s disease, as well as loved ones of cyclists and runners. In December O’Leary will meet industry leaders in the US in order to develop her business further, having been given that opportunity by the Cork Foundation.

“I had no resources to begin with, so it was a case of, ‘Okay, who do I know that can help me?’ ” she says. “Ireland is small in the best possible way; you just have to get up off your arse and start asking. The willingness to help, share contacts and make suggestions without looking for favours back is amazing, especially within the Cork business community. All you need is one person to point you in the right direction and you could be off.”

EVA MILKA
Gaelic Escargot
Best advice: Do the research and prove there's a demand for your product

Eva Milka decided to start Ireland’s first snail farm after returning from a holiday in France and being unable to find escargots. Soon after, she and her partner, Lucas Kurowski, a chef who’s also from Poland, decided to create their own supply.

“When we started breeding snails in our one-bedroom apartment everybody thought we’d lost our minds,” Milka says. But the more they won friends over with escargot dishes, the more they sensed an opportunity to do something different.

“When we did the research we discovered that there was an international shortage, especially in France, Italy and Spain, and that snail farming does not exist in Ireland, even though the conditions are ideal.”

It took about 11 months for Milka to get their business plan “investor ready”, during which time they were often reminded that Irish people don’t eat snails and that the lack of expertise would make life difficult. In 2011 Milka and Kurowski developed a plot of land in Garryhill, Carlow, and received backing from Carlow County Enterprise Board. The pair spent time on a Polish snail farm, learning as much as possible.

But when they tried to implement the system here it didn’t work. The weather proved too unpredictable, forcing them to come up with their own model. “Being the first to do something is incredibly difficult, especially when you’re in a foreign country,” says Milka. “It means building everything from scratch.”

Yet as soon as they teamed up with a Polish distributor and began producing 10 tonnes of snails a year, other Irish farmers wanted to learn. Milka, who originally moved here to work in the hotel industry, had no prior experience of running a business.

Gaelic Escargot is now developing the first manual and training programme for snail farming in Ireland. It has also participated in an accelerator programme with the Ryan Academy at Dublin City University, received funding from Diageo’s Arthur Guinness Projects and struck a distribution deal with La Rousse Foods.

The work-life balance is something they’re still fine-tuning, but Milka believes you have to sacrifice a lot at the start in order to achieve the right balance later, especially if it means pioneering an industry.

COLIN HARMON
3FE Coffee
Best advice: Do something you enjoy, then find a way to make money from it

Colin Harmon has spent five years building 3FE Coffee into a brand with international recognition. The ethos is simple: offer a variety of the world’s best coffees, with great attention to detail, and be nice to people. But 3FE isn’t just a cafe on Lower Grand Canal Street in Dublin: it’s a wholesale supplier that holds coffee classes, prints a magazine and runs a roastery as well as a subscription coffee service.

It all started when Harmon felt unhappy working in investment funds. He quit his job, learned everything he could about coffee and became a barista champion. When he was offered some free space at Dublin’s Twisted Pepper venue during the daytime, he starting serving customers there with just a bench and a machine.

“I had people coming in and saying, ‘This’ll never work. It’s unsustainable.’ If I had orders of more than four coffees, I was in ribbons. But what I was doing was building a brand: engaging customers and making sure every single cup was delicious.”

Since then Harmon has spearheaded Ireland’s specialty-coffee culture. Buzzfeed recently named 3FE as one of the “25 coffee shops around the world you have to see before you die”, and business has doubled since last year.

Although 3FE has never borrowed money or received investment, plenty of challenges have cropped up along the way.

“It’s easy to listen to entrepreneurs talk about how great it is and how it’ll change your life. But I’ve lost friends because of my business, especially in the first three years. I was working seven days a week, missing people’s birthdays and weddings, losing touch with friends I’ve known since I was little.”

Harmon values the network of colleagues, customers and characters that 3FE has developed much more than pursuing money. His family is happy and healthy. He spends every day drinking nice coffee, eating nice food and talking to nice people. That’s something he’s reluctant to jeopardise.

“If you were to say to me, ‘You’re going to be doing this for the next 40 years, and nothing will change for better or worse,’ I’d be happy with that. Liking what I do has to be central to everything. Smarter people than me have destroyed much bigger and better businesses just by overstretching.”

CRISTINA LUMINEA
ThoughtBox
Best advice: Get a mentor

Cristina Luminea was quick to recognise that children are no longer thinking or learning linearly. They become digitally savvy from an early age, with instant access to information, yet they are still being taught traditionally. Her idea was to adapt those methods to show children that learning maths and science can be fun.

Luminea, from Romania, first came to Ireland as an Erasmus student at Sligo Institute of Technology in 2006. She went on to work at Houghton Mifflin Harcourt Learning Technology, a publishing house for educational products in Dublin. The idea of starting a company was something she went back and forth on until September 2011, when she launched ThoughtBox, an educational-software provider that teaches subjects through “gameful learning”.

