Good afternoon, ladies and gentlemen. I’m delighted to welcome you to the fifth and final of our Science Week lectures for 2008. Discover Science & Engineering, in association with the Science Gallery, have brought together some leading speakers during Science Week, and I for one have really enjoyed the lectures that we’ve had, and I’m really looking forward to today’s. Anyone who’s interested in programming and engineering is in for a treat. We’re delighted to welcome Patrick Collison, who’s a former BT Young Scientist of the Year, who co-founded a software company, Auctomatic, which he sold this year, and he now works as director of engineering with the new owners, based in Vancouver. So a big welcome to Patrick. And our MC for today is Liz Bonnin. Liz first started her career presenting on RTE television, and she later moved to the UK to present on a number of TV channels. She’s presented a number of shows on Channel 4, and was also a regular presenter of Top of the Pops. Most recently, she presented the Science Friction programme on RTE, and she’s currently working on a new BBC science series. So I’ll hand you over to Liz and Patrick. [applause from audience]
Liz Bonnin
Good afternoon. It’s my great pleasure to welcome you here on behalf of Discover Science and Engineering. And we’ve got a very special last lecture in our Science Week series this afternoon. It’s my great pleasure to introduce you to a Young Scientist of the Year winner, who was accepted into the prestigious MIT at the tender age of 17, but who decided after just one term to move on and set up his own computer programming company. Now, within the year he sold this company for quite a considerable sum of money, and is now the new owner’s director of engineering, and all of this before the ripe old age of 20. I’m very much looking forward to finding out how on earth he’s managed all of this, and I’m sure you’ll have lots of questions for him as well, but for now would you please put your hands together for Mr Patrick Collison.
So, I mean, despite how it might sound, when myself and my brother John decided to start a company in, I guess, January 2007, it would be hard to imagine two more implausible candidates. I was 18 at the time; John was 16, in transition year. I had just finished my first semester at college. We knew absolutely nothing about business. I mean, to us the idea of starting a company involved, picking some sort of name, deciding we were worth X, and just sitting down and starting to write some code.
And we made a decision to start a company together in January, but we were not able to make it completely definite, and so I actually went back to start my second semester at college, and just as I was about to do that, we decided, hey, no, actually we really were going to do this company. John came over to Boston where I was to spend a month with me, where we tried to work out initial ideas. And on one of the first nights there in Boston, we found that there was this group Enterprise Ireland were holding an event in Boston, where they were inviting prospective entrepreneurs, whatever else. And, I mean, we felt that we were pretty lucky, that we’d just got to Boston, and we’d just decided to do this company, and here it was. I mean, there was this investment dinner that we could go to, and they were going to give us millions of dollars, and it’d be great.
And so we found out about this dinner the evening it was on, and so the dinner was starting at seven o’clock or whatever, and someone happened to tell us about it at, I think, five o’clock. So we decided we were going to go to it, obviously. And then at, maybe six or 6.30 we found that this was actually a formal dinner. And so I went to the wardrobe and looked through my extensive collection of formal T-shirts and decided that none of those were perfectly appropriate, and so at around 6.30 or so myself and John was scurrying around the dorms at MIT trying to find people who had suits and whose suits would fit us. Sometime around a quarter to six [sic] we found something that would kind of pass, and we took the subway to this dinner and kind of turned up at the door five minutes late in these sort of ill-fitting suits and asked to be let in.
And this I think was kind of indicative of our general experiences. I mean, we knew absolutely nothing about how this whole process worked. After this dinner in Boston, we weren’t too discouraged by our initial experiences, and myself and John went back to Ireland and rented a small office in the National Technology Park in Limerick, and pretty much just put our heads down and started writing some code. We knew from the beginning that we wanted to do something to do with eBay. We kind of felt that obviously eBay had been extremely successful, but they weren’t innovating a whole lot, they hadn’t released too many new features, and so we felt that there might be some sort of opportunity there.
What we decided to build initially was what I now describe as this combination of Amazon and Wikipedia and eBay, and it was as terrible an idea as that sounds. But we hadn’t realised that yet, and so we got to work on building it. We spent the first three months, I guess, doing little else but living and in some cases sleeping in this small office in Limerick. And then as we, as things moved forward, and as we realised that we may want to actually launch this thing at some stage, we began to think about other questions like whether we would raise some money or how we would buy servers and whatever else.
Up to this point everything had been funded by our savings, which is to say, our parents. [audience laughter] And so at this point, about three months in, we decided that we may actually want to raise some money. We started looking at the various options available to us in Ireland. I mean, the obvious one was Enterprise Ireland, which specialises in funding start-up companies. And after our great initial experiences we felt that that was a promising option. There was also stuff like county enterprise boards and whatever else, and I guess also private investors.
We had some initial discussions with various organisations, I mean, both Enterprise Ireland and some of those county enterprise boards, but we were, I mean, to say again, we weren’t the most promising candidates. I didn’t have a degree, I didn’t do my Leaving Cert. John was in transition year. We didn’t, not only did we not have a business plan, we weren’t even sure how to write one. And so, needless to say, they didn’t just write us a cheque. So even though we never got a definitive no from anyone, we did not do particularly well on that front.
