Colm Lyon is standing in a conference room in the Dublin office of Arthur Cox at the end of 2001 pitching his fledgling business to potential investors. The surroundings give Lyon and his business a polish and professionalism that defies the reality of a youthful start-up. In truth, he has borrowed and bartered and cajoled his payments business from the ground up. Now, it is time to start paying back on some of the promises, so he sets about raising funds through the old Business Expansion Scheme, which offered small-time investors a tax break in return for backing an indigenous business.

Lyon had done much of the paperwork himself, filling out the various forms and getting pre-approval from Revenue. Indeed, he had only brought on board Arthur Cox, one of the country’s most eminent and expensive law firms, to draft up the shareholder agreement – it was one of the reasons they had granted access to the conference room for his pitch.

Lyons raised the money to finance Realex Payments, his online payments firm, and the rest is history. It raised just €320,000 during that funding round, and never went back to the well. By the time it was sold in March 2015 for €115 million in an all-cash deal, a €10,000 investment – on which you got tax relief on nearly half – was worth €1.2 million.

The actual pitch is another story, and one Lyon explains in detail during our interview. But even now, twenty years later, what really resonates with the entrepreneur is how easy it was to navigate the system. The Business Expansion Scheme was designed to help firms raise capital in a simple and tax-efficient manner. And it worked, helping hundreds of other companies to scale, grow and flourish.

But as he thinks of his day of success in the Arthur Cox boardroom all those years ago, Lyon cannot help but think of a recent call he had with the Department of Finance to discuss the Enterprise Incentive and Investment Scheme (EIIS), the successor to the BES scheme. EIIS is widely regarded as a failure and is treated with both disdain and scorn across most of the business community, Lyon included. It is cumbersome and expensive.

On the call, Lyon made that very point, highlighting how easy it was for him to use the old BES, and how hard it is for the young entrepreneurs of today trying to raise funds through its successor. For Lyon, however, the trouble is that people have been making the same point for the last six years and no one seems to be listening.

Lyon argues it is part of a broader malfunction, where the attention of policymakers is geared towards multinationals and not towards Ireland’s start-up community. He has witnessed it first-hand, he says, while sitting on a government advisory committee for financial services. His proposals to promote indigenous entrepreneurship were gently deflected, while asks from big insurance companies were acquiesced to.

“I remember wondering why indigenous firms were being put into second place all the time at this table.  Somebody from the Department of Finance said it was about the jobs,” Lyon says. “But it’s not just about job creation – it’s about enterprise creation, and that that’s what we’re missing.”

He is not making the case out of personal interest. After all, Lyon and his wife were the biggest winners from the sale of Realex to Global Payments, a $6.8 billion New York-listed company, with a windfall of about €91 million. But he remains passionate about entrepreneurship, and start-ups. He has backed more than 15 of them in fact, he tells me over the course of our lengthy interview. Plus, despite his wealth, he is also a recent start-up founder.

*****

Colm Lyon has sunk €16.5 million from his personal reserves into Fire.

Colm Lyon has always interested me. And for a variety of reasons too. Many entrepreneurs launch their businesses straight from college. Lyon went to work at a bank and rose the ladder at Ulster Bank for 13 years before going out on his own. He was finally comfortable, but uncomfortable working for someone else. He also surrounded himself with the right people, taking mentorship from John Teeling and installing Laurence Crowley as his chairman. When the business was sold, he told the investors the good news at his house.

And, despite striking it rich, he opted to go again, agreeing a deal with Global Payments to retain ownership of a subsidiary company called Fire, which provides digital accounts that facilitate bank transfers, debit card purchases and payments. He has sunk €16.5 million from his personal reserves into the business to date and it is now raising a further €10 million in external funding. He acknowledges he could fund this himself but he believes that some outside support would benefit the business.

So, what drives him? And how did he turn a €320,000 investment into a €115 million payday? Plus, what are his views on Ireland, the economy and the future of entrepreneurship?

