Ireland is a strikingly beautiful place, particularly when you hit it on three of the best weather days of the year. In June, it stays light until 11 pm. On our first night, Paula and I walked past a traditional Irish wake attended by several hundred cheery mourners queued up outside waiting to see the coffin inside into a wonderful bistro for a bloggers dinner organized by Damien Mulley, the Irish blog champion. The food is superb the ubiquitous Stormhoek abundant and I still don't know who picked up the tab. There were about 20 Irish bloggers at the table and it seemed like each of them, one way or another, was involved in startups.
Before I embark on a foolhardy analysis, let me make a disclosure. Paula and I were in Ireland for three days and a wake up. Half of our time was spent tooling around the breathtaking countryside. So this report on Irish entrepreneurialism is severely limited in research and scope. In fact, it all circles around the crew involved with IT@Cork where I was a keynoter along with Salim Ismail. This is thin-slicing indeed. Cork is but one city, not a country. From what I heard, it feels a healthy rivalry with the larger Dublin community. We never got to Dublin,and I invite any knowledgeable readers to enhance this report with a comment or link.
But I'm pretty certain I was briefly witnessing a tech eco system in its formative phase. There's a lot going on in Cork and I'm told, elsewhere in Ireland. The historic trackback probably goes back only 10-15 years to when the global enterprises like HP, Microsoft, Dell and others started placing European headquarters and manufacturing facilities into Ireland where there existed a well-educated, low-priced labor pool. This has changed. Cork now has among the highest European costs of living outside of Paris and London. The boom sustained for over a decade has created more jobs than the Island-country of four million can fill. It is importing people from Eastern Europe o fill the lower end jobs as its people rise up the employment food chain.
Like Seattle or Austin or Silicon Valley, employees of large companies have started dreaming of having a run at a company on their own. They have felt the chomp of the startup bug, and are hot with entrepreneurial fever--at least among the folk we met through our hosts at it@cork and through a series of conversations with our good friend Tom Raftery who served as our host.
I think I saw in Cork was the beginning of an eco system in its formative stage. All the components are there--save two--venture capital and ubiquitous broadband connection. With an access rate of a mere 6 percent broadband connection, Greece is the only EC member with a worse rate. The reason, this tech savvy country lags so far behind other EC countries is long, dull and entails the interests of elected officials and carriers both of whom are primarily motivated to preserve their own incumbency.
The venture issue is another story and it is the one where I see change happening sooner and faster. Currently the major venture funding comes from the Irish government who approaches investing in new companies the same way a bank's loan officer must. Before you can get funding, you need to have a customer, and in many cases a physical facility where the bureaucrats can see the workers. This has the impact of a sea anchor on a fast boat catching a strong wind.
I see this changing for a few reasons. One of the sparse number of Irish venture firms, Dublin-based ACT put a few hundred thousand dollars into Stockbyte, a company that licensed professional quality photos online. When the company was acquired for $135 million by a larger rival, the VCs made better than 10 times their original investment. This story was told to me at least four times in three days.
That kind of word of mouth just keeps traveling and when it falls on the ears of people-with-money, they consider the possibilities. Much of Ireland's new wealth comes from real estate investment. These investors already understand the formula of high risk--high gain. Quite simply Stockbyte shows that there can be very high returns from tech start up investments.
Second, is outside money. People like my travel companion Rick Segal, who are looking to get an advanced look at the possibilities in the world rather than just his home base of Toronto. My guess is that the time is right for North American investors, some of whom have ventured into China, to consider closer possibilities like Ireland.
If the money comes, the eco system--even the broadband--will grow. The startups of Ireland will become fruitful and the multiples will make some smart early investors very, very wealthy.
At least that's what I see based on my brief and cursory look.
(Next--A look at a few disruptive technologies that I saw.)
