Openet’s Joe Hogan: How To Build A $100 Million A Year Company From Dublin

Joe Hogan DublinGlobe.com

Joe Hogan is the Founder and Chief Technology Officer of Dublin-based global software company Openet.

Founded in 1999, Openet products are used by telecommunications service providers to commercialize and analyze activity on their network; with reported revenues of over $100 million in 2014, they remain Ireland’s largest indigenous technology company.

Hogan is responsible for technology innovation at Openet, overseeing their architecture office, IP office and Openet Labs, a software research group based in Ireland and Malaysia. A joint recipient (with Openet CEO Niall Norton) of European Entrepreneur of the Year for 2012, he has been a staunch advocate for better tech education in Irish schools. He spoke to Dublin Globe at Openet’s headquarters in Dublin’s Park West Business Park.

What does Dublin need to do to be the best that it can be as a hub for tech and innovation?
Our startups must be connected with those who are further down the road. There are plenty of Irish companies that have gone international and learned a lot of lessons, and in Dublin we don’t spend enough time connecting those companies starting out to those that have already been there. The Israelis do a great job of this. If you’re running a startup, you don’t get challenged enough. Sure, people are impressed, but do you get qualitative, strong feedback? Someone who’s going to tell you ‘Sorry, but it’s not going to work…’ or ‘You need to rethink this part of it.’ I want to see the next crop survive, and a large wave make it through. And an element of that is a wraparound culture by existing entrepreneurs, like myself.

Sixteen years in, you remain the CTO as well as cofounder of Openet…

You should always be true to yourself in terms of responding to your own skillset. My skills have changed a lot over the years, but back then, I felt going into the CEO role was not the right thing. As CTO, I can concentrate on looking into the technology, and that’s where I am now. Now, the roles have changed a lot – I couldn’t read a set of accounts in ’99, I certainly can now! I understand all the mechanics of running a large business. To be able to cash your own cheques is extremely important. It’s a show not tell, culture. If you’re showing them a product that solves a problem, it’s a hell of a lot more compelling.

What’s your philosophy on selling?
You’re selling trust. You’re selling solutions. And you certainly don’t have to build a product for every point problem. If you’re in the base metals business, you can blend alloys together in different ways. From the outset, we had a number of these base products at the core of what we do, and we’ve built from there.

Going back to 1999, you’re laying the foundations of Openet – what was the original intention?
Back in ’99, if you remember, there was no mobile internet. The phone industry at the time was concentrating on making phones smaller, to the size of a Mars Bar, as opposed to the big bricks we had been lugging around. So when 3G got switched on, the challenge was: how are they going to bill for this? I wanted to look at the underpinning of that system. Because back since the beginning of the telecom industry, when you made a call from A to B, that call was stored on an old voice switch somewhere – and they collect those records, and bill you based on the number you called, how far away it was, and how long you were on. In the internet, there is no record that exists somewhere – that’s a large scale correlation problem. And we saw that right from the outset.

What was your background, at that time?
My background is in operating systems; I had worked in the depths of Solaris, which was the world’s biggest operating system at that time. So I looked at it as a Systems Software Engineer. We had to construct the record upon which internet traffic will be billed. What is the system that collects, correlates and prepares records for the service provider? So that’s where we started, and we were lucky early in the company to work with Deutsch Telecom – and if they have problems, so do the other large telecom companies around the world. We had identified our market.

The problem with innovating in an industry like this is that you can never stop. It’s like cutting the grass. The fact that you did it last week doesn’t mean you don’t have to do it this week.

And what, then, is the secret to surviving, and indeed thriving as a tech company?
I think we’ve succeeded because the decisions that we made were foundational enough that we’ve been able to support the economics of a growing company on it. If you chase down short-term-ism too hard, twenty per cent of your revenue will always drop off, because that product is disappearing quickly. You end up trying to climb the mountain with it slipping underneath you. You need to build solid products that you can accumulate revenue with over the longer term.

And the key to maintaining growth?
We’ve spent a lot of time focusing on the processes in the company, stabilizing our revenue so that we can march forward with the industry. Now, other challenges arrive – the telecommunications industry is growing at 2% per year, not the 10% clip it was at before, so you end up tilting into offering mobile operators products that help them make more money by not building as much network. So that’s why the Wi-Fi infrastructure is very important. We’ve built a fairly sophisticated analytics system that can look at the stress in the network – now, rather than revive that network when its congested, we can predict the congestion around fifteen minutes ahead. So we’re not putting the patient on the table, trying to resuscitate them. We’re slowing down the traffic, and breaking down the network so we can avoid it getting congested in the first place. These are systems that help operators make money.

You’ve always stressed the importance of innovation…
The problem with innovating in an industry like this is that you can never stop. It’s like cutting the grass. The fact that you did it last week doesn’t mean you don’t have to do it this week. You’ve got to keep looking over the horizon. If you lose your relevance, then you’ve got a problem.

So, how do you remain ahead of the curve?
We have our own innovation group, a separate labs team, a substantial patent portfolio – we’re one of the larger patent filers in Ireland, we’ve about seventy applications at the moment. So there’s a lot in flight at any given time. We have a decent success rate at getting them granted. Irish software companies often don’t patent their technology, and we didn’t in the early days. We take it very seriously now, and that’s a huge lesson learned. We’ve been involved in several lawsuits, and you must always have your IP protected.

What age were you when you started Openet?
Thirty-two – I originally had another business on the side. I sold legal software, that was a home business. This is my second one.

So what does the older Joe Hogan tell his younger self?
Interesting question… We’ve worked bloody hard, and we continue to. I don’t spend a lot of time reflecting on what we’ve achieved, to be honest, and spend even less time reflecting on things we could have done better. We’ve made a lot of mistakes – but I don’t necessarily regret them. That’s just part of the path. We learned from them. We got older, and smarter.

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