The start-up nation in the digital docklands

In the past 20 years, Ireland has solidified itself as a major player on the global tech scene – culminating in the success of the international Dublin Web Summit. Should Tel Aviv be worried?

By LAURA KELLY
Mor Assia (left) and Shelly Hod Moyal are the founding partners of iAngels, a company that pairs angel investors with Israeli start-ups. (photo credit: LAURA KELLY)
Mor Assia (left) and Shelly Hod Moyal are the founding partners of iAngels, a company that pairs angel investors with Israeli start-ups.
(photo credit: LAURA KELLY)
Twenty-two thousand people from over 100 countries, 2,000 start-ups, 700 investors: this was the Dublin Web Summit – a massive global gathering of some of the biggest names in technology and innovation.
Founded on the belief that tech conferences can be fun, the Web Summit – organized by a generation that grew up on music festivals and international travel – sought to give attendees an overall experience of Irish culture, including food, drink, music and more.
It also sought compelling content, with speakers ranging from Paypal founder Peter Thiel – with a net worth of $2.2 billion; to actress and philanthropist Eva Longoria; to smaller events, like a conversation with music video director Kevin Godley – who waxed on about having Sting lip sync to a sped-up “Mickey Mouse” sound track for a Police video, and had the crew rolling on the floor laughing.
And making a strong showing at the gathering were Israeli entrepreneurs, 48 companies in total, in teams as small as one person to as large as nine or 10; from start-ups with just a vague notion of an idea, to companies with investments of nearly $9 million.
The benefit of attending a conference like this for many of these companies was the opportunity to meet global investors and gain international media attention. This was shared by first- time attendee Mor Assia, CEO of iAngels – which partners angel investors with Israeli start-ups. “We’ve heard a lot about it, about it being such an intense few days for start-ups, investors and media to come together. Apart from the abundance of ideas, which is really inspiring to see... for us, personally, there is a lot of value in putting our word out there.”
Another first-time attendee from Israel, Ariel Siegel, said he didn’t know much about Ireland as a tech hub before coming to the event. The CEO of Elephone, the global phonebook, Siegel said the Irish entrepreneurial spirit impressed him. “It is similar to the Israeli, Tel Aviv mentality; [the Irish] are very outgoing, very outspoken, that’s what I’ve been seeing in the past few days.”
He also commented that the conference itself is a start-up and an entrepreneurial venture, and was impressed with the scope and organization of the event.
People, pints and business Taking place over the course of three days in the first week of November, the conference was a far cry from its humble begin - nings four years ago. At that point, 400 people got together at the instigation of Paddy Cosgrave, then a recent Trinity College grad - uate looking to capitalize on Dublin’s concentration of CEOs of companies like Google, Microsoft, Intel and Facebook.
Cosgrave famously tells the story of how he sought speakers for that first conference – conducting business calls with the likes of Twitter founder Jack Dorsey and Skype founder Niklas Zennström from the bedroom of the flat he shared with four roommates.
“They were always a little unnerved at first, as they were answering in their offices, and when they asked me where I was, I said I’m sitting on my bed in my bedroom,” Cosgrave related to press at the conference. He continued that his goal was to create an event that was business-oriented yet social.
“I promised them a pub crawl in Dublin as well as a conference.”
For a country that boasts of producing 55 million barrels of Guinness and exporting only five million, such a deal is indeed an enticing offer and led to one of the conference’s most famous anecdotes. In 2011, the second year of the conference, a young CEO from the US caught the ear of an investor in a pub just off the main shopping street in Dublin’s city center. Travis Kalanick was pitching his company Uber, which helps match people with carpools. At that point, Uber was operating in only three cities.
The investor, Shervin Pishevar from Sherpa Ventures, liked the idea. “Over the course of a pint of Guinness,” Cosgrave related, “Pishevar decided he was going to invest $26m. into Uber. They left the pub crawl, walked back to the Shelbourne Hotel... and printed out term sheets.”
Cosgrave thus built the conference on three important tenets: People, pints and business.
“In that first year, a small but great number of speakers came. I think they had a very good time, I think the people that attended had a very good time, and that the process of having a good time and telling their friends has repeated itself for years – and each year that passes, more people come.”
