@BarryMDownes - CEO#TSSG_WIT

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Agenda

• Overview of the TSSG.

• TSSG Innovation Platform.

• TSSG approach to developing start-ups and some lessons learned.

• TSSG Start-up Platform.

• Q&A.

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TSSG• International Research Institute hosted by WIT. • Founded by Prof Willie Donnelly in 1997 and led

by CEO Barry Downes. • Has 140+ staff and is 100% self funded.

• Expertise in key areas relevant to EI/IDA TIME cluster: • networks, • mobile and • communications services.

The Telecommunications Software and Systems Group (TSSG) at WIT

• Completed over 110 direct industry projects for start-ups in Ireland over the past 3 years and has spun out a number of leading international start-ups such as FeedHenry Ltd.

EXPERTISE

• On doing world class research and innovation - then turning this into economic impact in the South East and Ireland by supporting EI and IDA clients and by creating and supporting start-ups.

FOCUS

IMPACT

Networks

Network VirtualizationSoftware Defined Networking (SDN)

Mobile

Mobile Cloud Platforms (PaaS) and advanced mobile applications

Communications Services

Communication Services Platforms (PaaS) and

applications e.g. Web RTC

TSSG Core Focus Areas

Cloud

Software Platform and Infrastructure as a Service

Virtual and Augmented RealityVR/AR Communications, 3D User Interfaces, Education,

Simulation and enabling hardware

Data Mining

Predictive AnalyticsSocial Network Analysis

Data Security

TSSG Core Focus Areas

•Knowledge and IP•Publications in Leading Journals•PhD Students and Graduates•Academic Network around the World

•Powering Industry’s R&D Centres•Solving Industry Problems•Identification of Future Problems

•Driving EU Research Networks•Establishing Technology Roadmaps•Providing Innovative Solutions.

•Setting European Policy.•Defining European R&D Agenda.•Living at the Heart of Europe

•Building Innovative Companies•Impacting Irish SME’s•Transforming the Local Ecosystem

Co-Directors SFI Connect Research Centre

TSSG Innovation Platform

TSSG Approach to developing Start-ups / Lessons Learned

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Product & Customer Focus• Our focus is on building software product

companies that can scale internationally.• Key questions include: What’s the problem we are

trying to solve and for who?• Does the product offer benefits, in the customer’s

minds, different from and superior in some way – e.g. better, faster, cheaper to what’s currently offered by other solutions, including the status quo?

• Find out – go talk to the target customer (lots of them).

• Build an MVP and get feedback.• Then rapidly refine to increase the value offered in

each release – ie customer driven development.

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Ref : Steve Blank (2005) Customer Driven DevelopmentRef: Eric Reeis (2011) Lean Start-up

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Market Focus

• Ideally the market for the start-up is large and rapidly growing.

• Looking for big opportunities, often where we can disrupt existing ways of doing business or serving customers needs.

• A high potential business in a huge, rapidly growing market will require venture capital to support growth.

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Adapted from Everett Rodgers (1962, 2003) and Geoffrey Moore (1991, 2013)

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Industry Focus• We believe it is important to

understand the industry we are competing in and understand how attractive or unattractive is it.

• If the industry is a poor performer overall and are there persuasive reasons why, how we will fare differently?

• Industry structure can be overcome but requires a real understanding of the critical success factors and honest assessment before trying to.– e.g. Music industry

– Selling directly to Telcos

Ref: http://www.imro.ie/music-creators/music-industry-links/structure-of-the-music-industry-in-ireland/

Porter, M.E. (1980, 2008)

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Competition

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CompetitionWhat is our unfair advantage?

• How much will it cost to acquire and retain customers?• e.g. mobile games.

• Will margins be adequate to cover the cost structure?• Will revenues be adequate in relation to the capital

investment needed and the margins generated? • How much cash must be tied up in working capital

(inventory or other) for how long?• e.g. IoT hardware products.

• How quickly will customers pay?

Is the business model economically viable?

Competition is dynamic!

• Patents, trade secrets and so on – that other firms cannot likely duplicate or imitate to compete?

• Superior organizational processes, capabilities or resources that others would have difficulty in duplicating or imitating?

• Superior product benefits that are difficult to replicate.• Network effects.

• Competitors react!• Now image dynamic competition for FeedHenry from

the previous slide …

Osterwalder, Pigneur (2010)

The Start-up Management Team

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Building the Team

• Can the team identify the Critical Success Factors (CSFs) in the industry?

• Can they demonstrate that they can deliver on these CSFs.• What are the gaps and how can they be addressed?

Can the team execute?

Connectedness

• The need for a team.• The need to have different skills and creative tension but

be able to get on the same page re strategy.• Work ethic - Start-up’s require ferocious work and hours.• Drive and Passion!

• Who does the team know: • up the value chain: suppliers and partner? • down the value-chain: customers?• across the value-chain: competitors and substitutes?

• The more connected the better.

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Putting it all Together

Ref: John Mullins (2003)

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Finance

• Be frugal…. as if its your own money.

• Beg and borrow before you spend.

• Manage cash-flow aggressively.

• Build relationships with the Revenue, customers, suppliers, your bank, and your corporate council.

• Get Audited from day one.

• Manage the company so that its easy to do an investment due diligence and secure investment.

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Other Considerations

• Exhaust your network and every option to hire great talent.

• Can’t complete with Google / facebook on salary or brand but you can exploit the flexibilities of a small company.

• Reward with shares, options, holidays, bonus, travel opportunities, working from home.

• Make your start-up a great, fun and exciting place to work.

• Communicate all the time and let everyone know what’s going on (easier said than done).

• Leverage the supporting agencies – e.g. SEBIC, LEO, Enterprise Ireland.

Technology

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Software Process / Tools

TSSG Start-up Platform

SCIENCE

OtherResearch

Organizations

Angel Networks

and Incubators

Legal and

Audit

Sales Support

VCs

R&D through EI Programs:

Vouchers partners

EI & IDAInternational Office

EU Partners

StartupsEI Clients

Silicon Valley

Multinationals / IDA Clients

Support & Services

HR/FinancialConsulting Recruitment

The TSSG Start-up Platform

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Finally …

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Funding

• For high-growth technology start-ups that target international markets funding is key:

• There are a range of funding supports from start-up, to seed, to scaling: – New Frontiers, LEO, BIC, HBAN, the Banks,

Enterprise Ireland and Venture Capital.

• But how do you access them?

Questions@BarryMDownes - CEO

#TSSG_WIT