UCD Innovation Academy Team Start Up Ireland Report14Nov FINAL

8/13/2019 UCD Innovation Academy Team Start Up Ireland Report14Nov FINAL

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Team Start Up Ireland

#thebestplacetostart

14 November 2013

UCD INNOVATION

ACADEMY



14 November 2013 #THEBESTPLACETOSTARTpage 2

BACKGROUND 3

TOP 5 STARTUP ECOSYSTEMS AS REPORTED BY THE STARTUP GENOME R EPORT 4

EXECUTIVE SUMMARY 4

CRITICAL ANALYSIS OF REPORT 5

R ESEARCH ON IRELAND’S STARTUP ECOSYSTEM 6

FIGURE 1 BUSINESS CONFIDENCE INDEX FOR IRELAND (JANUARY 2011 TO OCTOBER 2012) 7

SWOT ANALYSIS 9

RECOMMENDATIONS ERROR! BOOKMARK NOT DEFINED.

CONCLUSION ERROR! BOOKMARK NOT DEFINED.

APPENDIX 11

APPENDICES 1 INTERVIEW TEMPLATE 11

APPENDICES 2 INTERVIEW WITH MARK K EARNS, GARY LEYDEN, EOIN COSTELLOE & SARAH O’FARRELL 11

APPENDICES 3 - INTERVIEW WITH, SEAN O’SULLIVAN, CEO R OCOCO SOFTWARE 13

APPENDICES 4 INTERVIEW NOTES FROM CEO KATE HYDE OF WWW.HENPARTY.IE 15

APPENDICES 5 – TWITTER SURVEY MONKEY 17




Background

Start up Ireland is a recently formed organization, which was created to gather data and

map Ireland‟s start up system. It was born from a desire to understand the true state of

Ireland‟s startup ecosystem and to separate the fact from the fiction. Whilst there is much

media coverage in Ireland of startups, in particular of the technology sector; the 2012 Start

Up Genome Report did not mention Ireland in it‟s publication of the Top 20 Startup

ecosystems worldwide. The Startup Genome report which was sponsored by Telefonica

Digital, presented research gathered from 50,000 startups and compared and contrasted 20

of the world‟s startup ecosystems. This report considered itself the most complete research

conducted on the status and nature of global startup ecosystems.

This project‟s brief was to critically analyse the report, interview key stakeholders workingin the area and propose an imaginative way of encouraging start ups in Ireland to register

their details on the crunch database (www.crunchbase.com) , Start Up Ireland‟s preferred

database.

This project took six weeks to complete and was authored by Ciara Garvan, Georgina

Naughton, Kresimir Stefko, Patrick McDonnell, Tosin Popoola.

http://www.crunchbase.com/







Top 5 Startup Ecosystems as reported by the Startup Genome Report1

Executive Summary

This project has five separate strands;

1. Critical Analysis of report

2. Research of Ireland‟s start up system, interviews and surveys

3. Distillation of views as included in this report

4. Brainstorming to create solutions on how to promote Ireland as #thebestplacetostart.

5. Production of video & online campaign

1 2012 Start Up Genome Report sponsored by Telefonica Digitalhttp://blog.startupcompass.co/the-startup-ecosystem-report-2012-is-live

Silicon

Valley

•Silicon Valley is by far the biggest, most important and influential startup ecosystem to which all other ecosystemslook up to. Silicon Valley‟s total output of startups sets the baseline to which all other ecosystems are compared.Although a staggering number of startup ecosystems have been established around the world, Silicon Valley remaintop of list in all dimensions.

Tel Aviv

•In the Startup Ecosystem Index, Tel Aviv ranks second globally, because it has the second highest output index ofstartups with a healthy funnel of startups across the developmental lifecycle, a highly developed funding ecosystestrong entrepreneurial culture, a vibrant support ecosystem and a plentiful supply of talent.

