Joe Hogan, the founder and CTO of Openet, an Irish-headquartered tech company employing 1,000 people, provides an insight into the steps necessary to turn Ireland’s domestic technology companies into international leaders.
Entrepreneurialism in Ireland is blooming in a manner never before seen in the nation’s history.
With recent estimates of 2,200 people setting up a new business in Ireland every month, it would not be excessive to say that the start-up/founder culture in Ireland is in vogue.
An area of particular growth is technology companies.
Think big to go big
The biggest obstacle to building Irish tech companies of scale is that of staying power. It takes at least 7-10 years to build a global technology company with a determined team and a good supply of capital.
Technology company building is a long road, which will require far sighted, ambitious investors. As Ireland’s economy is too small for today’s emerging tech companies to be successful, they must look beyond the domestic market from the outset.
For the foundation team of a new tech start-up, starting a global business means spending a lot of time away from home, meeting prospective customers and pitching against competitors. This is the only way to develop a real sense of a market. Your company will have more than one product and this market battle knowledge is key to how future strategic product decisions will be made.
A CTO of a new tech company should consider his or her role to be that of a tech evangelist, as he or she will normally be in the market selling a solution to future (and existing) problems. This vision on how the market is changing and why your prospective customer needs to ready themselves with your product is only achievable by knowing the breadth and depth of your market with an insight which is hopefully clearer and sharper than that of your competitors.
Focus on your core skills
Too often, business owners get caught up in their titles and neglect to consider their true role within a business. Many founders position themselves as CEOs rather than CTOs or CMOs – where their skills actually lie. They need to remember that the capacity to continuously invent is at least as important as building the business structure.
A balanced leadership team will endure far longer than a CEO who is business, tech, sales and all other functions all-in-one. Founder culture is now pointing to a wider acceptance of founders not acting as CEO but staying focused on what created the business in the first place.
Any founder should consider whether they truly are the CEO with the requisite accounting and business leadership background, for what will hopefully become a very large business, before that question is asked by their investors and the market.
Secure enduring investors and redefine success
In the past, the traditional venture capitalist sell-cycle has been to sell in the five- to seven-year range, after investment.
Only a small number of notable venture capitalists have been enlightened enough to hold, resisting internal pressures and holding out for a new, larger definition around what it is to be an Irish technology success. Ireland needs a venture capitalist community which embraces long timelines if scale companies, which are Irish owned and headquartered, are to be built.
The sell-cycle in Ireland is not helped by the Government’s taxation system. Rather than encouraging the holding of companies, it accelerates their selling with ever-increasing capital gains tax.
If the capital gains tax were graduated downwards for Irish company shareholders over a period of, say, 10 years, from company inception then in the final sale, they would be selling far larger companies, and the overall tax take for the revenue would be greater.
An opportunity exists for Government to help redefine the meaning of success, where Irish companies worth hundreds of millions are created, rather than sold prematurely in what is now a well-trodden range of US$50m to US$100m.
Learn from your peers
Enterprise Ireland has done a fine job attempting to foster communication with their CEO and CFO forums, but a deeper reservoir of Irish tech and commercial knowledge remains untapped.
Irish companies need to deliberately endeavour amongst themselves to assist each other by being available to share specialist commercial and technology tactics and knowledge they have attained, from how to do business in Brazil or Indonesia to contract law in Japan or Mexico.
A greater focus on sharing will cut down on the learning cycles for the next generation of Irish breakout tech companies.
Openet founder and CTO Joe Hogan was a guest speaker at yesterday’s Irish International Business Network’s annual conference in London