[BY KAREN O’ DONOGHUE] Sean O’Sullivan, the MD of SOSVentures and CEO of Avego is one of the nicest entrepreneurs I’ve had the pleasure of meeting. Part venture capitalist, part company builder, Sean is rapidly becoming a household name in Ireland after becoming the most recent addition to Dragon’s Den.
What made you decide to become a dragon?
The only reason I’m really doing it is to recruit programmers. No matter where you are in the world the most difficult thing to do is find really great programmers. And in Ireland it is so difficult now. It’s really just such a tight job market. So my reason for doing Dragon’s Den is just to make it easier for us to do recruiting through raising the visibilty of Avego. We had these ten job openings for Avego and it was taking forever.
So yeah for the funniest reasons people tend to do things but when they called me up to do Dragons Den the reason I did it was ultimately because of that.
Did you enjoy doing the series?
Yeah the takes were a lot of fun and I made several investments. I tended
towards more the gadget companies and all those going to market fairly
early. According to the other dragons on the show it was the best
crop of opportunities in the past three years so that’s an indication of a lot of the
investments that were made over the course of the season.
How do you think about exits?
I’m not really looking at the exit strategy. I’m more looking at how we serve
customer needs and build a long term company with good growth potential and
also provide our staff with a really good environment for them to live and to
contribute and develop their career and all of that.
And I wouldn’t have be playing up having invented cloud computing other than
the fact that it helps the reputation of Avego and helps people understand that
what we’re doing is a world-shaking thing. And we are getting really great people
but it’s so hard to keep going when you’re resource constrained by (in this day
and age) access to programmers.
Where do most of your technical hires come from?
Well in Google I know that about 80% of their programmers come from outside
of Ireland but in our case it’s probably about half and half. I don’t know the exact percentages. A stat I read recently was that 55% of programmers are from outside of Ireland and that doesn’t surprise me in the slightest because of course there are so many programming jobs in Ireland, people are coming from all over Europe to work in Ireland.
You’re involved with CoderDojo (with James Whelton and Bill Liao) which is trying to tackle the issue of young people getting interested in programming.
James Whelton is a social web entrepreneur and he’s on staff here at
SOSVentures so that’s how he can spend all his time doing CoderDojo making
it a success here in Ireland and also helping it grow throughout the world. That’s the kind of a big committment that we’re making to try to increase the talent pool and if you start at a really young age in programming it really does make a big difference to the capabilities you have so it’s very possible that we can develop more of a talent pool here in Ireland.
What do you see in James?
In five yrs time he’ll be seen as another Jimmy Wales, the guy who started Wikipedia. I think that if CoderDojo keeps on growing at the rate that
it’s been going at and has the impact that it can have and people sort of latch onto that, then I think that people will recognize it as a very important social media phenomena.
You seem to talk about longer timescales than many other investors?
Sometimes it does take the extra ten years! But if you stick with it it can work out really well. Like I give the example of this gaming company I invested in ten years ago – Harmonix. They had a great idea, it was absolutely brilliant. And for ten years they slogged away and every year there was yet another great new development and it never really broke and then Guitar Hero came out and it probably didn’t take off for a year but then it did and suddenly it was the world’s number 1 game over night for three years in a row. It went from being a company losing money, losing money but throughout people getting stuck in and getting things done and suddenly over night, boom, it’s the world’s number 1 game.
How do you stay focused for long periods of time?
By thinking about things that are impossible to be not relevant in the future like cloud computing. Like the company that I created in cloud computing, it was indisputible that the genre would make a huge difference and the people who joined me in the effort went on to found other companies
and create great things out of it. So the area that Avego is taking on is going to be very very big and we just have the persistence and the vision to stick with it and hopefully we’ll be another 5-10 yrs being as big as a Google or one of these other big permanent, world changing companies.
And how do you sustain the growth, how do you keep pumping cash into
We’re actually generating some significant revenues at Avego. We have sales in the US, Ireland, Europe, China and our sales are growing at a pretty rapid rate. We’re increasing our staffing based off our sales increasing significantly so in any given year some product lines might be profitable for us, some not as profitable. But you don’t want to scale an idea that isn’t working, you want to scale an idea that is getting market acceptance. That’s what the challenge is for an entrepreneur: to scale at the right time. And to actually try to stay really small, really lean. Like we wouldn’t be 60/70 people worldwide if we weren’t generating many millions of revenue. When I say that we haven’t gone big , it’s not that we haven’t gone bigger than most companies, it’s just that we haven’t had tens of millions of people using our products and we’re not generating hundreds of millions in revenues yet. It’ll take a couple of years for us to get there and it’s actually quite exciting because we are growing at 100% a year in terms of our sales revenue so it’s not like we’re growing small but if you think about it when you’re building something that’s going to be used by millions of people, growing by 100% a year growth is irrelevant. So our challenge is to break through that more rapid pace and that only needs to happen for 1 or 2 years where we’re growing at 10,000% and then we’re a big big company all of a sudden.
You mentioned Harmonix, are there any companies you feel you missed out on investing in?
Are there any that I passed over? Sure, probably but I’m pretty busy so it’s not like I’m looking for more things to do so if I missed out on some investments it doesn’t bother me. There’s few people that get them all right and I certainly get a higher percentage home runs than most do. My
track record is pretty strong, it’d be in the top 2% of venture capitalists, it may even be in the top 1% but I’m not sure. I do an average of about 27% return for the past 20 years. So that’s a very healthy range of return.
You recently invested in Storyful and Silicon Republic.
Yeah and I think they’re both great investments.
What prompted those?
So Bill Lao, who’s a partner of the team at SOSVentures, those were his picks and they were great choices that he’s come across in the market here in Ireland. Both of them have really been doing very very well. I’m sure they would have done well without our involvement to some extent. Bill’s a great mentor and has influenced their decisions and directions as well and their growth rates are top notch. Silicon Republic is now actually getting more pages than ever by quite a jump-step over what they had before and they’re really focused on their online edition now and making great progress there. And Storyful, I was on a plane from Boston to Houston and I ran in to a CNN producer for a big TV personality on CNN and she was telling me “Oh you’re from Ireland, do you know Mark Little from Storyful?” So you know it’s gaining traction at a very good solid rate, he’s doing a great job. Mark and his team are doing a great job there.
Do SOSVentures make a number of investments a year?
We make between 20-30 investments a year on average. We invest €1M every month in start-up businesses.
What’s the breakdown?
In dollar volume it’s probably a third Europe, third America, third Asia. In terms
of the numbers of companies there’s a lot more seed level investments in Asia,
I’d say there’s a greater number of companies in Asia, a decent number here in
Ireland and the UK and occasionally we’ve done a few in Germany but usually in
Ireland we’d do about ten over the course of the year.
Do you go out and look for companies or do they come to you?
Some companies we come across them and really like them. So there was a
Californian company which our China partner found and we were the first
to back it and then two relatively well known VCs came in after us (one of which is Founder’s Fund). So sometimes yeah, we do find people coming in after us. Another company reached out to me, I had invested in his first company
and they had gone public and he asked me to back him and I did and Google
Ventures came in after me. So generally we come in first. And then the others will
come in either alongside us where we introduce them to the team if they were
good to have around or we felt they added value or they’ll come in at another
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