Los Angeles

•Los Angeles has long been overshadowed by Silicon Valley in terms of high-growth technology startups. The domination of Los Anby Hollywood and associated industries has also made it difficult for startups to shine. However the LA startup ecosystem is gainincreasing momentum and now ranks third globally. Although the ecosystem has 70% less startups than Silicon Valley, it has a hea

funnel of startups moving through the startup lifecycle. The report claims is a healthy opportunity for LA to establish itself as analternative to Silicon Valley.

New YorkCity

•New York has established itself as a serious alternative to SV for startups in the consumer space and those focusing on e -commeradvertising, media and fashion. However, it has long way to go to truly catch up with SV, with about the half number of startupsSV. It has the highest numbers of female tech entrepeneurs at 18%.

Boston

•Boston has lost its position as frontrunner on the east coast to NYC. Although it has a well-established angel and venture capitalscene, Boston creates 79% fewer startups than SV. The Boston startup ecosystem is significantly smaller than SV but it has a healtfunnel of startups throughout the Startup Lifecycle. It can be considered a serious alternative to SV.

http://blog.startupcompass.co/the-startup-ecosystem-report-2012-is-live






Critical Analysis of Report

In conducting the research the most immediate concern was to interrogate the initialassumptions upon which the Start Up Genome Report was based. The report is based on

eight weighted components;

1. Startup Output Index: The startup output index represents the total activity ofentrepreneurship in the region, controlling for population size and the maturity ofstartups in the region.

2. Funding Index: The funding index measures how active and how comprehensive therisk capital is in a startup ecosystem.

3. Company Performance Index: The Company Performance Index measures the totalperformance and performance potential of startups in a given startup ecosystem,taking into account variables such as revenue, job growth, and potential growth ofcompanies in the startup ecosystem.

4. Mindset Index: The mindset index measures how well the population of founders in agiven ecosystem thinks like a great entrepreneur, where a great entrepreneur isvisionary, resilient, has a high appetite for risk, a strong work ethic and an ability toovercome the typical challenges startups face.

5. Trendsetter Index: The trendsetter index measures how quickly a startup ecosystemadopts new technologies, management processes, and business models. Where startupecosystems that stay on the cutting edge are expected to perform better over time.

6. Support Index: The support index measures the quality of the startup ecosystem‟ssupport network, including the prevalence of mentorship, service providers and typesof funding sources.

7. Talent Index: The talented index basically measures how talented the founders in agiven startup ecosystem are, taking into account age, education, startup experience,industry domain expertise, ability to mitigate risk and previous startup success rate.

8. Differentiation Index: The differentiation index measures how different a startupecosystem is to Silicon Valley, taking into account the demographics and what typesof companies are started there.




Whilst all the indexes above are valid the underlying data is based on those 50,000 startups,which are using a particular tool known as the Startup Genome Startup Compass. This is an

automated analyst in the cloud that helps businesses make better decisions via benchmarksand actionable recommendations. A critical analysis of this report concludes that this infact invalidates the report. Although the tool is widely available it is not mandatory for startups to use it. Therefore usage is based on other factors such as promotion of tool,knowledge of tool and cultural bias. Theoretically all startups in Ireland could completethat tool and Ireland would correspondingly rise in the rankings.

Moving on from the analysis of the report the fact remains that an objective third party wascontent to write a report on the Top 20 startup ecosystems and not include Ireland. Clearlythere is a requirement to validate the hypothesis that Ireland has a thriving startupecosystem.

Research on Ireland’s Startup Ecosystem

Research on the startup ecosystem was divided into two strands; desk research and field

research in the form of interviews at the Dublin Web Summit and a Techpreneur‟s

networking event.

According to the desk research, at the macro level there has been a decrease in the total

early stage entrepreneurial activity in Ireland. This is in no doubt related to the impact of

the economic downturn and the decline in consumer confidence over the last six years.

The Business Consumer Index reported that there was a decrease in the rate of Total Early-

Stage Entrepreneurial Activity in Ireland in 2012 was 6.1% down 7.3% from 2012. This rate is

now below the average across the OECD (1.9%), EU -27 (1.8%) and EU-15 (1.6%). Ireland is

now ranked 14th across the EU and 18th among the OECD countries. However, business

confidence index 2rose from -1 in January 2011 to 28 in September 2013.

