Jonathan Dillon, a graduate of UCD who recently joined Baidu, the largest internet company in China as Head of International Business, tells us about his career.
1. After graduation from UCD, you started your career in consulting with Cap Gemini Ernst & Young and moved to the technology sector becoming VP of Corporate Development at Yahoo–can you tell us more about that time and your motivations for moving into the technology sector?
As I was based in San Francisco/Silicon Valley while at Cap Gemini Ernst & Young (CGEY), I was actually working with a lot of technology clients, including big companies like HP, and also emerging internet players. It is a really exciting space that constantly challenges you. I did a range of things, from strategy to operations, and ended up focusing more on M&A.
While I enjoyed working for many different companies across multiple sectors as a consultant, I was more excited by the technology industry. In 2003, I moved from CGEY to Yahoo!, as they were looking to grow aggressively via acquisition.
We had a really good run for a few years – 40 acquisitions, over $5bn in spend and had good success with those deals and returns. Then of course things took a turn. In addition to external pressures from Google and Facebook, numerous internal management missteps lead to a less positive phase.
In late 2008, I started advising start-ups, with the intent of using the knowledge from being inside one of the big internet companies. I then took on the CEO role of one of them, an Irish company called HeyStaks.
2. What brought you to Silicon Valley?
It was sort of by chance. I had applied for one of the Morrisson visas way back when, not really with the intent of moving to the US but more to have the option of doing so.
I was working in Dublin when one finally came through in a late round so I went over to San Francisco for the summer, ran out of money, and decided to get a job.
That ended up being Ernst & Young management consulting. Things moved on from there and one thing led to another, and I have been here since 1994. While a little far from Europe, San Francisco is a good town from a lifestyle and business opportunity perspective.
3. You were previously CEO of HeyStaks, a new venture backed social web search company. Can you talk us through what the company does and how it got VC funding?
HeyStaks is an innovative search company, focused on a new way of determining search results relevance based on an algorithmically way of community ranking of content. It originated out of some doctoral work in UCD and the engineer founders asked me to come aboard and run it. We turned the technology into a set of products and business opportunities and raised our first round of finance from NCB Ventures in Dublin. It is unusual to see such a unique and advanced form of search technology come out of Ireland, and NCB were, and continue to be, very supportive.
Very exciting play, albeit in the highly competitive world of online search. The company is based in NOVA UCD.
I recently moved on from HeyStaks. I took on the role of Head of International Business for Baidu. Baidu is one of the latgest internet companies in China, and the second largest search engine worldwide. They are a public company on the NASDAQ. They are essentially the Google of China, and now want to grow internationally. That’s my job. For now we are focusing less on mature markets, and more on high growth emerging markets around the world.
4. Given the significant valuations put on tech companies – there is talk that we might be in the middle of a bubble – what is your view ?
I do think that the large companies that have gone public over the past 12 months have experienced rich valuations, without the fundamentals to support them. It almost seemed like the market was forcing these IPOs – both the public and the bankers wanted to see a tech IPO wave, whether the companies were ready or not. One of these companies with one of the more useful business models, LinkedIn, has performed well, albeit still at very high P/E. But most have seen a little bit of reality set in, where their young management teams have been challenged to make the transition to evolving to legit business models, with sustainable revenues, and under the scrutiny of quarterly public market and shareholder accountability. Some of these companies will likely find their feet, and may be able to justify current and even increased valuations down the road when their fundamentals catch up.
The good thing though is that even though the IPOs have been fairly big, they have been limited in volume. So I don’t think there is the same type of bubble as in 1999 that could have a contagion effect.
5. You are heavily involved in the social web – where do you see it going to next?
I think we are in a fascinating period, where innovation and consumer adoption is moving at an unprecedented pace. Search is evolving to a more personalized, integrated, and proactive model. Social networking is becoming ubiquitous, yet faces the challenges of privacy and monetization at volume. Content is increasingly available via whatever devices we are using. Mobile usage of all of the above has grown at a rapid rate, facilitated by ever capable devices, and with the solution providers challenged to keep up with consumer expectations. When I see my 5-year old daughter comfortably using the iPad I wonder where we will be in 2 years, let alone in a traditional 3-5 year outlook!
6. What advice would you have for anyone considering setting up their own technology start-up?
If you have the bug, or the idea, you should give it a crack. I have been on each side of the table – buying entrepreneurial ventures as part of a big company, then being the entrepreneur, and now running what is expected to be a large entrepreneurial effort inside a major company.
What I love about entrepreneurship is the ability to move fast and creatively, and live or die by your own sword, as opposed to death by red tape or politics. One should move quickly from ideation to customer prototyping, iterate rapidly with your product, and preferably introduce monetization early on. If you are Irish based, find a way to get close to your global markets, even if remaining physically in Ireland.
But people should go in eyes wide open. Very few succeed. Many good ideas and good entrepreneurs fail. So you need to approach it by giving it your all, yet also have some realistic expectations around it and know when to declare victory or when to fold ’em.
And as a CEO, always have a mentor or a muse to consult. As a VC once said to me, it can be lonely at the top and objective feedback and counsel from a trusted source is critical. Mine is my wife!
Interviewed by Conor O’Donovan, EMBA 2011-13