Cape Clear launched Cape Clear 7 in the last day or so. Features are here. I have to say the descriptions are a bit buzzword bingoish. Still this a very mature product, definitely worth considering if you have an integration project on the table in the J2EE space.

Arrived in Kitzbuhel on Saturday after a nightmare 24 hours when we discovered the kids passports were out of date on Friday night. It is possible to get a passport renewed in less than 24 hours on St. Patricks day but I don’t recommend it as heart medicine.

I’m not aware of anybody targetting missles at commercial airlines landing Salzburg, but you might be forgiven for thinking it after the manouvers out pilot indulged in shortly before landing. I have rarely stared out a window straight at the in an aeroplane whose wings are at a 90 degree angle to the ground 2 minutes before landing, even our kids were saying “hey we’re at a really funny angle”, yes, and Dad has a really funny look on his face.

Well not a speck of snow in Kitzbuhel when we arrived, it looked more like Wexford than Austria, apart from the blistering hot sunshine. The ski rep. Rick promised snow fall on Sunday and blow me down but he was right. The whole place was transformed overnight on Sunday to a skiing paradise. My skiing is still shite, but I can’t blame the conditions anymore. 

If you plan on bring kids skiing in Kitzbuhel, I can recomend the Kaiserhof Hotel as accomodation, its right beside the kids ski school.

 Great Video up on Crunch Notes. Good stats on how the world is changing faster and rate of change is changing faster than ever before.

So Enterprise Ireland doled out 175 million euro to Irish VCs last year on the basis that they would find matching funds and thus inject new vigor into the Irish VC market. Since then, well not much has happened. No Irish VC to date has raised a new fund, and none looks like doing so in the immediate future (please comment if you know different).

So here’s a suggestion, carve out 50m of that fund (or 75m or 20m) and just give it away in chunks of 100k to any Irish startup who meets the following criteria,

• Are in or have completed an Enterprise program, such as the one at the PDC or the M50 program at Tallaght. There are others but these are two I know about
• Meet standard HPSU criteria (will generate employment and export markets)

That’s it. You get a 100k (It can be tranched but that’s more management overhead, better to just chuck it out there) and go and start your business.

Even 50m would mean you could fund 500 startups. How many HPSUs are there?

That would still leave 125m to prepare the ground for those startups once they need to raise serious money from the Irish VC market.

Conor O’Neill leaves a valuable clarification in the comments,

A key requirement is that matching funds are NOT required from the startups

I have had a vague plan that someday I might teach my kids to program. Originally I planned to use a Logo dialect but Sean recently sent me a link to Scratch, the new programming environment for teaching children how to program. Its a graphic interface that runs on Macs and Windows is highly interactive and piggybacks on the turtle graphics model of Logo. However scratch is a much richer and more interactive environment with sounds, animation and a graphical programming language that insulates you completely from the VI/Emacs wars so prevalent in other programming communities 🙂

I’ve only had a quick play with it tonight but so far, so good.

Of course sooner or later, they will have to graduate to Python (the one true programming language).

I found a cool holiday tracking program last week http://whosoff.com. Lovely full feature program for tracking holiday allocations and requests for a small company. It has a proper approval system and lots of nice support for things like sick leave and pretty cool reporting tools. Best of all its free (ad supported, but ads are pretty innocuous).

Its a bit twitchy in Firefox (some gifs aren’t laid out properly) but apart from that does exactly what it says on the tin, tells you who’s off today.

John Gallagher – 2004 Smart Homes

Design and install central cabling systems.

Telecommunication and entertainment services.

New developments.

Market leader in Ireland.

Support broadband, telephony, networks, satellite services, multi-media systems.

Volume and large scale projects, quality and attention detail, build a brand, Innovation and R&D.

Turnover is vanity, profit is sanity.

Find a grey head to be a mentor.

60+ staff in 2006.

Ivan Coulter – Sigmoid Technologies

Delivering seamless drug solutions. 2006 winners.

Some drugs are water soluble, new drugs are not water soluble but are oil soluble. Convert large capsules into mini capsules to dictate delivery spectrum within the gut.

Crisis in pharma industry. Patents expiring, fewer drugs are emerging.

Drug delivery : solubility, permeability, stability.

8 people.

Huge list of academic collaborations

Developing four products at the moment.

Currently have 2m invested.

Looking to raise 4m.

Dan Phillpott 2006 winner, EnBIO

Enhancing BioMaterials.

Medical device coatings.

Active coatings. Induces a positive biological response for any medical implant (e.g. hip replacement).

Coating applied at room temperature. Therefor can be combined with other agents.

Makes a specific coating piezo electric to encourage healing.

