Research commissioned by NDRC into its portfolio of companies reveals UK, US, Australia and New Zealand are key markets for Irish startups. The vast majority of our entrepreneurs are highly educated, though not as many have a background in computing as some may think.
- Research commissioned by NDRC into its portfolio of companies reveals UK, US, Australia and New Zealand are key markets for Irish startups
- 9/10 NDRC founders have secured a college qualification
- Only 2/5 of entrepreneurs have a background in computing
- It takes startups, on average, two years to reach seed funding, and four years to reach Series A
- Competing with Facebook, Google et al for staff makes scaling up difficult in Ireland, though 7/10 entrepreneurs view this country as a good place to start a business
NDRC, which builds and invests in early stage digital and technology startups, recently commissioned research – with support from Bank of Ireland – that shows that the uncertainty surrounding Brexit is far from a problem for many entrepreneurs.
A study into NDRC’s portfolio of companies shows that one-in-three startups are eyeing UK expansion in the next five years, with similar hopes for Australia and New Zealand as Ireland-based startups ramp up their business activities. Unsurprisingly, both the UK and US are cited as important markets for Irish digital entrepreneurs looking to scale, with current operations in the US very significant.
Challenges are plentiful when in the earliest stages of building a business, but education is no such obstacle, with nine-in-ten (91 per cent) founders having achieved third-level education.
Interestingly, almost one-third of entrepreneurs have no formal education in business or technology areas, with just 39 per cent having a background in computing, according to the research.
Half of respondents cited working for themselves as a key reason for starting their own business, while many entrepreneurs relied on their own savings to fund their businesses in the early stages.
The research showed:
- More than 70% of entrepreneurs were moved to start their business by having an idea they believed would sell, after they had identified a gap in market
- They described themselves as ‘always on’ and risk takers, with more than half wanting to work for themselves
- They noted that the challenges facing ventures changed as they made their way through the various funding stages, with hiring the right people a constant issue, and sales important throughout the startup process
The research of NDRC startups, undertaken by Behaviour & Attitudes, saw almost 70 NDRC entrepreneurs surveyed, covering those from Pre-Seed right through to Series A businesses, with fewer than one-fifth (17 per cent) viewing Brexit negatively.
The results showed a stark learning curve for all involved, with the average entrepreneur spending less than one year researching his or her business idea before deciding to set up shop.
Ben Hurley, CEO of NDRC, said: “Discovering what makes up our entrepreneurs, and also what makes them tick, is of huge value to NDRC as we continue to seek out the best early-stage companies in the country.
“The findings show that a strong work ethic is a pre-requisite when building a business from the ground up. Meanwhile, Ireland’s education system helps, too, by providing a plethora of university graduates, something we’re seeing in the startup space to great effect.
“Perhaps the most surprising aspect of the research is how two-in-five founders have a background in computing, a figure lower than perhaps many people expect.
“NDRC sees this at its purest form, with founding teams that enjoy a mixture of skills and backgrounds often proving the most robust. NDRC invests at a very early stage, which is a time when such a strong backbone to a business is of paramount importance.”
Other findings from the research include the concern among Series A companies when seeking appropriate staff and attracting them to join a start-up company is quite a challenge.
“It’s difficult when you’re competing with the likes of Facebook and Google,” said one respondent. “They can offer much bigger salaries – you have to sell the dream.”
Michael Lauhoff, Director of Business Banking, Bank of Ireland said: “Through our partnerships with businesses across Ireland we have always found a resilient entrepreneurial spirit, so I’m not surprised to see the ambitious attitude of our startups despite developments such as Brexit.
“Bank of Ireland was delighted to work with NDRC on this important research. It’s only by truly understanding the aspirations, worries and needs of entrepreneurs and early stage enterprises that we can offer support which most benefits their business.”
NDRC has built and invested in more than 200 companies to date, which employ more than 800 people between them. Some of NDRC’s portfolio companies are Logentries, FieldAware, Wia, Tandem HR and Nuritas – the latter of which recently announced a €16.8 million funding round.
Over its history, around half of NDRC-backed ventures have secured follow-on funding, with the research finding that it takes startups, on average, two years to reach seed level (88 per cent), and four years to reach Series A funding.
The lack of suitable Pre-Seed supports for globally scalable businesses one of the reasons behind NDRC’s creation by the Department of Communications.
NDRC sources and builds digital start-ups to invest in and work with, providing them with an integrated offering of knowledge, experience and expertise and enabling them to become market ready faster, more successfully and more efficiently than otherwise. With a mandate from the Department of Communications, Climate Action and Environment, NDRC aims to ensure digital entrepreneurship is a growing and vibrant part of the economy.
NDRC’s first regional accelerator under Enterprise Ireland’s Accelerator Development Scheme (2015-2017), NDRC at PorterShed, based in Galway and sourcing throughout the West, was announced in May 2017. Its second, NDRC at ArcLabs, is currently seeking applicants.
About the research
In order to fully benefit startup digital companies, NDRC wished to conduct research on two core elements of running a digital company in Ireland: The constraints to starting a digital business; the barriers to scaling up and growing. Given the scope of this project, a combined qualitative and quantitative methodology was adopted by Behaviours & Attitudes. Nine in-depth interviews (with three pre-seed, three seed and three Series A businesses), and 59 census style interviews across the NDRC portfolio were conducted.