Activating Dublin: #bestplacetostart
A report on maximising the potential of the Tech
Startup ecosystem in Dublin
A n A c t i va t i n g D u b l i n i n i t i a t i v e
Executive Summary
1
Mission
Make Dublin the best place to
start a tech business
Objectives
Strengths




Increase the number & quality of
startups, growth rate, employment
and overall economic contribution
of Dublin’s tech startup community.
This can be achieved through the
targeting of domestic
entrepreneurs & spin-outs,
international entrepreneurs, and
scaling startups.
Thriving organic ecosystem (NB: don’t try to control)
Supportive base of international companies (eg Google,
HP, PayPal, Intel, FB..) & investment promotion (IDA & EI).
Multiple high quality innovation centres available to
startups (e.g. 3 of 8 Top European Accelerators).
Pro-business climate.
Opportunities



Coordination | Greater coordination of the marketing,
outreach and promotion of Dublin as the best place to start
(targeting domestic & international entrepreneurs).
Facilitation | Foster a more accessible and interconnected
cluster eco-system (making it easier to start and providing
the right environment to grow & scale).
Regulation | Enhance a pro-startup regulatory
environment and visa regime.
Prize
 Dublin recognised as the #1 EU hub for tech innovation where companies will start up,
scale faster, live longer and go further;
 double the domestic rate of aspiration to start a business;
 sustain Dublin’s thriving startup ecosystem; and
 create at a minimum 2,800 jobs and contribute €200 million p.a. to the Dublin economy.
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Contents
Summary
Objectives and approach
Assessment of current position
Recommendations
Next Steps
Summary
Maximising the potential of the Tech Startup ecosystem in Dublin
The following slides show the conclusions of a series of meetings and consultations held by a diverse
group of stakeholders chaired by John Moran, Secretary General of the Department of Finance, and
assembled under the auspices of Activating Dublin.
State of Play
Dublin is already a successful startup city, with a thriving ecosystem that supports a wide
range of startup tech businesses, in particular in mobile internet, telecommunications
software and digital gaming. The last two decades have witnessed significant growth and
the emergence of a dynamic entrepreneurial class. Strong informal networks have
emerged. Dublin is now home to a number of serial entrepreneurs and business angels,
with experience and capital available from building up successful businesses. Dublin also
houses most of the international hubs of the US headquartered technology companies.
The Opportunity
Building on that success, we believe that there is now scope to do more. With a more city
centric focus and better coordination, there is an opportunity to significantly increase the
startup company activity in Dublin. In particular, we believe that now is the time to:




