One of Ireland’s longest-running tech accelerators, NDRC (formerly the National Digital Research Centre), is ranked among the top ten in Europe according to Fundacity’s European Report, published earlier this year.
Tucked away on Crane Street on the cobbled streets around the Guinness Brewery, NDRC occupies a cavernous former warehouse full of exposed brick and greenery. This year is their eighth since launching, and they continue to go from strength to strength.
In 2014 they announced a total €88 million in follow-on investment raised by NDRC alumni, and they work with approximately a thousand entrepreneurs and forty companies every year through their two programmes, NDRC Launchpad and NDRC Venture Lab, as well as the NDRC Sandbox. I spoke to Ben Hurley, CEO and director of NDRC, Gary Leyden, VP of Venture Acceleration, and Amy Neale, Director of Communications at NDRC’s HQ in Dublin’s Liberties area.
So this is the eighth year of business – have things changed much in that time?
Ben Hurley: Technically, we started operations in Feb 2007, but we started investing properly in mid 2008. So this is our ‘investment birthday’, put it that way. Our original question was how to get research from universities into new ventures, and what’s changed over the years is that we’ve found the best ways to do that. An investment mentality, coupled with an accelerator approach to it, compressing the time needed, and then a major focus on the validation, on proving that the solution will address a real problem.
Back in 2007, there wasn’t as much of a culture of accelerators in Dublin.
BH: I think we’ve played quite a role in developing startup culture here. The idea that ventures of a certain stage would even require special supports is quite a new one, even internationally. Y Combinator was around but really only came to the fore in 2004. Around then we’d already done a series of investments through a programme called Catalyzer, a collaborative environment. We were starting to notice all these opportunities where, with a small amount of money and a bit of attention, they might convert into viable ventures.
Amy Neale: Technological changes have really contributed, and there’s this huge number of people interested now who don’t necessarily come from a well-capitalised base, or have any previous experience.
Gary Leyden: Now you have a whole generation of entrepreneurs thinking differently, who think you can build global enterprises from Ireland, you can take on big incumbent competitors and grow to scale. And there’s no huge capital cost to compete in these markets: they compete on innovation and speed.
Has NDRC built up a big alumni network over the years?
GL: That’s one of the biggest intangibles with accelerators – is there a network of alumni? It’s becoming self-fulfilling as we grow, that companies are willing to help those coming behind them. And at any given point, most of these companies will only be around six months ahead of those coming in, so they’re really close to all the learnings that they pass on.
BH: Silvercloud Health, for example. They’re only two years out of NDRC but are already in the US.
Among all your alumni, are there companies that stand out?
BH: Good question. Clearly there are some that have had greater valuations, but there have also been teams that stand out for just being really great at responding to challenges. Take Soundwave – the first time they came to us we said no. But they came back a second time around with a new idea. And even the initial manifestation of that second idea wasn’t exactly on target, but it was enough to start with because they stood out as a team.
GL: At the earliest stage, it’s really the people that make the difference between whether or not we invest. The assumption is that they’re going to have to pitch an idea that can scale, but its the people who drive that idea. It’s the people we invest in.
BH: Another really good example is NewsWhip: it’s chalk and cheese comparing how they were when they first came in to NDRC to how they are now.
GL: What we’re really looking for is the ability to adapt, to respond to coaching and mentorship, and to grow with the business idea and respond to feedback.
How do the NDRC programmes usually work?
AN: We have two different programmes, Launchpad and VentureLab, but at the core of both is a focus on the business model and getting validation early from customers. That’s the focus once you come inside this building.
BH: That sounds straightforward, but it can be very unique to the company. Even figuring out the right way to approach the customer. It’s a process that takes creativity.
GL: We also bring in mentors to work with every aspect of their business –financial modelling, PR, etc. – and then there’s just making connections. We bring in really interesting people to meet our companies every week at our Friday Sessions, usually entrepreneurs who share their experiences to an audience of maybe twenty or thirty people, primarily talking about the mistakes they made. Accelerators can tend to throw a lot of mentors at their companies, but what happens is that they get all these different bits of advice, so much that it becomes difficult to move forward. We try to do something more structured.
BH: Sometimes it can be about building out the team. People might hire while here and we make the introductions. NVMdurance, for instance, began with two guys in a garage down in Limerick. They had a great piece of IP, and while they were here we helped them expand their team.
What stage are companies usually at when they apply?
GL: Sometimes a place on the accelerator is the trigger that causes them to pull the team together in the first place. There are lots of people working through their idea in the evenings, who go full time when they get the offer of a place.
BH: We’ll go in at a really early stage if we believe it’s a strong concept.
GL: Though one thing we’ve learned over the eight years, really quickly, is that we won’t invest in individuals. Ever.
Do other accelerators?
GL: Probably not. It’s just a first test of a company if they can assemble a team, or at least find a partner to go with them on this journey. That’s usually really telling. That said, we also acknowledge that there are great individuals out there who just don’t have a team, so we do quite a lot of matchmaking.
Is the focus on health tech a recent addition? And on female founders?
BH: We started off quite domain agnostic, but over time we’ve built up specific domain competencies. The financial services domain is ripe for innovation, similarly with health – there’s massive innovation going on so we know down the line there will be funds available.
AN: And then last year we were approached by Enterprise Ireland and asked if we would run something specifically with the aim of getting more women involved in entrepreneurship. Our first interaction was ‘Why do something gender specific?’ But there’s a lot of research showing that having more diverse teams leads to more success.
What is the NDRC Sandbox?
AN: There’s a bunch of stuff that happens under that banner. It’s our experimentation place: we behave like a startup ourselves, and we’re conscious that we need to be constantly iterating and looking towards the future. Sandbox is how we try out new ideas.
GL: If we’re not moving as fast as any of our startups, then we’re doing something wrong.
Were there startups that surprised you by finding unlikely markets?
BH: Drop is an interesting one in that regard. When they were here they were working on hardware apps for phones. It’s a couple of years ago now: this was just after the app phenomenon had happened. They wanted to create hardware apps that attached to your phone giving it specific capabilities, and now they make digital weighing scales for kitchens that connect to your phone or iPad. Looking back, it makes sense that they were going that way.
GL: They were just really creative people with a great idea. You knew from talking to them that they were going to come up with something good. We helped them build out their team and bring in a CEO that complemented the rest of the team.
That’s interesting that you mention the importance of creativity.
BH: Creativity is key to the whole process. It’s just about harnessing creativity in the right direction.
GL: It’s really interesting how creativity is relative to the industry you’re in. Particularly in financial services, companies we thought at the time weren’t particularly creative can turn out to be really exciting for customers. You’ll find these very simple ideas which fix a very real, very big market problem.
One final question – if NDRC is like a startup, then what will its next iteration look like?
BH: We have the two programmes right now, but we’re looking into another type of investment, one slightly earlier than VentureLab.
GL: Mostly in the science space, we’ll occasionally come across a really talented researcher very early on, and if we see potential then maybe we can offer them some support to commercialize instead of them keeping on researching. The other area we’re looking at is that there can be a bit of a stop-start process with companies after they leave NDRC, before they secure institutional funding. Momentum is so important, so to encourage companies to keep growing we’re looking into sourcing smaller amounts of capital after they leave. Adding a bit of fuel could make a really big difference. We’re talking to people internationally who’d like to get involved in that.
AN: Our next investor day is on June 17th, it’ll be a showcase of our companies that are currently raising funds. Anyone interested in coming should definitely get in touch and have a look through the companies on our website.
Pictured: The NDRC team