Bill Liao outlines Ireland’s creative route out of the economic storm

1 Oct 2011

XING co-founder and partner of SOS Ventures Bill Liao

XING co-founder and partner of SOS Ventures Bill Liao told yesterday’s Digital Ireland Forum that creativity and entrepreneurship are key to the nation’s future – but bureaucratic frictions and poor broadband infrastructure are holding back a generation of digital creators.

There is a word you hear a lot in the social-networking universe lately and it’s the word ‘friction’. Moreover, Facebook CEO Mark Zuckerberg repeatedly uttered the aspiration of providing ‘frictionless’ services in terms of making social networking better for Facebook’s 800m users worldwide at the recent F8 developers conference.

‘Friction’ is also a term that Liao, co-creator of European business-to-business social network XING, uses a lot. At yesterday’s Digital Ireland Forum in Dublin, he said Ireland needs to reverse the petty frictions that added together are holding back creators and start-ups if it wants to fully embrace a productive future for its people.

“The future for Ireland is not ‘Ireland: come for the taxes, stay for the weather’,” he said. “You need to focus on the other resources that Ireland has in abundance – people. Ireland is a nation of storytellers and storytellers are critical to our world.

“There’s a thought that in times of scarcity hang on to what you have. It’s all gone, guys, but you can build it again.”

An Australian of Chinese descent, Liao co-founded, along with Founder Lars Hinrichs, Open Business Club in Hamburg in 2003 as a platform for business professionals and renamed it XING in 2006. XING was one of the first Web 2.0 companies to go public and has grown to become one of the world’s leading business-to-business social-networking portals.

Liao is noted for his philanthropic endeavours and is a driving force for a number of environmental and humanitarian causes, including, for planting 20m sq kilometres of new trees by 2020, and has volunteered for The Hunger Project in Uganda, New York and Mexico. A diplomatic passport holder, Liao refuses to fly and instead travels by train and ferry and is behind a global citizen initiative called The Declaration of Earth Citizenship because he believes nationalism is no longer relevant.

Liao has joined Ireland-based venture capital firm SOS Ventures and has invested in Startupbootcamp, which is run by former XING CFO, Eoghan Jennings.

Turning a crisis into an opportunity

Liao said Ireland’s economic crisis is also an opportunity for the country to switch gear, value its creators and create new industries. It’s an opportunity, he said, to tell a new story about the country and how it emerged from bad times.

“Bad times are great for invention. Invention is an enormous value creator. And stories are a low-cost way to build and easy to follow and can be refined, and we value stories. With the story is the traditional crisis, struggle and resolution that I would look for in a business plan. A movie, a software programme, a game – the creation of that – the creation of the story is value creation. When we grasp the fact that everything is gone and can be recreated with our own hands and distributed globally – we need to deal with the abundance of stories and get rid of the frictions that hold us back.”

Liao, who has made his home in rural Ireland, pointed to bureaucratic and infrastructure frictions – from finance to electricity and broadband – that multiplied are serious barriers for creativity and entrepreneurship.

“Ireland needs to get over frictions. I love Ireland, but my welcome to Ireland was to have my electricity cut off for three days. Then my wife asked me, where’s the broadband? Seriously, where’s the broadband? It took me six months to get broadband,” Liao said, adding he had to apply three times to get his green card despite being an investor in Irish companies.

“If you want to be a globally competitive nation – remove the little frictions.”

Liao hit out at the broadband issue for entrepreneurs in rural Ireland, as well as urban centres. “There is fibre passing Cork city but it is not connecting, we have to have backhaul to London – surely with a little bit of collaboration you can remove that friction.

“There are other little frictions – Irish universities have an enormous track record of patenting innovations and institutions have been set up to commercialise them – but the level of commercialisation is very low – there’s no bad will, just lots of friction.”

Thinking out loud, he said: “I wonder if we could license all Irish intellectual property (IP) to taxpayers, you could probably unleash billions of dollars worth of IP. How much innovation could be exploited by Irish firms paying taxes?

“You also talk about a brain drain – but if you reverse the frictions you could have a brain suck!

“If Ireland becomes welcoming of creativity – why not extend tax breaks to all creators, not just artists? We don’t have enough software programmers in Ireland.

“Australia does value extraction – Ireland could instead nurture creativity.”

Starting something unstoppable

Liao pointed to the pioneering work of 18-year-old technology entrepreneur James Whelton of Disruptive Developments, with whom he has started the Coder Dojo movement to inspire and nurture the love of software programming among young people. Just a few months old, the Coder Dojo movement has spawned dojos in Cork, Dublin and Limerick, and is gaining pace by the week.

“James told me how he learned to programme and how it was a real struggle and then when he won an internet award and it was announced on the school PA, he had kids coming up to him and that inspired him to set up a computer club.”

He told the room of how eight-year-olds who come to the Coder Dojo are learning languages from Scratch to Javascript and how kids and parents are learning together.

“We brainstormed and realised that for the movement to work it had to be cool and have edge and we came up with the name Coder Dojo. We said that if we’re to make this low friction there has to be one rule – above all, to be cool. If you waste people’s time, that’s deeply uncool. Now parents get to stay and learn with their kids. We are teaching kids how to code for free and people are generous and give us space and internet,” he said.

Returning to the theme of friction and enabling a whole new generation of start-ups and creators, he said: “Every game company on the planet is looking to reduce friction. The purpose of writing a software programme is to get interaction. A child who can programme is much more empowered than a child who can’t. Programming has language, syntax and grammar. The best time to learn is when you’re young.”

He said that bureaucracy and hurdles for entrepreneurs need to be removed, pointing to wonderfully creative people he knows in rural Ireland who are being held back from being economically productive by the nation’s poor rural broadband infrastructure.

“All of this is connected. Spreading from a seven-year-old with a laptop in Cork, we need to form movements and get frictions out of the way. It’s all about people.

“In tough times, those that stay connected and make things easily win.”

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