The start-up crusade from Ireland to California is becoming passé. So many do it now that the novelty has worn off. Surely you've noticed how your 'office in the Bay area' isn't the conversation piece it used to be?
Still they keep on going. Mainly because the riches offered by tech’s entrepreneurial holy land are hard to ignore. And while the Irish card might not be as unique as it once was, the growing number of expats has its advantages. Silicon Valley’s Irish community network provides vital support to startups fresh off the boat.
Enterprise Ireland is strong there too under the stewardship of Simone Boswell. Even companies that have been turned down funding from Enterprise Ireland can still be guaranteed access to all the networks and experience the organisation has amassed in California. "Dá ghaire do dhuine a chóta, is gaire dó a léine baist do leanbh féin ar dtús" and all that.
The Palo Alto side of Silicon Valley lacks the draw it once had for young start-ups. High rents and a more suburban feel have led to some longing for the bright lights closer to downtown San Fran. But anywhere in the Valley, you’re likely to bump into the right people who can turn a tiny operation into something bigger.
That’s why, despite the high financial risks, so many make the trip. Silicon Valley is a hugely expensive place to live, never mind do business.
"I first came here with the last bit of money the company had," says Kevin Holler, CEO and cofounder of specialist graduate recruiter Shake.io. "By the end of the trip I was counting quarters just to buy a burrito."
Entirely focused on the tech space, Shake.io intelligently matches students and new graduates with paid internships and jobs. On one side students build in-depth profiles. On the other companies, who are recruiting for new graduates, can describe in detail their ideal candidate. It seems like a perfect fit for Silicon Valley, where competition for new engineering graduates – from local institutions like the University of California Berkeley – has forced starting salaries upwards of 150k in some cases.
Division of Labo(u)r
As a result, many Irish start-ups hoping to maintain a presence on the west coast will divide their business across the pond: engineering and R&D in Ireland, and sales and marketing in the US. “We’ll be launching our ‘Gateway to the US’ initiative next year specifically matching Irish engineers with US companies,” says Holler.
Shake.io opened its US office over the summer at an invite-only, co-working space called Runway. “It’s on Market Street downtown,” says Holler. “We’re on the same street as Twitter.” At $700 per month for a desk, it’s not as expensive as some other places.
Accommodation is usually what wreaks havoc on the startup's budget. "You'll be paying around $3,000 a month for a double bedroom somewhere central," says Andrew Mullaney of Newswhip, a service that monitors how news and content spreads online through social networks.
"San Francisco is between two and three times the living cost of Dublin and a lot of Irish companies are now choosing to live in the city. The younger talent prefers to be in San Fran rather than Palo Alto even though they're pretty much the same price."
Unparalleled networking
Newswhip sell its wares to news agencies and PR companies mainly. It already has an NYC office but felt the need to be present in Silicon Valley. Why? Mullaney is still trying to figure that out. “It’s a good question,” he says. “We’re not fundraising at the moment but we plan to in the next six months to a year as part of an overall growth strategy. I guess I can warm up those conversations. The truth is the networking here is unparalleled.”
Mullaney is there on a fact-finding mission for four months. “I’m part of an incubator in San Fran, set up by an investor called Matter VC. I’m their resident CTO. They’re doing an incubation programme right now and I’m mentoring on it.
“But I also gain valuable insight and networking opportunities. Around 70 per cent of our business comes from the US. I’m the CTO and, while it may be uncommon for someone in my position to up and leave a company, it also has its advantages. I’m in a position to make decisions. Besides, I check in with the Dublin office for two hours each morning.”
It’s understandable that a tech company with an existing office in New York, might still look west. The numbers don’t lie.
"Over 80 per cent of the world's high tech vendors operate from California – primarily in Silicon Valley," explains Kenneth Fox from SaaS sales technology provider, Channel Mechanics. "Because decisions there are made very quickly, it was essential that Channel Mechanics establish a presence in the state."
The company has been operating its California office for a year, and in that time it has been able to generate business relationships and contracts with multiple high tech vendors. “Being in Silicon Valley is an essential part of the company’s business plan, with expansion slated to begin there late in 2015,” says Fox. “Our entire US sales, operations and general management are based out of California.”
Many more are coming to the same realisation as Fox: "Cali or bust". But this is at the expense of other tech hubs. Boston, for example, was once tipped to be the hub Silicon Valley has become. While it is still a major player, particularly in med tech, for various reasons, California came out on top.
"We visited San Francisco and Boston earlier this summer to meet with some of our existing customers and evaluate both locations as a place to set up in the US," explains Robert Fenton from ZenDoc, a web-based solution that streamlines quality for SME life sciences organisations.
“After this visit we decided to choose San Francisco. It presented the ideal mix in terms of access to talent, customers and investors. We have just opened the SF office and our marketing, sales and support teams will be grown from this location.”
The west coast has reached a kind of critical mass in terms of tech entrepreneurship. It is becoming increasingly difficult for anywhere else to compete with the Valley (regardless of how much ‘Silicon’ they stuff into their moniker). So much tech-related innovation lives and breathes Californian air that only a return to a more primitive time, before computers, could level the playing field.
This is one of the articles that appears in the latest edition of the Innovation e-mag available at irishtimes.com/innovation that also profiles the next generation of innovative Irish Teen Techies and features an interview with Dubliner Alan Joyce who has led a remarkable turnaround at Qantas
