Why isn’t this Google Ad in the Irish papers?

Congrats to our alumni Vol Pigrukh and the whole team at Profitero on building one of the most exciting and successful startups in Ireland. In particular congrats on;
  • Winning IBM Global Entrepreneur of the Year 2012
  • Winning IBM Smartcamp London 2011
  • Being selected as Dogpatch Labs resident 2011
  • Winning Seedcamp 2010 (first Irish company to do so)
Few other Irish, let alone European startups, have achieved your level of success in such a short time.
We’re super proud of your achievements and best of luck in the future.
Best regards,
Your former colleagues at Google Ireland

Unfortunately this ad doesn’t exist but I’d love to see this advert published by Google in the Irish media for 3 reasons
  1. Vol and Dmitry (his other Irish based co-founder) are great guys, but more importantly they are great examples of  ‘immigrant entrepreneurs’ who first came to Ireland via the lure of careers with large multinationals like Google, IBM, Microsoft and Accenture. Vol is originally from Ukraine and Dmitry is originally from Belarus (Their 3rd co-founder Kanstantsin is based in Belarus). They are products of the ‘Google BarrowPlex’ and great ambassadors for the quality and ambition of the talent being recruited into Ireland by Google, IBM and others.
  2. It’s a great PR and Recruitment win for Google. ‘Hey look at us, we’re not just here for the tax, we’re here because we can attract amazing talent to Ireland. And guess what, if you move country to join us in Dublin  you could also be a world class entrepreneur like Vol in a few years. Google is in the heart of Dublin and our alumni and employees are helping build Ireland’s Startup Eco-System!’ With one simple advert, Google could easily broaden ‘their Irish story’ away from just tax and free lunches by showing the longer term benefits Google are bringing to Ireland. For too long some have criticized Google and other multinationals for not contributing enough to the local startup ecosystem. Profitero ends that debate in my opinion – and they won’t be the only examples.
  3. From an Irish startup eco-system point of view this is a huge ‘win-win’ for the complimentary IDA led FDI program and Enterprise Ireland’s seed capital program. I’m pretty sure that without the presence of large technology multinationals or the EI backed Seed funds that Profitero would not be in Ireland. FDI was the ‘hook’ that first attracted the raw talent to Dublin, helped keep them here, and ultimately gave them the experience, credibility and time they needed to make the leap into entrepreneurship. Immigrants are a large part of the driving energy in most tech eco-systems and this is best reflected in Silicon Valley when between 1995 and 2005 over 50 percent of the venture-backed technology companies in Silicon Valley were founded by immigrants. With over 50% of employees at Google, and many other large tech organisations, being from outside Ireland I’m excited to see how many more Profitero’s emerge over the coming years.

The unsung heroes of Irish Tech


If you are in Ireland then at some stage, usually once your initial product is approaching beta, you WILL need to get on a plane – a lot! However, the holy grail of building a global empire while bootstrapping from behind your desk is possible – yet super rare – and I can only think of a one Irish Tech company today that fits that bill.

Teamwork.com is based in Cork, has a team of 23 people (all engineers – no real sales or marketing resources) and will probably do €10M in revenue this year. Teamwork was founded by Daniel Mackey and Peter Coppinger and they have taken no outside funding. In my opinion, Teamwork has to be one of the most unrecognized/ unknown success stories in Irish Tech these days. The guys are heads down, super profitable, passionate about product development and giving the big boys a very serious run for their money. They are world class and need to be celebrated as the model of ‘bootstrapping’ success. A model that Ronan Perceval (another bootstrapped success, who only recently took investment after building a large company) talks about in his great medium post entitled ‘What Startups can learn from the Mittelstand

Yawn – how unsexy! They didn’t have any big funding announcements or win a place on a famous accelerator. How are they going to make VC’s rich? How are they going to scale? How will they get overseas customers? Hell, they barely even had a mention on TechCrunch.

I doubt they will ever make it – poor guys :)

Should we raise a small or large seed round? A Funding Scenario


I recently caught up with a buddy who is setting out on a new venture. We quickly got talking about his new project and the 2 seed funding scenarios they are considering.

She/He is based in the US, has founded and sold companies before, and is about to go again with their new venture. This discussion was  fascinating (for me at least) and it was exciting to learn about this new venture and their plans for fund raising. I often find as an entrepreneur that I’ve learnt so much from other peoples experiences and ideas that we both agreed it might be cool to share this real (but anonymised) scenario with others and see what they thought. Here it goes…

Brief Background:

The business is in the ‘Uber for X’ realm. It is a B2B proposition that  is geographically focused and would need to be replicated in each new local market if it is to scale (i.e. no network effects). The initial team is in place, has worked together before and is working on their MVP. They are smart guys and their proposition has huge potential to disrupt and their much longer term vision is to move towards a  B2B2C position once they have a strong B2B business established.The company will be ready to launch their MVP soon and are pre traction/revenue.

