The latest figures regarding venture-capital funding for start-ups in Europe has shown that in the second quarter of this year alone, companies across the continent received €2.1bn, the highest since 2001.
Dublin: 28.07.2014 05.30PM
ITLG founder and president John Hartnett spoke to Siliconrepublic.com about how Irish companies need to tap into the Silicon Valley ecosystem, think big and think positive. He says it should be our ambition to see an Irish tech firm enjoy the same success as Zynga or Facebook.
It was a great honour to have John Hartnett, founder and president of the Irish Technology Leaders Group (ITLG), drop by the Siliconrepublic.com offices this week and he was gracious enough to fit us into his schedule in what was an action-packed week.
In 2007, Hartnett, at the time a senior vice-president at Palm, along with a group of fellow Irishmen in top positions in some of America’s biggest technology companies – including Apple CIO Niall O’Connor, Intel senior vice-president Rory McInerney and Cisco senior vice-president Barry O’Sullivan, to name a few – got together and created the ITLG. Despite the sheer scale of the Irish diaspora in America and elsewhere, there was an obvious gap in terms of how well-placed Irish, or executives of Irish descent, could play a role in helping Irish technology companies to grow and access an ecosystem in the Valley.
That organisation has grown from a few hundred to more than 2,000 senior executives around the world. Chaired by former Intel CEO Craig Barrett, they have established the Irish Innovation Centre in San Jose, California, and a venture capital fund has been established called the Wilde Angels Fund.
What is impressive about the ITLG is when they say they’ll do something, they do it and more. During his visit, Hartnett opened the Hartnett Enterprise Acceleration Centre at Limerick Institute of Technology (LIT) and instigated a programme with LIT that will bring start-up companies at the LEAP programme to the innovation centre in Silicon Valley, where they will get mentoring and a chance to raise seed funding.
He even convinced the Lord Mayor of Dublin Andrew Montague to have Dublin be Europe’s first city to proclaim Social Media Day on 30 June.
I began by asking John about his aims of creating a gateway to Silicon Valley for Irish technology companies. “The institute have done very well with 50 companies coming through this programme and 20 companies that are there today. The three most important things for any young technology company are access to capital, access to customers and access to talent.
“We have great talent in Ireland but the access to capital ... some 40pc of the entire US investment in venture capital is done in Silicon Valley, that’s US$8bn in 2010. Access to that kind of capital for young Irish companies is really a big deal.
“The other thing is access to customers. For a technology company, If I’m doing business with Intel, Facebook or one of the big companies in Silicon Valley, that’s a really big deal. Silicon Valley is the epicentre of technology, there are thousands of technology companies, the biggest names in the world over the last four or five decades that have led the way. Today, there are almost $2trn in market cap of the technology companies in Silicon Valley. The largest companies, the largest place to create your venture and that’s why we’re creating a gateway.”
I asked Hartnett if he believed it would be possible one day to create a multi-billion dollar Irish technology giant.
“I absolutely believe it is. Now is the best time ever. I know everyone’s a little bit heads down in terms of the Celtic Tiger having been tamed by the unfortunate banking and property cycle, but at the same time I have personally seen a much hungrier entrepreneur coming to Silicon Valley. And when I look at what it would take to build a multi-billion technology giant from Ireland, the ingredients are there from the talent, financial, technology and operations perspective. We may be weak in terms of sales and marketing skills but that is something we can get over.
“Really, it is more of the soft skill that we need to concentrate on – culturally in Silicon Valley it’s in abundance and that’s the ‘positive attitude’. People go there with a positive attitude that something can be done, big visions, big dreams. Kids walk out of university thinking, 'I’m going to create a big company'.
“They read in the papers that Steve Jobs has done this and Larry Ellison has done that – it’s a focus on the biggest game in the world. That creates kids with dreams and big visions. We need to have that.
“In Ireland, we tend to be negatively oriented and we have been tough on failure yet failure is a learning in Silicon Valley. The founder of HP's famous quote was: ‘If you’re not failing you’re not trying hard enough. And that’s what it takes. Failure is a learning process.’
“For me. personally. I have worked with US companies my entire working life. I have lived that culture and that creates a certain level of confidence and ambition and that’s what we need. I know we can do it and we need to believe we can do it and aim high.”
Hartnett said that having lived in the Valley he was aware of all the various networking events taking place and realised that anything in any way Ireland related tended to be culturally focused, rather than enabling the intense networking style that has been cultivated in the Valley.