The majority of entrepreneurs that closed their business cited that the business was not

profitable as their reason for doing so (42%). 17% claimed to have problems getting financein order to keep the business going.

2 Business Confidence Index for Ireland (January 2011 to October 2012)




Figure 1 Business Confidence Index for Ireland (January 2011 to October 2012)

A number of new startup companies in Ireland for years 2005 and 2006 are similar atapproximately 17,000 new companies per year.

Years 2007 and 2008 record significant reduction in new startup companies, this can beattributed to emerging global finance crisis and depression.

As of 2010, the number of new startup companies is slightly increasing to 14,100 and to astaggering 24,000 in 2011. A drastic increase of new startup companies in 2011 can beexplained by necessity, where necessity can be defined as „pressing or urgent need,especially that arising from poverty‟.

Year 2012 records 19,000 of new startup companies.

It is believed that 2,200 new startup companies are born each month in 20133.

3 Enterprise Ireland




Figure 2 Early Stage Entrepreneurial Activity in Ireland from 2005 to 2012

As part of the field research we interviewed key people in working the Startup Ecosystem.

These included;

1. Alan O‟Dea, founder of Startup Ireland

2. Eoin Costelloe, New Frontiers Startup Programme Manager, DIT

3. Sarah O‟Farrell, Programme Co-ordinator NDRC, LaunchPad

4. Gary Leyden, Director at NDRC LaunchPad

5. Sean O‟Sullivan, Rococo Software

6. Kate Hyde, www.henparty.ie

7. Mark Kearns, Inventorium, NDRC

http://www.henparty.ie/





Our findings from the interviews was that there was a huge amount of activity in the start uparena and good levels of government funding. There is no doubt however it is disjointed andpotentially this means Ireland does not have a cohesive message internationally. It alsomeans it may be confusing for Irish people looking to startup in Ireland as there is a plethoraof accelerator programmes and it is not clear how they are differentiated.

Also the majority of government funding and programmes are aimed at the technology orhealthcare sector. This means that viable businesses in other areas are at danger of beingoverlooked as experienced by Kate Hyde from www.henparty.ie (see Appendices 4).

SWOT Analysis

Strengths

1. Educated, young ,multicultural workforce

2. Large number ofaccelerator programmes

3. Goverment Support &funding

4. Web Summit

Weaknesses

1. Lack of co-ordinatedapproach

2. Focus on technology &healthcare

Opportunities

1. Web Summit

Threats

1. Youth emigration

2. Competing for talent withtech multinationals








Recommendations

The recommendations for Startup Ireland are as follows;

1. Promote Ireland and specifically Dublin as a startup ecosystem to challenge Silicon

Valley by releasing a viral irreverent video, which pokes fun at Cupertino.

2. Launch an online campaign to promote the use the Crunch Database,

www.crunchbase.com.

The campaign should be fun and interactive, echoing the start up ethos. The video is

based on the “Shake your Tailfeather” song from The Blues Brother movie and it is a

reference to those who have gone out and taken a chance and are now reaping thebenefits. This video will aim to build awareness of the Crunch database.

3. Startup Ireland should consider becoming a lobbying organization to the government.

There was considerable unhappiness with the last budget and a focus group is needed

to represent the interests of small startups not just big business as represented by

IBEC. Potentially the group could reach out to Paddy Cosgrove of the Dublin Web

Summit and see if he would become a spokesperson for Irish Startups.

4.

Create a website which is a “one stop shop” for all potential start ups. Ideally thiswebsite would outline all the different accelerator programmes and government

funding available. It would aim to provide neutral, objective information on all the

programmes thus enabling the user to find the programme which would best suit

them.

