How four young Irish firms are surviving the start-up rollercoaster
Start-ups featured in the New Innovator column reveal the challenges they have faced
Cambrist founders CEO Jacob Claflin, Blake Newman, head of product and Victor Mikhailov, chief technology officer. Claflin says “It really is two steps forward and one step back a lot of the time.”
It’s hard to beat the adrenaline rush of starting a business, but once the hype is over success is largely down to dogged determination and the ability to field curveballs. No two start-up experiences are the same, but some universal truths emerge. You will work more hours than you ever imagined. Everything will take longer than you expected. Falling outs with co-founders and funders are normal. Growing pains will hurt. Scaling is costly.
Two-year-old fintech start-up, Cambrist, is starting 2018 on a high. It has enough money to fund its growth for the next year, it has landed its first paying client and most significantly of all, it has found a strategic partner to help fast-track its growth and bring global scale to its business.
For the company’s founders, these achievements are some reward for burning the midnight oil. However, chief executive Jacob Claflin quickly dispels the notion that it has been an easy ride. “It really is two steps forward and one step back a lot of the time,” he says.
Cambrist’s founders have set themselves the task of revolutionising how international consumer payments are made. All three have long careers in the payments industry behind them and know their market. But even though their product’s potential was quickly recognised, it was still a long haul to convert interest into paying customers.
“No matter how good your product is, there is a credibility gap and it takes a huge effort to bring customers on board,” Claflin says. “Between April and June this year we moved our solution out of beta and the first live customer for our multi-currency processing offering is Perfectcard – Ireland’s leading corporate MasterCard gift-card provider.
“To date, we’ve helped them process over €500,000 of FX transactions, a significant step in validating our technology and proposition. Then over the summer, we signed a long-term strategic partnership with a leading financial services company to bring our product and services to their clients globally. This will accelerate our development by at least three years. We will go live with a major UK bank early in the new year and expect to double in size in 2018.”
The Freebird Club (TFC) is a peer-to-peer international homestay travel club for those over 50 and its founder, Peter Mangan, first started thinking about the idea in 2014. Following a successful pilot, the platform was soft-launched in September 2016 and now has 1,700 members and 162 hosts across 38 countries.
As a social enterprise, TFC, is driven by more than profit, but like any business it still needs money to operate and grow. Mangan says funding has been a big challenge followed by recruiting members and hosts who both buy into the idea of TFC and have sufficiently good tech skills to use the platform.
“It’s been a case of finding the sweet spot between providing safety and security while making it as easy as possible for people to engage. However, over time this will become easier as those reaching 50 will have better tech skills. As regards money, even with an idea that people love, it takes a long time to get over the line,” Mangan says.
TFC is looking to raise €500,000 in 2018 to fund the next stage of its development. “We want to build the team and the technology and ramp up the marketing,” Mangan says. “We have had support from ISAX (the Ireland Smart Ageing Exchange) and winning the 2017 European Investment Bank European Social Innovation Tournament has raised our international profile. We now have people coming to us looking to partner.”
In 2015 Patrick Shelley launched Kalak, an Irish premium vodka. At first glance it might seem foolhardy to enter a segment dominated by global brands, but with a 15-year career in the international luxury drinks trade behind him, Shelley recognised an opportunity when he saw it.
“I was struck by the fact that vodka was often more about packaging than substance,” he says. “I was not a vodka drinker as I found it odourless and tasteless so I set out to create a vodka with taste, character, purity and smoothness.”
Shelley used the talents of three master distillers to help him create Kalak and over the last 15 months the product has gone on sale in Europe, Asia, the United States and the Middle East. Kalak is aimed upmarket and Shelley says he was chuffed when the product received a rare five-star rating from the “bible” of the spirits industry, the Spirit Journal.
Shelley says the biggest challenge has been building distribution and retail support for the product. “In 2018, we are going to focus on supporting distributors in the markets with the most potential,” he says. “The real challenge is the sell out and we have doubled our rate so we are going in the right direction.”
Shelley sees his company’s boutique size as a competitive advantage. “There is a perception that the big brands offer a more ‘industrialised’ product and people are actively seeking out craft and artisan brands as an alternative. We have just released our first brand extension, a peat cask single malt vodka, so we are hoping for a really good reaction to that during 2018.”
It has been a busy 18 months for the transport solutions company formerly known as Huddl. It is now called CitySwifter – due to a trademark issue – and has also pivoted from a B2C to a B2B model.
The company originally set out to do for private buses what Hailo did for taxis – make them more easily accessible to commuters. But it has now decided that the real opportunity lies in selling its technology not in operating bus routes.
“Our original idea worked to a certain extent but it was going to be hard to break even,” says co-founder, Brian O’Rourke. “The Dublin Bus strike worked in our favour early on but when the strike ended it was difficult to maintain the volumes as we couldn’t accept the Leap Card and Dublin Bus upped their frequency. The good thing was that our technology stood up under the pressure so it was then a question of how best to use it.”
CitySwifter has developed a dynamic routing system that allows it to identify demand patterns in real time. Bus companies operating high-frequency routes in big urban centres are its main target market. “Our system will work in any country, but we are starting in the UK where the market is privatised,” says O’Rourke. “We’re doing for buses what low-cost airlines did for aviation – addressing inefficiencies. By using big data and predictive analytics we can adjust frequency to ensure shorter layover times, avoid the crush of overfull buses and make routes generally more efficient.”