position Dublin as a leading global startup centre,
attract significantly more overseas entrepreneurs to Dublin to build their businesses,
celebrate the successes with the wider business community,
encourage the wider acquisition of STEM skills to fuel our startup tech businesses, and,
ultimately,
 increase the sector’s growth rate, employment and economic contribution.
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4
Maximising the potential of the Tech Startup ecosystem in Dublin
The Prize
Through the recommendations outlined, we believe that efforts to promote and market
Dublin’s competitive advantages (high level of seed funding, strong multinational base,
successful tech clusters) abroad and encouraging collaboration at home can:
 help Dublin become the #1 EU hub for tech innovation where companies will start up,
scale faster, live longer and go further;
 double the domestic rate of aspiration to start a business;
 sustain Dublin’s thriving startup ecosystem; and
 create at a minimum 2,800 jobs and contribute €200 million p.a. to the Dublin economy.
In the US, companies less than five years old created
44 million jobs over the last three decades and
accounted for all net new jobs created in the U.S. over
that period. In 2007, alone 8m of the 12m new jobs
created were from young firms.
Scaling to Ireland’s population for that same period
would be equivalent to creating 630,000 jobs.
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Contents
Summary
Objectives and approach
Assessment of current position
Recommendations
Next Steps
6
Objectives and approach
Origins of Report
In its initial assessment of ways to make Dublin a better place in which to live and work,
the Activating Dublin Steering Committee identified enhancing Dublin’s position as a
Startup City is an initiative that offered significant potential. The initial assessment
recognised the existing and significant activity that already occurs in this sector, but
concluded that with better coordination and promotion we could do much better.
Working group
A working group was established and requested to assess this proposition, i.e. to
determine what actions could be taken to enhance the startup activity in Dublin and to
report back to the Activating Dublin SteerCo. The working group members and some of
those consulted with as part of the work are set out in Appendix 1.
In looking at the startup sector the working group has focussed on technology and other
fast growth companies that are high growth and have a focus on international markets.
These companies focus on new technologies that create new markets or are a
disruptive force in existing markets. They require specialist skills and venture funding,
but by their nature do not access traditional bank finance and tend not to place much
reliance on domestic markets. As a result, this sector has not been as affected by
issues with credit supply or domestic demand caused by the economic downturn.
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Process of report development
The initial assessment by McKinsey & Co included:
 Conducting a baseline of Dublin’s position on key
indicators and benchmarking against comparator cities,
and
 Consultations with more than 100 diverse multi-sector
stakeholders from public, private, and social sectors to
identify key themes for future regional development
Based on these finding a Working Group was set-up with
specific experience in this area. Building upon the original
analysis and the experience of the group the three key
themes to address were identified:
 Coordination
 Facilitation
 Regulation
Separate themed workshops were conducted by the theme
leaders drawing on expertise and knowledge along these
lines.
Activating Dublin
consultation & analysis
Activating
Dublin Steering
Committee
Working
Group
Initiative themes
- Coordination
- Facilitation
- Regulation
Initiative
Workshops
The group also engaged internationally with those in the
startup community to find best practice.
Working
Group
Based on this work the Steering Group has compiled the
following report with recommendations and a delivery model
to implement the recommendations.
Report
Principles on approach – advice from HBR | what we took from it
Governments around the world have a somewhat
misguided approach to building entrepreneurial
ecosystems by trying to replicate the ‘gold
standard’ of ecosystems – Silicon Valley.
The working group has considered the 9
principles, and incorporated them into our
conclusions as follows:
1)
The Harvard Business Review identifies 9
principles for creating a thriving entrepreneurial
ecosystem:
2)
1)
2)
3)
4)
5)
6)
7)
8)
9)
Stop emulating Silicon Valley
Shape the ecosystem around local
conditions
Engage the private sector from the start
Focus resources
Get a big win on board and over-celebrate
the successes
Tackle cultural change head on
More finance is not necessarily merrier
Don’t over engineer clusters; help them grow
organically
Removing administrative and legal barriers
to startup formation – it’s better than creating
incentives to overcome these
3)
4)
5)
6)
7)
8)
9)
Source: How to start an entrepreneurial revolution (Harvard Business Review)
We have sought to identify certain aspects of
what other successful centres are doing and
see if we can adapt, but not mimic other
centres.
Dublin has a thriving ecosystem: we should
not try to control it. We must help it grow
faster than competition by supports and ideas.
Private sector & entrepreneurs are a driving
force.
By necessity our resources are focussed.
We have targeted some big initial wins.
Our cultural challenges are around issues like
“Government cannot do it, only private sector
can” and “There is a unit with this remit
already”.
There is available capital for good ideas.
We have a startup cluster and need to look for
gaps to help it grow.
We’re already good at being pro-business but
can do better for startups.
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9
Reviewing what’s in place and working well
In approaching the working group’s work we have taken account of remits of National and
Local government groups and bodies in supporting the startup sector. There are a myriad of
supports and initiatives in place to support startup businesses.
The working group has tried to identify where action is taking place by multiple parties and
where better coordination is necessary (see appendix 2-5). Initiatives need to be balanced
between those that constitute direct intervention and those that are more supportive.
Excessive intervention in areas such as the existing networking arrangements of developers
and designers (though informal “hang-out” industry groups) cannot and should not be
controlled: the symbiotic relationships across these different groups requires a benefit for
both and we have suggested where necessary how this can be done.
The next phase of our work will be to develop in-depth business casing of the proposals to
see how they could be implemented or in some cases to look to pilot initiatives or implement
directly.
Source: The Cluster Initiative Greenbook ,
http://www.isc.hbs.edu/Greenbook.htm
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Contents
Summary
Objectives and approach
Assessment of current position
Recommendations
Next Steps
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The origins of the Dublin startup sector
Dublin’s tech startup scene emerged in the late 1990’s as a natural progression from the
previous decades of industrial development which was based around foreign direct
investment. Successive governments and IDA Ireland had persuaded a number of major
global technology companies to locate initially manufacturing and subsequently business
hub and research and development activities in Ireland. While Enterprise Ireland and
Enterprise Boards have worked to develop indigenous startups.
IDA have successfully tracked the changing dynamics of the technology industry as the
latest wave of “born on the internet” companies have chosen Ireland (and Dublin) as a
centre for their international operations. Similar successes have occurred with digital
gaming companies.
Although manufacturing activities have been relocated to low-cost locations, Dublin remains
a key international hub for technology companies. The importance of the linkage and
engagement by MNCs & Startups is
particularly important in maximising Dublin’s
potential.
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The origins of the Dublin startup sector
From these origins an indigenous technology sector has evolved. Many of the early startups
were founded by people who left the FDI companies, but more recently our universities and
colleges have delivered a cohort of highly skilled and entrepreneurial graduates directly into
this thriving sector. Enterprise Ireland has built a programme of agency supports to help
these companies to grow covering, inter alia, funding, management training, grants (e.g.
research & innovation) and export support.
A thriving ecosystem has developed around these indigenous companies with venture
capital, agency support, accelerator programmes, coding and design skills and a pro
business regulatory framework contributing to an environment where a number of world