And so things were looking a little bit bleak. We had this idea which we thought might be kind of OK, but we hadn’t raised any money and whatever else. But then, we knew of this investment group based out of San Francisco called Y Combinator. Y Combinator specialises in providing what they call seed-stage capital. That is to say, as investment amounts go, extremely small amounts of money, in the region of 10, 15, 20,000 dollars. This was in the region of what we thought we needed. We liked the sound of Y Combinator. I knew one of the guys involved in it from a couple of years previously. And so we decided to put together an application. We applied in around April 2007, and were pretty pleased when our application was accepted. And so, Y Combinator, as I said, is based out of San Francisco, and so we basically said to our parents, you know, again, John in transition year and me just finished college, or me just left college, that, ‘Hey, we’re moving to San Francisco.’ And they said, ‘Fine, OK.’
And, I mean, that’s basically what happened. Things have been kind of OK in Ireland for the three months, but we felt that our luck might be better out in San Francisco. So we went out there. We knew nothing about the city. I mean, I remember the, in particular the first night, trying to find a place to stay, which was an interesting experience, but another story. And we met with these investors from Y Combinator on our second day there. And they actually suggested that we merge with another company that they had already invested in. This was two guys from the UK; Harjeet and Kulveer Taggar. And they’d similar ambitions to us. They also wanted to do something essentially competing with eBay, but they’d gone about it in a slightly different way. They had built a marketplace for students, essentially.
And so we kind of had some discussions, talked about where it was we wanted to go. We realised that we were kind of a good fit, in the sense that they had focused quite a bit on the business side and had the different business models at work. They had raised some money, whereas myself and John had pretty much just been writing code. And so in, I guess, May or so we decided to merge, and that’s how Auctomatic came about.
And after that merger, we immediately decided again that we needed to change our idea. And what we ended up deciding to build was power seller tools for eBay. Basically, with eBay, or with any competitor to eBay, there’s this sort of chicken and egg problem of, like, the power of eBay, what makes it so successful is that there are, there’s a huge number of sellers and a huge number of buyers, and there’s this great network effect where they’re all in the same place. And so, for any competitor to eBay to succeed, you kind of need to get the buyers and the sellers simultaneously in the same place. I mean, you could launch a great improvement on eBay in the morning, and it would go absolutely nowhere unless you managed to, like, get that sort of confluence of inputs.
And we’d spent a lot of time thinking about this problem, and we still weren’t sure how we could solve it. And Auctomatic was what we came up with. Auctomatic was going to provide a better interface for sellers who were, say, making a living on eBay, or selling a large volume of inventory. And so these were frequently, I know, retired couples who had started to sell the family heirlooms or something, and realised that, hey, this is actually a pretty profitable business. eBay had never really focused on these people to any great degree, had never tried to make it very easy for them. And so we decided to put a better interface in the whole process, and that way get sellers starting to use our software, and then when we built up some critical mass there, we would also introduce some buyer-side stuff.
And so we decided this in May. We went about building it, essentially, and for the next, I guess, four or five months we did little else but sleep, eat and build our software. We launched it in October of 2007. It did reasonably well. The reaction we got from our initial users was very positive. Over the preceding couple of months we’d tried to work as closely as we could with eBay sellers so that we could get their feedback and make sure what it was we were going to release would be somewhat useful to these people. And it mostly paid off. We found out very quickly there was a huge amount of stuff we still had to do, but what we had was looking like it might be a pretty good idea.
Maybe, I guess, a month and a half after we launched this, we got our first tentative expression of interest from some other companies. Basically this company came along and said they may be interested in some sort of acquisition or something like that. And because Auctomatic was really not the company we wanted to build, we initially weren’t too interested in this. I mean, Auctomatic for us was very much a means to an end. This was just, you know, the Trojan horse by which we were going to engage our much larger ambitions of competing with eBay. And so, when some company suggested something like acquisition, it just, it wasn’t really something that we’d ever thought much about.
But then two other companies came along and said the same thing, and so by Christmas of 2007 we were kind of in this, in this strange situation where we expected to be focusing wholeheartedly on the product and trying to grow it as fast as we could, but actually we were in negotiations with three different companies about some sort of potential acquisition. One of the companies was called Live Current Media. And they were particularly interesting to us because even though they were a public company and had a reasonably long history, they were also reasonably small. At the time I think they were only about, maybe, 30 or 40 people. And so they were much larger than us, but at the same time they weren’t inconceivably large. They weren’t the kind of organisation where you join them and just become a face in the crowd. And so the discussions with Live Current continued, and then in February we ended up signing a deal with them to be acquired. And that, I guess, that finally closed in May of 2008.
