California dreaming for Irish start-ups

For Irish firms ripe for expansion, the Valley is the place to be, writes KARLIN LILLINGTONin Silicon Valley

ON THE fourth floor of a building overlooking Castro Street and El Camino in Mountain View, Enterprise Ireland and the Industrial Development Agency face off against each other. On the right side of the hall is the door for IDA Ireland. On the left, Enterprise Ireland, with a little shamrock pasted on to the buzzer.

Beyond the door – one that young Irish companies in Silicon Valley will know well – lies a bright corner suite of rooms that include a series of small offices for the latest group of Irish technology start-ups hoping to crack the US market.

Enterprise Ireland provides working space for companies that are established enough to need a Valley presence, meaning they are beyond the development phase and need a sales and marketing office, says David Ivor Smith, its senior vice-president of telecoms. Along with west-coast office manager Nick Marmion, Smith holds down this Valley fort.

Technology fashions change, and the economic rollercoaster rises and falls, but Enterprise Ireland’s job remains consistent: “We help companies get access but also are serving as a conduit for information,” says Smith.

“The core of what we do hasn’t changed,” says Marmion. “Information gathering, information dispersal. Contacts.”

Government cutbacks in Ireland mean the agency, like other areas of the Civil Service, has had to tighten belts and do more with fewer people, following reductions of about 25 per cent to the agency’s headcount, from 230 to 170. “Yet we have the same number of Irish companies, if not more, to be serviced. So we try to be as lean and efficient as we can,” says Marmion.

New social-media technology tools – including from Irish companies such as DataHug, a recent recipient of Valley venture funding – help maintain and manage networks more easily than in the past, they say.

But Marmion says there’s more money to expand services in some areas, such as bringing Irish companies to exhibit at the likes the upcoming Valley RSA Data Security event; bringing potential buyers of Irish products and services to industry events in Ireland; and funding “pathfinder” visits for companies that need to do market research.

“We’ll be organising an event around the RSA conference, hoping to get 10 companies out, into the marketplace, get some meetings for them. And we’ll have a stand,” says Smith.

Current areas of strength for Irish companies in the Valley include information security, gaming, payments, design innovation, social media and machine-to-machine technology.

A recent survey by the agency identified about two dozen Irish companies in this last area, says Marmion, about twice as many as they’d thought. “It always amazes me, the fertility of Irish companies out there.”

What areas of innovation are big in the Valley? “Think social, local and mobile – ‘SoLoMo’. That’s still really a hot space, as well as the whole idea of hyperlocal: knowing I am walking down Castro Street in Mountain View right now and sending me a coupon for 10 per cent off a pizza, for example. It’s all about . . . analysing big data and personalising it – personalising it down to that person at that time in that space,” says Smith.

But, he adds, areas that garner the most media attention or Valley chat are not typically the areas where the bread-and-butter business is for most companies.

“While Silicon Valley is very much about what’s happening in social media and the different media platforms, ultimately most business is about companies selling within verticals [specific niches and industries],” says Marmion. “So we’re trying to keep a view on . . . what’s emerging and converging, but lots of Irish companies are doing straightforward sales into verticals.”

With few exceptions, most Irish companies in the Valley are “in the commercialisation phase. Sales and marketing are the reasons they’re here,” he says.

Enterprise Ireland doesn’t directly offer incubator space for firms still in the development phase, although there are plenty in the region. “It’s a first sales and marketing foothold in the US that we offer . . . I’d be worried if a company is coming to the Valley from Ireland without a fully developed product,” he says.

Some Irish companies also come looking for Valley venture capital(VC) : “Some more prepared than others,” Marmion says. While there is value to companies in certain sectors to do so (he singles out gaming, which tends to need significant investment and is a hot area for investment), he warns that “companies need to disabuse themselves of the notion that it’s easy to come here and raise money”. “If you haven’t had traction with VCs in Ireland, you’re unlikely to get traction here,” says Smith. “The first thing VCs will ask is why your idea didn’t interest anyone back there,” especially with the increased number of seed funds that involve Valley VCs working with Irish venture funds.

Marmion insists there is funding to be had in Ireland. “While there are clearly banking issues, well thought-out strategy is getting funding.” Irish firms will see increased VC options, he says. To start with, the agency is now seeing a regular influx of Irish VCs to the Valley. Smith has an Irish VC a week coming out for the next couple of months, which is a new development. Some are coming over to talk to Valley VCs, some to look at companies, and some to fundraise.

“Irish VCs are waking up to the idea that they can add value” by working with Valley funds, says, Marmion, and Valley VC firms are increasingly looking towards syndication, setting up branch offices in places like Ireland.

Anything that puts good Irish ideas in front of a range of VCs is a positive development, he says.

Most Irish companies arrive with a greater level of knowledge and understanding of what they need to do than in past years, they say. And compared with a decade ago, there’s a broader, more helpful ecosystem of Irish people working in the Valley who retain strong links with Ireland.

For Irish companies, the pair says – especially the ones ripe for expansion that have won initial business in Ireland, the UK and perhaps Europe, “but aren’t going to scale from Ireland” – it’s a good time to be looking toward the Valley.

HOW GREEN IS THE VALLEY? IRISH SILICON START-UPS IN THE US

The current crop of young companies in Enterprise Ireland's Silicon Valley company incubator:

Duolog (duolog.com): develops electronic design automation tools for integrating system components on to microchips

Tethras (tethras.com): provides international language translation to developers for localising apps

Dial2do (dial2do.com): a hands-free service for dialling numbers or speaking messages or tasks to be transcribed and sent

Global Business Register (gbrdirect.eu): sources company information from European official national business registers

TheNowFactory (thenowfactory.com): collects and analyses mobile subscriber data in real time for operators

Seedups (seedups.com): crowd-sources funding for start-ups by connecting companies and investors