Growing up in public

18 Nov 2004

Deloitte’s Fast 50 programme may be about the fastest- growing technology firms on the island but it’s also become an annual celebration for survivors in a sector that is still nursing wounds from the dotbomb collapse of 2001. Webtrade CEO Jack Donaghy summed up the mood of the moment when asked what the firm’s biggest achievement had been to date. “It’s just been an achievement to stay alive over the past five years,” he quipped. But a room full of technology survivors knew he wasn’t joking.

David O’Flanagan, Deloitte partner for Ireland, had already put the event into historical context. When it was launched five years ago it was at the heyday of the internet boom when the scantest of business plans could attract serious investment. He talked about the “chill winds” that would blow through the industry just two years later, when the collapsing value of technology stocks became a wake-up call for more traditional business values to be reinstated. Going forward, he said, there were reasons to be cautiously optimistic.

“There are now signs that green shoots are beginning to reappear,” he believed, citing more robust business models as a necessary requirement of the new era. Another requirement is outside investment.

Speaking on behalf of the event sponsor, chairman of InterTradeIreland’s Equity Network, Barry Fitzsimons, stressed the need for seed capital to keep the conveyor belt of new companies coming along.

“The Seed Capital Scheme and the Business Expansion Scheme are critical to the early stages of a start-up,” he said. “Last year I called for the finance minister to expand the schemes — little did we know it would take so long to get approval from Europe.”

The European Commission’s decision to approve the schemes finally came at the end of October following a nine-month investigation. Fitzsimons acknowledged that tax breaks did not make bad investments good but they were crucially important to sustain companies in their early days.

The 50 firms themselves illustrated the rich variety and talent in Ireland’s technology sector. Winners ran the whole gamut, from purveyors of e-business solutions that cut their teeth in the boom days and have lived to tell the tale, to in-vogue technology specialists that have built businesses around compliance software or the fast-growing voice-over internet protocol market. What they all have in common — making them eligible for a Fast 50 placing — is a high percentage of turnover growth from 1999 to 2003.

Communications company eTel scooped top spot in this year’s roll call. At an event where growth statistics have long since spiralled off conventional sales charts, eTel had registered a staggering 2,652pc growth in turnover over the past five years. With its headquarters in Austria, the company describes itself as “central Europe’s leading alternative corporate telecommunications service provider”, taking on large and incumbent telcos in Austria, the Czech Republic, Hungary, Poland and Slovakia.

Founded in 1999, eTel’s strategy of focusing exclusively on serving the central European market evolved from an earlier incarnation that had operated exclusively at home. “We had been selling voice, data and internet services into Ireland against an incumbent and decided to take the same concept to a larger market region,” CEO Sean Melly told the Fast 50 audience.

He went on to pay tribute to his firm’s 300 employees. “We have a very young group of people that have taken on the giants of the telecoms markets. Working in five countries with all the regulatory issues, it’s been a real challenge.”

He gave an interesting insight into what a fast-growing company does next when he declared that he had no plans to explore new markets. “It’s tempting to expand into other countries but we’re not going to do that. In the next five years, growth will come through acquisition, consolidation and extracting all the synergies from the business we have.”

The runner up in the awards had also focused on overseas business, albeit in a very different way. The expertise of Connect Global Solutions was in helping its corporate customers localise products for global markets. But there was a reassuring reminder that there was still business growth to be had from Irish customers when web development and marketing firm Webtrade won third place. The company has provided online marketing solutions for a whole host of Irish organisations, including the Irish Internet Association, the Small Firms Association and the Galway Chamber of Commerce.

With its traditional mix of business and pleasure, the Fast 50 is always hosted by a TV presenter who has to grapple with more high-tech buzzwords than they are ever likely to see in a lifetime of autocues. For the second year running it ended with comedian Dara O’Briain ripping into an industry that is left with no choice but to laugh at itself.

By Ian Campbell

Extensive interviews with the winners and an overview of the Deloitte Fast 50 will appear in the next edition of Digital Ireland, out 25 November.

Sky’s Lisa Burke, MC for the Deloitte Fast 50 awards, is pictured with Sean Melly, CEO of this year’s winner, eTel.