Characteristically ahead of their time, Dr Steve Collins and Hugh Reynolds in the late 1990s set the template in Ireland for what many university researchers would today consider a rite of passage: taking an idea and shifting from the cosy confines of academia to the high-octane and high-risk world of entrepreneurship with a business idea and a whole lot of hope.
The duo, who are now onto their third start-up, helped to play a defining role in the development of the video-game industry globally, as well as Hollywood, when they left the computer science department at Trinity College Dublin to start Havok in 1998. They converted physics algorithms they had been working on into software that now powers the realistic physical and animated special effects consumers today enjoy in best-selling console games like Halo and blockbuster movie series like The Matrix.
According to Collins – and unusual for Irish academics at the time – they harboured ambitions to be entrepreneurs. “We both had long-standing desires to be involved in companies and change the world in a small way. We set up a research group in Trinity and decided that once an opportunity surfaced we’d jump on it.”
Havok came about because Collins and Reynolds saw a shift in the games market with the arrival of the Xbox and the PlayStation 2 games consoles, and knew there would be challenges in terms of realistic simulation. “Our physics software fit the bill,” said Collins.
The pair left Havok in 2007 just before Intel swooped in and acquired it for US$100m. Collins and Reynolds set up a new company, Kore Virtual Machine, focused on building apps for the education and entertainment space. Intel also bought that company, for an undisclosed sum in 2010.
What Swrve does
Today, the duo is back in action, with their next venture, Swrve. The company allows entertainment and video-game giants to use real-time analytics to learn about user behaviour in apps and fine-tune experiences while consumers are using the apps.
Late last year, Swrve secured a US$6.25m investment in a funding round led by Atlantic Bridge Partners and Intel Capital. The investment will enable Swrve to create 100 new jobs in a variety of areas, including mobile app analytics, R&D and technology testing.
Collins leads the company’s product drive and engineering efforts as chief technology officer, while Hugh Reynolds, CEO, is based in San Francisco, California, focusing on sales of the company’s technologies to major technology brands.
Collins said the same instincts in spotting an impending market opportunity with Havok have kicked in with Swrve. “We’re seeing an even bigger inflection point in which the entire infrastructure of the web is pivoting to mobile. The way brands interact with consumers is being driven by the ubiquity of mobile devices, and this is changing the dialogue that takes place between consumers and companies.”
The company has signed up video-games giants Electronic Arts and Activision as customers, and as well as sitting inside gaming apps on mobile phones, the technology can work across non-gaming apps, such as taxi app Hailo and TV apps, such as Zeebox in the UK.
“The apps market is the new web,” said Collins.
People’s interactions online are moving away from the desktop and onto mobile devices. Tablet computers are taking over from traditional PCs and Mac desktops, and brands are struggling to find ways to communicate with users, Collins said.
Swrve is planning to be in the middle, allowing brands to connect with consumers in real-time.
“We started off building a physics technology to work on high-powered devices, like games consoles,” said Collins. “Now we are building a state-of-the-art cloud technology that can interact in real-time with consumers as they are using their mobile devices.”
Swrve employs 50 people. Collins said the market for talented engineers and developers in Ireland is competitive, though the country still has a great start-up and IT culture.
He said the key to attracting the right talent is having the right mission. “It’s not about salary or location, it’s what you are trying to achieve. Swrve is a small company hoping to make a big difference.”
One of the plus sides to the expanding investment pool of international tech firms in Dublin, however, is the growing number of experienced people being skilled up in areas like sales and product management.
For Swrve, the biggest challenge is obtaining the best engineers, Collins said.
In terms of the dynamic that keeps Collins and Reynolds working together on start-ups, Collins said the motivation is quite straightforward. “I wouldn’t say we’ve cracked the secret of building a successful company – this is our third company together – but it’s a focus on building great technology that gets us up in the morning. The next thing would be going after a market we feel passionately about and the third and most important thing is building a team.”
Collins added that if start-ups can create a great team they have won the game.
“That team will go on to do something great regardless – and will reap most of the rewards, ultimately.”
In the past week, a number of Irish-based analytics software companies have made the headlines. The Now Factory, a company focused on the global telecoms industry, has been acquired by IBM for an undisclosed sum, while Logentries, a University College Dublin cloud spin-out, raised US$10m in a Series A financing led by Polaris Ventures along with Floodgate, RRE Ventures and Frontline Ventures.
Collins said analytics and big data are an area where indigenous software companies are finally beginning to make waves.
“We draw our services from the cloud and we have algorithms that are crunching billions of data points every day from millions of active users,” said Collins. “At the same time, every user gets a different experience in the app they are using. The idea is to make the apps they are using more fun, more relevant and engaging.”
Software industry ecosystem in Ireland
In terms of the local software industry in Ireland, Collins said the ecosystem is in growth phase. He added that in Dublin, where Swrve operates, there are many great start-ups, accelerators and start-up clusters.
“There are enormous opportunities for anyone who can bring together a great team and get initial funding,” Collins said. “There is a problem with the pipeline after that. We need more companies to go to A and B rounds but it’s very difficult to complete these rounds in Ireland.”
Companies that do get that funding have to do so internationally and the key to that is getting investors on board who are international and can help them reach those markets, Collins said.
“The reality is we cannot expect to have the entire pipeline that you see in Silicon Valley exclusively in Ireland. It’s great to see the international venture capital funds looking at Ireland thanks to Government support, but once you reach a certain scale, you have to think internationally.”
Collins said the trend whereby more Irish start-ups, such as Stripe, are locating their head offices in places like Silicon Valley is set to continue. Swrve has its headquarters in San Francisco.
“The old adage is to get close to your customers. In our space and for companies like Datahug, our customers and our partners are typically west-coast US so it immediately makes sense to operate from here,” said Collins. “Ireland will always be a great place to have engineering and R&D operations but in terms of sales and investment it makes sense to be in front of customers on the west coast.”
As more university researchers and academic staff are being encouraged to endeavour to turn their ideas into businesses, just as Collins and Reynolds had in 1998, Collins said changing ingrained mindsets is the biggest challenge.
“Starting a dialogue with anyone who can possibly listen to you is the first step. In academia there is a tendency towards secrecy and furtiveness. That’s the wrong thing if you want to excel in technology,” he said.
Collins added that start-ups should get out there and socialise.
“Make sure you talk with people who might buy or use your technology. Don’t worry about the secrets, just get out there and see if your idea has a value or possible or use,” he said. “You might just end up being successful or selling it – which is a big departure from where you started out.”
A version of this article appeared in The Sunday Times on 6 October