In his own words, this is his story:

Becoming an entrepreneur

I think the entrepreneurial bug if you like, or the disease, was always there. There was always an inkling within me that I would have loved to have been an entrepreneur… I suppose at that time I would have just thought of it as my own boss. I always wanted and liked the idea of working for myself. I had no idea what the topic or the business would be but the idea of being able to work for myself was just hugely attractive. Just the sense of freedom that you might get.

I had thought about other business ideas, but back then there was no start-up scene or any incubators or accelerators or anything like that – they hadn’t been invented yet. So, it was very much trying to work it out with the skills that you had. Was there something that you could do? It was not that I had done the same thing for 14 years at Ulster Bank – I’d gotten to see different parts of the organisation.

I was a business analyst when I went in and I always really enjoyed that because you’re looking at a situation where there’s a problem or where there’s an issue, and you’re trying to use the technology, or whatever it might be, to solve that problem or to bring in an element of automation or efficiency to processes. So, I enjoyed the business analysis and the project management side of things. I enjoyed making things happen. 

I enjoyed the idea of the internet and I always feel that now, when I look back, if you’re riding on the back of a wave, you’re in a good space because the wave will move you forward. And for me, it was the moment when I saw the buying and selling of stuff online. You could see the convenience at which you could buy stuff online. It was just shockingly easy, but the payment around it was not. You could see retailers having those issues where they didn’t know how to get paid and some of the banks were sending out card terminals to the retailers so that they could phone the customer and they could type the credit card into the card machine. It was very obvious that a piece of software could sit between it. I think that was the trigger, if you like. 

I remember going down to see John Teeling because he was a great mentor to me over the years. I had gone to see him with two other ideas as well, and he used to say to me, ‘What age are you?’  And I’d be 36 at the time. And he would say: ‘And this is your first idea? You won’t do this one, but I’ll see you in two years’ time when you’re on your third idea. You’ll be 38, it’ll be your third idea and that’ll be the one that you do’. And he wasn’t far off the mark. It is interesting how other people can see you sometimes better than you see yourself.

At the time, it was coming up to the millennium bug. We had retention packages that meant that you got a good lump sum in March 2000 because you were there for the introduction of the euro and you were there for the Y2K, so a lot of IT staff in Dublin at the time were celebrating in March 2000. I basically had a little lump sum so that seemed to be the perfect time to do it. I was 38.

The early days of Realex

It was really hard at the start because I didn’t know all the bits that I needed and what to look for first. Niall O’Cleirigh of Macalla Software gave me an office in his building. I spent a lot of time talking to people. I spent a lot of time circulating through my network – walking people through the idea, the concept, trying to get the business model right, trying to see where we would fit in. And obviously for us to work, I needed to be able to connect into the authorisation host of the different card acquirers – the banks basically. So I needed to connect into AIB merchant services, I needed to connect into Ulster Bank and Bank of Ireland’s credit card systems so that I could take the message from the website and pass it to them. 

A friend of mine, John Mooney, had co-founded the business with me. But he left then to go to America, so he was in the States. He wasn’t an executive, he was a non-exec. And John said ‘Make a shopping list of what you want. What do you actually need to get one customer live?’ 

I had been out trying to raise money, but I couldn’t really raise the money; nobody said yes. It was too ill-defined in terms of what it was at the time. And John’s point was if you could flip the PowerPoint and actually just have it so that there’s one customer live with one bank processing credit cards on their website, that would make a world of a difference. That was how we came up with the shopping list. 

“Looking back on those years, I remember them with great fondness.”

And then I went to a whole host of suppliers and asked them all basically for their services for free. And surprisingly, a lot of them said yes. And then Owen O’Byrne, who was basically the co-founder of Realex, came on board because I had sourced the equipment he needed.

Up until that point, I had nothing for him to work on. But I got the hosting for free, I got the firewall software from another supporter. We got the Windows software from Microsoft; we didn’t have to pay for it at the time. We got the equipment on 18 months’ credit. People helped.

We were essentially replacing the tills with websites if you like, and that’s basically what we did.  And lo and behold, Owen managed in March 2001 to get DirectSki with AIB Merchant Services and little did we know, we went on to process something like €12 or €15 billion a year with AIB Merchant Services. 

But it was March 2001 when we processed that first transaction for DirectSki into AIB Merchant Services. 