Funding Scenarios Presented:

  • Option A – Raise a big $1-2M Seed with the goal of securing a large Series A of $10M in 12 to 18 months.
  • Option B – Raise a small $250-350K Seed with the goal of securing a large Series A of $10M in less than 12 months.

My Quick Questions

  1. What option do you think is best? They preferred Option B. They felt they could close this Seed round relatively quickly and focus on proving the their model works in at least one market (even on a very small scale i,e, 5-10 customers)
  2. Would the Seed be priced or notes? The founder said both options would be SAFE (the new convertible note instrument from YC)
  3. Why do you need $10M for your Series A? What will it be used for? Engineering… AND scale the platform… AND operating costs… AND product… AND sales… AND marketing… AND customer service etc… (i.e. everything )
  4. If you could raise a $10M Series A tomorrow for 40% would you take it? If it was 30% yes.

Our discussion

My initial reaction was;

  1. It seemed to me the Seed discussion was a Red Herring as the company was targeting a Series A of $10M in all scenarios. I suggested that both Seed Funding scenarios were compatible. For example, they should aim to close their $250K Seed round asap and then raise additional Seed Capital using adjusted Caps in a ‘rolling seed round’ scenario as/if needed.
  2. Either way, since the $10M Series A is the real target they need to start a twin track process of engaging their target Series A VC’s now. The ‘dating process’ of getting intros. setting up meetings, getting advice & feedback, meeting other partners at the firm, preparing investor docs, getting to a potential term sheet, negotiation, passing due diligence, etc… will realistically take 6-12 months so this needed to start ASAP.
  3. I said that I thought their answer to question 3 really sucked. It’s obvious that money would go into all the areas they listed. I suggested they check out David Cancel’s ‘Golden Rule for pitching your startup or product‘ (which I’ve broken too many times to remember). In this great post David outlines why you should avoid the word AND when pitching. David is talking more around value propositions but I think it applies to all related answers as AND’s can ‘add confusion and show you don’t really understand your value proposition‘… or what you would do with $10M :)
  4. Instead I suggested their Series A should be all about one word. GROWTH. Therefore their seed capital needs to be used to demonstrate that they can achieve rapid growth and were ready to replicate their model in more locations. They must  ensure their seed milestones need are aligned around this goal so that they can be in a position to say something like;

‘We are raising a $10M Series A as we need to GROW quickly. We have early momentum and proven the model works. We now need $10M to replicate and scale the model into 10 new markets over the next 12 months. We estimate each new local market will require an initial $500K to enter. We  believe that the company will soon need to raise an additional $50+M Series B to then  bring this to 50 more cities and ensure nobody can catch us’.  

Obviously being so early stage, there is a tonne of unknowns to be discovered. I suggested that putting the $10M Series A (or whatever that number will be) at the center of their fundraising strategy when talking to all investors including Angels. As Christian Hernandez recently wrote 

 ‘Entrepreneurs need to fund raise to the level of their ambition and give themselves time to start down the path of achieving it’. 

I’m sure an experienced Seed Investor would be encouraged to hear that you are

targeting a $10M Series A in the next 6-12 months and are therefore looking for a smaller amount of seed capital today to first prove the model works in X local market’.

As long as the Seed Investor gets a valuation cap they are happy with then they might be more encouraged to invest.

We also had some great discussions around various topics such as Angels v Seed Funds, AngelList, Stealth mode, Approaching investors who have invested in similar / competing companies etc… but they are all topics for another day. I’ll make sure to maybe do a follow up post on this in a few months to see what route they took.

Major Disclaimer / Health Warning:

Of course every company is different (which is what makes startups challenging / exciting) and the correct answer is ‘It Depends’. Well that would be the correct answer if you were to ask a Top Tier paid adviser or consulting firm like a McKinsey, PA Consulting, Bain etc… This type of feedback exercise should really be treated more like a ‘brainstorming’ and ‘red team review’ session where ideas are proposed, attacked and defended in a safe environment. While too much advice and feedback can be quite negative and result in paralysis by ‘over-analysis’, I’ve often found it is very useful to discuss scenarios like these aloud with advisers when it comes to evolving and testing important strategic options. Remember, as Ciaran O’Leary at Earlybird VC says, ‘Don’t manage your startup by other people’s blog posts’ :)

I (and my buddy) would love to hear your thoughts, opinions, experiences and questions on raising a Seed Round and the scenario above. We’re both still hugely inexperienced and eager to learn how from others than may have been here before. Please drop a comment below or ping me on Twitter.

