Computers in Business :: Ireland's Leading Business IT Magazine

Some new businesses are the result of Eureka moments and Aonghus O’hEocha’s came two years ago when he heard a song on the radio that he liked. He waited until the end of the song to find out its name, but instead the radio station took a commercial break. It was then O’hEocha realised the need for a software application that would allow radio listeners identify what they were listening to.

O’hEocha, whose background is in product design, teamed up with fellow Galway native Eileen Banks, who handles marketing, and US-based duo Francis Phan and Kenneth Roy, who took care coding and developing a graphical user interface, in order to produce Grab Radio, an application for Apple’s iPhone and iTouch devices. Users of the application can see what song is playing when listening to the radio on their iPhone and have to push one button if they want to purchase the song from Apples iTunes Store.

One of GrabRadio’s main sources of revenue is from Apple itself, which provides it with a 3 per cent cut of the fee every time a user buys a song. According to O’hEocha, the fact that that Apple already has an affiliate programme in place for companies that drive traffic to its store meant that it was easy for the company to get the commercial side of the business up and running.

GrabRadio began by focusing on the local market by getting Irish radio stations on board and is now considering expanding into Britain. Having just been accorded ‘high potential start-up’ status by Enterprise Ireland, the company is seeking to raise money under the business expansion scheme, with an initial target of €500,000.

With further funding, the firm hopes to expand its staff, and O’hEocha believed the time was opportune. ‘‘There’s a lot of great technology people out there looking for work, particularly in radio, and we are trying to talk to a lot of them,” he said.

1. Do your homework. Make sure the business you are getting into has a strong and vibrant market.

2. Plan ahead with clear objectives – what you will do, how you will do it and how you will differentiate your product or service.

3. Once you know you have valuable content, remain focused and never take rejection personally; see ‘no’ as an opportunity to improve what you are doing, to remove obstacles and develop your business.

4. Take advantage of everything that is free to promote your product or service. This includes viral marketing, You Tube, blogs , Facebook, Twitter, word of mouth. Be focused in your approach. Develop a cross-platform campaign with Search Engine Optimisation, public relations, and create spaces that advertisers will want to occupy. Attend conferences and seminars and network like mad.

5. Don’t be afraid to make mistakes – but make them early and learn from them.

Before striking out on his own, Ciaran Bollard spend 15 years in sales and marketing, working primarily for SmartForce, where he ended up managing his own sales team.

Bollard knew he wanted to start his own business and the opportunity came knocking when he met Mark French at a mutual friend’s stag party. While Bollard had just been offered a lucrative new job at Calyx, French’s idea of a website for short films intrigued him.

The pair joined forces and created what eventually became Muzu.tv, a website that allows music fans to watch videos online and create their own video playlists, which can then be shared on popular social networking sites.

According to Bollard, getting into DIT’s Hothouse incubation programme was a vital step for Muzu.tv getting off the ground.

‘‘I had a good salary in my previous job and there was always the concern there about paying the mortgage and bills.

‘‘The fact that the programme paid us a guaranteed amount every month provided us with that little bit of comfort,” he said.

Muzu.tv now has deals with nearly all of the world’s major record companies.

However, the early days, when the company was battling to sign its first few deals, were challenging. ‘‘It was extremely difficult. What I would say is that you have got to have the courage and determination to be able to pick up the phone.

‘‘You need to beat down people’s doors. One of the things that worked for us was getting support at the grass roots level from big bands.

‘‘Eventually, there was a lot of negotiation, but it helped to have support from artists,” he said.

1. Do as much work as possible on the business idea before giving up a full-time job.

2. Make sure you investigate what financial supports are in place to help you make that adjustment from full time corporate life to a start-up, because they are there.

3. An important factor is to develop a strong advisory board that gives you credibility when talking to both customers and, more importantly, investors. If it is possible, secure people who have access to funding or know people who have it.

4. This may depend on the business, but a lot of companies tend to look too much to the Irish market. Ultimately, for the type of business that we are in, the reach is just not there. You can spend a lot of time flogging a dead horse for a very small return.

5. A lot of start-ups are put under pressure to hire people. Strangely, that can often come from investors. In my opinion, that is the wrong thing to do. I would proceed as far as possible on the cash and support that you get before starting to add costs to the business.

For every online entrepreneur with a background in technology, there is another who came into the business through quite a different route.

Paul Heeney had been a PGA golf professional for 18 years before he set up Onlineteetimes.ie, a website that allows golf club visitors book tee times at a range of golf courses across Ireland.

Heeney had been a club professional in Greystones and had begun doing some golf consultancy work when he met the person who had the licence for the Teetimes booking software in Ireland and he spotted its potential.

‘‘I had no background in online business whatsoever, but we undertook a very detailed plan to research the industry, to find out whether golf clubs were ready for this and gauge the level of interest from the public, by looking at other markets, mainly the US,” he said.

Heeney believed many start-ups focus too heavily on technology while ignoring the importance of distribution and building partner networks.

‘‘The greatest challenge with an ecommerce play is always going to be whether you can reach your target audience in the volumes that you need to bring benefit to your clients, namely the golf clubs, and to pay your own bills,” he said.