Looking back on those years, I remember them with great fondness. You really enjoyed them. There was huge excitement. I remember one time I had a Luka Bloom CD and I was listening to it at the time, and literally, the phone rang, and wasn’t it Luka Bloom himself, so he became a customer. And then we ended up at 19 customers. My old boss in the bank, Michael McCabe, came to me one day and said, ‘You know, you should really raise some money for this business.  You should get some money and try and get all the stuff in order and pay the people you owe the money to’.

We put a little deck together and Michael went to other people, and he said, ‘I’m investing in Colm’s business, I think you should too.’ And it’s only now when you look back you realise how powerful that is. Because a guy of his standing is going out there and he’s saying ‘I’m in, so I think you should as well. I believe in this business.’

So that’s how we got the BES investors, which became a kind of a great story in itself.

Raising funds and attracting investors

We went to raise money from the Business Expansion Scheme. We filled out all the forms ourselves without any external assistance. I managed to get the letter from the Revenue saying that if we did raise the money, we should probably qualify. The only thing I needed was a lawyer to do the shareholder agreement for us. So, Arthur Cox stepped in. What was brilliant about Arthur Cox was that I ran the presentations in their conference rooms. So, we had the brand association of having Arthur Cox involved. And WorldCom was doing our hosting and Microsoft was the software that we were using.

“And then, in some respects, the inevitable happened.”

Owen had prepared a piece of software that showed the transactions as they were coming through the system for the 19 or 20 clients that we had. And I remember standing up in the Arthur Cox office toward the end of 2001 and there were people in the room. I went through the presentation and then as I finished the PowerPoint, I flicked over to the monitor. We explained that there was an Irish based subscription company that was a customer who was selling something to do with a baseball game that was happening in the States. And they’re obviously having a sale or something because transactions are flowing through at the moment. And one of the guys was like ‘So, you’re making money when there’s a baseball game going on in the States, basically, because one of your customers is connected with that in some way?’  And we said ‘Yeah.’ 

And again, it’s only afterwards you realise how powerful that demo was, but it was almost accidental that we showed it. But it showed that as an Irish business, and as a small little business, we were able to participate in a global economy. We were demonstrating there was something here that showed there was a little gap between the retailers and the acquiring banks, that somebody needed to step in to make it easy.

And if you make it easy for both the businesses to sell online and you make it easy for the banks to be able to work with those companies who are selling online – I think it’s called the bowtie. We became the knot in the bowtie. But, as I say, I do look back at those years with a great fondness, they were really enjoyable times.

We raised €320,000. And that’s all we ever raised. I think for a €10,000 investment, for which they would have received tax relief – so it would have been a net €5,200 or whatever – I think it was €1.2 million return.

Scaling, growing, advancing Realex

We were very fortunate because as we got bigger, we were taking on more customers. The web development community was one that we got well integrated with. And as the developers then integrated into Realex for one client, they’d be recommending Realex for other clients, So, the level of adoption started to increase. And then, as our clients went online and started selling more online, the value of those contracts also increased. One of the big breakthrough moments was when tendered for the Aer Lingus business. We were small and wondered if Aer Lingus would put €500 million a year through a company with five people.

And I was trying to argue that I’ve had 27 servers, so I’ve had five times as many machines as I have people. And we won that business, and that I think gave us a huge boost. And on the back of that, a year later we won Virgin Atlantic’s worldwide business. We won the AA Insurance in the UK, Paddy Power, we started getting all these big brand names on board. We set out a bold vision of the future of the organisation. And we said, look, we really want to scale this up, we really want to get big.

And so, instead of direct distribution to retailers who were selling online, we started going to the actual card acquirers, so the banks who were processing the credit card transactions, and said, why don’t you white label this into your product.

HSBC came on board, Elavon Merchant Services came on board, Santander in Spain came on board. It took us nine years to get 6,000 retailers on board, and then I think three years later we had 12,000 retailers on board. So, we found that distribution became a very important part of the strategy, as well as the product. Up until that point in time, I was just focused on the product.

But the team that I had in Realex at the time, the management team was a super team of people, who as I say, who were all bought into this vision, who wanted to see this happen. And then, in some respects, the inevitable happened.