And so when people ask what the overriding emotions were as a result of this acquisition, it was not surprise or elation or anything like that. I mean, it was relief, that, like, hey, in this four month process from February to May, like. On so many occasions, there were various things that looked like it would sink the whole thing. But when it all managed to close successfully, it was just like, ‘Hey, shit, thank God.’ So anyway, I mean, this means when there was all this, I guess, media attention surrounding it in, I think, March, was it, last year, it hadn’t even closed at that point. So it really was a long, drawn-out process.
And one of the questions that – well, actually, sorry, I should say that this, by the way, is the official story of Auctomatic. I mean, I’m admitting all the great stories like, I mean, you must know Troy McClure from The Simpsons. Yeah, yeah, right. So at one point there was this investor, Josh Kopelman, who was, who had expressed some tentative interest in investing in Auctomatic. And, I mean, we were in awe of Josh Kopelman. He had founded several extremely successful companies, and, like, the notion that he might have the slightest interest in investing was very exciting to us, and so we arranged to have a call with him, I think it was two o’clock one day in order to give him our pitch. And, I don’t know, two o’clock for us was very early in the morning, but we felt we could make it. We got to bed pretty late the night before, I think it might’ve been five or six o’clock or something, and all I remember is at 11 o’clock the next morning the phone started ringing, and I’m kind of in some sort of half-asleep stupor, just, like, slamming the floor around me trying to find it. Eventually I pick it up, you know, it’s, ‘Hey, it’s Josh’s secretary,’ and ‘can you hold for one second,’ you know, she’ll put Josh on the line. I’m trying to figure out, like, what’s going on, it’s only 11 o’clock. And then it dawns. It was two o’clock Eastern Time, and we were in San Francisco, which is Pacific Time, three hours offset.
And so Josh duly comes on the line, and it’s, ‘Josh, sorry, can you just, can you hold on for one second while I get the team together.’ And so I run into the next room and, like, kick the other guys awake, and it’s like, ‘Hey, Josh is on the line.’ And so, basically, the three of us, myself, Harjeet and Kulveer sort of gathered around, like, you know, the shitty speakerphone in our underwear, giving our pitch to Josh Kopelman.
And so, Auctomatic was, I mean, in one sense it was the story I just outlined, and – sorry, the story I initially outlined, and in another sense it was like a long series of those sort of events.
The big question that I kept getting as a result of the acquisition was to do with Irish technology companies generally. I mean, we had begun in Ireland, but we had made the decision to move out to the US. And there are all these media questions like, did I think, or do I think that, like, all Irish technology companies should make that switch or, for people who are thinking of starting a technology company in Ireland, should they just straight away move out to the US and not even bother setting up in Ireland initially, or all that kind of stuff. And I always try to kind of avoid answering those questions, because my answer to should a technology company set up in Ireland, my answer is sort of, ‘No, but,’ and inevitably that just becomes no, and so I didn’t really want to answer them unless I could answer it right.
And so today I’d like to give, like, a slightly fuller answer to that question. Part of the reason I don’t want to get it wrong is that I think it’s actually pretty important. I was talking to a friend of mine about this a couple of days ago, and he reminded me of the Lisbon Strategy, which was this EU document released in, I think, 2004, that sets out this sort of grand ambition for the European Union to produce, and I quote, ‘the most dynamic and competitive knowledge-based economy in the world by 2010’. I mean, identifying this knowledge-based economy, they explicitly name Silicon Valley as what they want to emulate. What distinguishes Silicon Valley is, obviously, the huge number of successful technology companies. And all of those successful technology companies were at one point small start-ups. And so by saying that we want to create the world’s premier knowledge-based economy in the EU, what they’re really saying is, we want to make sure we’ve lots of start-ups.
And so, I think it’s pretty important that we get the start-up ecosystem right. Even though start-up is kind of a funny term, in the sense that people never seem to be completely clear on what it means. I mean, it’s a fairly recent word. I think it’s actually a pretty old concept, and this notion of there being risky, innovative, creative enterprises in which people should invest small amounts of money with the prospect of a much larger return has obviously been around for a long time. In particular, I think start-ups are very relevant today, with the dawn of computer-related start-ups. With something like biotech or even electronics companies, start-ups are still a pretty good proposition, but they’re reasonably expensive to establish, whereas start-ups that basically are software companies have a really low activation energy. Almost anyone can get one going.
And so, for that reason they’re especially attractive to young people. And so, over the last, I guess, 10 years or so, well, 20 perhaps, there have been an increasing number of young people starting start-ups. I think that’s a really interesting phenomenon. And I think the numbers considering that path are going to grow. In particular with the current economic climate, large companies are obviously suffering right now, and will continue to suffer for quite a while. But startups generally tend to do pretty OK in poor economic conditions. I mean, Google and eBay did really well during the last, albeit brief recession during 2001. So I think start-ups in general over, say, the next couple of decades are going to be really important to young people and also to the economy as a whole, and especially in the next couple of years, just as we’ve, like, these rough economic times, I think it’s a big deal.
