Internet business ‘is not a bubble’, say world’s top internet founders

19 Oct 2012

Dublin Web Summit founder Paddy Cosgrave, HootSuite's Ryan Holmes, Michael Acton Smith from Moshi Monsters, IDA Ireland's Barry O'Leary and Mike McCue, founder of Flipboard, at the start of F.ounders

The founders of top tech companies Flipboard, Moshi Monsters and HootSuite all agree that the fundamentals of the internet business are sound and that we’re at the start of an amazing period of growth. This time round, it’s not a bubble.

Today in Dublin, 200 of the most influential tech founders are gathered at the F.ounders event, which follows two days of the Dublin Web Summit.

Yesterday during the summit, the founders of HootSuite, Moshi Monsters and Flipboard gave their thoughts on where the internet business is headed.

Ryan Holmes is the founder and CEO of Vancouver-based HootSuite, a social media dashboard used by 70 of the Fortune 100 companies. Some 5m users use it to send 3m messages a day and the company employs 230 people. He revealed that HootSuite is looking at locating an operation in Dublin.

Michael Acton Smith is the founder and CEO of Mindy Candy and its creation Moshi Monsters, a social network used by 70m children around the world. A movie inspired by Moshi Monsters will come out next year.

Mike McCue is the founder and CEO of Flipboard, his fourth start-up, a personalised social magazine for iOS and Android devices that allows users to flip through their various Twitter and Facebook feeds, as well as bring in content from some of the world’s biggest internet brands.

They were joined by IDA Ireland chief executive Barry O’Leary and the founder of the Dublin Web Summit Paddy Cosgrave.

Acton Smith said the pace of change in the technology world right now is simply extraordinary. “I went to a school recently and asked 500 children whether they had iPads or iPhones and every single hand went up. This is the ‘swipe generation’ – the kids are comfortable with digital and this technology is affecting every industry.”

Holmes said social media is disrupting the very fabric of society. “If you think about the onset of the consumer internet around 2000, when we went online we all had handles. That’s all changed through social and now we can be ourselves. That’s what’s changed in a good way.”

McCue piped in: “One of the things I’ve noticed is how easy it is to start a business. Building a company is never easy, but now you don’t have to have an MBA or have millions of dollars to get started.”

The road ahead is clear

When you look around at what has to have been the best Dublin Web Summit yet and the positivity and passion of these individuals and many like them who came to Dublin this week, including Chris Poole of 4Chan, Tim Armstrong of AOL and blogger extraordinaire Robert Scoble, it’s hard to believe it’s now 12 years since the crash of 2000.

But I had to ask the founders if they believed things maybe are just too good in tech right now, in spite of a global economic downturn.

Holmes said: “I think the difference between now and 2000 is the fundamentals. In 2000, the business models were unknown, we didn’t know online advertising or e-commerce. But you can do things now at a fraction of the cost of what it took back then.

“I think we are in an amazing time. We’re not seeing a bubble. Rather it is the second phase in an era of amazing growth.”

Acton Smith pointed out: “Traditionally, whether there’s massive disruption – humans overestimate the short-term impact and are hit with spikes, they also underestimate the long-term impact.

“We’re now just seeing the major long-term impact. Everyone has connected devices, these powerful computers in our pockets. But we need to be careful with our estimates. Everyone wanted Facebook to be a US$100bn company, and that’s why that’s softened.”

O’Leary said that the sheer pace of everything in the tech world presents an interesting challenge for a country like Ireland. “From an Irish point of view, we have to cater for a variety of business models. The battle is how do you keep up with the scale and the pace – you have to be good at adapting to new business models.”

O’Leary pointed out that despite Ireland’s rich legacy of providing a European base for some of the very large technology companies from Apple to Intel, HP and Microsoft, the agency decided on a deliberate strategy to work with early stage companies and encourage them to locate in Ireland.

“We set up a team around the world to target early stage companies. You need to interact with these companies early because these companies are internationalising early.”

A case in point is online gaming company Zynga, which the IDA began working with when it was a 40-person start-up in Silicon Valley. Today, it employs 3,000 people, has revenues of around US$1bn a year and its Dublin operation employs 100 people.

McCue said ups and downs are a fact of life no matter what industry you are in.

“How businesses will survive ups and downs – it’s never as bad or as good as people think it is. There is a way you can moderate and think about the long term. Entrepreneurs have to learn more about that, how to build a successful company that will be around for the long haul.”

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years