“There was hope and ambition in the air. The whole internet economy had started. It was also bedlam, a kind of wild west in a way.”
On the desk in front of me are magazines chronicling the history of Ireland On-line, our island nation’s first internet service provider (one glance is enough to have you hearing that tinny dial-up tone ringing in your ears). On the shelf is a photo of a youthful looking Bill and Hillary Clinton, taken during their first days in the White House. All that we need is a bit of Italia ’90 memorabilia, maybe an episode of Scrap Saturday on the radio – and we’ll be squarely back in what National Geographic called ‘the last great decade’.
If anyone would be qualified to navigate the Tardis that gets us there, it’s the man sandwiched between the Clintons in the picture – Colm Grealy, CEO of Adforce and the man commonly credited with bringing the internet to Ireland. He probably should be a billionaire by now, but while he never quite got his financial dues for being the Neil Armstrong of our digital age, Grealy remains one of the country’s more interesting serial entrepreneurs and his story is bigger than pure nostalgia.
He grew up in Artane and worked as a special needs teacher in a national school until destiny called. There have been numerous critics of the anonymity of the internet as it developed, and the problems that this has caused to the present day, but Grealy says it was this very aspect of the nascent technology that first convinced him of its potential for the country. “I travelled to the University of Swansea, which was one of the world leaders in the area of special education at the time,” he recalls. “I saw a group of students there who were deaf and dumb and they were chatting on these portals. It was a black DOS kind of screen.”
“They told me this was a thing called the internet and that the people on the other end were in a university in Atlanta. It was the only medium through which they could communicate in which the people they were communicating with had no idea about their disability, so they could be judged solely on the content of what they had to say. And this, they said, was hugely empowering for them. My mouth was open. I knew it had a lot of potential.”
He’s modest about his reputation as the man who brought the internet here, presenting himself more as a Steve Jobs to the Steve Wozniak of fellow internet pioneer Barry Flanagan: “He set up a thing called Ireland On-line (IOL) and the first investor was Barry Grealy, my older brother. So Barry built it, and I sold it.” This was no easy feat in Ireland. People were suspicious of the new technology, early adopters were thin on the ground and many people were put off by the expense.
In the mid 1990s, a modem was £400 and it was another £200 to connect to the internet. Then when you’d paid for all that, you had only a smattering of people across the world to communicate with. “I’d come out of work and change out of my jeans into a suit in the toilet of the university and then present to an IT person who spoke a different language to me – but I was three steps ahead when it came to the internet,” Grealy recalls. “I could genuinely put faces on the first 500 people who went online in Ireland.”
“We’d put about 100,000 into the business and sold it for 2.5m, which I thought was a great deal,” Grealy recalls. “I ran it afterward for two years and it was then sold for 110m. So you live and learn. Hindsight is a wonderful thing.”
Predictably, several household name journalists in Ireland, including Vincent Browne, Ian Dempsey, Larry Gogan and Gerry Ryan, were amongst this group. “Before we knew it, we had 10,000 customers, then 15,000 customers. We had to have thousands of modems to keep pace. I was passing through Portlaoise and I went into the post office one day. And over the girl’s shoulder in the office I could see a bank of flashing modems and I wondered why the post office would have such a lot of modems.”
Grealy saw that one of the early adopters of the internet had been then-CEO of An Post John Hynes – so he sought out a meeting with him. He and Grealy did a deal whereby IOL piggy-backed on An Post’s infrastructure. It became the first nationwide internet service in Europe and the system evolved into such a critical part of An Post’s operation that the semi-state ended up acquiring IOL. Two years later, in 1998, businessman Denis O’Brien acquired the business. “We’d put about 100,000 into the business and sold it for 2.5m, which I thought was a great deal,” Grealy recalls. “I ran it afterward for two years and it was then sold for 110m. So you live and learn. Hindsight is a wonderful thing. There was no real venture capital in Ireland at that stage and there weren’t any real success stories. We were getting 20 times what we put in – we thought we were doing as well as we could.”
As more and more people connected to the internet the next big business question was, where they were going to go online? “We set up online.ie and it was going to be a onestop shop online, news, sports, business and so on – sort of like Yahoo!” In fact Yahoo! would look to acquire the business, and Grealy paints a vivid picture of the clamouring that went on in these early days of the digital revolution: “I launched a thing called First Tuesdays. The pitch was ‘this is where ideas meet money’. It took place at what was then Zanzibar on the quays. We thought we’d get 30 or 40 people but 400 showed up. It was like a ballroom of finance. You had money guys and ideas guys, desperate to meet one another. The following months we started a badge system. There was hope and ambition in the air. The whole internet economy had started. It was also bedlam, a kind of wild west in a way.”