To come back to what I was saying a couple of minutes ago, the blunt truth today is that starting a technology company in Ireland is not a particularly attractive proposition. And I think we have to be honest and realistic about that fact, and then focus on how we should change it. I think that the biggest problem that exists in Ireland today is that our investment community could do with some improvement. But all these criticisms, I feel, conceal actually an awful lot of optimism, in the sense that Ireland is actually quite well positioned. We’ve a reasonably well-educated population, we’re fairly well off. We’re a small country and so we can enact change fairly quickly. And so I don’t see any reason that Ireland cannot become the Silicon Valley of Europe.
But with that said, there are significant problems. And as I mentioned, I think the investment scene is probably the biggest. I guess all of us have been reading quite a bit about finance in the past couple of weeks, and one of the most interesting things I read is that, if you look at the – do you guys know the S&P 500 index? I’m sure most of you do. Right. So if you look at this index of the 500 largest companies in the US, and look at the returns of this index over, say, the 10year period between 1997 and 2006, you find that the average annual return on investment is 8.4%. But over the course of those, whatever, 3,650 days, if you miss out, or if you missed out, on the 10 best performing days, the average annual return goes down from 8.4% to 3.2%, just by missing the best 10 days. And so, if you invested $1,000 in 1997, and if you left that money invested for the entire period, you would have $2,400. If you missed out on those best 10 days, your returns go down to $1,300. Basically, your return is almost a third of what it would otherwise have been.
And I think this is the problem with the investment community in Ireland too. It tends to be quite risk-averse. It does not value failure in the same way that investors in the US do. And so I think collectively in Ireland this is something we really need to fix. The 'outliers', the really risky propositions, are where the great returns come from, and we don’t value this enough in Ireland. Even though investment is a kind of dry topic, I really think it’s something that we actually should get passionate about for the reasons I was mentioning before, about the growing importance of start-ups to young people and the economy generally, and all the rest.
And while the risk profile and the people’s, the community’s differing appetites for risk is a big part of the problem, I think an even bigger one might be the mindset generally. In Ireland it can seem like an extremely intimidating prospect to go and get some sort of start-up investment or seed funding or whatever it is. And it seems intimidating largely because it is. And I mean, I was browsing the Enterprise Ireland site and Y Combinator sites yesterday afternoon when I was preparing this talk, and I was just struck again by the extent to which this is the case. And so, I’m quoting here from the Enterprise Ireland website – this is where they outline their application process – and what they write is, ‘Project ideas must be discussed with your assigned development adviser prior to submitting a completed online application form. You’ll be required to clearly demonstrate to your development adviser the specific benefits of undertaking the proposal. There is a cumulative grant limit within a rolling twoyear period for all proposals approved under this category of funding. For further information please discuss with your development adviser.’ I mean, I honestly don’t know what that means.
And then I went to the Y Combinator site, and here’s how they describe their application process. ‘We’ll review applications by October 29th, and invite the groups that seem most promising to meet us in Mountain View on the weekend of November 14th. We’ll decide who to fund that weekend. Decisions will include the amount we’ll invest, and the potential of the company we’d want for it. If we accept your offer, we’ll write you a cheque immediately for as much as you need to cover your initial expenses. After you’re accepted, we’ll set up all your company paperwork for you, including getting you incorporated. Once your company exists, we’ll write a cheque to it for the rest of the money. You can spend the money however you want.’ In the light of that difference in mindset, I don’t think it’s any surprise that people find it far less intimidating in the US to go ahead and start a company.
The other issue is that, even if you do manage to get accepted in Ireland and do get some investment, the terms are not particularly good, and the models on offer are just not very favourable for young companies. One thing that Enterprise Ireland favours a lot is this notion of matched funding, where they will give you as much money as you spend yourself. And this just isn’t all that great when you have no money yourself. And so, I mean, again, it’s not particularly attractive to young people. And so, again, to compare it to the US, when Auctomatic, when we had used up the initial seed capital that Y Combinator gave us, we decided we’d like to raise it a little bit more, and we were approached by Paul Buchheit, who was the creator of Gmail, and he offered to invest 75K in the company. But he’s a particularly paperwork-averse guy, so he agreed to make this investment and then kind of just forgot about it. Then a couple of weeks later we sort of had this problem whereby we were due to go to a conference. We were going to go to eBay Live. We needed to buy some servers, but we didn’t have the money for it. So I was scratching my head, wondering how we’d fix this problem. And on the phone to Dell and talking about different options like leasing and, you know, how we’d pay them back in a couple of years when we had millions and millions of dollars. And they weren’t really buying it, so we were kind of stuck.
