The rapid growth of the tech start-up community in recent years has changed the face of global entrepreneurialism. From Silicon Valley in sunny San Fran to Silicon Roundabout much closer to home, a new wave of entrepreneurs are tapping into the digital treats on offer and taking them to even more incredible heights. Nevertheless, far from being the only hotspots of this tech earthquake, there is a place between London and the American West Coast that is slowly but surely becoming its epicentre. Whilst it may have gone unnoticed to the more casual observer, there has been a reciprocal increase in interest occurring in Dublin of late.
What definitely hasn’t gone undetected is the damage that the global financial crisis has caused to the Irish economy, which is only just starting to claw its way out of recession. It’s fair to say that the IMF-EU bailout of November 2010 – necessitated by the collapse of the country’s banking system – has grabbed many a headline, with the collapse of Ireland’s property market casting an equally dark cloud. But there is another story being written that deserves to be told, not least because it shines a ray of sunshine across an otherwise gloomy landscape.
It is now ten years since Google opened its EMEA headquarters in Dublin, and the tech giant is in good company. The likes of Microsoft, Facebook, Twitter, Amazon, LinkedIn and PayPal – to name but a few – also have dedicated bases in the Irish capital, and they have been followed en masse by a host of innovative tech start-ups from near and far looking to emulate their more established peers. You could almost say that the ‘Silicon Docks’ – as Dublin’s tech community has been fittingly labelled – is bursting at the seams. And whilst that may not be the case just yet, it certainly isn’t for want of trying. What is clear, however, is that the rampant development of Dublin’s start-up ecosystem is unhindered by the recession. In fact, the opposite appears to hold true.
“The strange thing about what is happening in the start-up system is that it is a wonderful time to set up a business,” says Michael Culligan, business manager at enterprise support organisation Dublin Business Innovation Centre. “That is not looking through rose-tinted glasses, it is more to do with the reality that costs have come down and there is more availability of labour.”
The average age of Ireland’s population – the youngest in Europe – also presents tech firms with a sizeable advantage, especially when accompanied by a national government that is pro-enterprise and pro-education. “There is a very strong level of trust in cross-industry collaboration with the colleges and universities,” explains Barry O’Dowd, senior vice president of foreign direct investment agency IDA Ireland. “When they come back in for second rounds of funding, they won’t be considered for approval unless they have got enterprise partners with them. That was already there as an idea but I think the recession has brought it to the fore. It is now more fine-tuned and working much better for us.”
The abundance of talent on offer in Dublin certainly offers a major advantage – and it runs a lot deeper than the calibre of people graduating from the city’s higher education institutes. The migration of the corporate giants to Ireland has brought with it a rich pool of tech experts which, on top of Dublin’s home-grown IT graduates, all adds up to a very attractive picture indeed. “Because we have got such a real strong embedded base of overseas industry giants, what they have done is generate a whole cadre of middle and upper management that has been available for some of the younger companies,” explains O’Dowd. “We are beginning to see a lot more participation in some of the incubators with people coming out of the Googles and going into some of these projects. They are coming with experience having worked with some of the big names in the past, and that is a big plus.”
What this means in practice for the city’s start-up ecosystem is therefore particularly interesting, and is put in further perspective by Culligan. “The large multinationals that are here and maturing are starting to see people spin off and set up their own companies,” he says.
Partly as a result of the work done by agencies like the IDA – which tries to attract start-ups from overseas – and Enterprise Ireland, whose focus is primarily on Ireland’s own start-ups, there is now a strong and fluid start-up community based on a sense of shared purpose.
“It is a really well-connected ecosystem and I think that is something that gives Dublin a huge advantage over some other cities” says Gary Leyden, director of tech entrepreneur accelerator NDRC Launchpad. “Everybody helps everybody out, be it with recruitment, be it looking for investment, be it looking for access to new markets.”
And Dublin’s size only adds to the close-knit feel of the city’s start-up scene. “I think one of the benefits that Dublin has compared to other cities is that it is a city of scale in terms of being in that one million bracket, but not being too big that people don’t know each other,” says Patrick King, policy and communications manager at the Dublin Chamber of Commerce. “There are a few coffee shops where you know there are going to be some guys from the venture capital world, and they are approachable. So I think that existing ecosystem is a good thing and the size does help in that respect.”
Indeed, the size factor also sheds light on another aspect of the ‘recession argument’. At the end of the day, the very nature of technology-driven enterprises means that their focus is normally global as opposed to local. Therefore, a desire to crack Ireland’s domestic market is not top of the agenda for a number of the tech start-ups flocking to Dublin, or even emanating from Ireland themselves.
“Because the Irish market is so small, you have to look abroad and so people build start-ups with a global mentality or at least a regional mentality,” says Gaston Irigoyen, the co-founder and CEO behind DIY and craft mobile application Guidecentral, itself a home-grown Irish start-up. “That is very different from any start-up in the US where they typically focus on the US market for four, five or six years before they expand to Europe or any other parts of the world.”
In this sense then, what is it that makes Dublin such an attractive option for the export-driven tech entrepreneur? Well, its very position on the map certainly seems to have some credence. “I think it is a great gateway between Europe and the US,” Irigoyen adds. “It is a five-hour flight to the East Coast, it is a two or three hour flight to anywhere in the Continent. I think it is a place that connects both regions very well; depending on the nature of your business, you may want to go one way or the other, but either direction is easy.” And the city centre’s proximity to Dublin Airport is something of an added bonus in this regard.
