Ireland’s Cisco kid shows it’s never too late to start up

1 Apr 2014

Barry O'Sullivan, CEO of Altocloud

In the late 1980s, a then-25-year-old Barry O’Sullivan decided to roll the dice and follow a dream that had been nagging him. He sold his car, left his job at Nortel in Galway, and bought an airline ticket to California where a few years previously he had worked as a student intern.

What followed is the kind of glittering career tech executives in Silicon Valley may only dream of.

Cork native O’Sullivan, best known to the Irish public as one of the exacting investors on Dragons’ Den, in recent weeks retired from a successful career with networking equipment maker Cisco. As a senior vice-president at Cisco, he helped mastermind acquisitions of tech companies, such as WebEx, for US$3.2bn, and had been an active angel investor in start-ups in Ireland and California.

Now, after 11 years at Cisco, O’Sullivan is embarking on his biggest challenge yet, as CEO of a new Ireland and Silicon Valley-based start-up called Altocloud, with the aim of transforming communications between businesses and their customers.

At Cisco, O’Sullivan served as senior vice-president in charge of voice products, a US$2bn a year business. He has also been a member of the Strategy Group of Padmasree Warrior, CTO of Cisco. O’Sullivan is also one of the earliest members of the Irish Technology Leadership Group (ITLG), established by Irish and Irish-American executives in Silicon Valley, Hollywood and on Wall Street, who decided to it was time Ireland tapped into its diaspora community to foster economic growth.

Funding for Altocloud

Altocloud has been funded so far to the tune US$1.5m by SVG Partners. O’Sullivan said Altocloud is an attempt to finally defeat the problems posed by call centres by combining communications with the latest in data analytics.

“Everybody has been through this whether it is with banking or cable TV. You push button after button on your phone, repeat your name to a machine and everything else before you finally get to talk to a real person. It’s a horrible experience. We want to fix that problem.”

Businesses spend US$100bn a year on online advertising, trying to push their brand around the world, and then they spend US$300bn a year on call centres, which is mainly spent on labour – and the bad experience just pulls the brand down, O’Sullivan added.

“In 2014, many customer journeys actually start on mobile apps or on the web, so we employ analytics in such a way that by the time the customer has to talk to a call centre, the agent on the other end of the line knows exactly what the situation is and the customer is spared the horrible experience of constantly holding and pressing buttons.”

Many executives of O’Sullivan’s caliber and range of experience tend to stay in the corporate game to the very end. He is therefore rare in that he is leaving one of the world’s biggest tech companies to work on a start-up, just like a 20-something.

Altocloud has a team of 13 employees. Ten staff members are based in Galway and three are in Silicon Valley.

The team in Galway is basically the software team, a combination of communications people who have been in Cisco and Avaya, O’Sullivan said. Then there are PhD graduates in data science from the Insight Centre for Data Analytics in NUI Galway. The team in California is focused on sales and marketing.

California dreaming

Looking back on his career, O’Sullivan said he always wanted to go to California.

“What I learned pretty quickly was that Irish people from an educational and motivational point of view do very well when they get over there. And that’s what happened with me.”

O’Sullivan rose through the ranks at Nortel in the US and in the late 1990s was appointed CEO of Periphonics, a New York-based technology company that had been acquired by Nortel.

In 2002, O’Sullivan received a phone call from the private jet of John Chambers, CEO of Cisco. On the line was Charles Giancarlo, Cisco’s then-head of product development, who had a proposal for O’Sullivan.

“He sold me hard and I simply had to join Cisco. I learnt so much at Cisco and being part of a team that went from nowhere to No 1 in enterprise communications, knocking out companies that had been around for over 100 years, was an amazing experience.”

During his 11 years at Cisco, where O’Sullivan masterminded multi-billion dollar acquisitions and led multi-billion dollar business units, he kept an eye on entrepreneurs, as both an investor and mentor. He was an early investor in Trustev, the Cork tech company the EU named European Start-up of the Year and that won the top start-up accolade at SXSW in Austin, Texas.

The temptation to finally start something for himself, which he always wanted to do, was too strong, O’Sullivan said. He had been involved in investing in companies and being on the board of small and early stage companies, and he got to know lots of CEOs who were going through all of that.

O’Sullivan said he really thought if he had the right idea and the right team, he would have a good shot at doing something big.

“When I saw the team that I could put together on the data analytics side from Insight – the best data scientists in the world, in my opinion – I knew I could plug into the communications world. It was just the ideal opportunity and I believe it is a huge problem that we are trying to solve.”

Start-up stereotype

And he said it’s just a stereotype that graduates in their 20s trying to emulate Mark Zuckerberg, CEO of Facebook, or Steve Jobs, Apple’s former CEO, exemplify the start-up world in Silicon Valley. Besides, O’Sullivan has the contacts and knows the market he is targeting.

He added that in enterprise software start-ups it’s not unusual to have people who have come from big companies or who aren’t in their 20s. Some of Workday’s founders, for instance, were in their 60s. Or look at Pat Phelan at Trustev, who is in his late 40s, O’Sullivan said. “He’s been great and I invested in him a year ago and I am pleased that I did. He’s just a machine, he’s the prototype for what start-up CEOs need to do. He has won all the accolades and I’m very impressed, but what has most impressed me is the traction he has got with customers and they are real customers, real revenue and it’s not just PR.”

O’Sullivan said the software start-up mindset in Ireland today can simply be described as focused and he lauds the achievements of Dublin companies, such as Intercom, which just raised €17m and plans to hire 100 people, and executives, such as Eamon Leonard, who sold his software company Orchestra to Engine Yard.

However, despite the Government claiming it plans to create jobs by supporting entrepreneurs, the structure of Ireland’s economy is still heavily skewed towards supporting defunct property developers.

If Ireland is going to play to win, then it needs to be competitive, O’Sullivan said. He would like to improve capital gains tax, which he said is a disincentive for entrepreneurship.

“If you want to build a high-value company, then 33pc is too high when it is only 10pc in Northern Ireland. But it’s 0pc for property developers in Ireland at the moment; that’s just nuts. If our tax policy about playing fair and playing to win, well, if we’re going to play fair then it should be the same for everyone and not one way for property developers.”

Make the move

One piece of advice O’Sullivan has for founders of Irish tech companies who see Silicon Valley as the portal for rapid growth is to follow his and the Collison brothers from Limerick’s example of upping sticks and living there.

“I suggest one of the founding team needs to be in the US to build out the network, the business, the customers. Pretending to go to the US by flying over and back, people see through that right away.”

O’Sullivan said there’s still a little bit of reluctance among tech founders to leave Ireland. “Dublin and Cork are such great places, Ireland is such a great place and entrepreneurs don’t want to move. But I think you kind of do need to,” he said.

“Pat Phelan is doing that and Grainne Barron from Viddyad has already moved and that’s kind of necessary.”

O’Sullivan spends most of his time in California, where his family lives.

“I’ve got a network that I have built over 25 years and so I’m a little different to some tech founders in that way.”

A version of this article appeared in The Sunday Times on 30 March

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