The new start-up spirit

31 Mar 2011

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Siliconrepublic.com editor John Kennedy says there have been confirmed sightings of a ‘can do’ spirit around and about Ireland. Tech start-ups and enterprising graduates will drive our economic recovery.

If you want to go somewhere where no one really talks about the recession or petrol prices, just talk to a tech start-up.

Take Jerry Kennelly, the Tralee-based entrepreneur who sold his first company Stockbyte to Getty Images for €135m in 2006. Since then, Kennelly has become a driving force behind the Endeavour programme, which is powering numerous start-ups, and he has fostered a culture of entrepreneurialism in Kerry that extends down to eight-year-olds. As well as this, his latest venture, Tweak.com, provides businesses around the world with high-end design resources.

“I think we’re at the strongest point in our entrepreneurial history,” says Kennelly. “As a judge in the Ernst & Young Entrepreneur of the Year Programme you see the figures and reality of it.

“We are building competence at an incredible rate now, Irish companies themselves and the multinationals. We’re now getting critical mass and as a nation of entrepreneurs what we’re really good at is understanding customers and turning an idea or concept into something that makes life better for customers.

“There’s more done in Ireland than any country in the world to support entrepreneurs. I don’t agree with all of it, it doesn’t always function the best way.

“We really need to look at education and the way we’re preparing the future generations and how they look at their careers. I think really there’s no real effort made to educate people on their futures. For example, we would teach maths, we’re teaching remedial maths.

“We’re never going to produce programmers of a global standard if we don’t improve what’s happening there. It’s stated time after time by the leaders of multinationals that the standard isn’t good enough.”

Teaching entrepreneurship

One of the graduates of Kennelly’s Endeavour programme is Connor Murphy of DataHug, a social CRM technology company from Cork that recently won the 2010 Maples & Calder ‘Spark of Genius’ competition, as well as the Irish Software Association’s Technology Start-up of the Year competition and InterTradeIreland’s Seedcorn competition.

Says Murphy: “Two years ago, there was no Endeavour programme, no Startup Bootcamp or Web Summit. Two years ago, there was this unlocked potential, now it is exploding. The ecosystem is changing, the world is coming here and looking at us. Enterprise Ireland gets a lot of criticism, but in reality it is supporting these initiatives and staying in the background.

“Jerry’s vision is a Silicon Valley in Kerry and some people laugh at that, but if you go down to Kerry for the Young Entrepreneur Awards, there are 1,800 students taking part and you now have eight-year-olds on the Junior Entrepreneurial Programme. He is grabbing Kerry and the surrounding counties and changing the culture of the way kids are learning entrepreneurship.

“The glass is more than half full,” Murphy continues. “We still have failure rates but failure is a good thing, people learn from it. Once we get the angel community, going, the possibilities are endless.”

Angel investors syndicate

Diane Roberts of the Halo Business Angel Network (HBAN) worked in Enterprise Ireland’s Silicon Valley office for six years and now manages a network of 180 business angels who are prepared to invest in promising start-ups.

Last week, HBAN launched a new syndicate of angel investors with €2m ready to channel into knowledge-intensive technology-based start-ups. Called TechExecs, it is led by entrepreneur Ian Shearer and other private investors.

Says Roberts: "I’m surrounded most of the time by entrepreneurs who are positive. A recession is probably the hardest time to jump out of a job and start a business. But then, on the other side, you have investors who have to be optimists in order to be investing their cash at this time."

Roberts says there are a number of active angel investor consortiums springing up in locations like Cork and along the M1 corridor connecting Newry, Dundalk and Drogheda.

While in the Valley, Roberts spent time with executives who had exited their own start-ups and were heavily focused on helping other start-ups. She says that spirit is emerging in Ireland.

"There is a can-do attitude that will only be fuelled by a community of businesspeople who are willing to seed young companies. The indigenous economy will get Ireland back on its feet again and I believe that passionately."

Right conditions for start-ups

Niall Olden, managing partner with Kernel Capital who manages the Bank of Ireland Kernel Capital Fund, believes the conditions are right for start-ups. "Just about every cost of doing business is cheaper now."

Olden says the rise of business angels in the Irish economy is a welcome development.

"Private investors in early stage tech companies should be cherished. The private investor is somebody who knows the business but it is also a sign they have tremendous respect for the individual leading the business."

Also passionate about the potential of Irish start-up talent are John Scanlon and Owen Laverty of NUI Maynooth’s Commercialisation Office, who link up to 200 business partners and mentors with graduates whose university R&D projects could become world-leading companies.

So far, Scanlon and Laverty have worked with up to 40 companies, connecting them with the marketplace and potential SME partners.

"You can’t turn a university instantly into a product development network," says Scanlon.

"Market validation is essential. For example, if a researcher did some day come up with a cure for cancer, you’ve got to make sure that it can be manufactured and brought to market. This is the real-world part that the academic doesn’t often think about."

Laverty adds: "Enabling start-ups in Ireland isn’t solely about the technology or science, but the feasibility of what they are trying to achieve."

Among the companies Scanlon and Laverty have worked with is NUI Maynooth spin-out Mute Button, which has developed a device that could cure the 40m people worldwide who suffer from chronic tinnitus. The key has been bringing the technology to trial. Another company is Beemune, which has figured out a way to combat the colony collapse disorder that is affecting beehives all over the planet by priming their immune system. Beemune is conducting large-scale trials with the US Department of Agriculture.

"Jerry Kennelly is right; this could be the best place in the world to set up global firms. We are seeing a culture shift in universities and investors are for obvious reasons less interested in property. Technology has its risk, there are no quick flips, but matching promising start-ups with investment is critical," says Scanlon.

NUI Maynooth’s Commercialisation Department will be holding a Connect event linking college research with SMEs on 6 April at 8am in Carton House in Maynooth, Co Kildare. To learn more, go to the website.

For the past two years, Silicon Republic has run a campaign to highlight the imperative of creating the digital infrastructure and services upon which the success of our economy depends.

The website for Digital 21 provides a forum for all those interested in accelerating the development of Ireland’s Digital Economy.

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Editor John Kennedy is an award-winning technology journalist.

editorial@siliconrepublic.com