Short story: Patients recover more quickly with less chance of setbacks.

Raised 2m.

Business model, licensing and royalties.

John Cavill, Chairman, Intermezzo Ventures

Setup a local area networking company (Logical Networks). What was good about our company? Why was it successful. 3i funded. Imported technology from US.  Within three months 3i had invested in three other companies in the same space. One company had gone bankrupt, bought all support people BMW 5 series. Second company, founders fell out with each other.  Third company struggled for first year, then developed some different software that was quite successful.

Finally there was our company. CAG 55%. What was the difference?  Team builds success, lone entrepreneur is a myth. 

Want to understand what makes a good team? Went to Henley to do doctoral research.

What research has been done around the world regarding what makes a successful team?

• The VC industry
• Entrepreneurial Capital
• New aspects of entrepreneurial research

The VC’s Dilemma

“The process of picking winners continue to challenge, baffle and mystify even the most experienced investors. Certain winners somehow fail; apparent losers sometimes win”. (Smilor 1997).

VCs have moved to investing larger sums of money in smaller numbers of businesses. Equity gap between bottom end VC investment (2m) and the emerging companies requiring less than that. Business Angels are starting to fill that gap.

VC Performance

15-20% will be blockbusters

23-35% will be winners

20-30% will break even

15-25% will fail (Laurie 2001).

Why do businesses fail?

Of every 100 businesses that fail, 92 will fail due to bad management, 8 will fail due to acts of God.

Management is the key driver of success? Failures: 69% failure of management, 17% external shocks, 14% flawed business model.

Lens Model: Entrepreneur/Team, Product Service, Market, Financial (business model, capital structure).

VC Human Capital Evaluation

Airline Captains – Systematic data collection/analysis

Art Critics – Snap judgement

Sponges – Soak up data non systematically

Infiltrators – Become quasi management

Prosecutors – Aggressively question management

Suitors – Woo management

Terminators – impossible to achieve – can’t measure

69% of types fall into first three.

IRR .8, .25, .20 for first three.

Usage rates : 13%, 30%, 26%

Attributes of Entrepreneurs

Entrepreneurs like pornography

creativity innovation vs general management skills, business know how, networks

Bottom left : Promoter, Bottom right: Manager administrator, Top right: Inventor, Top Left: Entrepreneur

Many different definitions of Entrepreneur.

Gazelles and Mice. Gazelles, consistent growth of 20% a year for 4 years. Mice, learnt to survive, work hard to feed themselves, remain stable in size and are comfortable with their status.

Only 3% of Entrepreneurial businesses are Gazelles. Drop off of Gazelle status is dramatic over the next three years.

Enterprising person – Create a small or micro business

Entrepreneur – Create a significant business

The growth entrepreneur – Create a sustained high growth business

Move from founder to leader.

New group : The Ultrapreneur, create a hypergrowth business, growth rates of 50% to 500% a year.

Entrepreneurial Attributes:

• Need for achievement
• Internal Locus of control – I control my destiny
• Risk taking
• Tolerance of ambiguity
• Creativity/Innovativeness
• Need for autonomy
• Self Confidence
• High energy levels

Entrepreneurial Team Dynamics:

• Age
• Gender
• Educational background
• Parent(s) entrepreneurs
• Prior work experience
• Prior joint work experience (worked together in mgmt team before)
• Prior startup experience
• Balance of operational skills
• Established networks

Largest number of variables are in the team and the lead entrepreneur.

Todays workforce is being judged by a new yardstick..not just by how smart we are, or by our training and expertise, but also how we handle ourselves with each other.  (EQ)

Success profiles are dominated by High EQ individuals. Failing profiles are driven by low EQ.

Experience + EQ is the key determinant of success.

Left brain vs Right brain. Right brain individuals tend to be entrepreneurs.

Big list, all dyslexic. Jobs, Churchill, Rockefeller, Patton, Branson, Ford, Einstein, Newton.

During a hurricane even turkeys can fly.

www.enterprisehubnetwork.co.uk

DNA link to entrepreneur ship, identical twins study.

High testosterone, more likely to be entrepreneurial. 

Business plan in one hand, urine sample in the other.

Letters from the trenches (founder of Phive).

ISA – 150 members, indigenous technology businesses, entrepreneurial and export oriented.

The current environment. Irish R&D expenditure 2006 400m, 2007 1bn.

Early stage still gives us the best ROI (2004 numbers).

ISA Survey. 6 entrepreneurs. Current model is not a meritocracy its random. Funding focused on multi-nationals. Commericalisation process varies across institutions. Process convoluted and entrepreneur unfriendly.

No clear roadmap for funding across colleges. Focused on flighty P.hDs.