“I’d been very interested in going to business networks and that gap was there. We decided to create the ITLG and decided not to call it Irish-American because we felt that ‘Irish’ was a brand worldwide.
“We set it up with 15 executives in 2007. And today, we have 2,000 executives and it is growing stronger and stronger and seeing various different pods of strength around the US, particularly Silicon Valley, but now seeing southern California, particularly San Diego and LA in areas like infotainment and gaming, and there are executives in Disney, Warner, Dreamworks and Sony that are all Irish or Irish-American and the great thing is they are happy to help and happy to give back to Ireland.”
I pointed out to Hartnett my suspicion that aside from being great socialisers, when it comes to professional networking, there is much Irish start-ups need to learn.
“Networking is not just a pure social event. It is a planned event – you know who is going to be there, you make sure you meet those people. Make sure business cards are exchanged, follow up contact and meetings. It’s a pre-event, an actual event and a post-event. That is networking. Ireland, in many respects, and Irish people are great socialisers, but go out and have great fun and walk away not knowing the person any better or having a factual conversation that leads to business.”
But, he said, networking skills are getting sharper. “I will say over the last few years I’ve really seen this accelerate; certainly through a lot of events we have done in Ireland but also in Silicon Valley that have accelerated that. Events like the Dublin Web Summit – you’re seeing more commercial-oriented technology networking events that are really creating business, and the guys sitting in the corner chatting could be creating the next great technology idea and that’s what needs to happen.”
Hartnett explained that the motivation behind creating the Irish Innovation Centre was to create a focal point for Irish entrepreneurs from all over the world. “Many entrepreneurs from all over the world need to land and plug into the ecosystem, which is the venture community and big tech companies there. Having it in San Jose was important.
“Today, we have over 30 companies in the centre. So that, from that point of view, was a good first step for us. The second thing was being able to invest in companies. You can help and you can mentor a company, create the events and encourage innovation, but you have to follow it with investment and that’s why we’ve created the Wilde Angels fund.
“It’s a fund of smart investors involving people from the various companies like Intel, Apple and Cisco. All very tech-savvy and all capable of helping a company. These are the winning ingredients that will help us here and that’s what we are driving.”
I asked him what qualities make a successful entrepreneur in Silicon Valley. “Ultimately, it’s down to the individual. That entrepreneur – you can have the elements that can help them but ultimately you’re still going to have to work your ass off, be persistent, take 14 nos before you get a yes, you’re still gonna have to get out there and take the risk of failure.
“Entrepreneurs are not the traditional 9-5 people. They have to be tough-skinned and still have to do the effort. But I think that today, in the tough environment we are in. It is creating that hunger and that desire for an entrepreneur to be successful and then when these guys start being successful it’s going to start breeding a whole generation of success and that will get the whole ball rolling from an Ireland perspective.
“The Valley hasn’t been a success over the last five years, the Valley has been a success over the last 70 years. So Ireland has had a 35-year history with Silicon Valley, where big companies have come to Ireland; now is the time for our big companies to be created in Ireland and work internationally.”
I point out that Finland has Nokia, Sweden has Ericsson, Germany has Siemens and venture that isn’t it high time that the Republic of Ireland had a technology company of global renown?
“The time we are living in right now is the start of all that and creating multi-billion dollar companies from an Ireland perspective may not happen this year or next but definitely over the next five years.
“If Groupon can get offered US$6.5bn by Google and be in existence for under two years, why can’t some company from Dublin or Limerick do the same thing?
“Success is going to be based on successful Irish companies on the world stage when we have a Facebook, a Yahoo or a Google. That’s success.
“What is not success is when a company sells for US$10m or US$20m and the company that is acquiring them is going to take that company and turn it into a US$100m company. We are going through that cycle at the moment. Success for us is when we are getting the multiple hundred million-dollar or billion-dollar valuations and Nasdaq-quoted companies.
“Israel has 130 Nasdaq-quoted companies today and they did that over a 15-year period. Ireland has the same ingredients but only two or three companies on Nasdaq today. That benchmark of success is when we have 20 or 30 Nasdaq-quoted companies.That’s what leaders should be involved in and also from a Government and agency perspective. That’s got to be the focus.”
“It’s not good enough just to create a company just to sell it to someone else, it should be about creating a company that will employ thousands of people in Ireland and be public companies, that’s what I would like to see.”
Photo: Lord Mayor of Dublin Andrew Montague and ITLG founder and president John Hartnett deem Dublin the first city in Europe to proclaim Social Media Day this week