Don’t forget the 3C’s when fundraising for your startup.

Corporate Lawyers, Corporate Development teams and Competitors are often overlooked or avoided by first time fund raisers. I think this is a mistake as I’ve won customers, raised money, developed partnerships and understood my market better by engaging these cohorts as part of my fundraising activities.

Corporate Lawyers

Every technology investment deal usually has at least 2 sets of law firms involved. So as the tech world is a small place, good technology lawyers, and in particular M&A lawyers, get unparalleled insight into what deals are happening from who is writing the Angel checks to what the bigger firms are looking for in terms of acquisition targets.

Partners at these firms are all about building and managing relationships and are often very open to meeting early stage startups, as like investors, they are always looking for the next Google to work with. I’ve found ‘good’ lawyers in tech to be excellent networkers and I’ve secured customers and investment via their introductions. They also have great insights into valuations, deal terms and all of the other important details required during fundraising.

Corporate Development

I did not really know what this role involved when starting out. They are basically the teams that manage acquisitions and investments for bigger companies. Therefore you should think of them as Investors and/or the potential Acquirers of your company. They sometimes have titles like Head of Strategy and typically work to help their parent company achieve their strategic goals. This often means a mixture of acquisitions, ‘strategic investments’ and helping secure business development opportunities.

There are several potential issues with taking money from ‘strategic investors’ (I won’t go into them here) but I’ve found these relationships hugely beneficial. I would start by meeting Corp Dev teams in your industry and sharing your vision for your company. In many cases they might see you as potential competition so you will have to make a judgement call on what to share. You should also ask them for their feedback on your vision and try to understand where do they think the market is going. They will often introduce you to business lines such as sales, product, marketing, partnerships within their corporation which can be hugely helpful if you are looking to explore a sales / marketing partnership.


I love competitors. And this is not because of some aged cliche about how I need an enemy to crush. It is the opposite of that. Founders and employees of competing firms are probably the most interesting people you can meet. Think about it. You both share similar passions about the industry and they have valuable insight and experience that could be hugely beneficial to you.

Yes, they will not want to exactly share that, so the first meeting can be awkward. But you are going to see them regularly at Industry events, come up against them in sales meetings, and most importantly, you will need to regularly talk about them with potential investors.

I’m always talking to everyone I know who works at or is involved with competitors. I’ve also learnt that several competitors were not really competitors at all and they have become great friends and partners. We’ve looked at hiring several people from competitors and I’ve also been approached by a few about M&A deals. In fact, one that was changing direction even offered us their clients, and none of this would have happened had I not built a relationship with them.Competitors are a complex relationship, but important and one I would not shy away from.

I guess I sometimes see competition like the ‘Highlander’ movie where the catch phrase is ‘There can be only one’. At the end of the day, there can only be one market leader and maybe room for a strong 2nd place. If you are lucky enough to be one of them you will probably acquire some of your competitors, if you are not, you will probably be acquired by them. Either way, you are probably going to be seeing most of them for a long time.

An introduction to the Dublin Startup Ecosystem

This was from my recent talk at the 2013 Startup Grind Conference which was titled ‘Build a Silicon Valley Company Outside Of Silicon Valley’ and was under the wider theme of ‘Overcoming A Startup Weak-O-System’ which had Brad Feld as the Key Topic Speaker.

You can access the slides here http://www.slideshare.net/maurindi/murphy-dublin-ecosystem

Why the Tools are Winning

Growing up in Ireland being called a tool was a bad thing.

But now being a tool is very smart… especially when it comes to increasing your chances of startup success in the tech industry.


As a long-time fan of analogies, I like to summarise my thesis along the lines of ‘It’s easier to get rich selling shovels in a gold rush than hoping to strike gold’. As the volume of new startups explodes, so does their need for smarter ‘shovels’ to help them get to market faster.

While you cannot build a long-term sustainable business from startups (churn will be high as most startups fail), you can leverage this early cohort of fast-moving, risk friendly, early adopters to secure a critical beachhead of early revenues, testimonials and (very) honest product feedback.

This early momentum is pure gold when it comes to securing initial investment and attracting bigger customers. Therefore, selling ‘shovels’ as an initial route to market, is very smart combined with a focused B-2-D (Business to Developer) business model.