class startup technology companies have emerged.
 Dublin is currently a hotbed of tech innovation with more than 200 tech focused startups
based in incubators around the city and region.
 Supporting this is a healthy availability of seed funding with Ireland amongst the top three
European countries for VC investment per % GDP (European Venture Capital Association
2012).
 Pro-business with ‘Ease of Doing Business’ rank in top 15 of 185 countries (World Bank).
 Dublin is also home to three of the top ten tech accelerators in Europe (TechCocktail).
This strong base offers Dublin a huge potential opportunity to grow amongst the top
performing startup ecosystems in a sphere where competition is fast & fierce.
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Dublin’s thriving Start Up Eco-System
Business &
Sales
Accounting
Comms &
networks
Legal
Tech P.
Dublin
Beta
Space
Python
meetups
IXDA
Ruby
meetups
Craft
Developers
Universities
There are over 20
informal gatherings of
developers, designers,
etc. on a weekly or
monthly basis in Dublin.
Designers
Refresh
Node.js
UXPA
* At the core of a
startup founding
team there are three
roles: Developer,
Designer & Business/
Sales people
Dubstarts
Angels / Mentors / VCs …. banks
Incubators / Accelerators
Multinationals
Adapted from Eamon Leonard’s
contribution at workshop
IDA / EI / Enterprise Boards
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There are already the key components in place, excerpts from
“The Irish Tech Startup Guide”
Available at http://www.slideshare.net/FrontlineVC/the-irish-tech-startup-guide produced by Frontline Ventures
Dublin has the startup ‘assets’ necessary to
be a world class tech startup hub
In the EU, Ireland is ranked first by the World Bank for
ease of starting a business and consistently in Forbes’
top list of 'Best Countries for Business' report.
Venture Capital – Investments as % of GDP (2012)
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TOP 8 EUROPEAN STARTUP
ACCELERATORS AND INCUBATORS
RANKED
Seedcamp
Pan European
Startupbootcamp
Tetuan Valley (Spain)
Startupbootcamp
Eindhoven
Springboard
London / Cambridge
Openfund
Athens
NDRC Launchpad
Dublin
Propeller Venture
Accelerator Fund
Dublin
Startupbootcamp
(HealthXL)
Dublin
Source: Independent Study commissioned by
TechCocktail - http://tech.co/top-8-european-startupaccelerators-and-incubators-ranked-seedcamp-andstartup-bootcamp-top-the-rankings-2011-06
http://www.evca.eu/uploadedfiles/home/knowledge_center/evca_research/2012_Pan-European_PE&VC_Activity.pdf
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But against this background, there are challenges that are inhibiting
further success
International competition is fierce, with other locations looking to capitalise on branding
themselves as a startup city and target globally mobile entrepreneurs or investment
capital. Dublin’s position as a startup city is not fully acknowledged in the international
surveys, even if we are accepted by many as the Tech Capital of Europe.
Capacity Issues
Our incubator/accelerator units are near capacity, with restrictions in many of the units.
Moreover, they have each developed on their own separate momentum (e.g. University
patronage, private sector or public sector patronage) with limited coordination or
communication between these incubators/accelerators.
'We have certain skill challenges we government is seeking to address, such as through
doubling of ICT graduates by 2016, and other challenges remain around languages and
professionals in the ICT sectors (National Skills Bulletin 2013). We need to be able to
assemble technological and language skills that are not necessarily available locally, so
the ability to attract in global talent is important.
There is also a sense that the general business and wider community is unaware of the
strengths of the sector, in terms of encouraging individuals to participate or to invest.
Finally, although our enterprise agencies do a good job, they have a national remit and
therefore promote Ireland rather than Dublin. There has been a lack of ambition to be a
European sized city hub.
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The competition is fierce
Silicon Valley remains world’s largest and most-influential startup ecosystem. It is not the only
important startup ecosystem in the world as other locations seek to emulate it.
Competition across Europe has become fierce, with national governments promoting their
cities and regions:
 The UK government pledged £50m for East London's Tech City part of a plan to better
support fledgling technology startups
 The French government is creating a ‘world-class’ incubator in Paris for 1,000 startups
 Berlin is using its low cost/highly qualified labor, very creative city, low cost living, &
cosmopolitan reputation
The Startup Genome Report on top 20 Startup Ecosystems in the
world did not rank Dublin – a real missed opportunity even if the
survey methodology is imperfect.
Most Active Startup Cities
Source: SeedTable
The lack of coordination between Dublin’s startup centres & key players
may lead to a lost opportunity
Strengths
▪ Supportive base of
international companies &
investment promotion
▪ Multiple high quality
incubation/innovation
centres available to
startups
▪ Pro-business climate
Gaps
▪ A distinct lack of one story
for Dublin
▪ Treatment of each area as
a cluster in own right rather
than part of a Dublin cluster
▪ Making pro-startup policies
more clear, concise on
regulation and being a
world leader on approach to
immigration & visa process
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Contents
Summary
Objectives and approach
Assessment of current position
Recommendations
Next Steps
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Our recommendations
Our recommendations are broken down into one overarching
recommendation and six further recommendations that are
grouped around three themes:
1. We believe that there should be a
single strategy for Dublin as the
best tech startup city, backed up
by the resources & accountability
to deliver that strategy through
coordination across government
agencies, local government and
the other members of the startup
ecosystem.
2. We have identified three key
strategy areas around our themes
of coordination, services and
regulatory supports.
3. We have scoped six further
recommendations to turbocharge
our Tech Startup City.
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Our recommendations
1
Governing mission/
overarching recommendation
Make Dublin the best place to start a tech
business. This requires a single regional strategy
and the tools, resources & people to deliver it.
Key Strategy Area
Facilitation
Regulation
Help startups find the services they
need so they can focus on starting &
growing their businesses (e.g. office
space, legal, accounting..)
Ensure the regulatory
environment is pro-startup and
is viewed as open to
international startups
Coordination
Strategy objectives
Provide coherent coordination,
marketing, outreach and
promotion to tell a one city
story
Deliverables
2
3
4
5
6
7
Promote a
coherent story for
the city to attract
high quality
startups
Support
stakeholders to
build linkages and
create new high
int’l profile
activities
Provide one-stop
portal to help
startups in search
of supports &
services
Identify & address
gaps in Dublin’s
cluster linkages to
maximise growth
& scaling in the
cluster
Improve & clarify
current regulations
that support
startups in Ireland
Develop a new
streamlined visa
process for
international
startups &
investors
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1a
Overarching Mission | Agree a Single Strategy for Dublin
Startup activities in Dublin are supported by national agencies (EI/IDA), local authorities
and through a number of incubators and supports. However, there is a lack of
coordination of messaging which may undermine the efforts of many in this space.
The National Competitiveness Council has stated that - the key challenge for
successful cities has been to develop coordinated policies across existing institutions
for tackling problems and developing solutions, rather than the creation of a single
citywide governing entity.*
Pressing need for a single clear Dublin-centric strategy and a coordination of effort.
Dublin City Council’s Dublin Digital Masterplan is an encouraging recent development
that sets a vision of making Dublin “a global leader in innovation where technology is
harnessed, adopted, adapted and created to develop economic competiveness and a
cohesive and sustainable society.”
This comes at a time when Dublin City Council are going through a major reorganisation with the integration of the Docklands, Enterprise Board and Digital Hub. In
addition, other agencies/bodies in this area are looking at their overall strategy… now is
an opportune time to agree a single strategy.
*Source: “Our Cities: Drivers of National Competitiveness”, Forfás/National Competitiveness Council, April 2009, Section 2, The Governance
of Cities is Complex, page 17
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Overarching Mission | Responsibility for the Strategy
1b
Put in place a Champion/ ‘Commissioner’ for Startups:





