At first blush, Web Summit was a textbook start up. Three friends with similar backgrounds and much in common getting together to pursue a dream. Paddy Cosgrave had been in school with David Kelly at Glenstal Abbey, the Benedictine-run boarding school in Limerick since the age of 12, and the two shared a house when the business was founded in 2009. Cosgrave and Daire Hickey overlapped at Trinity College, where they were successive presidents of the University Philosophical Society – one of two college debating societies.
These types of bonds are important according to those who study start-up “culture”, and there is no shortage of them. In a 2021 article for the Harvard Business Review, Yariv Ganor – who styles himself a start-up psychologist and psychotherapist – stressed the importance of shared values and common interest among founders of successful start-ups.
The best example are the founders of Google, Sergey Brin and Larry Page, whom Ganor described as having “eerily similar upbringings”. They are same age; both went to Montessori schools – why this matters he does not explain. Both had parents who were academics. Both did computer science degrees and met at Stanford in 1996. Almost 30 years later they retain voting control of Alphabet, the $2 trillion parent of Google and a number of other companies.
So why did it all go awry in the case of Cosgrave, Hickey and Kelly, who have reached a settlement in their acrimonious High Court dispute? The simple argument is that the likes of Brin and Page are the exception that proves the rule attributed to John D Rockefeller, the founder of Standard Oil and one of the wealthiest Americans of all time: a friendship founded on business is a good deal better than a business founded on friendship.
‘It is so expensive in Dublin we decided to rent’: Swedish embassy returns to capital
Tenants who were ‘full of hatred’ followed and video-recorded neighbours, tribunal hears
‘I was 34 and all my friends were having kids... I was like: what am I waiting for?’
Consumers could face €1,000 increase in bills across energy, broadband and other areas from this week
Ganor offers a slightly more nuanced twist on this truism, drawing on the relationship between Apple’s co-founders Steve Jobs and Steve Wozniak and how their relationship evolved, leading to Wozniak’s eventual departure from the iPhone maker.
He describes Wozniak as a “giver” who was focused on what others want, and Jobs as a “taker” who prioritises his own needs. As Apple’s success demonstrates, this type of relationship can work well, Ganor argues, until a point is reached where “they [the giver] just can’t give any more and don’t receive enough in return”.
Comparing Web Summit with the likes of Apple and Alphabet may seem a little farfetched, although Cosgrave might beg to differ. It is not too hard – based on what has been aired in court – to see Cosgrave as a taker in this context and Hickey and Kelly as givers who reached their limit.
Both sued Cosgrave, alleging that their rights as minority shareholders in the business were oppressed by him. Their actions followed Cosgrave instigating a case against Kelly, who Cosgrave claimed squeezed him out of an opportunity to establish an investment fund that he believed leveraged Web Summit assets.
Hickey claimed he was invited into the business in 2010, and his role was “procuring and managing relationships with speakers and key sponsors, co-ordinating and creating content for the events, dealing with media relations”.
He moved to the US in 2013, chiefly to build Web Summit’s business there but also, the court heard, to “avoid having to interact personally with Mr Cosgrave on a regular basis”. The court was told he found Cosgrave to be “a very difficult person with whom to work” as well as “highly unpredictable” and prone to reacting with “extraordinary vitriol” when challenged.
It’s a long way from how he describes his initial relationship: “I looked up to Mr Cosgrave,” he said, “and sought to follow in his footsteps.” Sounds like a giver who had reached his limit.
Kelly – who was also invited to join in 2010 – described the breakdown in his relationship with Cosgrave in similar terms. He said it had become “irredeemably toxic”, and this led to his resignation as an employee of Web Summit in early 2021 by which time his onetime friend was running the company “in a manner akin to a personal fiefdom, as if he owned it outright himself”.
At one stage Kelly texted Cosgrave: “I am going to make life simple for myself ... start my own small business or work for someone else will need to figure that out. Thanks for everything but it’s time to pull the cord.”
Cosgrave saw it all very differently. According to his lawyers, the two men cheated on him and his company. Cosgrave was merely standing up for himself. He had offered them stakes in his business out of generosity. “How is he repaid? They cheat on him. They cheat on the company,” his lawyer told the court.
There is a danger in all of this that the very human and very common emotions at the heart of the Web Summit case get elevated to some sort of outworking of a universal law of start-ups. What happened is much more prosaic. The unravelling of their relationship is, in the end, just the story of three friends who created a €200 million international technology conference brand and seemed to have the world at their feet, but ultimately ended up trading insults in the High Court.