Why Ireland? The fact that such a large-scale conference took place in Dublin took many attendees by surprise. Ireland is usually associated with its Guinness stout, potatoes and rolling green hills. The country will be celebrating its centennial in 2016, and is looking back at its history of struggle and revolution, known more for its trials and tribulations than success.
The Great Famine – from 1845 to 1852 – was one of the worst tragedies to befall the Irish, with 1.5 million dead from starvation and disease and millions more emigrating. But the 2000s brought a new type of depression. The economic boom of the 1990s saw many Irish spending much more than they could afford, leading to the worst recession in the Euro Zone.
At present, Ireland is in debt to the EU for €200b.
But the Irish have started to pull themselves out and resurgence is gaining traction, thanks in part to the growing tech scene in Dublin and what is affectionately known as the “digital docklands.”
Dublin’s tech scene has grown steadily since the 1990s, thanks to a series of smart government decisions and an aggressive outreach program. Ireland has proven an attractive destination for large corporations to house their European headquarters, with its 12.5-percent corporate tax. It is the only English-speaking country in the Euro Zone and coordinates easily with markets in Europe and the US. On top of this, government agencies specifically set up to help companies acquire work visas for their foreign employees make transitions easy, and it boasts one of the most domestic, educated workforces in the EU.
“I call them the ‘Four Ts’: taxes, track record, talent and technology,” Connor Murphy, an Irish entrepreneur, said in a Skype call from his home in Berlin.
Murphy, who was born in Cork, is hailed in Ireland as a “tech whiz kid” and is the founder of Datahug, a service that informs people “who knows who” in their company.
Murphy’s own entrepreneurial success can be seen through the lens of this formula. Majoring in computer science in college, he said he was always interested in technology and dabbled with a few start-up ideas in college. He then went on to do consulting for product development, gaining experience in London and the US for six years before forming the idea of Datahug.
“It was there I saw the inefficiencies of CRM [customer relationship management] and systems to help understand who all my colleagues knew and were connected to, and that’s where I started the company – back in Ireland in late 2009.”
Murphy said that along with Ireland’s free university education, there is also a big push for studies in computer science and technological engineering. Recent graduates find employment in Dublin working for large tech companies that started in Silicon Valley.
They then usually get the opportunity to train in the US, gaining invaluable experience and contacts.
“I think it makes it a bit easier for people to consider, ‘Hey, I’ll give this a go myself,’” Murphy said. “‘I know what success looks like, I have a good ecosystem here in Ireland and I have no debt from college.’” He added that the growth and success of a tech ecosystem is dependent on local entrepreneurs. They are the ones who will make big exits – being bought by larger companies for millions (or even billions) of dollars – and can then become investors in their own right.
“The strength of the tech ecosystem is actually these angels, and the angels are created through these acquisitions,” Murphy said before adding, “And Israel is a lot further down the line.”
Where Israel excels, Murphy said, is in the fifth “T,” transactions. He used the example of Facebook, which will set up its office in Ramat Aviv in the com - ing months with Israeli Adi Soffer as CEO. The social networking powerhouse entered the Israeli market by first purchasing data analytics company Onavo for $200m. This type of purchase makes millionaires out of its founders, giving extra liquidity to its CEOs, em - ployees and investors, returning capital to the venture capitalists and injecting that same amount of money into the economy.
In the same respect, Murphy explained, Facebook entered Ireland with one employee and began hiring 10, 20 or 30 people. But in Israel, they “create maybe 10, 20, 30 millionaires, instantly hire 200 people and inject $200m. not only in taxes, but in liquidity back into the ecosystem.
“If Ireland could actually develop some of the start- ups that would be appetizing to the Googles and Twit - ters of the world, that would be a sign of maturity,” Murphy maintained.
The Irish-Israel connection It’s no secret that Ireland is anti-Israel in politics and rhetoric.
On October 22, the Upper House of the Irish Parliament passed a motion calling on the government to recognize a Palestinian state. The move was symbolic, following other countries like the United Kingdom and Sweden that also proposed non-binding resolutions to recognize a Palestinian state – but the intention was to put “pressure on Israel to pursue a genuine peace process,” Sen. Averil Power said, according to AFP.