Full time leadership
Accountability & responsibility for the strategy
Facilitator who startups see as their key contact when hitting a barrier
Works between Local & Central government
Metric driven (see recommendation 1c)
Suggested Job specification:








Experience in a startup as a founder
Knowledgeable in the tech company space
A positive, "can do" attitude with a track-record of assisting entrepreneurs/SMEs
Strong communication and advocacy skills
 Experience working with relevant local & central government officials providing
services and information to startups and entrepreneurs
Credible & capable advocate and adviser for startups
Problem solver
 familiar with the specific challenges facing startups, possibly through
experience working with startups
An ability to support startups with their requirements when dealing with public
procurement / operating in a number of jurisdictions
Organisational skills - ability to assign resources, prioritise tasks
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1c
Overarching Mission | Good quality metrics driving strategy delivery
We believe that progress must be measured, to ensure that initiatives are effective and
allocation of resources is optimal.
Need for Reliable Statistics
The working group found it challenging to obtain reliable statistics on the exact size of
Dublin’s startup sector. Not all companies are registered with or receive support from
agencies. Not all startups seek to locate in incubation hubs initially, some share with other
companies or locate suitable space.
There are challenges in determining the extent of investment in startup companies and in
the available funding, although we received strong anecdotal evidence that funding is a
available for good quality startups, with the possible exception of larger expansion amounts
where companies typically look to international VC firms to participate in funding rounds.
Community Sharing Data
Given the challenges in accessing reliable data we believe that there is a need to work with
the community on obtaining better data on activity levels in the sector, to inform policy
decisions and this must be done as an initial step.
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1d
Overarching Mission | Aligning resources towards the Strategy
Even with a person responsible for the strategy’s
delivery there will remain a need to:
 provide a single clear focus point in the city for
the services for startups,
 help navigate the existing fragmentation of many
agencies and units involved, and
 create an approach that is startup focused.
A single unit/organisation should be responsible for
delivery for the objectives and recommendations set
out in the report. This should build on the
recommendations in the Digital Masterplan to
establish a business accelerator team.
At the moment, however, many of these functions are
in some case already being delivered in part by
agencies or units with other core functions. This
integration should be achieved through the reorganisation with the integration of the Docklands,
Enterprise Board & Digital Hub currently underway.
NYC’s small business support website – a best
in class example of how to support business
Younger firms are the largest contributors of new jobs due to the inverse
relationship between growth and size – The Central Bank (Ireland), 2013
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2
Promote a coherent story for the city by piloting a group of key actors
working together on their message about Dublin
Dublin needs to establish its reputation as a
credible place for startups and
entrepreneurs to base themselves. Most of
the elements are already in place but there
is an absence of messaging and promotion.
We believe that this can be achieved by
immediately establishing a taskforce that will
leverage existing material to provide a
Dublin story. Their core mission would be to
provide coherent coordination, marketing,
outreach and promotion, then to make it
widely available.
*
*
*
Source: The Cluster Initiative Greenbook,
http://www.isc.hbs.edu/Greenbook.htm
Although we believe that the marketing deficit needs to be addressed as a matter of
urgency, there is strong potential that through success and trust building a group tasked
with promotion of Dublin could take on bigger objectives as similar projects elsewhere have
done.
The above illustration from international literature, shows how groups such as this have
similar objectives. The chart provides longer term insight of potential objectives for such
coordination.
*
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2
Taskforce to aggregate and support the use of material about
Dublin’s startup cluster – Key participants
Government Agencies
HEIs
Innovation clusters and companies
Coordination
Outreach &
business
development
PR &
Marketing
Link agencies, Better organise
Publicise
HEIs, hubs and
regional
success
companies
outreach
internationally
together
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3
Support stakeholders to build linkages and create new high
international profile activities
We need to support stakeholders in the startup ecosystem through a series of events and
activities that increase the profile of the sector. We have set out overleaf 14 individual
initiatives that we believe could be delivered over a two year period, to provide for better
linkages between the community and other actors in the space and to better communicate
the success of the sector.
The timing of certain recommendations is opportune: the build of the Luas extension gives
an opportunity to promote the startup sector on the site hoarding. A startup festival could be
held in conjunction with the already successful WebSummit. A Dublin based crowdfunding
initiative could provide a broader range of investors with a chance to participate in the
sector. Better linkages with the foreign-owned technology sector could help cross
fertilisation and carve out of redundant technology to startups where it can be better
exploited and commercialised. Local prizes and awards could celebrate the successes of
our startup businesses.
The coordination of the overall schedule of events could reside with the Dublin startup
office in our overarching recommendation. Individual events can be delivered under the
control of that office or by the community itself. We believe that it is important to have a
flagship event such as a Dublin version of the Mass Challenge (one of the worlds biggest
start up competitions based in Boston, Massachusetts) that is targeted at a global audience
could really help brand Dublin as a startup city.
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3
Initial proposals to support stakeholders to build linkages and
create new high international profile activities
Celebrating
Success
Startup
Billboard
Startup
Festival
Engaging
the MNCs
International
Spotlight
Empowering
existing
community
Coordinate
data on
cluster, publish
Startup Dublin
Survey
Dublin Mentor
Panel
Made in Dublin
Dublin Startup
CEO Forum
‘Booker’ Prize
for startups
Flagship
Project
MASS
Challenge
Startup
Ecosystem
Fund
IncubatorMNC spinout
support
Attracting
New startups
Dublin Startup
Association
Startup
Apprenticeship
scheme
Crowdfunding
site for Dublin
startups
• 125 Global
finalist relocate
to Dublin during
4 month
accelerator
period
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3
Celebrating Success
Startup Billboard
• No current activities in this space
• Potential includes:
• Hoarding for Luas Cross City
Startup Festival
• Similar to South by Southwest
(SXSW)
• Showcase success
• Link between culture &
innovation
• Existing players:
• Dublin Web Summit
• Innovation Dublin
• You Bloom
| Engaging the MNCs
Startup Ecosystem Fund
• Funding for great ecosystem ideas
• Matching funding model community
and MNCs
Dublin Mentor Panel
• Mentors from MNCs
• Link to Farmleigh Global Irish
Forum
• Key existing actors:
• Accelerators
Incubator MNC Spinout Support
• Crucial spillover effect of effective
cluster
• Existing programmes:
• Corporate Spinouts
• Startup Weekend – Dublin
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3
International Spotlight
| Empowering Existing Community
Coordinate data on cluster & publish
• Ensure data collected, int’l survey’s
completed – eg Genome project
• Potential players:
• IDA, EI or cooperative of centres
Startup Dublin Survey
• Collaboration on a regional survey
• Start by circulation and commitment of
existing community
Made in Dublin
• One Stop shop
• Portal for resources
• Key actors in space:
• Deep Pool
• Proposal linked to recommendation 4
in this report
Dublin Startup Forum
• Key players:
• Irish Software Association
• Informal networks
‘Booker’ Prize for Startups
• Prize so large that it makes a
statement
• First mover advantage
• Potential player:
• Royal Irish Academy
Dublin Startup Association
• Offer reduced prices on software
packages
• Create a clear voice in the space
• Potential players:
• Dublin Chamber, IIA, others
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3
Attracting New Startups
| Flagship Projects
Startup Apprenticeship Scheme
• Developing link to existing internship
schemes to bring more into startups
• Directory of interns & startups
Crowdfunding site for Dublin Startups
• Links in with Dublin as a test bed
• Key players:
• Fund:it
• Linked Finance
MASSchallenge Metrics, 2013
MASS Challenge
• Options:
1. Destination (big building)
2. Event
• Goal of getting international
entrepreneurs into the country
• Potential players:
• Dublin Web Summit
Funding raised by each class of entrants
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Provide one-stop portal to support startups in search of services
4
There are significant supports and services for startup businesses. These include local
and central government enterprise supports, incubation hubs, accelerators, office space
and required private sector service supports.
However, accessing the required services and supports can be challenging for
startups. Many services are also provided in a disconnected way and better coordination of
marketing and delivery of supports to startups can help the sector to grow. Questions like:
‘Where do I find space?’ ‘What space is available to meet my growth aspirations?’ ‘What
agency supports are available?’ ‘Who provides financial services or advice to startup
companies?’ or ‘What are my regulatory obligations?’, can be hard for startups to answer.
There is a genuine lack of natural spin out space once companies are finished in
accelerator/incubator programmes. The planned build out of The Digital Hub to
accommodate this natural progression was affected by the collapse in the property market
and other centres do not provide for this natural progression.
The dislocation in the property market is also affecting provision of space to startup
companies:

