Bloomberg News

Tech Startups Replace Bankers as Dublin Begins Recovery

June 09, 2014

Google Inc.'s European Headquarters

A man and woman carry their shopping bags along the Grand Canal Dock and look back onto the European headquarters of Google Inc., center, in Dublin. Photographer: Simon Dawson/Bloomberg

Dublin’s economic revival starts at places like 23 William Street South.

The two-century-old building is filled with technology startups in the heart of a city once dominated by bankers and real-estate agents. A year ago, the four floors and basement lay vacant after the country’s worst recession since records began in 1948.

“It’s very doubtful we would have been able to get this building in this location a few years ago,” said Conor Stanley, 37, one of three founders of Tribal.vc, the venture-capital company that took a 10-year lease on the property and now rents space to 20- and 30-somethings fighting to found the next WhatsApp Inc. “The drop in rental prices allowed it all to work.”

Already host to U.S. companies like Google Inc. (GOOG:US) and Intel Corp. (INTC:US), partly attracted by a 12.5 percent corporate-tax rate, the city is playing catch-up at the other end of the industry. Surveys show Dublin lags behind London, Berlin and Tel Aviv as a base to build tech companies. A report commissioned by local leaders found a “lack of ambition” to create a European startup hub.

“It will always be a double-edged sword,” said Barnaby Voss, 32, co-founder of Blikbook, an online tool for university teachers to manage their workload. He moved to Dublin from London last year. “On one hand, the big international companies add to the buzz around Dublin. On the other hand, it can be difficult to hire staff. People will tend to accept a big offer from a Google over startups. It’s a safer option.”

Selling Dublin

About 105,000 people work in technology in Ireland, up from about 75,000 in 2009, accounting for about 5 percent of all jobs, according to industry association ICT Ireland. In Israel, called the “Start-Up Nation” in the title of a 2009 book by Dan Senor and Saul Singer, about 10 percent work in the industry.

In Ireland, three-quarters of tech workers are employed by multinationals. Dublin didn’t make the top 20 in the 2012 Start-Up Genome Report ranking, compiled by San Francisco-based Compass Inc., which collects data on technology companies.

Against that backdrop, city authorities are seeking to hire a startup commissioner for two years, having studied London and Santiago in Chile -- both in the top 20 list.

“We need someone to be an ambassador, a champion, to be able to shout about Dublin a bit,” said Patrick King, policy and communications manager at the Dublin Chamber of Commerce. “If you look at Startup Chile, for example, they make that story come alive a bit more.”

Brewery Smell

In the shadow of the Guinness Brewery, where the smell of hops lingers in the Liberties neighborhood, sits a campus called the Digital Hub. After a failed collaboration with the Massachusetts Institute of Technology, the government turned a space into a workplace for about 70 tech companies.

Down the River Liffey toward the docklands zone is Wayra, an accelerator pioneered in Latin America and owned by Telefonica SA. (TEF) It houses 10 startups in the Spanish phone company’s Irish headquarters close to the area known as Googletown. William Street South, a hive of the city’s hippest bars, cafés and fashion shoots, lies in between.

Sitting next to the Miss Fantasia sex shop and close to Grogans, a bar frequented by some of Dublin’s best-known writers, No. 23 mirrors the rise and fall of the economy.

In 2007, the height of Ireland’s real-estate boom, Anglo Irish Bank Corp. provided financing for a company controlled by one of the city’s largest developers to buy it.

Batman Posters

The developer later went bust, and the building ended up with the National Asset Management Agency, set up by the government to purge the financial system of commercial real-estate loans.

Tribal signed its lease in December after the previous tenant, a coffee-shop company, went bust. The company pulled up carpets, whitewashed the floorboards and walls and filled the building with Ikea furniture. The stone staircase is stripped bare, Batman posters lean against a wall, and in the basement a red light flickers to signal when the cubbyhole for making private calls is free.

Each Thursday, Tribal hosts a lunch for the companies in the building. On a mild afternoon in May, about 20 people gathered to eat bagels, drink bottled water and listen to new arrival Simon Dempsey discuss his travel website LikeWhere.com.

Wearing jeans and a white T-shirt, the bearded 37-year-old tells his audience that feeding the pigeons in San Francisco is illegal but there’s a hotel in Berlin with coffins fashioned into beds.

‘Great Spaces’

“We found a few great spaces around Dublin, but the terms just never really suited,” said Dempsey, who moved back to start LikeWhere after 10 years in Leeds in the north of England. “Landlords want long leases and that just doesn’t really suit startups.”

Across the city’s leafy Georgian squares, Blikbook co-founder Voss reckons Dublin is about 25 percent cheaper than London to establish a startup. Rents alone declined about 60 percent in the wake of the real-estate crash.

A dozen people work in his Mount Street office, between Enterprise Ireland, the state agency that invested in the company, and the cobblestoned square of Trinity College Dublin.

“Rents in London are crazy,” he said. “In Dublin, you can have a nice office in quite a prestigious area as opposed to a dingy warehouse in the middle of nowhere.”

Filling Posts

The downside is finding staff. Google employs about 2,500 people in the city. Housed in an old cinema, Twitter Inc. (TWTR:US)’s European headquarters are a bike ride away, while accommodation finder Airbnb Inc. is hiring. Pay in technology companies rose 6 percent last year, underscoring demand for talent even with the nation’s unemployment rate at 11.8 percent.

A solution for the entrepreneurs is the model employed by established companies: Half of Blikbook’s workers are from outside Ireland, coming from as far away as Ukraine.

About 20 percent of the 56 people working on William Street South are from overseas, and that number may rise as two more startups prepare to move in. Charging 250 euros ($340) a month per desk to break even on the project, Tribal has had to turn away more inquiries as projects proliferate.

“We’re not looking to make a profit from the building,” Stanley said. “We had some upfront spending. We may get that back, we may not. But it suits us because we are creating this community.”

To contact the reporter on this story: Dara Doyle in Dublin at ddoyle1@bloomberg.net

To contact the editors responsible for this story: James Hertling at jhertling@bloomberg.net Rodney Jefferson


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