Do any of you know Twitter? Yeah? OK. So, for anyone who doesn’t, Twitter is the site where basically you provide short status updates that describe just what you’re doing or what you’re thinking or what’s going on. And then people who know you can choose to receive those updates. So I just wrote a short tweet saying something like ‘Trying to figure out how we can possibly pay for these servers,’ or something to that effect. And Paul Buchheit, this investor, saw that tweet, and he kind of phones up and he’s like, ‘Hey,’ you know, ‘I agreed to invest, didn’t I?’ And we were like, ‘Yeah.’ He was like, ‘So, I mean, why don’t I just give you my credit card number?’ I was like, I mean, as you do, I was like, ‘Sure.’ And so, yeah, he gave it to us, and we bought our servers. And once again, I think this is the difference between Ireland and the US. I mean, in Ireland, if you go with this matched funding option, you’ve to get audited accounts, and different monies are ring-fenced to be spent in different areas, and this must be certified R&D, blah-blah-blah. Again, it’s… I don’t understand it. And in the US we get a phone call from an investor offering us his credit card number. And from the perspective of a start-up founder, I mean, I think it’s pretty obvious which is preferable.
And on a slightly broader scale, or just a little bit more long-term, I was also trying to think about what distinguishes Ireland from the US, how we could improve things here. And I think one pretty big thing that it would be great to see changed is just education and in particular secondary education. Computers in schools right now is pretty terrible. I mean, even though there’s a reasonable amount of it, I think, it tends to be kind of vocational training in Word and Excel and all the rest. And I mean, Word and Excel are certainly useful skills to know, I mean, it’s good to know how to use them, but it’s not teaching you computers themselves. It’s just teaching you specific applications. And so what I think we really need to do is introduce programming into schools. Programming is going to be the, well is and is going to be more so, the maths of the 21st century. And the sooner we realise that fact the better. I think, I mean, programming is going to become the fourth R, you know, as in those three Rs. I mean, if you allow writing as one of the Rs you have to allow programming. Steve Jobs has this great quote which kind of aptly describes the power of how computers can extend the power of thought. And that’s basically that – humans are quite slow as land animals go in terms of running, I mean we can be outrun by so many different creatures. But a human on a bicycle can beat anything. And so, by analogy, computers are bicycles for the mind. And I think this expresses it well.
In the same way that the printing press increased the leverage of individual person, who could then go and, instead of just distributing a couple of dozen pamphlets, could go and influence a couple of thousand, or tens of thousands of people, computers increase the leverage of one individual person. I don’t know of anything that’s as simultaneously creative and yet constructivist and challenging and open-ended and all the rest. One small example of this is, last Christmas, while we were involved with all these acquisition negotiations, I needed something to keep my mind off things and stop myself going mad. I’d also been travelling a lot, and because of that, been without access to the Internet. And when I was deprived of access to the Internet, I didn’t have access to Wikipedia, and I realised how little I really knew. I mean, with no Wikipedia there I was stuck. So I decided to write this application for my phone that allowed me to store a complete copy of Wikipedia on it. And this is no huge technical achievement or anything, I mean, just taking the copies, or the database dumps that Wikipedia provide and just putting it onto a phone and putting a little reader on top of it.
I enjoyed it and it was a fun project to work on for a couple of weeks. Then, in something like March of this year, do you know the $100 laptop project? The $100 laptop, basically, is this project that came out of MIT, where they want to bridge this digital divide, and provide inexpensive, robust laptops to developing countries. And so, one of the members of that organisation contacted me in March and said they’re interested in porting this Wikipedia application to the OLPC, which is their laptop. And so they took the code I wrote for my phone and ported it to this laptop. So now the current batch of something like 100,000 laptops going to Peru, I think it is, now includes a Spanish version of this Wikipedia application, so that those kids without Internet access can have access to the entirety of the Spanish Wikipedia.
And as I say again, the creation of this Wikipedia application was no big accomplishment, but the kind of leverage that programming gave me in that instance is quite indicative of the experience in general. And I can’t think of many other things that allow you to influence so many people in such a straightforward manner. So, yeah, I really think this is something that’d be worth changing. I was speaking at Sligo IT last night, and on the car on the way in I was speaking to one of the lecturers, and he was saying how, I mean, we were talking about this thing, it was like how programming is so engaging and all the rest. And he said that actually they’re running into that at the moment, whereby a lot of the students are complaining that the labs close at 10 o’clock and they get really engrossed in some problem they want to stay there.
And that reminds me of a story from one of our investors, one of the guys from Y Combinator, who tells the story of how when he was in high school, it was kind of the days when there might be… the computer in their school might have been the only computer in a fivemile radius. And so they, himself and his friends were really into programming it, and I think they eventually set it up so they could access it remotely, and then one night it crashed. And so, obviously waiting until nine o’clock in the morning was not an option, so there’s some story whereby they climbed up on the roof and found a panel on the roof they could open, made their way down into the bowels of the school, found the server and eventually restarted it. But again, this is not particularly unusual as programming goes.
The other thing that I think would be worth changing in education, and I mean this comes from just me thinking back to, I don’t know, experiences of the last year and a half or something, things that I was pretty bad at and would be nice to have had a bit more of a head start on. A big one is public speaking. I really think that public speaking should be reintroduced to schools. I mean, this was something that was painfully evident to me back over the past year or two years. It was something I really sucked at, and still kind of do. So I think it would be great if – the difference that a good public speaker makes is huge, just like the ability to express yourself and display some sort of confidence in getting your ideas across is really important and makes a big, big difference to people.