Space is available but may require significant negotiation/interaction
with NAMA.



Available space is often priced at uneconomic rates for startups.
There are non-flexible leases in the most desirable locations.
There is a lack of clustering of similar categories of startups across the city.
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4
Provide one-stop portal to support startups in search of services
Other startup cities are catching up with
Dublin through dedicated supports for
startups, to coordinate the provision of space
and services. Delivery of services can be
provided through the existing public sector or
private sector organisation, but coordinated in
a much better way.
An example of what can be achieved is
London & Partners, which is a collaboration
between the private sector service providers
(space, professional services, etc.) and the
city.
It provides a one stop shop of services to the startup community. We should introduce a
Startup Dublin portal that could help startups in the city navigate between:





National and local agency supports and programmes
Incubator/accelerator space and programmes
Other space solutions for growing startup companies
Financial service solutions and providers for startups
The main pillars of the regulatory framework affecting startups and those service
providers that specialise in advising start ups.
5
Identify & address gaps in Dublin’s cluster linkages to maximise
network effects
All of the elements of a typical startup ecosystem exist in Dublin.
Our stakeholder consultations found that certain aspects are not operating at an optimal
level: be it space in accelerator programmes or flexible hot-desking solutions for
companies that are not yet ready for the fully commercial property market. Natural market
forces of the property sector mean that space is not always available to startups in optimal
locations (e.g. near fellow startups or larger companies with whom they collaborate).
Transport linkages between cluster nodes and other locations (e.g. universities/ research
centres) are not optimised. Such linkages are important for the companies & cluster. In
Silicon Valley, there is a ‘doctrine’ that firms need to be within 20 minutes of their investing
firm.1
Strong clusters contribute to the survival of startups and can significantly increase the
incidence of startups and their durability over time (33%-50%). 2
We recommend:
 a follow up study to see what gaps exist in the linkages across the Dublin cluster, in
terms of provision of space, presence of cluster interactions or transport linkages;
 investigate if there is a private sector business case for a building as an icon for the
startup community which would provide easy access to range of startup needs.
1 – It’s Not the People You Know. It’s Where You Are, The New York Times,
http://www.nytimes.com/2006/10/22/business/yourmoney/22digi.html
2 – Delgado et al., Clusters and Entrepreneurship, Center for Economic Studies, 2010
35
36
5
Example nodes in the Dublin Cluster (current & potential future ones)
with their transport links – how do they connect?
DART
DIT Grangegorman
Docklands
Luas
Heuston Quarter/Digital Hub
Centres for Science,
Engineering & Tech
Co-working space
Meet-up spots
Accelerator/Incubator
Dublin bike locations
current and planned
Luas
20 minute rule:
•
Barrow Street to
Digital Hub
Car 11min /peak 20+min
Bike 12min
5
Dublin’s portfolio of incubators/accelerators
Main Supporter
Location/Centre
Accelerator/Incubator
Government
Digital Hub / Liberties
NDRC Launchpad
Telefonica
Docklands
Wayra
Irelandia
DCU Ryan Academy / City West
Propeller Venture Accelerator Fund
Polaris Venture Partners
Docklands
Dogpatch Labs
Startupbootcamp Ireland
Docklands
Healthxl
DCU
Invent | DCU
UCD Innovation
NovaUCD
Trinity College Dublin
Launchbox.ie
Eastpoint / Docklands
DIT Hothouse
Guinness Enterprise Centre / Liberties
Dublin Business Innovation Centre
National College of Ireland
Business Incubation Centre
EI’s New Frontiers
Trinity College
Trinity Technology & Enterprise Campus
Enterprise Ireland
Dun Laoghaire Institute of Art, Design &
Technology (IADT)
Media Cube
EI’s New Frontiers
Blanchardstown IT & Tallaght IT
Synergy Centre
Source for majority of data: http://www.digitaltimes.ie/wp-content/uploads/2012/06/Incubator-programs4.pdf
37
38
5
9 of the top 10 Global Software Leaders are in Dublin and
8 of the top 10 US companies are here
Fortune 500
PwC’s Global 100
Software Leaders
1
2
3
4
5
6
7
8
9
10
Microsoft
IBM
Oracle
SAP
Ericsson
Symantec
HP
EMC (excl. VMware)
CA Technologies
Adobe
Source: Data was compiled by the Global Software
Business Strategies Group at IDC.
1
2
3
4
5
6
7
8
9
10
US Companies 2013
Apple
AT&T
HP
Verizon
IBM
Microsoft
Amazon.com
Dell
Intel
Google
in Ireland
In Dublin


