Start-up firms on parade at bootcamp

Budding Irish entrepreneurs were put through their paces with some savvy business advice, writes KARLIN LILLINGTON

‘THE COMPETITION is inaction and complacency. The competition is inefficiency and waste.” It sure sounded like a call to arms at a Startup Bootcamp for entrepreneurs, held as an opening event to the Dublin Web Summit last Tuesday.

Eoghan Jennings, former chief financial officer of social media company Xing, and organiser of the “camp”, warned his audience against thinking that competition only comes from outside countries, before rallying the troops around the idea that they too could build a successful and innovative company out of Ireland.

About 100 individuals from hopeful young Irish companies attended the event, intended to give companies an intense grounding in some real-world, start-up basics.

A range of speakers covered everything from building an online audience to building a sales team, using e-mail to automate sales and marketing to how many ways an entrepreneur might fail before finding the right business niche. The audience ate it up and, perhaps reflecting a weakness that State bodies like Enterprise Ireland have identified, everyone especially wanted to know more about sales and marketing.

Speaker Harry Largey, also formerly of Xing and now chief executive of Cloudmover.com, took the audience through the ins and outs of selling, while also defending his profession in a self-deprecating way. Noting that company founders will all have to be head of sales initially, he said, to laughter, “The sales hat is not a bad one – it’s actually quite an honourable profession.”

On a more serious note, he reminded audience members that sales fuel company growth – with a wry aside that perhaps in areas of the technology industry, company founders can be prone to forget this.

“Particularly in this Web 2.0 world, some have the idea that if you build something, it will attract people and sales and then it’s just a matter of having big enough shovels” to gather in all the cash.

He pointed out the sobering fact that 49 prospective sales leads typically end up in only one real sale, and advised companies to aim for the goal of reaching 50 real customers, because not only would they help fund a company through its initial growth, but would form the basis of its next phase of growth and expansion.

Salvatore Esposito, chief executive at online content company Populis (which employs 70 in Dublin), spoke about building and monetising an online audience. He advised entrepreneurs to focus on using search engines to drive traffic, as 65 per cent of traffic on information websites is driven by search engines. Work to be a leader in a niche area too, he said, as consumers spend 77 per cent of their time on niche sites.

He cautioned about making the assumption that social media support, such as the number of fans on Facebook, translate into direct benefits for a company. “What exactly does a fan mean for your site?” While it is definitely good to have a social media strategy, he noted that this is not the same as bringing in site users, customers or sales.

Monetising an online audience is a particular challenge. The best option is advertising rather than a subscription approach, he argued, and the best advertising approach tends to be contextual and “pay per click” ads, such as the type provided through Google, rather than display advertising.

He said that contextual ads can bring in money to a website even when they advertise a competitor. People are going to click around and visit different sites anyway, he said, so why not at least earn some money off them when they visit your site? He noted that the Ryanair website takes this approach.

Kerry entrepreneur Jerry Kennelly, who sold his own company StockByte to media giant Getty for $125 million, stepped in to give a last-minute talk in which he explained some of the start-up challenges of setting up his new online design company Tweak.com.

He encouraged audience members by noting Ireland was an excellent place to be setting up the company right now but, from personal experience, he also noted how quickly the technology landscape, and therefore the market for a product or service, can change.

A company might start as the disruptor of an industry and have initial success, but the market can change so swiftly that customers can suddenly vanish as a new disruptor enters the market. He noted that StockByte, which provided royalty-free images, was a disruptor to Getty’s traditional market. But soon after Getty purchased the company, the paid-for images and royalty-free market was disrupted by the arrival of “crowd-sourced” photographs costing nothing. “If you’re going to be a disruptor, you certainly don’t want to end up being the disruptee,” he advised.

User experience expert Des Traynor from web applications company Contrast.ie was the final boot camp speaker. He also advised the audience to focus on setting up businesses that could bring money in from the start rather than relying on funding.

He said that even if a company is offering a free service, it’s a good idea to be sure that users would pay for the service.

“If you don’t solve the monetisation problem, nothing will save you,” he said, musing that Twitter faces this issue as it keeps discovering that attempts to introduce advertising only alienate users.

Good companies are built on the triple qualities of having real business viability, having desirability as a product or service, and having feasibility. “Just two out of three will not cut it, ever,” he said.

He said he felt web businesses should be built on a three-legged stool, where the legs represent business, experience and technology: the business idea needs to be sound, the user experience needs to be excellent and “technical strength is a massive formidable strength for a company”, he said.

Although the bootcamp was a free, one-off event within the web summit, Jennings announced at the conclusion that an Irish branch of the Startup Bootcamp accelerator network, which originated in Denmark and is now backed by a wide range of technology industry mentors and venture capitalists, will launch in Dublin in the summer, with participants going through a similar process of talks and advice, spread out over several weeks rather than a single day.

STARTUP BOOTCAMP: CLOSE-QUARTERS MENTORING

FOUNDED IN Denmark, Startup Bootcamp is an accelerator programme for technology start-up companies that puts company "teams" through three months of talks by industry experts, close mentorship and networking opportunities, in exchange for 8 per cent of company equity. At the end, an "investor day" event is held where companies will pitch themselves to potential funders. The Irish branch will be the second added after Madrid, and will include the involvement of well-known Irish venture capitalists Barry Moloney, Seán O'Sullivan and Brian Caulfield, a member of the board of The Irish Times Limited. International applications are taken centrally by Startup Bootcamp and teams assigned to a particular city can come from anywhere, so Dublin-based teams would not necessarily be Irish companies. Eoghan Jennings, who will run the Dublin programme, said that Ireland will focus on "smart city" companies that make use of large data sets, sensors and devices. More information: www.startupbootcamp.dk/