Tech & Innovation

The centre of innovation

By Business & Finance
15 July 2014
Silicon Valley
A view of Silicon Valley from above. © Patrick Nouhailler

Cian Hughes explains why it’s so important for Irish businesses to connect directly with San Francisco and Silicon Valley.

The Silicon Valley and San Francisco environment offers technology start-ups the ideal base, supports and community to scale their business into the US. Irish tech companies scaling into the US need to seriously consider a permanent presence in Silicon Valley or San Francisco. These companies must build lasting business relationships and provide customers, partners and investors with easy and regular access and communication. This positions the company as a local US organisation and gives customers and investors confidence in the company’s commitment to the market.

This year, Charlie Ardagh, CEO of PropelAd, a Facebook advertising solution provider with a core team based at Wayra in Dublin, moved with his family to Palo Alto to drive his company’s sales. “If you have a tech start-up and are able to have at least part of the team based in Silicon Valley, your chances of success are a lot better,” Ardagh says. “The eco system that exists in Silicon Valley, the potential partners, availability of risk capital and the mind set do not exist anywhere else on earth.”

While Silicon Valley is often viewed as a ‘Disneyland’ for entrepreneurs, Ardagh says: “It’s highly competitive here and the streets are not paved with gold. It still requires a huge amount of work, sacrifice and luck to make it work.”

Limerick born brothers, Patrick and John Collison – the founders of online payments company Stripe – made a similar journey in 2007 with their first company Shuppa. Shuppa was renamed to Auctomatic and was sold for $5m in 2008. The brothers went on to found Stripe in 2010, which is now valued at $1.75bn and is backed by Sequoia Capital and Tesla founder, Elon Musk.

The start-up community play a significant role in the growth of early stage technology companies. This is very apparent in California and is a bottom-up, entrepreneur-led and organic phenomenon. Entrepreneurs are the leaders and universities, governments and investors are feeders. This is a very different approach to the clusters or hubs environments that governments try to create.

San Francisco has recently started to outpace Silicon Valley for technology jobs, with 57% growth from 2010 to 2013. Young entrepreneurs and technologists are opting for the city lifestyle and access to amenities. Start-ups developing consumer-based technologies, particularly social media, mobile and cloud apps, have a preference to be closer to their clients, each other and their venture-capital funders. Salesforce, Google, Twitter, Lucas Film and Zynga form the top five tech employers in San Francisco. Square, Dropbox, Airbnb, Yammer and MyFitnessPal have HQ’s in San Francisco and are expanding rapidly there.

My recent visit to San Francisco took me to RocketSpace, a leading technology-focused accelerator for fast growth companies who are seed funded or beyond. RocketSpace was launched in 2011 by Duncan Logan, a technology executive who was challenged by the expensive options for his own new start-up in San Francisco. He says: “Coworking is exploding as a popular choice for start-ups, entrepreneurs, and even larger companies looking for a cost effective ‘office as a service’ model as opposed to locking themselves into long office leases.”

Since 2011, they have grown to occupy two facilities in San Francisco. RocketSpace believe that its success provides its best marketing. Former Enterprise Ireland VP, David Smith – now US Market Access Center’s VP of International Programs – provided a guided tour. The US Market Access Center (US MAC) maintains a presence at RocketSpace and functions both as a soft landing and a launching pad for emerging tech companies coming to the US from overseas.

On a trip to California last year, I visited Liam Casey’s PCH tech manufacturing accelerator, Highway 1 on Alabama Street, San Francisco. Highway 1 offers $50,000 to fund selected start-up companies. In-house engineers help them to develop their initial prototype into a product ready for volume manufacturing during a four month intensive programme. The Highway1 team work also with the start-up to determine their manufacturing outsourcing requirements and help them to get ‘China ready’. The Highway 1 supported companies also get an opportunity to consult with Lime Lab, the PCH product development house.

On a more recent trip I visited Lime Lab and met with David Austin, the new VP of PCH access. Lime Lab work with the world’s best product companies to guide hardware programmess through all phases – from idea, to development, manufacturing, and finally to market. Austin’s role is to make sure that the start-ups PCH are working with have full visibility and access to PCH’s global capability.

Runway, a co-working space of 30,000 sq ft is located on the 4th floor of 1355 Market Street and is in the same building as Twitter and Yammer. Runway was founded by entrepreneur and Y-Combinator alum, Allan Young in January 2013. Runway is designed with start-ups in mind, with an emphasis on openness and collaboration which is essential for moving fast and working smarter. Runway participation is by invitation only and the facility is full to capacity with 70 resident companies.

Centre for innovation

The SVG Innovation Centre on Santa Clara Street in downtown San Jose was founded by Irish entrepreneur and investor, John Hartnett in 2010. The Innovation Center is a bustling community of start-ups and technologists and provides private offices, open plan, hot desks and virtual space to over 100 scaling technology companies from Ireland, Silicon Valley and beyond. SVG is now opening LAB353 in Dublin to provide technology and R&D services and a launchpad for scaling start-ups into EMEA.

SVG Innovation Centre, San Jose

SVG Innovation Centre, San Jose

TechShop manager, Raffie Collet came along to see my LAB353 presentation at the SVG Accelerator and encouraged me to visit and see their offering for myself. TechShop is a part fabrication and prototyping studio, part hackerspace and part learning centre.

TechShop provides access to over $1m worth of professional equipment and software. Each TechShop facility includes an array of laser cutters, plastics and electronics labs, a machine shop, a wood shop, a metal workshop, a textiles department, welding stations and a waterjet cutter. Members have open access to design software, featuring the entire Autodesk Design Suite.

Huge project areas with large work tables are available for completing projects and collaborating with others. Furthermore, they offer comprehensive instruction and expert staff to ensure members have the training and skills to use the equipment effectively.

Square, the card reader technology founded by Twitter co-founder Jack Dorsey, was founded and initially prototyped at the first TechShop in Menlo Park. Earlier this year, Dublin City University announced an alliance with TechShop to bring the fabrication studio to the DCU Innovation Campus in Dublin in 2015.

Silicon Valley welcomes entrepreneurs from all over the globe. More than 50% of Silicon Valley start-ups are founded by immigrants. This provides a diversity of talent and knowledge that has contributed to the success of Silicon Valley. These entrepreneurs have recognised the importance of this truly cosmopolitan tech innovation environment.

Now Irish entrepreneurs must embrace the opportunity that the Silicon Valley and the San Francisco technology community and the eco system it offers them to scale their companies to global success.

Cian HughesCian Hughes is technology advisor and head of operations, SVG Partners and Irish Technology Leadership Group (ITLG)