Dublin’s Multinational Companies can offer huge potential for startups;

Mapping Dublin’s multinational landscape and how it links with the community will be a
critical part of understanding the cluster’s gaps.
Greater engagement is an important cluster element to develop as there is recognition
from the tech MNCs that startups are a critical part of their ‘digital community’,

The IDA’s Landscape project offers an important tool in this work http://www.idaireland.com/app/landscape/
39
5
While greatest concentration is at core (particularly of small startups),
companies have also located into groups on the M50 ring
Blanchardstown/
Damastown:
IBM, Xerox, Symantec, PayPal,
Creative Labs
Ballymun/ Glasnevin:
Biomedical Diagnostic
Institute, Clarity, Invent
DCU
Eastpoint:
Activision, Citrix,
Cisco, Oracle
Yahoo
Dublin 1 & 2:
Accenture,
Google,
Facebook,
LinkedIn,
Twitter
CityWest: Adobe,
SAP Sage, Intel,
Sony, Xilinx, Ryan
Academy
Sandyford:
Avid, EMC, Microsoft
Vodafone, Novell
Belfield:
Clarity, Systems Biology
Ireland, NovaUCD
5
40
Components of a cluster
Availability of
other required
resources (e.g.
space)
Access
to/availability of
customers
Anchor
organisations,
who define the
cluster
Availability of
capital
Existence of
informal
networks
between cluster
participants
Availability of
mentors and
serial
entrepreneurs
for companies
People with
good skills are
available
Reputation
(location
recognised as
a cluster)
Access to HEIs
for research/
transfer of
knowledge
Linkages to
suppliers and
advancements
Proximity (e.g.
Silicon Valley’s
20 minute rule)
5a



Follow up study to see what gaps exist in the linkages across the
Dublin cluster
The eastern sector contains multiple economic sectors that are now embedded in the Docklands
Quarter – the primary ones being in the financial, legal and digital spheres.
The western sector contains Digital Hub, St James’s medical campus, Heuston Station and DIT at
Grangegorman.
 These character area nodes constitute a strategic economic arc and counterpoint to Docklands
and as a ‘Gateway’ enjoy major links outwards to the city region and inwards to the central city.
This links to the Dublin City Development Plan
 RE12 To promote flexible buildings that facilitate work
clusters and affordable work spaces that develop in
proximity to each other so as to allow skilled selfemployed workers operate independently and also in
co.
 RE22 (ii) To consolidate employment provision in the
city by incentivising and facilitating the high quality
redevelopment of obsolete office stock in the city
 REO11 To identify and map the existing and potential
clusters in the city region and identify effective
supports to optimise the clustering benefits
 RE22 (ii) To consolidate employment provision in the
city by incentivising and facilitating the high quality
redevelopment of obsolete office stock in the city
Dublin City Council should seek to address the policies and objectives set out in the Development Plan
and where necessary complete the supporting research by the end of 2013 / start of 2014.
41
5b
Investigate if there is a private sector business case for a building
as an icon for the startup community which would provide easy
access to range of startup needs.
‘Top floor’
“Mature” startups preparing to
spin out of the cluster into
surrounding office space
‘Core space’
Relatively advanced companies
paying subsidized rents
‘Lobby’
Accelerator program that will
encourage new high risk startups
in strategic areas such gaming
and cloud computing
Example: Cambridge Innovation Center
(Boston/Cambridge) http://cic.us/
‘Service support centre’
•
•
•
•
•
•
Accountants
Solicitor
Real estate agent
Incubators/accelerators
Administrative support
Angels & mentors
42
43
6
Improve & clarify current regulatory framework for startups
Our stakeholder consultations found that the current regulatory framework works well for
startups, as would be expected given the positive rankings that Ireland enjoys (e.g. top 15
Easiest place in to start a business – World Bank Doing Business Report). We have
identified recommendations across four specific areas, as follows:
▪
▪
▪
▪
6a
Access to public procurement
Access to finance
Tax initiatives
Administrative processes
Access to public procurement
Our stakeholder consultations identified difficulties for startup companies in accessing
public procurement opportunities, due to:
 Significant administrative burden for each proposal
 High costs to prepare proposals
 Financial guarantees which are generally required
We should enhance startup access to public procurement by introducing an
accreditation method which would approve companies for Government procurement.
44
6b
Access to Finance
Although, in general, access to finance is easier in Dublin than other startup locations,
and the Government extended tax incentives to support start-ups and SMEs in Budget
2013, there are some challenges:
 in particular VC funding in the €5m - €10m range can be challenging to procure,
 the Employment and Investment Incentive (“EII”) is somewhat restrictive, and
 there is a lack of consistency in relation to the requirements of investment
application forms with an increased time and cost required to complete forms
We should establish a group to examine in detail the suggestions received on
improving access to finance for startups, which are as follows:
 Reform the Employment and Investment Incentive:
 Remove the EII from the specified reliefs for the High Earners’ Restriction as relief
is already restricted under the scheme
 Increase the time period for investment under the EIIS to 5 years
 Outline deeming conditions for eligibility in place of current “trading” criteria
 Reduce administrative burden for entrepreneurs by introducing standardised forms
(endorsed by the IVCA) for completion when seeking investment.
45
6c
Tax Incentives
Tax incentives offered by other locations target the startup sector, for example:
 In the United Kingdom HMRC offers tax initiatives to encourage investment in
business, including:
 Incentives for non domiciled individuals to remit funds to the UK and invest in
certain businesses
 CGT relief for entrepreneurs on disposal of certain businesses
 Equivalent to EII is not included for “High Earners’ Restriction
 The French “Auto-entrepreneur” tax system charges small businesses a
percentage of their actual turnover in social charges and French income tax
reducing administrative requirements
As suggested in 6b, a group should examine in detail the suggestions received, vis:

Incentives for venture capital firms to establish operations in Ireland (tax free gains, carried
interest);

Enable non domiciled individuals who may become resident in Ireland to remit funds to
invest in certain businesses without liability to tax;

Introduce a CGT relief for entrepreneurs who dispose of their business;