It is not only budding entrepreneurs who are jumping on Boeings and taking off for the Emerald Isle, however. The happenings in Dublin have also caught the eye of foreign angel investors and venture capital firms, all of them eager to get a slice of the action and keep the ecosystem’s wheels turning. “You have got mentors and investors from Silicon Valley who have previously been here setting up multinational companies and operations become angel investors in their own right,” says David Scanlon, development adviser at Enterprise Ireland.
“There are not many places in the world where that sort of activity happens and I think when you mix it with the level of seed capital that is available here, it makes for an incredibly good environment.”
The amount of seed capital available for start-ups in Dublin is indeed a big draw and, intriguingly, is yet another inadvertent result of the recession. “Every cloud has a silver lining and when the banks were recapitalised, one of the small side effects was a certain amount of money was put into seed venture capital funds to invest in young start-up companies,” says O’Dowd. “So ironically, there is more seed venture capital money around now than there has ever been, which might seem counter-intuitive but that is the case.”
Evidently, the government in Ireland is very much on the side of start-ups, and this is reflected in a range of financial measures designed to make their life all the easier. One of these is a favourable tax regime which offers benefits to the younger companies and multinationals alike. Whilst a 12.5% rate of corporation tax is generally more relevant to the established firms, total relief is available to Irish start-ups for the first three years up to a profit level of €40,000. R&D tax credits are also incredibly handy for tech entrepreneurs in the development stage.
Nevertheless, despite the attention the tax situation often gets in the press, it has become the elephant in the room in certain respects. Yet, when one considers the richness of the entrepreneurial scene in Dublin, the abundance of talent on offer and the fact that Dublin is such a vibrant cultural hub, the tax issue probably deserves to be left untouched, at least as far as being the ‘silver bullet’ is concerned. “There are other islands in Europe that have lower taxes than us, like Malta,” says Scanlon. “So if you want a 10% corporate tax rate and nice sunshine, but nobody to do business with, Malta is a good bet.”
There is still a long way to go before Dublin’s ecosystem is able to stand on its own two feet. But that is by no means a slight on what is a brilliant example of how cross-collaboration between government, big business, education and young enterprise can create something so exciting, not only for Ireland but for the international tech community. “I think in one sense, our end goal is to talk ourselves out of a job,” Scanlon smiles. “And I think it is definitely moving in that direction.”
The pick of the crop
The wealth of talent on offer in Dublin certainly influenced UK start-up BlikBook’s decision to move its headquarters from London to the Irish capital. Co-founded by four graduates in 2010, BlikBook offers an online platform for students to share learning with their peers and tutors. “It is basically a student engagement tool that manages the interactions between students and lecturers,” says commercial director Barnaby Voss.
“Lecturers use it for class management, and students use it for getting academic help outside of the lecture theatre.”
Voss explains that BlikBook was designed in part to accommodate the needs of less confident students who would often shy away from approaching their tutor for face-to-face help. The platform is free-to-use but it is monetised by reading lists – with the company taking commission on book sales – as well as by sales of student behaviour data, which is collated by the company for use by universities and other interested parties.
With a third of UK universities now on board with BlikBook, the move to Dublin has been accompanied by a $1.3m funding round involving the likes of Enterprise Ireland. It is now looking to roll the platform out across Ireland – before looking Stateside – and Voss believes that the quantity and quality of young workers in Dublin helps it trump London in the talent stakes.
“Dublin has got the highest proportion of graduates in the western workforce, he says. “There are a lot of great institutions here with a lot of prestige and they are not only pumping out great graduates; they have got strong international links as well.”
Working in very close proximity to other like-minded firms is also helping BlikBook gather pace. “Somebody once described Dublin to me as a global village,” says Voss. “Rather than there being six degrees of separation, there are two degrees of separation, and that is what you find in the tech scene here.”
Going it alone
It’s fair to say that Guidecentral’s CEO and co-founder Gaston Irigoyen has every right to bang the drum for the Dublin tech scene. Having previously worked for Google and YouTube in his native Argentina, he was introduced to life in the Silicon Docks when Google chose Dublin as its European base. And, as is commonplace among members of the ecosystem, he took the skills and experiences he had built up with the big boys and applied them to something of his own making, which is fitting given the nature of his new venture.
Essentially, Guidecentral is a mobile phone application for DIY and craft enthusiasts which allows them to create their own ‘how to’ guides, as well as access those uploaded by fellow members.
Irigoyen operates his enterprise out of Dogpatch Labs, a dynamic co-working space established in Dublin by San Francisco-based venture capital firm Polaris Partners. “Dogpatch is great in terms of connecting us with the start-up ecosystem,” he says. However, whilst Irigoyen admits there is something unique about the tech environment in Dublin, he believes that more collaboration is necessary before it can begin to really compete on the global stage. He says, “From my point of view, although I do see a lot of people leaving the big corporations and starting their own businesses, I do believe that there is still a lot of work to be done in terms of the start-ups and more established companies working together.”
However, having been identified as an investment-worthy High Potential Start-Up (HPSU) by Enterprise Ireland, Guidecentral looks set for big things. And Irigoyen is particularly praising of the Irish authorities for their commitment to the start-up cause. He explains that through a combination of the Competitive Start Fund (CSF), the HPSU scheme, and a stint at one of the many esteemed tech accelerators in Dublin, a solid start-up stands to receive €300,000 from the government to help it on its way. “There is a very good programme and progression in place to help start-ups through the first couple of years, which are usually the most difficult ones,” Irigoyen concludes.