Taking the decision to sell

By 2014, around €28 billion a year was going through the system for 12,500 retailers. We had moved into Sir John Rogerson’s Quay, we got a lovely office in there, and it was right on the river. There was a great excitement. You could hear different languages being spoken in the office; it was great. We had 170 staff.

We had offices at one stage in London, Paris and Amsterdam. We closed the Amsterdam one, but we kept the Paris one for a long time. And there was a great sense within the team, but we knew that the status quo wasn’t going to work forever.

This journey, as I say, it comes in waves of growth, and you’ve got to try and work out then what’s the next one. We knew that the product worked first, we knew the distribution through channels was working. So what’s the next thing? It has to be even further internationalisation, and further opportunity to distribute the product. And so, we put together some plans, and we also felt that we could move more into the financial side of things ourselves as well, and hence the creation of Fire at that time too, as a subsidiary of Realex.

“I think for me it was just a massive release”

So, we started to look at creating a more holistic solution for retailers, a solution where they could not just sell online, but when they’ve sold online, they can put the money into an account with us, and then they could use a debit card to spend the money in that account, and so on. So, we started to do all that, and then between the jigs and the reels, as happens in these situations, we went through a process, and we had great interest from strategic investors who were interested in acquiring the business.

Their interest obviously was to be able to take what we had and, because of their vast distribution, they could add hundreds and thousands and millions of retailers. So, these companies could take this solution and it was very clear to us that Global Payments was a fantastic fit. They had such worldwide global distribution. They didn’t have any e-commerce gateway. Our people became their people, and they became experts within that organisation in this area, and one of the greatest acquisitions I think that they said that they made – largely because of the talent.

“When I think about learnings, I think back to the John Teeling school of simplicity.”

Was it tough to sell? I didn’t really know what I wanted when I went into the process other than I knew I didn’t want things to stay the way they were. And it’s an interesting kind of thing that you’re forcing your hand when you do that. So, we actually got it down in the end to two offers of investment – I think it was €14 million is what we were thinking of raising if we went down that route.

And we had two offers then to acquire the business and we went out for a reflection dinner as we called it, with the key management team and the original shareholders who were working in the company.

And I just went around the table and said ‘look do you want me to go with A and B which is investment or C and D because at this stage we need to decide the direction that we’re going, and everybody said to go for the acquisition. I was the last one to speak so it didn’t matter at that stage and the consensus was the scaling of this business into the future was more likely to happen if we were part of a large international financial organisation. And that was absolutely true and it has continued to scale.

I think for me it was just a massive release – not worry or burden but just this enormous sense of relief that it was done and that it had happened. You feel released from the operational side of the business – because I wasn’t involved in running the business from the day that it sold. And it’s just that sense of kind of release and relief that you get at the same time is a phenomenal feeling.

I had agreed that I would acquire Fire as part of the exit and that solved a problem for them because it was a regulated entity that still needed venture money. And they didn’t want to take that into their organisation.

Starting again: The Fire story

I mentioned the wave about when people were buying online and selling online back in 2000. Right now, I’m seeing two things. I am seeing an accelerated adoption of digital processes and technology by businesses – that businesses are just adopting more and more digital solutions all the time, putting stuff into the cloud, using all the cloud-based applications that they can to be able to run their businesses. It’s happening at such a pace that sometimes you nearly have to step back and realise that businesses are going digital at 90 miles an hour.

And the other thing that’s really changed is that people now have their bank accounts on their phones. And this hasn’t yet been tapped into in a business sense from a payment perspective. And it is inevitable to me that there’s going to be this wave of account-to-account based payments and that the card is going to be displaced.

That there is a big change coming because technology has advanced to the point where we now for example can demo how people can take out their phone, they can tap it against a tag, their bank app opens up, whichever bank they’re with, they authorise and make the payment and there’s no card involved. This is a change and so it’s a combination of businesses going digital and bank accounts being accessible via your devices, that to me means that there is an inevitable merger of these two things going to occur.