Enable startups to award share options to employees tax efficiently;

Improvements to the R&D tax credit regime to make it more attractive to small businesses,
e.g. outsourcing limits, loss making companies cannot surrender credit to key employees;

Possible enhancements to the IP regime to remain competitive with other jurisdictions.
46
6d
Administrative processes
Administrative requirements for startup companies can be challenging:
 Many struggle with accessing and providing information, with significant initial costs
for startups in engaging lawyers and accountants.
 There is often duplication of information required, for example in registering
companies with CRO and Revenue.
 Tax administration can be disproportionately burdensome for startups.
Suggestions received in our stakeholder consultations which should be investigated
include:
 Provide a coordinated facility to better support administration needs of companies;
 Merge and develop the www.businessregulation.ie / www.smallbusinessfinance.ie
/ www.basis.ie websites to create a “one stop shop” for new businesses;
 Ensure businesses receive quick response to speed up set-up times;
 Putting in place the right conditions for digital innovation in data protection & IP;
 Consolidate the business and tax registration processes with a single unique
business identifier that enables agencies to access all relevant data.
47
7
Develop a new streamlined visa process for international startups
& investors
Most countries do not have access to the full range of technical and language skillsets that
startups require. Ireland is no different. Certain countries also actively encourage immigrant
entrepreneurs:
 In the UK, an Entrepreneur Visa is available to establish new business or invest in
existing business
 It is not restricted to certain businesses
 Initial investment of £50,000 per entrepreneurial team (up to 2 people) is required
 In Canada, a Startup Visa Program enables immigrant entrepreneurs to launch
innovative businesses by granting permanent residency
 Entrepreneurs are linked with private sector organizations
 Focus on innovative businesses that will eventually compete globally
 Minimum investment: $200,000 from Canadian venture capital fund / $75,000 from
Canadian angel investor group
 Start-Up Chile seeks to attract early stage, high-potential entrepreneurs to begin their
startups in Chile, as a platform to go global.
 Provides startups with US$40,000 of equity-free seed capital, and a temporary 1-year
visa to develop their projects for six months
 Project must be globally-oriented and easy to scale.
48
7
Opportunity – international startups need international people
 Research clearly identifies a strong link between foreign
born entrepreneurs and strong international startups
 In the1980s to 1990s, Silicon Valley attracted more
foreign-born scientists and engineers than any other US
technological center.
 From 1995 to 2005, immigrants founded 52.4% of the
startups in Silicon Valley
 In 2000, 53% of science and engineering workforce in
Silicon Valley was foreign-born.
 Other US technology regions had less than a
quarter foreign-born.
 However, there has been an 8.5% drop in immigrantfounded companies in Silicon Valley (43.9% since 2005)
 According to the authors, this signifies a potential
reversal in previous trends of expansion of immigrant-led
entrepreneurship.
“The proportion of immigrant
founders in the Silicon Valley
has declined since 2005
which should raise questions
about the United States’
future ability to remain
economically competitive in
the international market.”
- Kauffman Foundation
Source: Then and Now: America’s New Immigrant Entrepreneurs, Part VII by the Kauffman Foundation,
http://www.kauffman.org//uploadedFiles/Then_and_now_americas_new_immigrant_entrepreneurs.pdf
49
7
Develop a new streamlined visa process for international startups
& investors
In April 2012, Ireland introduced a Start-up Entrepreneur Programme which enables nonEEA nationals to secure residency status in Ireland. This is extremely positive development
but up-take has been small to-date, we believe that it needs to be improved and promoted:
 it requires capital of €75,000 per individual;
 it needs to be championed by the community, particular the programmes alumni;
 it is too narrowly geared to High Potential Start-Ups (HPSUs) startups.
There are also other reported difficulties with visa applications impacting with the startup
technology sector (although issues affect larger tech companies as well). Relative to other
countries these may not be ‘as bad’ but in addressing the needs of business &
entrepreneurs and their pace/expectation the below should be improved:
 uncertain application process for non-EEA individuals,
 timescales needed to secure startup entrepreneur visas (6 weeks – 4 months),
 timescale needed for applications by short term business visitors,
 ad hoc arrangements may be possible for entrepreneurs attending accelerators but
are not guaranteed,
 difficulties obtaining work permits for employees, and
 no pre-clearance facility for individuals visiting Ireland.
Of particular concern is that visa applications are not linked to sectors where there are skill
shortages.
50
Develop a new streamlined visa process for international startups
& investors
7
As a matter of urgency, we will engage with the Department of Justice & Equality and the
Department of Jobs, Enterprise & Innovation through a workshop to balance the
expectations of the startup community with the challenges of immigration policy. As part of
that engagement, the issues to be addressed and with business & entrepreneurs leading
to a pilot or new approach include:

Develop a more international entrepreneur friendly system
 Enhance Entrepreneurs Visa to compete with initiatives in other countries
 Lower the threshold amount. For example, lowering it to €40,000 for the first
entrepreneur and €25,000 for each additional entrepreneur involved with a
four person limit;
 Support entrepreneurs who have successfully completed their accelerator/
incubation programme with follow on-time (e.g. 3 months) to secure next
round funding, provided they have funds to meet living costs.

