Following in the footsteps of Google and Facebook, tech start-ups from around the world are now flocking to Dublin.
You've heard of Silicon Valley, Silicon Alley, and, by now, likely Silicon Prairie, but across the pond, there's another tech hub making quite a name for itself.
Welcome to the Silicon Docks, the Dublin neighborhood bordering the Grand Canal Docks, where tech giants like Google and Facebook have set down their international headquarters. Beyond the docks, other major players like LinkedIn, PayPal, Amazon, Twitter, and Zynga are all packed into a city that's roughly one-fifth the size of San Francisco. Now, despite the country's ongoing economic struggles, a slew of emerging growth start-ups are flocking to the city of pints and pubs. This year alone, tech darlings including Indeed.com, Hubspot, Zendesk, and, most recently, Dropbox, have opened or announced plans to open offices in Dublin. They're in good company: Ireland's Industrial Development Authority, or IDA, says that in 2012, 140 foreign companies either expanded or launched in Ireland. This cluster is earning Ireland a reputation for being, as Dropbox's vice president of business Sujay Vaswa told us, "the heart of tech in Europe."
The Selling Points
Ireland's low corporate tax rate--just 12.5%--has long attracted entrepreneurs, and was once the country's key selling point for foreign business owners. Today, IDA's senior vice president of emerging businesses, Barry O'Dowd, insists Ireland has much more to offer. There's Enterprise Ireland, for instance--a government-sponsored organization with a venture fund that's the largest in Europe. There's the Dublin Web Summit and F.ounders conference, which, in just three years, have become two of the world's most popular events in tech, attracting the likes of Jack Dorsey, Steve Case, and Bono in recent years. But most importantly, O'Dowd says, there's a whole lot of talented young people.
Ireland boasts the youngest population in all of Europe, and this year, Citibank's annual list of most competitive cities in the world ranked Dublin as the city with the best "human capital." The city is home to dozens of colleges and universities, including the esteemed Trinity College and Dublin Institute of Technology.
"We have a lot of good knowhow coming through our universities," O'Dowd says. "And we work closely with colleges and universities to ensure they're up to speed on where tech sectors are moving."
The local talent pool has also gotten a boost from Google, which opened its Dublin headquarters in 2002 and has since been recruiting highly trained tech talent from all around the world, thanks to Ireland's lenient work visa process. Today, Google employs some 2,500 people in Dublin, not to mention many more the search giant's employed since the office opened. Facebook, for its part, employs hundreds more. The techies, it seems, are taking over, a trend that's proving irresistible to international start-ups with eyes on going global.
"Our No. 1 decision criteria when we were looking at where to expand Dropbox in Europe was: Where is the talent?" Vaswa says, adding that Dropbox's Dublin headquarters is set to open at the end of January. "You start with some great academic institutions, and add a few companies that paved the way, and soon, a city becomes known as the place. That's what happened in Silicon Valley, and I think Dublin's in a similar position."
According to Vaswa, the mere existence of the IDA also makes Ireland attractive. Not only does the agency do the heavy lifting in convincing businesses to locate in Ireland, but it also helps them get up and running. "The IDA is so welcoming that you don't have to pioneer everything yourself," Vaswa says.
Petter Made, co-founder of the Berlin-based mobile payment processor SumUP, agrees. "These guys are the rock stars of the Dublin economy right now," he says, adding that SumUP launched its operations division in Dublin in September. "They've helped us with everything from getting office space to banking services. You name it, they have contacts that will speed up the process of getting established."
All this activity has not gone unnoticed by foreign investors. Last year, the Boston-based Polaris Ventures, launched its first international outpost of its co-working space Dogpatch Labs just a short walk down Barrow Street from Google's headquarters. "If you look at a heat map of start-up activity around Europe, it'd be hard to ignore Dublin," says Noel Ruane, a Dublin native and Polaris' European venture partner.
There's Seed Funding, Too
According to Ruane, there's more capital available to these start-ups now than ever before, thanks to Enterprise Ireland's Competitive Start Fund, which invests in 15 seed stage start-ups every quarter. There's also a handful of accelerators in the city, offering start-ups much-needed seed funding, including Launchpad, which Ruane founded in 2010.
Meanwhile, Ruane says, Dublin's two shiny new tech conferences, Dublin Web Summit and F.ounders, have done a great job directing investors' attention to the Emerald Isle.
"What struck me was there were investors like Accel, Sequoia, Kleiner Perkins, and NEA at the last event," Ruane says. "If these people are making a 6,000 mile trip, it's because they're hearing rumblings of good things in Ireland."
Don't Forget the Pubs & Pints
The success of both conferences has made Paddy Cosgrave, the guy who founded them back in 2010, something of a celebrity. He says there's one often overlooked advantage to Dublin as a tech mecca: its pub culture. "The Germans might have given us great engineering, and the Dutch gave the world a network of shipping and trade, but Ireland's main contribution to the world is its pubs," he says. "A huge advantage of Dublin and of the event is providing the founder of Angry Birds the chance to get to know the founder of YouTube over a pint. That's a pretty rare moment in a year for most founders."
It's a tradition that homegrown entrepreneurs like Connor Murphy are now finding advantageous, too. "The serendipity part of networking is quite powerful," says Murphy who co-founded Datahug, a start-up that works with corporate clients to automatically scan internal emails, calendars, and other contact lists to unearth connections to potential clients and sales leads.
On a recent night in Dublin, Murphy says he ran into Dropbox's head of business development at a pub. "Then in the door walks Paddy Cosgrave," he says. "I ended up accidentally networking 50 yards from my company."
Murphy, who grew up in Cork, Ireland, says he's seen no signs that local entrepreneurs are resentful or fearful of all the international competition coming into the country. In fact, he thinks this cluster effect is giving Irish entrepreneurs chances they never would have had, say, 10 years ago, when Murphy started his first company. It was a social networking site called J1summers.com, aimed at international students working in the United States for the summer. The site got tons of traction early on, with more than 1,000 users signing up within two months of launching, and yet, without access to capital or a cohort of other entrepreneurs to tap for expertise, Murphy's business failed.
Ten years later, he says, times have most definitely changed, making Dublin the perfect home base for Datahug, which raised $5 million in funding, from international investors including Ron Conway and Draper Fisher Jurvetson, since it launched in 2010.
"Ten years ago, I had a very good business proposition, but I didn’t have a community around me," Murphy says. "Today, the support is significantly different. It means things can really happen, now, in Ireland."