Conclusion

There is considerable activity in the startup ecosystem. Within this sector success breeds

success and it is important to celebrate the successful start up companies. The more that

can be done to create excitement and a buzz as a start up location the better. Enterprise

Ireland are working at the macro level but there is the potential to work at the level below

both nationally and internationally.






Appendix

Appendices 1 Interview Template

1. Can you tell us about your role and the work here in X?2. How would you rate Ireland‟s startup eco system?3. What do you think could be done to improve the ecosystem?4. What role should the government play? Is it active enough currently?

5.

What role should education play?6. Is the start up community Dublin centric?7. Is it biased towards particular sectors?8. What is the impact of technology multi-nationals such as Facebook & Google on the

Irish start up scene?9. What are the barriers to entry?10. How has the financial collapse impacted the start up scene?11. As a nation do you think Ireland has an entrepreneurial mind-set?

Appendices 2 Interview with Mark Kearns, Gary Leyden, Eoin Costelloe & SarahO’Farrell Date: 30th of October, 2013

Q1. How do you rate Ireland’s startup ecosystem?Mark Kearns – Dynamic, very disjointed, different initiatives being kicked off. With inthe startup ecosystem there is a huge amount of activity. Uncoordinated.The chaos is part of it but not all of it however chaos can lead to waste.But is can also lead to innovation. Need very loose co-ordination so people gettogether.Packaging up to sell this abroad, that where it needs to be much tighter. Co-ordination of a message, who we are and why we are doing it..Otherwise it just becomes bland.

DWS is not a startup event – it is not that accessible. They have made some effortsaround fringe events, piece of the jigsaw. Not part of on-going eco system. Over timedoes it generate activity beyond the weekend it is here. (IRELAND)




MK: DWS could use its spotlight, you can also take some loose co-ordination in termsof messaging. Too focussed on being a conference, if it engaged more with the huge

array of activities and events – pub meet ups, dub starts – if they were brought moreinto the fold, what can we do to ensure that light is not just shone on the web summitand what is coming out of Wayra etc..

Q2. What do you think could be done to improve the ecosystem?

MK; There are some great programmes, New Frontiers, Wayra, NDRC – it is a linearjourney for a startup but there are also huge gaps in terms of clear pathway. Gaps areat early stage team forming stage, what happens when you leave the accelerators. 4 –

5 start up valley of deaths. Need to understand they exist. There is not enoughprivate money risk – Enterprise Ireland have their own approach to this.

Not enough private risk money. Fairly active seed fund activity. Expertise and smartcapital… lot of funds don‟t understand new business models.There is another gap after 50k, MK disagrees with seed funds but don‟t act like seedfunds.. They like series little- a they come in when you are advanced you don‟t needthem.. It is very competitive but it is still a good proposition it can die. Think seedfunds don‟t take enough risks.

EC: one thing missing is interfaces to big companies where start ups can easily testtheir beta products. Johnny Ryan at Irish Times, tried to provide an interface forinnovative products. But for a startup to get involved in big companies is very rare.

Q3. What role should the government play?

MK think it should be involved until it doesn‟t need to be involved anymore.Start UP Chile – government put a lot of money into promoting it as a startup.There is disagreement amongst the group on this GL pointed out that Chile had avery clear problem it wanted to address.

GL Think the government should be as light as possible, it is a facilitator. NDRC – quite a broad remit as to how we do it – could be much more effective as anorganisation if we could do it our way. More you bring government into it the riskier itget..

Also in relation to the budget – they don‟t get what startups need and they do moredamage, the level of ill will has plummeted because of government entry.Budget did nothing for it – complete and utter fraud.




Appendices 3 - Interview with, Sean O’Sullivan, CEO Rococo Software

Q1. What is your role?I am involved in two start ups. First one has begat a second start up, Rococosoftware and a product called Local Social.Also spun out Diall2 do.com

Q2. How would you rate Ireland’s startup ecosystem?Never been better. May be at an all time high with start up activity. Always a

lot of entrepreneurship technologies. Lot of people came out of Iona andstarted companiesRight now there are financial supports, seed capital schemes, competitivestarting funds, incubators + networking events – are at an all time high.Both funding and activity and mix of people. Technical, design and marketing – web savvy that mix of talent is on tap to some extent.All that talent is here now, 15 years ago you would have had to go elsewhere.

