Shane McAllister, Mobanode: After 10 years the company is working hard to adapt to changing market conditions and the new economy Picture: Adrian Butler
“IT is great to look out on the Shannon and see how busy it is now with the rowing crews and the kayakers,” says Shane McAllister, sweeping an arm across the grand vista from his office in Howley's Quay.
“Of course you see the emergency crews too,” he adds.
It’s a sobering reminder that there are two sides to every coin - like the upturn in Ireland’s economy for example.
Shane’s company Mobanode has been operating successfully in the city centre for 10 years, designing apps for mobile devices for a diverse set of clients.
Coming out of the economic crash he was involved with a company called Magnetic Time that was selling software that allowed you listen to work documents and emails on your iPod (“that’s how dated it was”, he laughs).
Conversations with venture capital groups led him to realise however that everything was going to be happening on the phone in the not too distant future.
“When I went out on my own I knew I was doing something in the mobile space but I didn’t know what, and I’d like to say I knew iPhones and smartphones were going to be as big as they were, but I was just in the right place at the right time.”
Now times have moved on, Mobanode is 10 years in existence and he is seeing a bit of a change.
“The economy has picked up and you would naturally think ‘that’s brilliant’, but what has happened is that it is hard to retain staff. We are a service-based business, our only cost is our staff and that’s increasing and we’ve lost a number of staff to multinationals and you can’t compete.
“The other, flip side of that is we had a really good run with the advent of mobile, the app store and worked for a lot of really good clients who said, ‘yeah, we should do something on mobile, it’s important’. Now they’re saying, ‘well, it’s not going away, we need to skill up internally on this, we need to be able to do it’.
“So a lot of our clients over the last ten years, some of them now do what we used to do for them.”
All of which means the company has to take a look at itself and try to figure out where it fits into this new reality. In part that has meant shoring up how they do things and trying to identify a new focus.
“It’s a really competitive market, developing apps, you’ve to compete against internal teams developing apps and also if they outsource to eastern Europe or further afield even.
“Essentially, clients are outsourcing to us, but that’s near-shoring, we’re in Limerick, if you’re in Dublin, it doesn’t matter we’ll come up to you, we’ll be there in a couple of hours.
“We’ve seen a few move over to eastern Europe or Asia and while the headline figures look good - $20 and hour, compared to $65-70 - the management overhead is what kills them, they don’t look at that, they don’t realise that”.
The value added, in terms of engagement and input has been a USP of the company meaning they have nearly become like a partner to some clients. With competition only increasing, building and maintaining relationships is critical to success
“It’s my primary role,” says Shane, “that client-facing side of things, understanding your client.
“It’s not a hard sell that we do. Sometimes we take a few months to get the work from a client, we’ve to figure out what’s their problem, what do they want, a lot of this stuff is new for them as well too.
“And we’re very realistic too, we would have turned down a lot of work over the years, because people don’t always need apps. They want an app, because so and so has an app, but it’s not necessary.”
As an example of the transitioning market, Shane points to the hotel industry.
Many might have desired an app before for appearances sake, but now could have genuinely useful ones that are transactional.
Looking ahead, Shane says, loyalty customers or business travellers staying in a certain hotel can have the app on their phone, which acts as a key to access a booked room.
It might have a welcome message when the person gets anywhere near the hotel telling them they’re checked in tonight and in room 101. The client could walk up to the room, open the door and once inside, control the lights, the TV and other facilities.
“That’s how the app market has changed in the ten years that we’ve been doing it,” says Shane.
“It started off being marketing apps, you needed an app, they were information-led, they weren’t transactional, you weren’t making any money off them.
“Now what we see the key players and the companies that do really well, it’s transactional, it’s how you communicate with the person who has the one-to-one with the device. That’s how you make your money from the app.”
One of Mobanode’s biggest successes has been in this sphere with the energy company Pinergy.
The app is how everybody tops up their account and counts something like 20,000 users on a monthly basis. All of the money is coming through that for that company.
“Then you become valuable to somebody like that - your app is the conduit for all this revenue.
“How do we do something better and more clever the next time and the next time and I suppose that’s an area, if we’re trying to sustain ourselves, that we’re probably going to have to look at - the transactional-based apps. If we can retain that business we will.”
Medical-based apps and sports-based apps have in the last couple of years become a much bigger proportion of the company’s work.
Doctors these days are not referring to books they’re looking on their phones so Mobanode has built guideline apps for reference material and worked with hospitals around the country in that sphere.
The sports apps that track everything we do, like cycling and running apps are famililar to most of us. The company has also worked on a number of sport rules apps.
Setting up a business in Limerick was easy; as Shane points out all the supports are there if you have the idea. He was one of the first people out in the Hartnett Enterprise Acceleration Centre in LIT.
“There was a cohort of people there at the time, that centre had just been built, I was one of the first tenants in there and we’re all still friends.
“Certainly at the start they’re very good, more particularly from your cohort, not necessarily the centre itself, but you’re in a place with everybody else trying to get going and the support derives from that.
“Mundane stuff like who has got the best bank account, who is the easiest to get these set up, how do I incorporate, what do I do?
“The problem with some of the start-up centres I suppose is that sometimes people can stay too long, so what I did, I was two years there and I deliberately moved out and when you do that (and I moved into the city centre too) you put yourself in the frame of mind of being commercial.”
After 10 years of successful operation, that commercial head is needed now more than ever.
“Yeah, we have to figure it out, we’re at a real time of change you’ve to fight harder for projects, internal costs are more.
“We used to compete really well, but now we’re at the point where companies are saying, we can outsource this project to you guys or we can hire someone for six months ourselves and see how we get on and keep the intellectual property inhouse and that’s maybe happened us three times this year, which was a bit of a wake-up call.”
As he says, mobile is no longer new and unique and companies realise that most web access is by mobile devices and they need to be concentrating on it.
“Mobile first is key, that’s what is driving it and what’s driving a lot of companies to ask, ‘hold on this is our primary platform and we’re outsourcing this?’
“So that’s been the biggest change in the last year, 18 months, resources in terms of staffing and a lot of the work we would have done happily, we’re now hearing ‘we can’t really outsource this anymore, because we need to own this. We need to be able to manage it ourselves’.
“So that puts a different spin on the direction and that’s why we're in a state of change as to where are we going, what are we doing, how do we add value, so we'll see.”
- This feature is part of a wider 32-page supplement called Limerick on the up, carried free with the Limerick Leader and available online here