After getting 60 golf clubs on board in Ireland, the company then expanded into Britain, where 340 clubs have signed up to Onlineteetimes.co.uk.

‘‘We proved our concept in Ireland and used the lessons we learned there to develop our own booking platform to bring into the UK where we are already the market leader,” he said.

1. There are a lot of very good ideas out there, but the real key is to do as much research as you can on your service or product. Often, there are countries that are leading the way in certain things. If you can find a unique selling proposition in an Irish or UK context, there is enough information out there for you.

2. For a web-based business, functionality must always win over design. You need to get someone to buy something from you or engage fully with a service. There are a lot of great web designers out there, but the winner of them all is Google. You cannot get a simpler website.

3. In the e-commerce world, if you are starting from scratch, but want to build an online audience, partnering with busy websites in a manner that is beneficial to both is important. You need to identify your key partnerships and approach them early.

4. There are quite a lot of hidden costs that you can’t ignore. They would be hosting, search engine optimisation, banking, Google Ad words. All of them are vital to your business.

5. There is a myth about the internet, that if you have a busy side you can knock off a lot of ancillary revenue from advertising and other things. If your core revenue line is not working, you won’t make it up on advertising and cross promotion.

Ray Nolan, the co-founder and former chief executive of Web Reservations International (WRI), is regarded as Ireland’s most successful internet entrepreneur.

WRI was set up in 1999 after Nolan, a software developer, created a booking system for Tom Kennedy, who owned the Avalon hostel in Dublin.

They cofounded WRI and developed a network of websites that handles bookings for 23,000 properties globally.

WRI makes its money by taking a small deposit on each booking made online. By working entirely online, the firm kept its costs low and profits high; in 2008, it made €19.8 million profit on revenues of €38 million.

Nolan and Kennedy cashed out of the business in November last year, when private equity firm Hellman & Friedman acquired WRI for$340 million.

Nolan is understood to have made at least$100 million from his involvement with the business.

Nolan is now working on a new venture, a ‘hiring network’ called Worky.com, and is a backer of several other technology companies. He is involved in Cloudsplit, Reva Health, Asavie.com and recently invested in Green Diamond Technologies.

1. The web is about deconstructing business models. Business models that exist offline don’t always go online. And you need a domain name that is short, a lingual, onomatopoeic and works in Asia. Some of the biggest brand names out there are no good outside the US.

2. If you’ve got a customer who needs something and they can’t afford to pay for it, then get ten of them and get them all to pay a bit. Then they’ve got a product and you end up owning it.

3. The web is a big place, but it’s all about word-of mouth.

We were always very, very careful about customer service and were quite innovative. We weren’t really the first-mover in the sector – there were others there, but we probably just did it a little bit better.

4. The dotcom bubble deserved to burst. Those guys they raised a lot of money too early and spent it too quickly. We didn’t hire anybody until we had the payroll covered by the sales. There was no other option but to make it make money.

5. We had no marketing budget, so we did it organically. We owned multiple domain names and funnelled all the traffic up to Hostelworld. And it’s very easy to get codded by people who say they’ll push you up the Google ranks, so take those promises with a pinch of salt. You can’t just ditch words onto a page and hope Google loves you.

A social networking site for guitar enthusiasts, dbTwang.com opened its doors last December. The business is the brainchild of Keith Bohanna and co-founder Fintan Blake Kelly. Kelly has been a guitar collector since his teens, while Bohanna’s background is in internet consultancy, helping firms develop commercialisation strategies.

‘‘If you can found a business with someone else, it is a much healthier way of working. Investors like to see complementing skills sets but, as much as anything else, it is the psychology of being able to share the ups and downs with,” Bohanna said.

The pair learned a number of valuable lessons early in the game. Initially they tried to bootstrap the business, but found they weren’t able to generate enough cash from their day jobs to get the project off the ground. They then changed tack and brought some investors on board.

‘‘What we pulled out of the whole experience is that there are investors out there but at the angel investment level it is always people who are directly known to you who will invest. People who are one step removed just won’t invest. We were joined by a lead investor Gerry McQuaid, who was commercial director of O2, and he gave us access to a lot of people,” Bohanna said.

dbTwang now has more than 1,000 users and a growing database of guitars. The next step for the company is to launch the commercial element of the site, whereby users can pay to publicly store a detailed catalogue of their guitar collection, which should aid in the recovery of guitars should they ever be stolen.

1. There is a really strong network of start-ups in Ireland. I meet people from time to time who are not involved in that community. It’s a real shame, because there is a lot of support, encouragement and advice available. Take the time out to go to events and meet people.

2. Find an experienced mentor who has been through it before. People who are successful are very open to being approached and don’t bat an eyelid when asked for advice. They won’t always say yes, but there’s no harm in asking.

3. Talk to your users and customers as quickly as you can. For example, we had a well thought-out plan for one service, but in a single morning we spoke to three potential customers and discovered there was no demand.

4. You should be open about your idea. Some people tend to fudge, but you never know where useful contacts are going to come from and, unless you share your idea early on, you are going to miss out on a lot.

5. Technology has to be developed properly, but it is secondary. A relevant and easy to use service is the important thing. Nobody will care how it works.