The Icing on the Cake

So, how will the tech ecosystem in Ireland be affected by the loss of Web Summit? The FT reporter asked me on the phone last Thursday morning. I digested the question a moment as I paced the floor of my office. Will there be less funding for startups because Web Summit has moved away? Will our companies lose customers or their competitive edge? Will multinationals move their R&D teams out of Ireland? Nope, I thought. I couldn’t see any of these things happening. “The ecosystem won’t be affected at all” came my black and white answer, but already my brain was seeing color.

The Web Summit announcement was not a surprise to many of us. What surprised me was the public outcry and sense of loss that came with it. You’d think our best companies like Teamwork, Intercom, Movidius and CarTrawler were forsaking us for Lisbon, but they’re not. They’re staying right here in Ireland, despite a tax system that does little to support them. Ah. If only we could drum up a similar level of public outcry about taxes for indigenous tech companies!

Web Summit is a 3 day conference that gave us 5 great years, lets say all in all 20 great days, as the city at the center of the tech universe. Would I like 20 more days? Sure. But do we need that once a year global conference to keep our own tech economy moving forward and keep us focused on building great companies out of Ireland? No we don’t. We already have what it takes to attract investors, media and others here all year long, so lets just get at it.

When this time last year someone suggested to me that Web Summit was the “Hail Mary” I needed to kick start my work in Dublin I was confused by the comment and remain so today. It’s a terrible thing if we’re relying on a conference to safeguard the reputation of our industry.

Whether they’ve attended Web Summit or not, most VCs and serial entrepreneurs in the US, for one, still think Ireland is a tax haven for multinationals and little else. Now, that’s the kind of reputation we need to spend lots of time and money changing.

So please, lets wish Web Summit well and get back to focusing on the priorities. We’re already working hard, sharing a positive attitude and creating thousands of great startups out of Dublin. Lets focus on that and how to secure Dublin’s future as a global tech hub, year in and year out. Things like a strong angel investor community, unique collaborations between our multinationals and our startups, a tax system that supports our growing entrepreneurial culture, a recognition of the value of failure, and a belief in our ability to grow global companies. With these core elements in place, the rest becomes icing on the cake.

There are already multiple plans afoot to “fill the void” left by Web Summit. I recognize the importance of a conference of its size to the local economy and will be very supportive of these initiatives. But my real focus is on a complimentary and different set of priorities.

By the way, it looks like the only direct flights from the US to Lisbon are through Newark, NJ and Miami so we could still invite attendees to a meeting or two en route in Dublin.

Niamh Bushnell

Don’t Forget: Startups+Friends #1stFriBrekkie is this Friday, October 2nd 8-10am. Register here!

Lines and Dots

IMG_2212A couple of years ago, I lost an important client for my startup because I asked them to sign an NDA. The relationship limped on for a while after, then finally conked. Official cause of death: a lack of trust. Thinking back on my naiveté still makes me blush. Me who was supposedly steeped in the cool, startup culture of New York, and a seasoned entrepreneur on my second startup.

A couple of the discussions I had last week brought me back to this painful experience. John Hurley, the CTO of Ryanair, told me that entrepreneurs often tell him their ideas are “top secret” and share such scant details that it’s hard to offer them any meaningful feedback. Then, a colleague brand new to mentoring startups, told me he was asked to sign an NDA. He was confused and annoyed by this request, and I understood why.

For sure, there’s a time and place for NDAs, like when you’re ready to “open the kimono” on your company’s IP. But asking for an NDA at the idea stage of a business or before a relationship has even begun to have traction just makes the entrepreneur look like an amateur drowning in hubris. I mean really, what were the chances that my prestigious client in New York would first pay to use my product, then “steal” the idea and then reassign their precious engineering resources to build their own version? I had a better chance of winning the lotto.

So early stage NDAs imply a lack of trust and generally speaking, they’re a sign of a weak or immature entrepreneurial ecosystem. Where there’s no trust, there’s no electric flow of ideas between individuals and networks. Entrepreneurs - and all other stakeholders in the entrepreneurial ecosystem - are supposed to be out there, morning to night, selling their ideas to anyone who’ll listen, getting feedback and iterating as quickly as possible. This just cannot happen in a culture of top secrets.

We must encourage our young - or first time, or just naive - entrepreneurs to talk more openly about their ideas and businesses. Help them to recognise that without execution, their ideas are worth nothing. In fact, they’re as insignificant as dots. And to paraphrase Mark Suster, one of my favorite VCs: People invest in lines, not dots.