Things were moving very fast, however. Within months Nasdaq peaked and the whole implosion of the digital sector started. Grealy had to navigate his business through the tough years that followed. “We survived because we could still generate revenue,” he says. “We took the publishing system we had and made it available to companies. We’d acquired Irish Abroad in the US – a social network for the Irish (which brought him into contact with Irish Voice publisher Niall O’Dowd, who made the introduction to the Clintons). In the midddle of this blaze of publicity he also set up Dublin Daily, which was like a nascent version of the Daily Mail Online – targeting the young female demographic, with a mixture of celebrity gossip and hard news.
There was also a newspaper version: “It was the one I was sorriest that it didn’t work out,” Grealy recalls. “We made some disastrous editorial mistakes – including moving sports from the back to the middle and launching on the week of Cheltenham but having no horses. “It was the first online rival to the established newspapers and I hadn’t realised how seriously they would respond to the threat. Instantly there were rounds of freebies: CDs, two-for-ones, restaurant vouchers, all of that. As soon as one ended and you thought you had breathing room another would start.” He sounds more passionate about the newspaper than anything else he mentions: “The buzz of seeing someone on a bus physically holding your newspaper – you can’t beat the rush of that.”
But that high made the low that was to follow even more difficult. “When you have to tell staff that their jobs are gone, that’s very tough. This was before the recession and there was really very little sympathy in Dublin for businesses that didn’t work out.” After the demise of Dublin Daily, he began working as a consultant and became involved with 02 as the phone company grappled with the implications of the internet for mobile operators. “This was prior to the invention of the iPhone, so it was hard to predict all the changes that would bring,” he says. “I became involved in anything that was to do with ads on a phone. It looked very much like the operator was going to be bypassed. Once the iPhone was invented all of the internal strategies had to be binned, it was a game-changer for mobile operators.”
I was three steps ahead when it came to the internet,” Grealy recalls. “I could genuinely put faces on the first 500 people who went online in Ireland.”
Convinced of the potential of mobile advertising, Grealy set up Adforce (“where the web meets mobile, meets advertising”). In the beginning, he says, it was “more like share trading than Mad Men”, as the emphasis was placed on reaching specific demographics rather than generating content. Since then, however, the company has put together a creative team for advertisers to build ads and they’ve been at the cutting edge of helping publishers “monetise mobile”. This, he points out, has become even more important in recent months, since Google has announced that mobile searches have now surpassed desktop searches.
He’s bullish about the coming year, with Adforce’s revenue now up to 5m. Grealy’s most recent adventure has been selling the company to American venture capitalists, Kinderhook Partners. “I was doing a presentation showing what we had done for Irish advertisers to Americans, and there was one guy hanging around and he watched the same presentation three times,” he says. He asked me if I’d ever thought about selling the company. He told me he was from a private equity fund and that he was looking for a company that specialised in mobile advertising to trade as part of a broader advertising company in the US. “Two weeks later I was in Manhattan. I’d spent six hours presenting to eight of them. They asked me how much I wanted for it, and I said $8m. They looked at each other and said OK – but the condition was that I’d go over to the US and get stuck in there.”
So he moved. First to south Florida, then to Philadelphia, commuting every few weeks back to Dublin, where his wife, Aislinn and three children, Cian (22), Fiana (20) and Donal (16) live. But Grealy was beginning to lose faith in the path the company had found itself on. “You have to really believe in what you were doing and I felt the direction was wrong. We were buying offline companies and I wanted to invest in mobile,” he recalls. His solution was to buy the company back from Kinderhook (“for a lot less than they paid for it”) in a complex deal which involved writing off equity in the US.
He reinvented the company here. “Things are looking up. The ad market has bounced back, mobile and digital are huge parts of that. We’ve seen an increase in revenue across the board of 35pc on last year. We paced ourselves quite well through the recession.” Throughout it all he’s become “comfortable in terms of finances” but never made the kind of money where he could consider quitting work altogether. Not yet at least. In the last month he has been involved in intensive talks about moving back into the US market in a bigger way – and a deal is imminent. “We have just closed a funding round,” he says. “Half of the funding has come from the US and half from European partners. We are just about to begin a project whereby we sell advertising on behalf of a media company. We will place ads onto their apps and websites. It’s going to be huge.”
Time to party like it’s 1999?
This story originally appeared in The Irish Independent. Reproduced with thanks.