Q3. What are the barriers to entry as a start up in Ireland?Don‟t think there are any really, you can find a list of networking events on the

internet there are about six accelerators, NDRC, Launchpad, Wayra.Enterprise Ireland competitive start fund.You can also get the basic seed money to get going- Seed Capital scheme – if you arein paid employment and you decide to start and put it into company – they give youback the tax that you paid on that into your pocket. Think it is pretty healthy now..There is a Dublin Beta networking event every three months, had one just before thesummit and it was very busy.

Also have been talking to people who have sold their companies and made money. Inthe UK budget they brought in legislation whereby you can sell company A and startcompany B and put money you get into the new enterprise. This could drive start upsto the UK.

Q4. What could be done to improve ecosystem?

Venture capital issue at the middle area- that has been the way for a long time here.500k- 2 million that is the area that is not well serviced locally. DFJ and Polaris andreal VCs locally not beginning to invest.What Polaris has been to invest 10 million dollars locally, quite recently.

Is it a real issue? It is an issue for where you may go next. Maybe that so – Directflights to San Francisco coming back in in a couple of months time.




Scarce resources- user experience. design US style shops- that is also true of thevalley.

Dun Laoghaire NCAD, are beginning to see this is an area of elegant and beautifuldesign. They have just begun to start doing some of that.That is a really good mix… an area that is under exposed to – to date.. We would begood at that in Ireland.Immigration laws are an issue for highly skilled – break on growth for companies at acertain stage and that visa issue would reduce friction..For those large scale companies this would have a meaningful effect.Sean O‟Sullivan (from Dragon‟s Den) ran a visa campaign online.

An interface well worth while to develop better.Team building around an idea is crucial.. We understand technology then there is a

refocus on selling- dearth of selling skills. In the accelerator in Cork second week inprogramme they have a call centre group that start ringing the contacts and networksthat might purchase the product as a start up.Don‟t take people on until they have over 10 customers.The first ten customers – what the problem, where the market. Understand salespipeline.. 12 months to close enterprise sale – so there is a very first early adoptersales- getting those business on board. Understand what it takes, the betas – gettingthose – trial and adopt those products. Use the multinationals.

Q5. What are the barriers to entry? Bureaucracy?

No team to help me – who do you work with? Where is information on accelerators- alot of information – coaching mentoring, very high touch which are there but notcommunicated to market well enough. Still surprise – never heard of- once you areout of tech it does not reach. Understand problems in market. Tech guys can build asolution to fix any problem. Lack of domain visibility in the market.

Q6. As a nation do you think Ireland has an entrepreneurial mind-set?That is a valuable role government could play.List of countries top 300 universitiesThere is a smoothed path if you have a stem (Science Technology Engineering)

degree.Do you think there is a role for education?In primary and secondary curriculum, should be teaching computers-Need to learn programming in schools.. it is a tool which should be learnt..Coder dojo has a huge impact over time even if they don‟t all end up working in IT,

Q7. Is the Ecosystem Dublin based?Eco system feels Dublin centric- cork has a pretty good scene going on. Centre ofgravity around the greater Dublin area.




Appendices 4 Interview notes from CEO Kate Hyde of www.henparty.ie

1. How would you rate Ireland’s startup eco system?

I don't believe we have a startup eco-system in this country at all. The

enterprise boards can be very difficult to tap into in many places and I

personally found that staff in many of these organisations do not come from

entrepreneurial backgrounds themselves and often had little or no experience

in starting a company. In terms of the wider support structure for starting a

business - there isn't any startup ecosystem, in my opinion, to tap into.

