Enterprise Ireland's incubator role shifts as Irish firms grow up

Campbell is one of the sleepier suburban towns tucked into Silicon Valley. The old orchards are gone, traded for the usual architecturally bland headquarters of various technology companies and office space that costs a bit less than Cupertino or Sunnyvale and a lot less than Palo Alto or Menlo Park. But a reminder of the previous incarnation of the city, before microchips and motherboards, is present in an incongruous banner for the Campbell Prune Festival, hanging across its main street .

Right across the road is Enterprise Ireland's Silicon Valley office and incubation centre for Irish technology companies. Campbell's convenient location, without the cost, is what drew the government agency to locate in an old, converted school just off the main road. Surrounded by high-tech start-ups and other Valley hopefuls, the agency established this office in mid-1998 - perhaps surprisingly late in the Republic's technology boom.

"It was a huge risk for us," says Ms Marina Donohoe, the Enterprise Ireland vice-president who heads up the small two-room office shared with two researchers and another Enterprise Ireland official. But they decided it would benefit clients - Irish companies hoping to expand into the United States - and help them form the links with US companies that might be looking for partnerships or suppliers.

In its three years of operation, the office has handled 19 client companies, some based in its incubator facility - basically a set of small offices in the school - that can house up to five start-ups at a time. Of those, some have been bought out, such as Apion and Transware; some came to market and then realised a US push wasn't making sense, such as failed Eircom investments Viasec and Ebeon; and others set down roots and set up their own Valley office, such as Massana and Havok. At present, the incubator has three occupants - AEP, Nanomat and Cape Clear Software, although Cape Clear is in the process of setting up its own office.

The Enterprise Ireland facility "has never been busier", says Ms Donohoe. Three years ago, only 15 Irish companies had operations on the west coast. Now, it's more than 60, she says. "Clearly, Enterprise Ireland is maxed out trying to support those companies." Certainly, Ms Donohoe has a strong reputation among Valley-based Irish firms as a tireless worker who knows her stuff.

In the past, the main focus of the Enterprise Ireland office was to serve as a networking hub and advice centre for Irish companies that would arrive into the midst of the Valley's highly contact-oriented culture and have no idea who to talk to or where to advertise for employees. An initial shock for many, says Ms Donohoe, is discovering that a Valley programmer will command a higher salary than their Irish chief executive.

Enterprise Ireland will help set up meetings, advise on office rental costs, organise an Irish contingent for technology conventions - just about anything that can get a foot in a Valley door for young companies.

However, as the indigenous Irish technology sector has grown and matured, the role Enterprise Ireland takes has begun to change too, says Ms Donohoe.

Where companies used to primarily need advice on setting up, now they need support for market development - which includes everything from how a company presents itself to business-lead generation.

"One of the areas I think Irish companies are quite poor in is marketing themselves - who they are, what they do, what they're offering," she says. Often, key management and sales representatives are unable to make an articulate "elevator pitch", she says, a basic Valley capability that requires one to be able to concisely pitch the company in the few moments one might spend in a lift with a cornered venture capitalist.

Enterprise Ireland is also trying to move beyond the old-style method of taking an Irish stand at a technology show and clustering a set of start-ups on the exhibition floor. Now, they try to partner the smaller companies on larger stands with complementary big firms such as Iona or Baltimore Technologies.

Enterprise Ireland is now seeing far more sophisticated, intelligent and seasoned companies compared to the early days. "You don't get people who have these weird ideas," she grins.

That said, she is also seeing fewer companies come out from the Republic in the past few months and is not sure if this is due to the general economic slowdown or other forces. "We could have reached a critical mass of software companies in Ireland that are ever going to move to the US," she says. Or, perhaps it's the difficulty in getting the funding at the moment. Eighteen months ago, she notes, it was more common for companies to be given a few million to set up and expand.

"I think it's quite cyclical," she says, noting that Enterprise Ireland's Boston office had problems getting companies for its incubator at first. "Right now, there's not as many people interested, but who knows what will happen in six months?" They've considered closing the incubator as well. "It's very difficult to know when we've reached the stage where companies don't need a physical presence."

For now, however, Ms Donohoe continues to look for areas "where we can add and deliver value". And that means pushing her Irish client companies, "getting them into industries where they don't have any contacts and don't have a comfort factor".