OK, so I’ve talked a little bit about how Ireland should change or whatever and all these sort of big, grand notions. But the other question that I tend to get quite a bit is just tangibly if someone is thinking of starting a company, or just thinks that they may be interested in it or just kind of wondering in general what the whole process is like, what you should do or who you should talk to or what you should read. And that question is actually much simpler to answer. There is one book called Founders at Work which is a collection of, I think it is 30 interviews with founders of companies that went on to become extremely successful. But all the interviews investigate the period, like, the genesis of the company, back when no success was in any way assured. And for that reason it’s really powerful. I mean, you’ve stuff like an interview with Steve Wozniak, who’s one of the founders of Apple. And he’s discussing the stage where he was just building Apple computers in his bedroom, essentially. And so, to look at all these companies like Yahoo and Apple and all the rest, at the stage where they're just operating out of garages, is really interesting stuff, and it’s by far the best resource I know in terms of getting a better idea as to what this whole technology start-up thing is about.
And with that I think I’ve exhausted everything I want to say, but I’m more than happy to answer whatever questions people have.
Liz Bonnin
I would love to open up questions to the floor. If you don’t mind waiting until you have the microphone in your hand before you ask the question, so everybody can hear you, that would be great. Before I do, though, I just have a quick question for you with respect to what you’re up to at the moment. I mean, obviously you’re very excited about new things all the time, new programs. What are you working on with the company at the moment in Vancouver?
Patrick Collison
So, one of the big things we’ve going on right now is this website Perfume.com.
Liz Bonnin
Perfumes. I love it. Very technology-based.
Patrick Collison
Yeah, I mean, we’ve had to go through this extremely tough learning process of reading books about perfume and finding out how it all works, but, yeah, so Perfume.com is basically the Amazon.com of perfumes. And so, we launched a new perfume earlier on this week. And so, given that the majority of the business takes place in the last couple of weeks before Christmas, this is something that’s taking up a lot of our attention right now, and so it’s a very different thing to work on, but it’s interesting.
Liz Bonnin
With regards to your company, does it really matter what the product is, or is it just about how to sell it best on the Internet? Is that what the company is and concentrates on?
Patrick Collison
You mean, sort of, in general? Right. There’s definitely a lot of stuff that can be applied generally, and techniques that’ll work almost no matter what the business. But there is also a surprising amount of stuff that is, like, specific to each individual one. I mean, like I say, we do literally have books about perfume, right. And so, that part of it is actually pretty interesting.
From the floor
What is your take on the likes of, say, Joomla, for example, like, from the transition from HTML for web design and that? Do you have an opinion on Joomla?
Patrick Collison
I’ve never used it, so I don’t have much of an opinion, to be honest. I mean, I’ve heard good things from people who do use it, but not having had direct experience with it myself, I can’t say very much, unfortunately.
From the floor
This is probably a question – after you had been targeted by a potential interested party, did you get any help in finally closing the deals on the business side, to make sure that you got a good deal, and, you know, you sold at the right price, at the right time etc?
Patrick Collison
Our investors were actually extremely helpful there. I mean, we obviously had Y Combinator, and they’ve guided several companies through acquisitions already, so they had plenty of experience with it. One of our other investors was Chris Sacca, who had just left Google. His position there had been their head of special initiatives, and so he again had had a lot of involvement with Google’s M&A, and obviously there’s lots of that. So they were always quite close to the process, and Chris in particular stayed really close to things. I mean, we would forward on different emails we were receiving, and he would give his take and basically just the day-to-day stuff of how you should deal with different things and different issues, and what sort of stuff tends to be significant and what you can safely ignore and all the rest. He was really, really helpful for that. And so, we definitely did have good support on that front. And for any company entering into any sort of acquisition negotiations, I do think it is really important to have someone who has gone through the process before, because just knowing what things you should worry about and what things you shouldn’t is a huge help.
Liz Bonnin
You made it very clear that it didn’t happen overnight. You had many pitches in your underwear. But we’ve got a lot of people from schools here today who, in this day and age, may have aspirations to be as successful as yourself fairly soon. You’re only 20 still. What would be your main points of advice for anyone who’s got a little idea but wouldn’t have a clue how to go about it, being only 16, 17, 18?
Patrick Collison
Well, I guess my main advice would be, whatever the idea is, to get in a position where you can build it yourself. I mean, obviously with computers that means you should learn to programme, but even something not necessarily to do with computers, I think you should just acquire a very deep technical knowledge of the area. Even if you don’t actually end up doing most of the development yourself, I think it’s incredibly important that you’ve a really, really good understanding of the area you’re involved with. I mean, like I say, I’m hesitant to generalise too much, because all of my experience is with computers. But I think this is something that applies generally in business. So I suppose the other part of that is, for anyone thinking of starting a company, I would strongly recommend doing something in computers for the reasons mentioned, in the sense that, just the start-up costs are so low, and you can get things up and running so fast. It’s like a really ideal proposition for young people. I mean, I’ve huge respect for young people who manage to start non-technology start-up companies, just because it’s so much harder. But for people who want to do something business related and don’t know exactly which area they want to get involved in, I would strongly recommend computers and the Internet.