And to take advantage of that trend, you need to have at the heart of this a digital account. And banks don’t make digital accounts, banks are making the same accounts that they made years ago which are basically by-and-large paper-based. One of my banks that I deal with recently got rid of all my historical transactions and they put them on PDFs now that I have to download that I can’t search. So, it’s like they are not digital-focused in their solutions, and you know they’ve got such a broad range of services that they provide that the payment side of the account doesn’t hit high up on the agenda.

“We just kicked off an external funding round of €10 million.”

So, for me there’s a great opportunity here to position an organisation as a high-tech digital account like that is also an account that cannot just be a regular account but it’s an account with a range of services that are broader and more than which you will get from a bank. It is also an account into which you can accept payment directly from other bank accounts from payers so that you basically eliminate every middle man that’s in the equation at the moment from card providers, terminals, acquirers, issuers – you don’t need any of it because direct payment is going to happen and so that’s what we conceived up back in 2008 long before the world was ready for it and unfortunately we tried to build both sides of that equation – both the business side and the consumer side and that was never going to happen, it was too much.

So, we waited.  And we are now there.

We were looking at what’s called, PSD2 – a payment services directive that came in Europe in 2018 and we got regulated with the necessary licences to be able to provide businesses with these digital accounts and we started to get feedback as well from some of your early-stage customers. You start to get a bit more excited, and you start to potentially change things in a certain way and bit by bit by bit we realised that the API (Application Programming Interface) that we had over the account was the huge thing that made us different.

‘You won’t do this one, but I’ll see you in two years’ time when you’re on your third idea. You’ll be 38, it’ll be your third idea and that’ll be the one that you do’

Somebody actually said it to me, ‘how come Google will tell me where I’m eating my lunch and my bank won’t tell me when a lodgement’s arrived?’  Well, we can do that and we can also give you 10,000 IBANs, we can also issue you with 5,000 cards and we can let you through the API manage the linkage between the card and the account if you want to. So, this card is coming off this account now but two minutes later you have it coming out of that account. So, we created this platform, which is basically a digital account platform, and it allows us then to bring a range of different services to a host of different companies.

I’ll give you some examples – Grid Finance, Accelerated Payments, Invoice Care. So, they all use Fire as a platform and they use it because they open multiple accounts for each of the loans that they give out. So, it’s completely automated if you like right, and it works brilliantly for the likes of Grid in the case of merchant cash advance which is a really very good product that they give to retailers when they want to buy stuff. And they’re able to then take the repayment from their card proceeds. Buymie – they use the Fire platform and they use it for cards, because all the BuyMie shoppers carry Fire debit cards. And then he’s able to use the API to control when the card is used, how the card is used, how much it’s used for and where it’s used, right and so he’s got this API that gives him. So yes, we’re doing the same thing as what a bank account might do but we’re wrapping the whole thing up in an API that makes it really integrate-able into business processes.

Fire and the future

I’ve funded it to date to €16.5 million, and I haven’t made any secret around it. And we’ve brought it to the stage. Two things that hit us hard. Brexit and then Covid. We got over Covid relatively quickly because we were able to kind of focus more on a small number of large deals rather than trying to do a big number of small deals. But prior to Covid, Brexit hit us, and it was horrible. Up until that point in time, we were passporting our licence into the UK. We knew that that would end, so we had to get regulated in the UK.

But getting regulated in the UK was in some respects the easy bit – that’s the application that you put into the Financial Conduct Authority. But we had to separate out our platform and we had to basically run two organisations that are independent of each other because they’re separately regulated. And all of our client funds for example had to be segregated across the two organisations. We had to reissue account numbers to all of our UK customers. We had to go through and get two Mastercard licences. So, that hurt us badly. But now we’re in a very, very strong. Our year-end is the end of April and we’re probably expecting to do about just over €2 million in revenue. We’re processing about €1.5 billion a year through the system at this stage, and we’ve about 3,000 customers.

What we want to try and do is to take our digital account, and we want to try and embed it into the business ecosystem as much as we can. So, we’ve a whole load of business application providers out there – ERP, CRM, property management, whatever it might be. And we believe that those platforms, that if they could integrate to a digital account, would then give their customers a really enhanced experience. And that’s what we’re going to try and do. It’s that we’re going to try and make Fire the first-choice digital account that business platforms use to help their customers to manage their funds.

