A calculated bet on tech trends saw Sean Blanchfield and Dylan Collins embark on a start-up they sold to Activision for $17m. Today, Blanchfield is focused on saving the digital publishing industry and the web from itself.
On a windy day in November 2005, my fiancée and I brought her teenage nephew – an avid gamer – to see the Xbox 360 in action, a few days before it was officially launched to the public worldwide. We trundled up the stairs of an office of a start-up called Demonware near O’Connell Street in Dublin. It was the usual start-up affair; pizza boxes hung languidly open amid a sea of software books and video games. A stripped down test version of the games console that looked nothing like what was about to be launched sat by the window.
The offices were those of Demonware, a company founded by Sean Blanchfield and Dylan Collins. The company was one of the first makers of vital middleware that helped publishers behind games like Call of Duty to bolt on multiplayer capabilities, just as the multiplayer revolution was heating up.
Little did we know at the time, but it would be just over a year later that Activision would acquire Demonware for $17m. Today, Demonware is the lynchpin of Activision’s strategy in a time where multiplayer gaming is the key to the console world. Demonware now employs hundreds of people in Dublin, Shanghai and Vancouver.
If there is a book to be written about the indigenous Irish tech industry, a chapter should be dedicated to House 6 at Trinity College Dublin (TCD). This is where, in 2000, third-year students Collins and Ronan Perceval were working on the university newspaper and fourth-year student Blanchfield was working alongside them at the student union.
“That’s where we all met and we recognised an entrepreneurial streak in one another,” recalls Blanchfield, who will be speaking tomorrow night (Wednesday 19 October) at the Bank of Ireland-backed Startup Grind at Google on Barrow Street in Dublin.
“I had one more year to go in college and Dylan and Ronan had two and we decided to create a business and bootstrapped it from there. After college, Dylan and the others worked full-time at Phorest and I worked part-time as I was working on a PhD.”
Phorest – a company that provides technology to the beauty salon industry and is still led by Perceval today – was the engine room for a number of companies to emerge in those heady post-dot-com days, when polite and official Ireland wanted nothing to do with tech. Instead, a looming property crash was pretty much in vogue.
Among the products and services to emerge from Phorest at the time was Text By Numbers, a mass messaging platform that was beloved by Irish political parties of the day.
During a brainstorming session, the subject of another Irish games software company called Havok hiring everyone they knew came up, and Collins and Blanchfield sketched out ideas to go into gaming. It was a small community back then; Havok co-founder Steve Collins lectured Blanchfield at TCD and many of its earliest employees corrected his lab assignments.
“Dylan had done his dissertation on the games business and I was doing research into computer networking and we wondered if we could put our research to work the same way Havok did to come up with a product. That was 2002 and Demonware was born.”
Feeding a monster
“We decided that multiplayer wasn’t big at the time but one day it could be, and we worked out various scenarios and came to the conclusion that the big games studios were going to struggle with multiplayer. We decided there was space for a specialist provider of middleware that companies could bolt onto new games.
“At the time, we were 21 or 22 and it was very hard to raise initial capital for the business and looking back, I’m still not sure how we succeeded.
‘It was a massive risk trying to invent something that had never been invented before, in the hope that one day someone would need it’
– SEAN BLANCHFIELD
“One way or another we got to raise €500,000 and moved into our new offices off O’Connell Street after making a clean split with Phorest.
“It was a massive risk trying to invent something that had never been invented before, in the hope that one day someone would need it.
“We happened to get it right. It is hard to separate luck from skill and looking back, it is all a bit of a blur. It is hard to second-guess looking back. When Activision acquired Demonware, I was 27.
“Looking back, it is fair to say that Activision probably got up to 1,000 times more value out of the business than they bought it for and we are proud to see the company is still around, with hundreds of people working around the world on multiplayer technology.”
After Demonware bought Activision, Blanchfield stayed around for 18 months before getting out and embracing the start-up life once more.
Collins continued to have the magic touch – a new games company called Jolt he established after Demonware was acquired by Gamestop in 2010.
“Around 2009, I teamed up with an old classmate, Brian McDonnell, and we acquired a computer game off Dylan and Jolt called Utopia, and we tried to develop it.
“Then in 2011, Brian and I set up a different type of games company – where everything we thought we knew about social gaming, we could apply to online education and teaching corporations about Lean Six Sigma.”
After the success of Demonware, the move into corporate training turned out to be a marked, contrasting failure for Blanchfield.
“We made a great product but we made the mistake of trying to sell to companies that were too big for us. As a small start-up, we found it impossible to close a sale with companies that had hundreds of thousands of employees.”
