Startup Ireland has released the results of its second annual survey of Ireland’s early stage entrepreneurs. Conducted in partnership with Amarach Research the research identifies the obstacles encountered by Ireland’s entrepreneurs and their attitudes to the strength of the startup sector in Ireland. Despite record number of startups being created each month in 2015, few are scaling successfully. The survey gives a direct insight into the experience of entrepreneurs in Ireland trying to scale their startups.
The survey was conducted in the months of October and November in conjunction with the Startup Gathering and received over 417 responses. The full results are available online here. The survey found that 48% of the entrepreneurs that responded were inspired to start their business because of their own direct experience of a problem and related work experience. The sectoral focus of Irish startups remains concentrated in consumer/internet and business/enterprise products and services, while there has been an increase (from a small base) in life science/biotech focused startups (10%).
There has been an increase in the share of startups in the survey who have been in operation for 1-3 years (42%), suggesting that more are surviving and moving into the next stage of operation. In terms of the obstacles to them scaling, 81% of entrepreneurs find it difficult to access scaling supports to grow their business (72% in 2014) while 79% found access to funding and talent major obstacles. These obstacles to scaling are of concern because research in the UK by the national ScaleUp initiative found that just 1% of startups scale to achieving £1 million in revenue 6 years after they start.
The majority of startups that have not developed any significant IP in their business (64% have neither patents nor trade marks) with 3 in 10 startups availing of R&D supports such as innovation vouchers or Innovation Partnerships in building their startups. Reflecting a relatively low level of engagement with startups by large corporates and MNCs in Ireland, only 1 in 10 respondents availed of support from large corporates when building their startups.
Reflecting the national shortage of suitable co-working space the startup sector has become slightly more polarised in terms of its location profile: the share of those working from home has gone up (from 40% in 2014 to 49%) as has the share in rented offices. Research by Startup Grind found that entrepreneurs working from home lack networking opportunities and as a result can struggle to scale their startups.
In answering questions on the state of Ireland as a potential ‘Startup Island’ 78% are in agreement that Ireland becoming a global startup hub will benefit their business but 79% feel the startup sector in Ireland is not performing to its full potential.
Commenting on the survey, Eoin Costello, CEO Startup Ireland said: “We conducted this survey with Amarach to help provide a voice for Ireland’s early stage entrepreneurs. If Ireland can get the fundamentals right at the beginning of the journey for startups then there is the potential for larger numbers of startups to be able to start, scale and succeed from Ireland. Based on this representative sample there appears to be insufficient awareness amongst entrepreneurs of what supports are available, not enough accessible supports for scaling and entrepreneurs perceive that the startup sector in Ireland is not cohesive and aligned. Our survey highlights the fact that coordinated action across the private and public sector is needed to enable Ireland’s startup sector to deliver to its full potential.”
Comment on the survey from leading Irish entrepreneur Colm Lyon said –
“More people are engaging in setting up businesses of their own and it is imperative that we have the best start up ecosystem in place to support these entrepreneurs. However most respondents to the survey (79%) believe we are not performing to our full potential. To build jobs, enterprise and wellbeing we need more businesses. The early stages of a business are its most crucial and we must focus our attention on ensuring that no stone is left unturned with respect to the support we can provide to early stage businesses. Perhaps the most important – and often misunderstood aspect of that support is the availability and easy access to early stage funding. We must make early stage funding easier and more accessible. In doing so we accelerate the development of the business so it can adapt faster, learn more and increase its chances of success.”