Improve the visa application process for international investors & business people
 Introduce pre-clearance facility for entry into Ireland;
 Improve availability of work permits for employees of individuals who invest here;
 Review the skills-based visa schemes ability to attract individuals with skills which
are not readily available in Ireland;
 Introduce a single application process for overseas entrepreneurs who require a
visa.
51
Contents
Summary
Objectives and approach
Assessment of current position
Recommendations
Next Steps
52
Implementation timeline and plan
We see the startup Dublin workstream of Activating Dublin having three stages:
 Initial report – which sets out initiatives that address the issues we have identified
and to help Dublin to do better as a startup city;
 Business casing – as some of the recommendations require additional analysis to
identify issues around scoping (e.g. may require a pilot), resources and ongoing
funding models; and
 Delivery of the recommendations.
Our main recommendation is for an overall unit or organisation to take the lead in
promoting Dublin as a startup city. This unit or organisation, or through a stakeholder
group, can oversee the delivery and co-ordination of the other recommendations. It may
not be possible to put in place the necessary structures in advance of progressing other
initiatives. In such case it may make sense to ask the original working group to oversee
that process until an overall unit is in place.
To the extent to which the Activating Dublin SteerCo accepts the report’s recommendations
we also recommend the establishment of a PMO structure to manage the delivery of our
recommendations, establishing workstream stakeholder groups (where necessary),
resourcing and managing of the delivery of the actions. The PMO structure could be
combined with other activating Dublin initiatives.
Overleaf is a suggested timeline for delivery of the recommendations.
53
Implementation timeline and plan
Overarching recommendation
Create a unit/organisation
whose aim is to help
Dublin become the most
dynamic place for tech
startups
1
Action
Engage with DCC and
agencies on
establishing a Dublin
startup unit.
Other recommendations
Timeline
Resources
Address funding model
in discussions, believe
that any exec. Should
sit within DCC and
balance of resources
provided pro bono.
2
Promote a coherent
story for the city to
attract high quality
startups
Conduct a pilot study to
separately promote
Dublin as a startup
City.
Activating Dublin to
fund pilot. Discuss
funding as part of
planning for expansion
of project
3
Support
stakeholders to
build linkages and
create new high int’l
profile activities
Develop business
cases to support 14
individual initiatives
Address funding model
in individual business
cases.
4
Provide one-stop
portal to support
startups in search of
services
Develop a business
case and funding
model and outsource
operation of portal
Address funding model
in business case,
believe it can be self
financing.
5
Identify & address
gaps in Dublin’s
cluster linkages to
maximise network
effects
Outsource project
to
DCC Studio to
look at cluster
linkages
Resources provided by
DCC.
6
Improve & clarify
current regulations
that support
startups in Ireland
Engage with
central/local
government and
agencies to action
initiatives
Develop a new
streamlined visa
process for
international
startups & investors
Engage with
D/JELR to get
agreement for
pilot of improved
visa procedures
7
Sep Oct Nov Dec I Jan Feb Mar Apr May Jun Jul Aug
Unit established and resourced by end June 2014.
Look to address sector data issues by Dec 2013.
Initial pilot
14 business cases
delivered
Business case by end Dec/ Portal online
by June 2014
Initial scoping &
report
No incremental
resources envisaged.
Representations
made
Funding should be
provided through
central government
and self financing for
any new processes.
Engage with DJEI &
D/Justice and action
accepted into APJ
Work on addressing
identified gaps
54
Appendix 1
Working group
▪ John Moran, Department of Finance (chair)
▪ Edel Flynn/Ruth Flynn, The Digital Hub (theme leader)
▪ Gary Leyden, NDRC Launch Pad (theme leader)
▪ Joe Tynan/Edel Gunning, PwC (theme leader)
▪ Paul Hayes, Games Ireland
▪ Raomal Perara, ThousandSeeds and INSEAD
▪ Declan Hughes, Forfas
▪ Peter Finnegan, Dublin City Council
▪ Paul O’Connor, Department of Finance
▪ Caitriona O'Kennedy / Emmet Oliver, IDA
▪ Will Prendergast, Frontline VC
▪ Lorcan O’Sullivan, Enterprise Ireland
▪ Jamie Cudden, Activating Dublin / Dublin City Council
▪ Patrick King, Activating Dublin / Dublin Chamber
Consultation group included
▪ Steve Collins, swrve (founder Havok)
▪ Paddy Cosgrave, Dublin Web Summit
▪ Eamon Leonard, EngineYard
▪ Paula Fitzsimons, author GEM Report
▪ Barry O’Leary, IDA
▪ Des Fahey, Dublin Business Innovation Centre
▪ Conor Jones, McKinsey & Co
▪ Eoghan Murphy, TD
▪ Philip Maguire, Dublin City Council
▪ Barbara O’Beirne/ Shane Gannon, McKinsey & Co
▪ Joan Mulvihill, IIA
▪ Cllr Naoise Ó Muirí , former Lord Mayor
▪ Eoin Costello, Hothouse
▪ David Varian, Guinness Enterprise Centre
▪ David O’Halloran, Retail Unlimited
▪ Shane Scully, Bennett Construction
▪ Terry Neill, London Business School & UBM
▪ Tom Hayes/Naghmeh Reilly, Enterprise Ireland
▪ Liam Davis, brite:bill
▪ Chan Shi, McGrath McGrane Solicitors
▪ Daniel Ramamoorthy, Treehouse
▪ Katherine Licken, Department of Communications
▪ Liam Kavanagh, The Irish Times
▪ Ronan Harris, Google
▪ Dick Gleeson, Dublin City Planner
▪ Cian McGinley, Eversheds
▪ John Menton, Arthur Cox
▪ Gina Quin / Aebhric McGibney, Dublin Chamber
▪ Deirdre Ni Raghallaigh, Dublin City Council
▪ John Murphy/Declan Doyle, PwC
▪ Kevin O’Sullivan, Silicon Canal
▪ Stephen Brennan, The Digital Hub
▪ Mark Whelan, Dubstarts
▪ Brendan McDonagh, IDA
▪ Sean Purcell, Dublin City Council
▪ Margaret Ledwith, Innovation Academy UCD
▪ Greg Swift, Dublin City Enterprise Board
▪ Dr Majella Giblin, TCD
Appendix 2 – Example of Lean Business Canvas used in process
55
Appendix 3 – Action Blocks from Digital Masterplan
Creating
Awareness &
Building
Participation
•Citizen focus
Building the
Digital
Commonage
Knowledge as
Power:
Developing
People for the
Digital Age
•Big Data
•Open Data
•Infrastructure
Organising Action
Expanding &
Innovating the
Economy
Global
Positioning
•Investment
•Use Horizon 2020
funding
•Companies w/ R&D
potential
•Startups
Shaping a
Better City
•Companies
•Communities
•Individuals
56
Appendix 4 – Enterprise Supports in Dublin
Source: Presentation by Joanne Hession, QED on “Dublin, the best city in the world to start a business” (2013)
57
Appendix 5 – Initiative Mapping in Innovation/Startup space (Jan 2013)
58