Niamh Bushnell

 

Tel Aviv Tales #2: Why they double down on data

IMG_2179Last Monday in hot, dusty Tel Aviv I met the team behind Startup Nation Central (SNC), a non-profit founded by Saul Singer who’s also the co-author of the 2011 bestselling book, Startup Nation. Independent, focused on promoting innovation in Israel and privately funded by Singer, you could say SNC is a (much!) more mature version of the Commissioner’s office here in Dublin, and my discussions there were very helpful, in particular in relation to the Dublin Data Initiative and multinational/startup engagement in the city.

Startup data is a huge part of SNC’s strategic and day-to-day focus in Tel Aviv. They employ 11 fulltime data analysts who call, email, meet and network with startups all day long, every day. As a result, they update every one of their 4,500 startups’ profiles, at worst, every 5 months….Deep Breath….WOW.

Their definition of a startup - an Israeli company with a live product and an R&D function in Israel - may well understate their startup numbers relative to other ecosystems. But they don’t seem to care about that. And when I asked them why they don’t have an interactive map of startups in Tel Aviv like other cities have, they replied simply that it’s not a priority because “no one cares where a startup is actually located”.

SNC offers multinationals a concierge service using a similarly systematic approach: It goes out proactively to Global 2000 companies, builds relationships with them, finds out what keeps them awake at night, “imports” those problems, and sets up itineraries to showcase potential solutions from Israel. I’m guessing that defining these “global problems” is a lot harder than it sounds but the fact that they have a business development team whose job it is to make this happen is impressive in itself.

So what can we learn from the investment that SNC is making in developing their own, unique dataset of startups? Would a similar resource increase the level of collaboration between startups and multinationals in Ireland, and between startups themselves? Would it bring more investors to our doors, more media, more international entrepreneurs?

Phase one of the Dublin Data Initiative in conjunction with Crunchbase told us that there were 2100+ startups in Dublin. That was a good start, but I’m wondering whether the next step requires a real investment of time and money to develop a dataset that we own and can share publicly for the benefit of everyone in the ecosystem, and for those we are trying to attract in.

I asked the SNC team why they believe the effort to collect and maintain up-to-the-minute Israeli startup data is worth it, and the answer again was a simple one: it makes them unique, credible and in the end, more innovative than anyone else.

***

Thanks for all the great feedback on Tel Aviv Tales #1. If you missed it, Here it is.

Niamh Bushnell

Chief Scientist, I'm Impressed.

IMG_2196With must-see European tech capitals like Berlin and London already ticked off the list, I landed early last Sunday morning into Tel Aviv for two and a half days of listening and learning. A couple of the conversations I had there were truly illuminating, starting with a meeting at OCS, the Office of the Chief Scientist.

OCS is a government agency similar to Enterprise Ireland, and it was interesting to learn how they approach challenges that echo our own: a small domestic market, startups emigrating or exiting too early, multinationals scooping up valuable teams and IP.

OCS has over 40 programmes supporting Israeli tech companies at every stage in their development. I was particularly impressed to learn about their early stage incubator programme. It looks like this:

  • There are 19 incubators across the country. The majority of them are wholly or partly owned by international angels, VCs and multinational corporations.
  • Each incubator is sector specific and all are for-profit entities.
  • OCS provides $600-800K in funding per company and takes no equity.
  • To win an OCS tender, the incubator must prove its reach into global markets and access to global customers.
  • Each incubator must also have a follow-on fund.
  • The funding given to startups is a conditional grant to be paid back at a rate of 3.5% a year upon generating revenue.
  • There are penalties for leaving Israel. If a company gets acquired abroad they reimburse OCS up to 6 times the value of their grant. If the IP remains in Israel they pay it back 3 times.

For me, the genius in this programme is the incubator ownership. As OCS explained it, “In 2011 we realized that the mechanism for accessing foreign markets was foreign owned incubators in Israel”. So, they put big money down and found the partners their startups needed to be global from day one.

OCS talked about how they drive innovation - by funding R&D collaborations between Israeli and foreign startups, Israeli startups and multinationals. And they say that entrepreneurs are talking more and more about building big companies from Israel. Why? Because the local ecosystem is now mature enough to support them at every stage of their funding and global development.

Finally, OCS told me that in Israel, there is “a complete legitimacy to fail”. To be sure, we’re much better at acknowledging the value of failure than our European brethren, but have we reached the point where it’s “completely” legitimate?

It’s good to be back. Now lets keep talking.

Niamh Bushnell

 

 

 

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