Change. Aims of government R&D retaining Multi-nationals and training people for multi-nationals. Now commercialisation, startups and spinouts. SFI. Globalisation. New people. Lots of non-nationals.

Behavior. People behave as if we know what we are doing. The situation requires new approaches.

US and Israel prove the startup model.

How do we maximise this opportunity.

Best practice. Israel invested 10bn in VC.  World beating research, Entrepreneurs, route to market consumer or multi-nationals.

Don’t take the technology out of the university to early. Israel focuses very heavily on incubation.

SFI and EI are well aligned on the move from R&D to commercialisation.

Startups are not linear. Map networking activity over the pipeline. Business formation issues are done right at the start in the US.

Best practice is defined by financial success.

Involving major multi-nationals is key.

A business startup is a singularity driven by a series of network events.

Challenges.  Access to UNI R&D is confusing. No list of Irish R&D projects in Universities.

Jockeying for position, EI, SFI, multi-nationals, Universities.

Entrepreneurs in a weak position. Academics have full funding.

Incubator access guarantees funding in Israel.

Funding raising takes too long.

ISA actions. use Expertise Ireland as a common portal. Workshop on best practice for startups. Handbook on funding. Stanford program for CEOs. Working to promote entrepreneurship.

Be-Herd project.

Questions:

John Tracey, Gerry Murphy, Aislinn Rice, Ian Murphy, Hal Wilson

Gerry: There is no difference between the domestic and global market. There are no walls anymore. Competition will come to you.

200 companies control 80% of world trade. You have to operate globally to supply these companies.

Ian: Certain segments can scale up. Allan McClay is unique in that he has invested all of his money back into the NI economy.

John: Can we compete? How should we organise ourselves? (People, market opportunity, product) Key element of competitiveness is domain knowledge. Fitness for purpose is key. e.g. Apple Computers are focused on ease-of-use.

Hal: More second/third generation entrepreneurs in Dublin than NI. Can we build businesses of scale, are entrepreneurs ambitious enough? Do we lack confidence? Need to show Irish entrepreneurs they can beat the world, but exposing them to the competition.

Aislinn: Need to develop sales and marketing expertise to expand to a global footprint. 96% of revenues come from overseas. Sales model based on a mix of direct/indirect. We have worked with a Chinese distributor for the past 5 years. He now runs the Andor Chinese office. Andor is a component of larger systems, therefore we need excellent partnerships. Andor growth is 30% year on year.

John: (Q: How do combat copying of ideas?) The type of technology that comes out of Ireland is complex and in the case of software the price tag is around 300k. By building in domain knowledge you make the product defensible. Product architecture and design lives at home. We prefer near shoring (eastern Europe) to Asia/India. In Indian your staff turnover is probably 40% and there are timezone issues.

Hal: If you are bulking up by acquisition then you need the skills to manage that process. NI not there yet.

Ian: I’d be much more optimistic. There are examples here already (Sean Quinn, Allan McClay). The Island economy forces us to move overseas very rapidly. There are successes and failures (SBP: One sold for 10m, another went into receivership).

Gerry: Job losses in Ireland are mainly in the multi-national sector. No such losses in domestic sector. We need to look inside companies to see the problems. Startup rates are very good in Ireland. We less successful at scaling businesses (e.g. the ability to make acquisitions). Business models are often inappropriate (no recurring revenue, not a repeatable business or service). Companies try to go it alone, need to use partners to scale. They need proper organisational structure as they grow (board and management).

Ian: Very expensive for Bio companies to sell in the US (1m per year not unusual). They need VC for this to work.

Aislinn: InvestNI has been very helpful to Andor. Trade missions, logistics, finding partners, opening overseas offices. Also helped find new offices.

Hal: (Q:How do you help with Partner recruitment?) There is no substitute for doing the work yourself, don’t embrace the partnering model before you understand your customer base and your own product. Understand the economics of your supply chain.

Gerry: (Q:Does the Celtic Tiger help Irish companies?) Everywhere you go people have heard about the Celtic Tiger. Its easier to approach Irish companies as a result. Makes Eastern Europe very approachable. Your in the door! We need to do more in emerging markets (India, China, Mexico, Brazil, the Gulf states).

John: (Q:Why take a risk with property so lucrative?) There are large emerging markets with significant capital spend (mobile, networks, broadband). Traditional markets (US, Continental Europe) have made investments. Emerging markets have no legacy systems (e.g. China is a mobile network only).

Aislinn: Our stable market customers are moving to the emerging markets and dragging us along.

Hal: (Q:Is innovation the key?) Innovation is important and differentiation is key. You also need to understand your customer.