Liz Bonnin
Do you think you were somewhat lucky with the support you got along the way? I mean, I know you’ve had hard times, but it seems to me like, even with your investors being so helpful, do you feel you got a lot of help that might be difficult to get for other people?
Patrick Collison
Without doubt. I think there’s an awful lot of help available to anyone who goes looking for it. I would never say to someone, you know – I don’t think anyone who actually wants to get help will have a problem finding it. And there’s a great culture of almost unreasonable helpfulness in Silicon Valley. One of my strongest or most memorable events was a couple of weeks after we got there. The CEO of one of our competitors dropped us an email asking if we wanted to catch up for a cup of coffee and just discuss things. I mean, he was one of our competitors, and by rights we should have been at loggerheads. But we met up, there was this sort of tentative initial period where we were trying to suss each other out, but we got over that, and we actually had a really good discussion, and he gave us various bits of advice, and told us about different things he had learned, working in the eBay ecosystem, different pieces of code we might be interested in taking a look at and all the rest. And it was really good advice, and we went and used it. And so, this sort of mindset of helping out even when there’s no immediate or obvious kind of self-interest in doing so pervades Silicon Valley, and it’s one of the best things about it. And I think people there have realised that what goes around comes around.
From the floor
What programming languages do you use, and what do you see as the future of programming, what language?
Patrick Collison
For Auctomatic, it was mostly written in Smalltalk. I guess there’s probably quite a few people here who haven’t come across it, but it’s a pretty obscure language, originally developed in the 1970s. It was one of the first object-oriented languages. I think I only know five people or so who actually programme in Smalltalk, day to day, so it’s a really obscure minority language, but I know – I had used even a Lisp programmer, which is also a really obscure minority language, so I was kind of used to being on the fringes in that sense. We felt that Smalltalk was a pretty good fit for the kind of stuff we wanted to do with Auctomatic. And I guess, more importantly, we felt that you really shouldn’t use a programming language based on how easy it is to find people who already know it, but I think it’s much more important to find a language that suits the problem you’re working on. All the people we hired had never, I mean, had hardly even heard of Smalltalk previously. Everyone had to learn it as soon as they joined the company, and that was never a problem for us. If you get smart programmers, there’s never a problem, having them pick up another language.
Liz Bonnin
And with respect to the future of the languages, do you have any thoughts?
Patrick Collison
I mean, it’s kind of strange in that my two favourite languages are Lisp and Smalltalk, and these are both extremely old languages. And to whatever extent I have ideas about the future, programming has kind of, there always have been two sort of families of languages, the ALGOL/C, and that’s kind of grown down through various iterations of becoming more dynamic. And then there was this sort of Lisp/Smalltalk family, which has always been very much on the fringes. And even though by popularity the C family has always prevailed, I think that’s gradually swinging towards the Lisp/Smalltalk side of things. So it’s always a bad idea to make predictions, especially when they’re about the future, but I see the Lisp/Smalltalk family of languages being the future of programming languages.
From the floor
Would you agree that the lack of technical community is equal, if not a greater problem, than the sort of red tape associated with getting investment capital in Ireland?
Patrick Collison
Well, I think that’s kind of a chicken and egg problem – I think to a fairly large degree, to what extent there is a lack of a technical community, a lot of that is because of the lack of a good investment community. And I mean, OK, sure, you can debate which is the original cause, but I certainly think that there are a lot of extremely good technical people that come out of Ireland, and there are certainly plenty, such that there could be a very vibrant technology scene here, and I think the reason that it’s not stronger than it is, is because so many of the people leave the country. I think a strong investment scene could go a long way towards changing that. You really don’t need a huge number of people to start creating that network effect. And, now being in Vancouver, I kind of see that. Vancouver is in a somewhat similar position to Ireland, in the sense that they have a fairly good technology scene, but they would like it to be stronger and they’re always sort of comparing it to Silicon Valley. But they have a significantly better investment community. And as a result of that, they’re actually starting to build up a pretty decent general technical community and different groups of programmers and companies and sort of springing up in the Vancouver area. And the main difference I see between Vancouver and Ireland is not the people themselves, or the kind of technical people the areas are producing, but just the investment communities.
From the floor
What was the transition like, moving in to work in a company? And how many are working underneath you? And you’re director, so are there people, are you director of people who are a lot older than you?