A few days before presenting the idea to the NDRC LaunchPad, Luminea met Claire Burge, an entrepreneur who had just sold her own business, and the momentum behind ThoughtBox quickly took over.

“The first two years were just, ‘Go! Go! Go!’ ” she says. “To be honest, I had a very patient boyfriend. It was a case of going to work around nine and then coming home at midnight.”

ThoughtBox has since become an award-winning enterprise with games that have been downloaded in 57 countries. Luminea knew from experience that people often make the mistake of aiming their product at a market of “everybody”. By taking her idea directly into classrooms she discovered exactly what her target audience wanted.

But, even still, trying to keep the company afloat during its infancy felt unpredictable. “There were moments of thinking, This is it. We won’t be able to continue,” she says. “But something always came through, and we were lucky enough to get money every single time we needed it.”

Luminea’s best piece of advice is to get a mentor: someone with experience who understands the ups and downs of entrepreneurial life.

BRENDAN O'DRISCOLL
Soundwave
Best advice: Meet relevant figures in your industry for a coffee

In 2011 Brendan O’Driscoll saw a woman so immersed in music that she walked into a tree. He was working for a tidal-technology start-up in Sweden at the time, but he wondered what song the woman was listening to. And that gave him an idea. O’Driscoll and his cousin Aidan Sliney decided to develop a music-discovery app charting what people were listening to on their smartphones and where.

When they took the concept to the NDRC LaunchPad programme, things escalated quickly. O’Driscoll sent a message to Apple’s cofounder Steve Wozniak on LinkedIn, asking to meet for a coffee while he was in Derry for a presentation. Wozniak was so impressed that he publicly endorsed the app, as did the actor and gadget fan Stephen Fry. O’Driscoll also emailed the US billionaire Mark Cuban, owner of the Dallas Mavericks basketball team, who agreed to invest in the start-up.

Since launching, in 2013, the app has been downloaded more than a million times in 190 countries, winning Google’s Top Developer award and raising more than $4 million in funding. Soundwave now has a staff of 10, with offices in Dublin as well as San Francisco.

“We’re all first-time founders, so that’s obviously a big challenge,” O’Driscoll says. Setting up something from nothing is daunting, he adds, especially in an industry as difficult as music.

“From the outset I was so eager to get involved that I threw everything at Soundwave and had very little time for family, friends or even my own health,” he says. “But over time we’ve realised that sleeping under your desk isn’t a long-term solution.”

The best part of Soundwave’s success, he says, has been the recognition that this is a legitimate job rather than a hobby. O’Driscoll encourages anyone pursuing a start-up to meet people in their chosen field, as it could be a valuable opportunity to validate their idea.

“Entrepreneurs are massively collaborative in Ireland,” he says. “Ultimately, they’re not in direct competition with each other, and a lot of them just want to see other Irish people succeed. That’s really powerful. There are also great systems in place . . .

“There’s never been a better time to go after your dreams and turn that night-time idea into a daytime reality.”

PAT PHELAN
Trustev
Best advice: Fail early and get it out of the way

Pat Phelan is home in Cork for a few days, having recently moved to New York. After a career in ecommerce and telecommunications, Phelan cofounded Trustev in 2012 as a platform to protect online merchants. It analyses fraud “fingerprints” in real time to assess whether a customer is genuine.

“All the risk sits with the seller, and we thought that was a completely unbalanced model,” he says, “so we saw a huge market opportunity to come up with something game-changing.”

Last year the European Commission named Trustev as its top technology start-up. It has since raised $3.5 million (€2.7 million) in seed funding, was listed by Forbes as one of the hottest global start-ups, and won the prestigious SXSW Accelerator competition.

Most of Trustev’s clients are outside Ireland, Phelan explains, and running a business between time zones has required enormous commitment. “I don’t have any personal life,” he says. “I have no hobbies. Friends are quick-grab phone calls. I haven’t seen my best friend in at least a year – and he lives in Cork. Everything has to be put on hold when you’re a running a company of this scale. For both myself and Chris [Kennedy, co-founder] it’s a lonely road.”

Having said that, Phelan considers himself incredibly fortunate and takes heart from the number of young Irish entrepreneurs approaching him for advice. “I’m 49 – much older than most in start-ups – and I’ve made a lot of mistakes, so I’m able to give them a bit of that experience.”

Phelan often advises entrepreneurs to start in pairs: someone business-minded who can sell and someone tech-minded who can build. Three of every four start-ups fail, according to Harvard Business School, but investors are often more interested in someone’s long-term potential for their portfolio rather than just a one-off project.

“I’m a big believer in failing quickly and getting it out of the way,” says Phelan. “We’ve got this attitude in Ireland where failure is a badge of shame. In the US anything is a badge of honour.”