We just kicked off an external funding round of €10 million. So, what we’re doing at the moment is rather than me funding it exclusively, which I could do and I’m happy to do, we feel that the company at this stage that it’s at now would benefit from an external investor who maybe has good experience as well in both this sector and also in scaling the business. So, we just actually kicked off a funding round, an external funding round, of 10 million. That takes us to the next stage if you like. It wouldn’t be the end of the journey. For me, I feel that if we get the distribution right, the distribution strategy right with Fire, I believe it could be a multiple of Realex. It could be a really, really big organisation.

Regulation and competing with banks

One of the things I am really keen on is the early start-up stage. I really like the blank page at the start and the confusion that that brings is what’s my first step. But I’m very keen on how policymakers can make it easy – or not – for various stage start-up companies, particularly those who are going to be regulated.

So, we are a regulated entity. And being regulated is necessary in order to be able to make and sell the services that we provide to consumers and businesses. But sometimes I think from a policy perspective we forget that there are companies with massive balance sheets and 10,000 employees here that are regulated, and then there are companies with five people. And where do we set the expectation? Because it is the same regulation that applies to both. So, how can we manage that in a better way?

“I think about it with Fire – why are people using Fire and can I articulate that message clearly.”

And there are a number of what I would regard as structural issues that exist within the market. So, for example, we are classified as either payment institutions or e-money institutions. We are not banks. So, you go for a licence depending on your business model as a payment institution or the e-money institution. And that’s common right across 28 countries in Europe including the UK now. And if you as a payment institution or an e-money institution, for example, need access to the clearing system, you need to go through another bank. And fundamentally in my head, that’s wrong because I want to compete with these people.

So, why do I need to go to one of my competitors in order to compete with them? And in the UK a number of years ago they addressed that issue, and they gave institutions like ourselves direct access to Bank of England settlement accounts. That hasn’t happened from a European perspective. And to me, that’s a policy discussion that needs to occur, but it’s not happening. In fairness, the Central Bank has been very open and they’ve been very engaged with me, particularly over the last six months. We wrote about a six- or seven-page document to both the Central Bank and the Competition and Consumer Protection Commission.

I shared it with the Department of Finance as well. All with a view of just trying to highlight that, guys, that there are issues. They are also barriers to innovation in the Irish market that exist in the regulated market here. And these would be subtle things but when you look at the open banking space and when you look at the opportunity that it gives retailers to be able and businesses to be able to get people are using a new digital bank. But with any bank account. And that’s open banking, and what we should be doing here is discussing that. But when you have a BPFI which is a trade association trying to bring out what I would classify as a closed banking solution, which they’re trying to get permission for at the moment, that conflicts with the objectives of an open banking world.

An indigenous company in a world of multinationals

A lot of the sort of policies aimed at the start-up space are just not landing, like the employee share scheme or the EIIS. It makes my blood boil sometimes when I see that. I was on a call with Scale Ireland and the Department of Finance recently to discuss EIIS, the new BES.

And I made the point that I as a person working on my own was able to fill up that form and to get BES  approval for my business and I was able to raise that money, albeit with support from Arthur Cox, but it was like minimum in terms of the effort. People are saying today that they’re actually paying a fortune to try and get help to get the money, and it makes no sense whatsoever.

“Policymakers seem bogged down and there is a lack of understanding of what it’s like to be in a start-up world.”

I had a first-hand experience of it in when I was chairperson of the Fintech and Payments Association here. I joined the industry advisory committee for the IFS 2020 as it was called at the time. Simon Harris was running it back then, and it was a group for the international financial services strategy, and I was there to represent indigenous firms. It was the rebranding of the old Clearing House Group. 