Saving the internet from itself
It was while picking through the debris of their failed games company that Blanchfield and McDonnell, now joined by fellow TCD computer scientist Neil O’Connor, sifted through 50 different business ideas they had written down.
One of those ideas concerned ad blocking, which the team reasoned would be a problem for the online publishing industry.
‘Ad blocking isn’t really the problem. It is consumers’ reaction to web being a pile of s**** in many ways’
– SEAN BLANCHFIELD
“The online media industry is facing an existential crisis because of ad blocking software,” Blanchfield said, pointing to millennials downloading software that prevents annoying ads from interrupting their online experiences.
“Ad blocking isn’t really the problem,” Blanchfield reasoned. “It is consumers’ reaction to web being a pile of s**** in many ways, and particularly ads being intrusive, interruptive and annoying.”
The sad and lamentable truth is that the online ads industry screwed up by failing to enforce standards, and many of those annoying ads are still cluttering up the web.
“It’s like global warming where the people burning the coal aren’t worried about the weather getting bad where they are. The effects of bad advertising in economic terms are externalised, so people install ad blocking software so long as there are torrent sites out there with crappy ads and popovers and unders and dodgy stuff that could hide a virus attack. As long as there is a small fraction of websites out there behaving badly, all other sites will continue to suffer.”
PageFair’s approach is to deploy technology that cleans up ads and at the same time, makes it impossible to block inoffensive ads.
“Publishers take our tags and when they detect a user is an ad block user, instead of sending an ad in the regular way, it goes through our servers and we crunch it down to sanitise it and return it as a plain JPEG – this prevents against ad blocking, but at the same time guarantees security, privacy and speed for the user.”
PageFair’s market is primarily in North America among ComScore 100 publishers like newspapers, broadcasters and other big media brands.
Regarding Facebook’s tussle with ad blockers, Blanchfield is sympathetic to the social media giant.
“Facebook was 100pc right to do what it did. Facebook is an excellent engineering organisation and is defending itself against unwarranted ad blocking. If you look at Facebook ads, they are unobtrusive, they don’t annoy in any way and the targeting implications are easy to understand because it is based on information you gave and can take back.
“They are fighting the same fight as us and that is gratifying.
“We war-gamed what we thought was going to happen in the digital media industry and we won. We came to the conclusion that the only solution would be to stop the ads from sucking and defend them from being blocked.
“We are now at the point where the second biggest ad player on the internet – Facebook – is taking similar action. It validates what we are doing.”
Unless the publishing and ads business tidies up its act, the danger posed to publishers by ad blocking could get worse, as publishers get more desperate and look to native advertising. The biggest danger is that consumers will be harder to reach.
“Even the most upstanding publishers are loosening their morals when money is tight.
“In a web that is full of popovers, native advertising, pre-rolls and more, it is a vicious cycle and if it doesn’t get resolved, people will just switch off.”
Blanchfield’s entire entrepreneurial career has been in Dublin and he believes starting up in the city has always had its challenges.
“There’s plenty of expertise and experience in technology, which is superior compared to a lot of other cities in the US and Europe. But the challenge more than ever is getting your hands on any of that talent.”
‘The irony is that in many ways, the IDA’s success is Enterprise Ireland’s challenge’
– SEAN BLANCHFIELD
Blanchfield warned that more needs to be done to ensure students in primary, secondary and third level are prepared for the jobs of the future.
“The irony is that in many ways, the IDA’s success is Enterprise Ireland’s challenge.
“We have a small population and there are only so many computer science graduates. We can do better, but that means starting with primary schools and that is a very long-term investment.”
He said that while PageFair is well funded by local investors, competing in terms of salaries and benefits against Google, Facebook, HubSpot, TripAdvisor, LinkedIn and others is tough.
PageFair, which currently employs 18 people, is now looking beyond Ireland to employ talented software engineers.
“We are getting very good at visa processes and work permits,” he deadpanned.
In his interview at Startup Grind on Thursday, Blanchfield said that his core message will be around diversification and luck.
“In my life, I’ve been lucky. Skills and personality are useful in this business, but I believe in luck. I only get to do PageFair because before that I was lucky enough to work with Phorest, then Demonware and then Jolt. Each one gave me the opportunity to continue to get lucky.”
But even with the best of luck, Blanchfield concluded that failure is always there and the start-up journey comes with responsibility.
“People often don’t face up to that responsibility. They are investing their own lives and the livelihoods of their families to purse dreams that may not come true.
“You have to have a sense of objectivity about it and know when to walk away and move on to the next venture.”