It's a gruelling experience. The business people, mostly young founders of companies not accustomed to Dragon s' Den -style scrutiny, stand alone in front of a crowd and tell a panel of industry experts what they do. The experts then probe the businesses identifying weaknesses.
The questions range from who the competition is (“Who is gouging your eye out?”) to what is unique about the business that will attract investment and funding (“What’s the IP [intellectual property] here?”)
South By South West Interactive – or "SXSW Interactive" for short – draws social media and technology companies from around the world to Austin, Texas, for five days of intensive networking and showing off new products, services and mobile apps. It's part of a wider music, film and comedy festival that is one of America's best-known celebrations of the arts.
Among the participants at the technology festival are 13 Irish companies pitching to industry figures such as Jeff Ragovin, co-founder of Buddy Media that was sold to Salesforce last year for $745 million (¤550 million), and Bob McCooey, senior vice-president for new listings at Nasdaq, the New York market for technology stocks.
At one point, David Kidder, author of The Start-up Playbook , asked why one Irish start-up was "a painkiller, not a vitamin".
The festival allows companies to hone their pitches and see what the money men of venture capital and technology finance are looking for in businesses. The showcase of companies, organised by Enterprise Ireland, helps to blood company founders.
“It is about innovative, disruptive companies and start-ups, about the community and about people trying to help each other. We are not trying to scare these companies but give them advice,” said McCooey.
Landing deals
StoryToys, the Dublin company that creates interactive apps and pop-up books for children, is represented at the festival to try to land deals with big children's brands, similar to the deal it landed with
Chuggington
, the children's television programme. "We are going to be looking for more investment later this year as we scale up our team. Speaking here is going to raise our profile," said Gavin Barrett, the commercial director. "The festival is also great crossover for us with film and television here too."
Another Irish company, Soundwave, founded by Brendan O'Driscoll, is at SXSW to talk about its mobile app, which allows users to see what other users are listening to anywhere in the world – you simply zoom in on a particular area and the app shows the user the most popular tunes on playlists.
O’Driscoll doesn’t see as much value in the six cent the company will make on every 99 cent sale of a song on the app as on the analysis the company can provide bands, record labels and companies wondering what people are listing to.
Intuition, the educational technology firm backed by financier Dermot Desmond, is in Austin to raise the profile of its new Advantage product, which creates an online platform that big companies can use to train employees and which also has a social dimension allowing employees to share material.
Sarah Clarke, a New York-based director of Intuition, says that technology and social media gatherings can often be ahead of the learning and development events the company attends. "It is an opportunity for business connections. This is not just a music and art festival," she said.
Dublin-based Intuition has a production centre in nearby Dallas. Clarke says Texas offers a great geographical base.
"Texas for us was a good mid-point between the west and the east and being close to North Carolina where financial companies are based is important," said Clarke.
The Lone Star state has replaced New York as the second-largest state economy in the US after California. It is the 15th-largest economy in the world, as large as Canada or Spain. Rick Perry, its Republican governor, recently paid for television commercials and billboards in California to encourage people and businesses to move to the state, much to chagrin of the local state officials.
Texas has no state income taxes and Perry pushes a strong pro-business agenda. This has helped make the state a hub for information technology companies in addition to the oil and gas industry for which it has always been famous. The head office of computer maker Dell is located just north of Austin.
Texas has been one of the fastest-growing parts of the US, and Dallas, Houston and Austin are among the US cities attracting the most migrants over the past decade, mostly from the northeast and west coast.
Common ground
Speaking on a trade mission to Texas last week, Minister for Enterprise, Jobs and Innovation Richard Bruton said the failure to build business ties with Texas has been "an oversight" given the common business sectors such as medical devices and technology.
Bruton said he met Perry “to pick up a bit of the secret sauce” behind the economic success of Texas and came away saying that it was about removing “obstacles that might stand in the way of businesses”.
"Texas is the model that we want to follow. Texas is the best state in the United States in which to do business," he said.
Enterprise Ireland is considering setting up an office in Texas to tap some of the state’s success and help Irish firms push their wares in America’s south.
"There are less bees around the honeypots here than on the east and west coasts – the competition is lower," said Gerry Murphy, director of North America at Enterprise Ireland. "It is largely undiscovered by companies coming into the US."