2. What do you think could be done to improve the ecosystem?

We should be looking at developing a culture with proper information and

support structures in place. If someone wants to start a business in the morning, there

isn't anywhere to go. Where can people find information on how to build a website,

how to learn about SEO, legal issues, setting up proper bank accounts, accounting,

registering a business name, applying for a domain name etc. There is so much to

know and nowhere to find this information. Many of us learned as we went and by

making mistakes.

3. What role should the government play? Is it active enough currently?

The government should be driving this on. We should have dedicated online

information on how to start a business. This information should be on the enterprise

websites and stand alone websites funded by the government. There should be a

dedicated advertising campaign encouraging people to start their own businesses.

There should also be a list/database of professionals around the country to go to, that

can provide startup information in the legal, accounting and IT areas. I believe the

government could be doing more. The Gathering was a very successful initiative. Ifthe same energy was put into a startup ecosystem surely we would see results?

4. What role do you see Education playing?

To be honest, I don't believe education creates entrepreneurship. I think

someone has entrepreneurial tendencies or they don't. I don't believe it can learned.

However, I do believe for those that do have such tendencies there should be modules

available at second and third level - practical hands on information on how to start a

business.






5. Is the start up community Dublin-centric?

Not especially in my mind.

6. Is it biased towards particular sectors?

Yes, high tech exportable products/industries. How many of these companies

have gone bust or get funding for R&D, only to fold and not create any jobs?

Yet my company employs 8 full time staff and the jobs are sustainable.

Attention needs to be shifted towards smaller indigenous businesses that are

sustainable

7. What are the barriers to entry? Bureaucracy?

Men in suits who don't know the first thing about running their own businesses

and yet select companies that will or won't get assistance/funding. I was told by these

sorts of people not to give up the day job. I was denied spots in incubation centers. I

couldn't get funding from the banks. People laughed at my business idea. And yet

today my business continues to grow and we have a 7 figure turnover. We need people

that speak the right language advising start-ups. We need the right people to educate

future entrepreneurs and we need to start focusing on smaller companies who can

take people off the live register if they are given the right tools to grow.

8. What is the impact of technology multinationals such as Facebook & Google on the

Irish start up scene?

None, in my mind. Everyone wants to work for them. But I don't see they have

contributed to the start up scene here as they are essentially American

companies.




APPENDICES 5 – Twitter Survey Monkey

As part of the field research the team reached out to a number of international startups and

asked them to complete this Twitter Survey. Three people responded anonymously.

Twitter1. Are you aware of Ireland as a potential start up location?2. What would be your top three places worldwide to startup a company?3. What is your view of Ireland as a potential startup location?4. Why do you have this view of Ireland as a potential startup location?5. Where is the strongest competition for Ireland as a startup location?

Responses to Twitter Survey;

Q1. Are you aware of Ireland as a potential startup location?

100% said yes.

Q2. What would be your top three places worldwide to start up a company?

Answer Choices Responses

Silicon Valley 66.67%

Boston 100%

New York 100%

London 33.3%

Q3. What is your view of Ireland as a potential startup location?

Note; There were five answer choices;

Answer Choices Responses

Excellent

Better then Average 100%

Average

Below Average

Poor

Q4. Why do you have this view of Ireland as a potential startup location?




- Good connections within the small economy. Well internationally connected. Good

culture of entrepreneurism.

- I am familiar with the scene in Dublin and all of the tax benefits.

- As a startup location to begin a startup there is a high amount of positives. To scale a

startup in respect of sales, customer acquisition and investment I do believe this is

difficult.

Q5. Where is the strongest competition for Ireland as a startup location?

i. Silicon Valley, New York, Berlin, London

ii. The already validated markets you will find in the major cities of the United

States.

iii. London, NYC, San Francisco & Berlin.

Q6. What could Ireland do to improve its attractiveness as a startup location?

i. More access to international decision makers, including funders.

ii. More success stories. More successful startups being heard from Ireland,

the more likely you will have people wanting to go there and emulate

that success.

iii. More education around growth strategies, better links with customer

bases overseas and better access to seed funding.

UCD Innovation Academy Team Start Up Ireland Report14Nov FINAL

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