European start-ups need to venture out more

13 Jun 2011

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In his look back on the week, Siliconrepublic.com editor John Kennedy argues that start-ups cannot wait for change to happen or opportunities to come to them. Irish start-ups, in particular, need to get out more in Europe.

There has been a germ of an idea building in my mind for more than a year now and it began at last year’s DotConf. I was talking to Facebook’s director of user operations Sonia Flynn about software developers and she made the point that few Irish developers bothered to turn up at a Facebook Garage event that was held in London a few weeks earlier.

I wanted to argue that this was because the Garage could have been held in Dublin, considering Facebook’s large presence in this city and then I copped on to how stupid and lame that line of reasoning was. London is just an hour’s flight away and through the enterprising efforts of Michael O’Leary, relatively affordable. In that sense, if developers really wanted to attend the Garage they could have been in any city in Europe with little inconvenience. That Garage could have been held in Glasgow, or Copenhagen or Bucharest. If you want the business bad enough, get out there.

One of the troubling things about covering technology companies, start-ups in particular, is that once you get to know the individuals behind them you can’t help but root for them and wish them the best. Often, as is the case, the ones you think will make it don’t. And the ones that do think differently and make unorthodox decisions.

Among those that fail, often you hear the lament about insufficient venture capital, lack of State supports, lack of a local customer base, too much red tape, etc. It is rewarding when you do meet these people later on and they are trying again. In this instance they are wiser, a little battle scarred but just as enthusiastic and interestingly, this time, more methodical and rapid in their movements.

But conversations I’ve been having in recent weeks compounded a nagging thought – are local start-ups in Ireland getting on a plane and working it within Europe? Instead of waiting for the venture capital and customers to come to them and complaining about red tape for local grants and allowances, they need to treat Europe as their gateway to the rest of the world, or go directly to Silicon Valley like the Collison brothers did.

Acting global, being local

There is plenty of evidence to suggest that many do realise early on that to go global you have to act global – take Cubic Telecom’s Pat Phelan, for example, who is constantly working his way across Europe and the rest of the world to win key deals.

Late last year, I spoke to Chris Dark and Mattias Ljungman of Atomico, who were adamant that there’s a world of opportunity to be discovered in terms of start-ups emerging from Europe, Latin America and Asia, and not just Silicon Valley.

At last week’s Dublin Web Summit, I popped my head in briefly and spoke to TechCrunch Europe editor Mike Butcher, who pointed out that the clever thing about European start-ups is they can build their products here and distribute across the globe. “The thing about raising funds in Europe is you have to be smart as a European entrepreneur. Many start-ups aren’t used to the fact that they need several term sheets when raising investment. Get on a plane, look for funding.”

Butcher pointed out that new funds, such as Passion Capital in London, are emerging, and their funding is being matched by government investment, boosted by new legislation and increasingly US venture capitalists are paying greater attention to the region.

“People are realising they can’t get a corporate job anymore so they have to think in an entrepreneurial manner. They are getting used to the fact that things will fail, they pick themselves up and start again. I see people in their 20s doing something for awhile, and then pivoting in another direction.

“Jurisdiction-wise, in Europe, you can set up in different jurisdictions and still base your company where you want to. You just have to be smart.”

An example of this kind of smart savvy was personified by Emanuel Gal of Brainient, who I also spoke to at the summit last week. Gal is a 25-year-old Romanian entrepreneur, blogger and internet consultant, living in London. He started his first business at the age of 10, creating business cards for the teachers in his school. Currently, he’s the CEO of Brainient, a video technology company focused on helping video publishers make more money with their video content.

Gal told me that Europe to him is the best place to start a technology company because he has access to so many markets and ultimately, languages, that makes it all the more possible to internationalise a product before even leaving Europe.

A good example of this can be seen in Paris-based Jolicloud, a company that has developed the world’s first cloud operating system and which has already attracted more than 500,000 users. Tariq Krim, its founder and CEO, previously set up netvibes.com and shares Gal’s viewpoint that it’s possible to base a start-up in Europe – in his case, Paris – and succeed globally.

Irish firms inevitably look to Silicon Valley, like all technology firms in all regions do. There are cultural reasons and, of course, the fact that many US multinationals are based here.

But look around you here in Europe – there’s no city that’s not more than a few hours away, the internet has made it more affordable to start up a company – just get on a plane.

To sum up, I’ll steal a line from the Roman philosopher Seneca: “Luck is what happens when preparation meets opportunity”.

Be prepared to get out there and find those opportunities.

Editor John Kennedy is an award-winning technology journalist.

editorial@siliconrepublic.com