Power, who proposed the motion, said the recognition of Palestinian statehood “is not an Israeli bargaining chip, for them to play in their sham negotiations.”
In the pub and on the street, saying you’re from Israel is met with a cautious hes - itation – the Irish may say they don’t know much about Israel, but what they do, they don’t agree with.
Yet at a technology conference, even in the heart of Dublin, Israelis are rock stars.
Benjamin Bellity is a French immigrant to Israel, whose company Babiis records toddlers’ reactions when watching a video message from their family. Bellity is CEO and CTO of his company, and was the one to represent it at the conference out of his small staff of two. In a 1.2-meter-wide booth towards the back of an expansive conference hall, the only thing that stood out on Bellity’s sign, sandwiched between hundreds of other start-ups, was his country of origin: Israel.
“There was a time I was introducing my start-up as a French start-up, but since I’m talking about it as an Israeli start-up, actually I’m thinking I’m more impressive,” Bellity said, meaning he experiences only positive reactions from people when he says he is based in Tel Aviv. “Suddenly, I’m a genius... being an Israeli start- up already means for people that you’ve [achieved something].”
Visiting the conference on its second day, Israeli Ambassador to Ireland Boaz Modai noted that there is a lot of cooperation and positive competition between Israel and Ireland in the fields of tech. “I must admit that too often the political situation overshadows some of our activity. Fortunately, when it comes to this type of summit, it’s not the case at all.
“We are enjoying here very good openness and interest by the Irish [in hi-tech]; the fact that we are the start-up nation is not to be denied,” he added.
Cosgrave said he’d love the opportunity to bring the Web Summit to Tel Aviv.
“Israel is just mind-blowing as a technology hub, how such a tiny country has produced just a remarkable revolution in technology in such a short space of time. I’m sure we’d love to go.”
Many attendees at the Web Summit remarked that the annual DLD Tel Aviv Dig - ital Conference is on par in terms of prestige, if not in size.
“DLD doesn’t come close in magnitude, but quality of the people is higher,” said Yuval Kaminka, co-founder and CEO of JoyTunes, an application for iPhone and iPad that can distinguish musical notes without being connected to an instrument.
He said he has received feedback that the technology they employ “can’t be seen anywhere else.”
Standing in the media room at the conference, Kaminka said that at the Web Summit, because of its size, only one in 20 people would be a beneficial connection. “At DLD, it’s 40%.
“It’s far less people, but any person who comes to the booth that you talk to, there’s a good chance he’s a good contact of some sort.”
He added that at DLD, “production-wise it’s smaller. Also the ‘show factor’ – in Israel, we don’t do much show.”
Many Irish entrepreneurs visited DLD, and the Ireland-Israel Business Network, started by Dublin native Clyde Hutchinson and launched in March 2013, works to - wards building better connections between companies in the two countries. Murphy pointed out that it would be natural for Israel and Ireland to work together, as they are in similar time zones (Ireland is only two hours behind Israel), both are halfway to America, and both have strong diaspora communities.
In fact, when Facebook opens its Ramat Aviv office in March 2015, it is expected to coordinate directly with its Dublin counterparts.
So long, Tel Aviv? Dublin, London, Berlin and San Francisco continue to be attractive destinations for start-up companies, with the added benefit – over Israel – of having direct contact with the European and US markets.
But despite the advantages, many companies continue to register as Israeli and even build their headquarters in Tel Aviv.
Shelly Grizim is vice president of Webydo, one of the most highly praised start- ups coming out of Israel. Webydo changes the way websites are built, moving from coder-based JavaScript to development through art design programs.
Forbes wrote about it four times in the last year, and it enjoyed positive responses throughout the Web Summit.
Based in Tel Aviv, Grizim responded that sometimes the disadvantages out - weigh the advantages. “It’s more challenging because our audience is far away, we have the seven-hour difference... people have to work all night to give support,” Grizim said.
She joked that it doesn’t get much better than living on the beach, and since Webydo is a family business – with her brother Shmulik as CEO – it’s nice to stay close to home.
“But it’s important for Israel,” Grizim noted about their decision to stay in Tel Aviv. “That’s the main thing.”