Location, location, location – VCs & founders agree it plays a role in success

Oct 30, 2013
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The following is a guest post from Mike Sottak, President of Wired Island International. You can follow him on Twitter at @WiredIslandPR

How important is location for starting a high tech venture these days? That was the question debated on a couple of morning panels at the Dublin Web summit, with panelists agreeing that no location has a corner on innovation but certain dynamics lend themselves to greater chances of success.

“My experience is that places with a dense urban core with diverse populations, where general English is the primary language are best suited for attracting innovative people and companies. In this age we are talking about companies that aren’t built on electrical engineering but social engineering , and that makes an  urban lifestyle – places where you can get a good cup of coffee, walk to work, and are surrounded by a diverse group of people – more conducive, I think,” said Brad Burnham, managing partner at New York-based Union Square Ventures.

That notion was supported – and clearly evidenced by panelists from two Ireland-based start-ups, both of whom announced new rounds of funding at today’s event.

Serial entrepreneur Pat Phelan, CEO and founder of e-commerce security start-up Trustev, which announced a $3 million seed round, thinks of themselves as a global technology company. “Ireland is fantastic and we have a great team here (based in Cork). But we have to think and act globally,” he said, mentioning that he was moving to the US for a year to help with the company’s market expansion there. “For us being in New York is important, too.”

Meanwhile, Brett Meyers, an Australian ex-pat who set up his e-commerce firm Currency Fair in Dublin, said that while the location important, particularly as a means to attract the right people.  He empathized this as critical a company enters a growth stage – which his outfit is, announcing a new round of $2.5 million today. “You have a small team when you are start up and everyone is involved in everything. Entering a growth stage you need more people and you have to shift your focus to attracting good people and let them do things.”

Noel Ruane, of Polaris Ventures and founder of DogPath Labs in Dublin, also had high praise of the Summit’s host city. “We’ve invested more than $23 million in Irish start-ups this year, which is more than we have put into West Coast (US) companies. DogPatch Labs in Ireland has been a great success with more than 30 companies based there now. Good companies raise money and that’s happening Ireland now.”

Microsoft Ventures has cast a wide net in its investment strategy, putting money in companies throughout Latin America, Asia and Europe. James Maiocco, director of the software giant’s investment arm, highlighted Israel of one of their more successful centers for finding innovation.  “No country has a corner on innovation. Greta ideas and great companies are everywhere. There are certainly clusters that have developed conducive ecosystems, but you are kidding yourself if you think great ideas only come from those 10 or so tech start up cities.”

Accessibility to other like-minded people and meeting face to face rank high on most investors’ and entrepreneurs’ wish lists for an ideal location. “I learn a lot from being in a mix of entrepreneurs. The power of that is magical. For companies, you can quickly adapt products. You pick up things that you aren’t going learn from watching video or reading on the web. You need to sit down face to face. Those kind of interactions happen in dense areas,” said Tony Conrad of San Francisco-based True Ventures.

Conrad pointed out the shift from suburban office parks to more electric and vibrant urban settings that is happening with start-ups in the US, citing the growth of downtown Durham, North Carolina compared to the traditional more sedate setting of traditional tech hub Research Triangle Park

Ciarán O’Leary is a partner at Early Bird Venture Capital Berlin and he praised that city for its electric, creative and sometimes non-conformist thinking when it comes to entrepreneurship. “Berlin attracts people who produce things that a lot of people would dismiss as being dumb. Some of the biggest success in technology are built things that on people thought were really dumb, but there’s an attitude in Berlin that those things are worth pursuing.” O’Leary also noted that its important to have broad et of information sources and not just rely on sources that “confirm your view of the world.”

Regardless of location, most everyone agreed that attitude was a key factor in start-up success, and that the ‘no fear of failure’ spirit that once was relatively unique to US start-ups is now more pervasive in more locations and cultures.

“The current generation is so much more confident and secure with themselves. There’s no paranoia about what others think or a fear of failure,” said DogPath’s Ruane.

Photo via Mashable