I remember sitting in that room with investment services businesses, investment banks, asset managers, insurance companies, these massive big businesses that were in the IFSC, and I would try to raise issues, and I remember being told at the time ‘Ah that’s really a budget issue. You need to do that in your pre-budget submission.’ And then the next item on the agenda is like ‘How do we change the legislation for the insurance companies?  Because they’ve been asking for something to be changed.’ And I remember wondering why indigenous firms were being put into second place all the time at this table? Somebody from the Department of Finance said it was about the jobs. Somewhere along the way in people’s heads, there’s this idea that if a start-up goes from four to six people, that’s a 50 per cent increase in its headcount.  And for any startup that’s a massive, massive step, right. But if you have got 400 people working in your organisation and you take on another 50 people, it’s a small increase.  So, the lesson for me was that this hasn’t sunk in, that it’s not just about job creation – it’s about enterprise creation, and that that’s what we’re missing.

And the one that really hurts is the employee share option programme. It shows a complete lack of understanding as to what it’s like to be in a start-up, and why people want to work in start-ups because they want to learn. They want to see what it’s like because maybe they want to do their own start-up in due course. I think awful is the manner in which that there is no simple mechanism by which we can give those employees a proper reward, and to treat share option schemes in the same way as you treat property speculation – it just makes no sense to me. They’re completely different things and certainly as a business here in Dublin we find it really difficult to compete with multinationals particularly for technical talent, and it’s an ongoing issue that happens time after time after time, and we need to be given some parity. People want to work in the start-ups, but it reaches a point in their lives where they say, ‘Well look, I actually can’t anymore because I need something else here. I’ve a lot of time for what Scale Ireland are trying to do. I think they’re doing a great job. Unfortunately, policymakers seem bogged down and there is a lack of understanding of what it’s like to be in a start-up world.

Backing start-ups, scouring for investments

We are involved in about 15 active investments. We have backed Advisable.com, which is Peter O’Malley’s business. It is a platform for freelancers and companies. We have Gudog with Timothy McElroy. It used to be HouseMyDog and it became Gudog.  So, it’s one of the biggest pet minding marketplaces and dog daycare.  He’s just recently moved into dog food as well. So, we just recently increased our investment there actually.  And VT Networks is another one.  VT Networks are doing really well.  They just got An Post and ESB and Glanbia as clients. We have a small stake in the Business Post.

We also put money into a start-up fund in Germany, so that way we don’t have to look for opportunities, and then we can do is we can co-invest if we like. We are involved with Frontline. We went into the Frontline Seed Fund III and we have a commitment to Frontline X, which is American companies coming to Dublin. 

It’s good because, well if nothing else, it’s important to support that community as well. Obviously then some of the investments got hurt. We had some investments in the travel and tourism side of things.

We invest as a team through a vehicle called Payvation. We don’t have a website or anything. So, it’s mostly just inbound, and we look at the people. We were doing pre-revenue and now we’ve stopped doing pre-revenue, because you don’t want to put everything in one basket if you like. And with the funding round in Fire starting off, we’re really busy as well.

We put money into funds that do a particular type of investments – it is a way of still keeping your asset allocation balanced. But we would look at the people first. And then we would look at the obvious usual kind of stuff – the opportunity and the problem and the product and the ability to make the stuff.

Strategy and learnings

When I think about learnings, I think back to the John Teeling school of simplicity. You are a businessman, you are nothing else and you have got to be able to make something that people want to buy. And to do that, you have to know your proposition better than anyone else.

One of the big helps for me in business over the years, has been, that distinction between the product and the proposition.  Really understanding their proposition is so important. And it is really hard to do – that is the other thing – it is really hard. And you make so many assumptions and you are constantly trying to validate that your idea around the proposition is solid and right. And that is what being in business is all about. Because you will find any way to make the stuff. But you have got to be able to sell it. So, for me, it comes back to sales all the time and understanding that proposition. That certainly is something that I think about quite a bit.

I think about it with Fire – why are people using Fire and can I articulate that message clearly. Even now I am thinking if I could be better at that still. I still could learn to express our value proposition in a better way. And how am I going to do that? Well, I am going to have to find more customers, talk to more customers, and as I talk to customers directly, all the time, particularly prospects and trying to find out what do they want, why do they want it, what value do they think it is going to bring to them? So, I can understand really the problems that they have got. And a lot of it comes from this digitisation of all the processes around them. That is what is really driving them all forward right now.