Like gold rushes, new ‘Startup Hubs’ are emerging. As an example, look at the startups that are leading the growth in the Irish Tech Industry right now;

Learnosity – A toolkit for educational assessment.[bootstrapped]

Logentries – A tool to analyse log events. [Raised $10M]

Intercom – A tool to better communicate with users. [Raised $30M]

Trustev – A tool to reduce e-commerce fraud. [Raised $3.5M Seed]

Swrve – A tool for in-app messaging and A/B testing. [Raised $11M]

Stripe – (..and while not exactly Irish) A tool for developers to take payments online. [Raised $120M]

As Matthew v5.5 famously said;

‘Blessed are the Tools, for they shall inherit the earth’.

How to get the most from your next ‘Startup Advice’ themed coffee

I’ve learnt a lot (and still have a tonne to learn) since founding my first Startup.

I’ve been lucky enough to have met several great founders, mentors and advisers along the way. Most of these meetings have been over coffee, beer, dinner and even once in a gents toilet (!). Therefore I’m always happy to return this ‘karma’ by sharing my experiences, connections and advice with early stage founders wherever possible.

Unfortunately, I’ve noticed that I’m regularly spending too much of every coffee meeting talking about the same things. Therefore in in order to optimise future coffee ‘chats’, I’m going to suggest you review this ‘check-list’ before we meet. I hope that this will allow us to spend more time talking about your business .. and not the general business of startups.

Here is what you should know before we meet;

  1. AARRR – Pirate Metrics. This is a startup KPI framework first coined by (the always colorful) Dave McClure of Paypal and 500 Startups fame. Here is Dave giving a 5 minute introduction to AARRR and here is the slideshare. Study this and take 10 minutes to define what your AARRR metrics are.
  2. Read as much of what Mark Suster writes as possible. I would start with his best posts on Startup Advice. I would also encourage you to regularly read posts from Fred Wilson and Brad Feld.
  3. Read all about Lean Startups and Growth Hacking and learn the meaning of ‘MVP’, ‘CAC’, ‘LTV’, ‘Customer Development’ etc…

When it comes to your business, I want to quickly know;

  1. Why you?
  2. Why now?
  3. How can I help?

The first two are key to building credibility that you know your market and have the skills / experience / drive to succeed. The third question should be as specific as possible as it helps me understand how / if I can help.

Finally – despite being a product person – I really don’t care too much about your product. I want to know;

  1. Does your product work? If not when will it work / be launched?
  2. How are you going to acquire the customers / users / data you need to succeed?
  3. What is your biggest fear for the business?

I hope this helps you prepare for all your ‘startup advice’ coffees and let me know if you think I’ve missed anything.

P.S. Mines’s a latte :)

How fundraising has changed – 9 Lessons from AngelList founder Naval Ravikant

Here are some great quotes / lessons / extracts that I liked from a recent ‘This week in Startups’ interview with Naval Ravikant. Naval is the founder and CEO of AngeList and started his first company at 23. The interview is about 50 minutes long but well worth a view if you have the time. I think Naval’s advice is spot on and I’m also very excited for how AngelList, and in particular their new syndicates, are disrupting traditional VC.

  1. Premature scaling is a big reason start-ups fail. People writing you checks will want you to ramp up fast. This is a mistake unless you are already killing it in the market. You need to keep it small / super lean for as long as possible.
  2. Accelerators are now your series A (50k), angels are your series B (500k) and VC’s are your series C ($1.5M+)
  3. You should get to escape velocity before you talk to VC’s. You now should be able to do this with Angels. You need to show traction or you need to show you are doing something very unique and difficult. i.e. Dropbox today would need to have 100,000 users with a monthly growth rate of 20% before they would qualify for a VC round.
  4. Valuation is temporary but control is forever. (when you raise VC) You have given up control of your company and it is no longer your company. You are the entrepreneur but you are working for somebody else.
  5. Remember this when negotiating ‘standard’ term sheets. Lawyers will typically have a bias to the VC’s as they spend more time working with them on multiple deals over time. Therefore the VC will always get the benefit of the doubt when you hear phrases like ‘that is standard’ from your lawyer.
  6. Accelerators are the new, better, faster graduate schools. You even get paid to go.
  7. Enterprise or consumer? You need to build the product you are most passionate about. You need to be number one no matter which product you chose. There is no real prize for 2nd.
  8. Chances of success. Consumer less than 1%, Enterprise is probably 10%. You are constantly learning with each startup. Timing and dumb luck are important.
  9. Look at raising with a rolling convertible note round. This means that you can be fund-raising all the time. You are not in the artificial old model of only being open for new funding every 18 months.

Thank you to Jeffrey Char for posting a link to this video and further analysis on Facebook. Jeffrey is a hugely experienced entrepreneur and investor who is based in Japan. More importantly he is a great guy and a big fan of chocolate if you are ever visiting Tokyo :)