Patrick Collison
In terms of integrating into a larger company or whatever, the transition actually wasn’t that difficult, mostly because the company wasn’t that much larger. I think to move into a company of a couple of thousand people would have been a much more awkward transition. But going from a company of, whatever we were, seven or eight people, to a company of 30, 40, 50 people, it’s not all that different, and you still know everyone’s names and know everyone, and there’s still a similar kind of small company vibe. And so in that sense it wasn’t too hard. How many people are under me? I honestly don’t know offhand. I mean, because we’re still a pretty small company, the whole hierarchy thing just is not particularly strong. And so, for some given person, I mean, I’d even have to think, you know, like, are they under me or not. I mean, I just don’t know.
Liz Bonnin
Are you aware of being 20 and, sort of, supervising as such someone, I mean, does that feel odd to you?
Patrick Collison
I mean, yes; that is the case. I don’t feel particularly odd. I mean, I think people generally treat you the age you act rather than the age you are. And so I’ve never had any particular problem there. That’s also something I think the US is pretty good at, and I guess North America generally, because there is a fairly strong tradition of young people being fairly successful. I mean, there’s the Gateses and the Zuckerbergs and all the rest. So I don’t think people there find it all that strange.
From the floor
In terms of when you were a kid, and school and that, and your first computer, when you had your first computer, was there this eureka moment where all of a sudden you knew how to programme, or was it something that you had to work at or...?
Patrick Collison
Right from when we got our first computer, I was immediately kind of obsessed with it. And so, yeah, like, I – when we got it I was never thinking of careers or jobs or the future or anything like that, but certainly from the very beginning it was something I was really interested in. I didn’t start programming until I was maybe13 or 14 or so. I mean, you hear these people in the US who start when they could barely talk or whatever, and I was certainly not one of those people. But from when I started programming I was hooked straight away, so I spent an awful lot of time throughout secondary school programming. So, yeah, I mean, to answer your question, it wasn’t like a gradual sort of transition to be involved with computers or anything like that. Right from the very beginning I was pretty much hooked.
From the floor
You mentioned at the start that you didn’t have a Leaving Cert. And do you think that was actually an advantage to you, and you didn’t have to concentrate on stuff, you were concentrating all your effort on programming? And the second part of that question is, when you left college after your first term, do you think that was also an advantage, in that you weren’t, like, institutionalised into that way of thinking?
Patrick Collison
With regard to the Leaving Cert or whatever, the reason I didn’t do it was just that I wanted to do it sooner, basically, and so my original plan was to do the Leaving Cert at the end of what would have been my fifth year or whatever. But the Department of Education actually doesn’t allow you to do this, so I just ended up doing the A-levels myself. I mean, and so in that sense, like, I did a kind of equivalent exam, and so even though I didn’t do the Leaving Cert itself, I don’t think my experience was massively different to everyone else.
Liz Bonnin
You did five subjects, didn’t you?
Patrick Collison
Four. Yeah.
Liz Bonnin
Chemistry, physics –
Patrick Collison
Yeah, the great thing about the A-levels is, you can – there are no compulsory subjects, so if you’re not a big language person you just don’t do any languages. So I did maths, physics, computing and chemistry.
Liz Bonnin
And got what in all of them?
Patrick Collison
I got four As.
Liz Bonnin
Says he very meekly.
Patrick Collison
But with regard to the college thing, there was a similar question last night, and this is something that I’ve been wondering about myself. I went away and actually looked into this to see if there is any kind of correlation between the level of educational achievement and entrepreneurial success. And there is a correlation, but it’s in favour of education. So I think this kind of popular perception of really successful business people being school dropouts or whatever is, or may actually just be random bias. I mean, sure, Steve Jobs and Bill Gates and Wozniak were all college dropouts. But as you move further down that list, pretty much all the guys there have college degrees. And so, I guess the two answers to that question of how college influences it, and the first is, I don’t think it actually matters all that much, and to whatever extent it does matter, I think college is actually probably net a good thing. And I certainly have no particular aversion to college or anything, and it’s something I can imagine myself finishing at some stage.
Liz Bonnin
Do you think you might go back to MIT then?
Patrick Collison
I I’ve no plans at the moment, but I would consider it at some point.
Liz Bonnin
Is the door open for you? Do they allow that?
Patrick Collison
This is the great thing about the US college system. You can take time off at any point. I actually didn’t tell them that I was going to defer until the first day of my second semester, but I walked into the registration office, said I would like to put everything on hold, and essentially I just had to sign one form and that was it. And, yeah, I can now go back pretty much any semester in the future. Having that sort of flexibility is obviously a huge advantage, in that, if I had to have made a definite commitment that I was leaving in the very beginning, I don’t think I would’ve been prepared to do that. But given that the worst case scenario, we just, you know, we decided to start this company, and then it went nowhere and whatever, I mean, I could’ve just resumed stuff in six months’ time. Having that safety net below is certainly pretty important for me, and I think is a big reason why so many people do not feel much hesitation in taking time off.
Liz Bonnin
Sure. I’m afraid we’re out of time, but that was absolutely brilliant, very interesting. I’m sure you all agree. Patrick Collison, everyone.
Patrick Collison
Thank you very much.
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