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Brian Caulfield

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Brian studied computer engineering, followed by two years’ post-graduate research, in Trinity College Dublin. He began his career at a small subsidiary of Swiss multinational Landis+Gyr. However, when the subsidiary was directed to be wound down, Brian and his colleagues bought the company for 2 Swiss francs in 1992. This company was then built over the following years before being sold to Trintech in 2000. In 2001, Brian co-founded another software company named Similarity Systems, which was later sold in 2006. Prediction Dynamics, a company which aimed to commercialise PhD research, was also co-founded by Brian, but this failed in 2004.

Following this Brian joined Trinity Venture Capital where he was involved in many successful start-ups during his 6 years as Investment Director. After a stint as Interim CEO at AePONA, Brian joined Draper Esprit as a partner in 2010. He has continued his involvement in successful technology start-ups, such as Movidius which recently sold to Intel.

Brian had two successes and one failure as an entrepreneur, and says he “learnt more from the failure than I did from the successes”.

+ Was there anything you learned in college, or anything that you got involved with that you feel helped you later in your career?

When I was in college there was little emphasis on entrepreneurship, but that has changed a lot now. Entrepreneurship has been legitimised as a career path, it is now an option for people.

I think engineering is a great basis for starting your own company, as I think is reflected by the number of people with engineering degrees who founded successful companies. I think it provides a good foundation for problem-solving, and using logical steps to work through a challenge. It is also worth noting that entrepreneurship is not the same as invention. Entrepreneurship involves much more, as it requires implementing an idea, bringing to market and carrying through.

+ What are the most important factors that you consider when deciding whether or not to invest in a start-up?

When choosing to invest, the most important thing, for me, is the market opportunity. Is it a high-value unsolved problem? After that, the team is the next criteria I look at. Who are the people, are they committed and focussed, do they have relevant experience, are they trustworthy, and are they coachable? Coachable doesn’t mean that they have to follow all instructions by the letter, but rather do they take input well? Finally, most people are surprised when I say that the technology comes third. Once the first two factors are right, the technology can sometimes be figured out after the fact.

The two biggest reasons I would decide not to invest would, firstly, be if the company is not scalable. We want to be able to sell the same thing repeatedly to multiple customers; if a company selling a service has to hire more people to scale, then that would not be ideal. Another issue would be a lack of integrity or concerns. A disregard for business ethics would also be a factor in my decision to invest. Most VC’s would say that when things go wrong it was for one of two reasons: either bad market timing (too early or too late) or people. Comments such as “I should never have trusted that guy” show where the issues arise.

I think it is also important to ensure that people don’t see venture capital investment as an end in itself, it should be a means to an end. It is also worth mentioning that venture capitalist are interested in high growth companies with international market potential, but that’s not to say that this should be glorified. Smaller businesses, which are profitable and employ many people, are equally as important.

+ What 3 pieces of advice would you give to student entrepreneurs?

Firstly, I would say to build the business that you want to build, rather than the business you think an investor wants to invest in. If you do the latter, you will be pretending the investor, and running a business that you don’t believe in.

Secondly, I believe that life is easier if you’re doing something that you’re passionate about. Great entrepreneurs are not about, or motivated by, the money. Usually, they’re the ones who see a problem with something being done wrong, done badly, or not done at all, and they’re passionate about fixing that problem.

Finally, don’t try and do it on your own. Being the CEO of a start-up is a lonely position to be in, and if problems arise at a later date, you can’t “downstream” the stress, so to speak. As well as that most venture capitalists won’t invest in a sole founder. This is partly due to insurance – if your sole founder gets run over by a bus you’re going to have a problem – and partly because it can make things very difficult. I would also advise young entrepreneurs to leverage those with experience. Send emails, make phone calls, ask for a sit down over a cup of coffee, I’ve always found that entrepreneurs are generous with their time.

+ How do you think the environment for entrepreneurs has changed since you began your career?

I think the environment today is much more hospitable than when I began my career 25 years ago. In Ireland there was no availability of capital, little support and no base of experience to help those starting their career. Now the conditions are much better, with large amounts of capital available and a large group of people who have had years of entrepreneurial experience, and are willing to help. There are also bodies such as the IDA and Enterprise Ireland, which is a fantastic organisation. While I may not agree with everything they do, they do an infinitely better job than their counterparts in other countries. Finally, it’s now cheaper and, overall, easier to start a company than ever before.

There are of course still some challenges, I find it disappointing that entrepreneurs pay more personal tax than normal PAYE employees. There is still some stigma attached to the career, as entrepreneurs are seen as “chancers”, which is not quite the case in my experience. So going forward, I would say that tax policy is an area that could be improved. As well as this, I think that the global war for talent and skills, in particular within the technology sector, is an issue that will prove to be a difficulty in the future. Unfortunately, there is not much the individual entrepreneur can do in this case, but it is for this reason that I believe the recent U.S. and U.K. policies are acts of insanity, becoming increasingly hostile to immigration. Ireland should be actively encouraging immigration, trying to incentivise those with the desired talents and skills to move to Ireland, along with their families. There should also be a focus on education in order to address this issue, but this is much more of a long term solution.

+ Finally, which areas do you think will attract the most investment in the coming years?

I personally have a focus on technology, although smaller businesses and other sectors are equally as important. The areas that I believe show the most potential include machine intelligence, which will face challenges in the future as regards the automation of roles. Digital health is also a large focus of Draper Esprit, and we expect 25% of our investment to be in this area.

There are opportunities in other areas as well. People often refer to the “Internet of Things” without a clear idea of what they’re referring to. To me, the Internet of Things would involve many sensors connected to the internet, collecting large amounts of data, which could then be utilised to improve life. For example, within agricultural technology, pollution management and traffic management, data is captured and intelligence is applied in real time.