Co-founder and CEO of Brown Bag Films Cathal Gaffney talks to the Dublin Commissioner for Startups Niamh Bushnell. This article appears courtesy of the Dublin Globe

Dublin-based Brown Bag Films is one of the most exciting European animation studios. Acquired by 9 Story Media Group last year, the animation studio has been in operation for 22 years, with notable productions like the Oscar-nominated “Give Up Yer Aul Sins” and “Granny O’Grimm”. Alongside those, other shows have earned Gaffney and Brown Bag Films numerous Emmy Awards, a Peabody Award, and an International Emmy Kids Award. Niamh Bushnell talks to Gaffney about creating award-winning work, his passion for kids animation and the importance of facilitating and developing great talent.

Tell us about Brown Bag worldwide?
We have seven productions at the moment and work on a wide variety of shows. Our clients include Disney, Amazon, BBC, and Nickelodeon. We have 184 people from 30 different nationalities in our office in Smithfield in Dublin 8, who work on CGI (computer-generated imagery) and post-production. Alongside that, we have the 9 Story Media large studio in Toronto, a smaller one in Manchester and a writing room in Santa Monica. We’re one of the bigger indies in the world for kids’ content.

What are the roots of Brown Bag Films in Dublin?
Brown Bag started off when two animation students got kicked out of college for making their own short films. We borrowed 2,000 Irish pounds. We spent 1,500 on a photocopier, a month’s rent, and a month’s deposit. The remaining five hundred was our working capital. That was in 1994, and it has been a slow and organic growth since then. The idea of an exit strategy wasn’t even in our lexicon for the first 20 years. It was always about doing great work and building the business. We never took on any investors or any other capital at all.

Would you have done things differently if you knew business the way you know it now?
Yes, and no. The advice I would give to Cathal 20 years ago would be different to the advice I’d give him today. I do think that an awful lot of startups are focused on fundraising and not on the core product, and I think that’s a huge distraction, which can consume you.

When was the moment you realised you had made a good decision?
It has always been about doing good kids’ animation for us. We never made programs for the funders, broadcasters or the co-producers. We made programs for the kids. Our first big break was the short film “Give Up Yer Aul Sins,” in 2001.

You got an Oscar nomination for that.
Yes. We had a business turning over less than a million euros at the time, and every month’s invoices coming in on time made a big difference to us. That DVD went on to sell 710,000 units. It christened us. But it had a flip side too. Everyone just assumed, “Oh my god, they’ve got an Oscar nomination, they’re too busy, they’re too expensive, just leave them alone.” It was like a double-edged sword, and it was two years before we got our first job directly as a result of it.

We wrote down in our business plan that we want to get nominated for a second Oscar. That’s when I stepped more into the business, and out of the creative. As the talent, I was the blocker, but as the talent facilitator I could allow everyone else to flourish, and that is how the business would grow.

One of my proudest moments was in 2009 when “Granny O’Grimm” was nominated for an Oscar. Its creator, Nicky Phelan, had joined us after college to scan drawings. He had moved onto designing commercials, directing them, and then ultimately into making short films. We supported his growth. When the Oscar nomination came, I felt really happy to have created the environment where we could identify talent and allow it to flourish.

How do you create that environment when you’re scaling fast, under a fair amount of pressure and budgets are tight?
It’s not easy. It has to be a philosophy, and it has to be a culture. It isn’t a diktat that’s on a wall or in somebody’s employment contract. It has to be something that’s organic and happens in the culture of the business. You have to invest time in your people and spend more money than you can afford on training. Every year, a percentage of the payroll has to go for training yourself, your management team and all your staff. What you get back out of that is exceptional. None of that will happen if you don’t have good HR. If you use HR as a strategic tool in the business, as strategic as sales and marketing, it can transform your company. HR is right up there with finance and production in here.

How did you crack your first big deals?
I suppose everybody gets a lucky break. It’s a lot of work and a lot of luck. If you’re opportunistic, always looking for the opportunity and working hard, you will jump at the opportunity. For us, it was Diana Manson who worked in Chorion in New York that gave us our first 3D series deal for “Olivia”. I wouldn’t give me a job with the infrastructure we had back then, but she took a punt on us. But if it weren’t for Di, it would have been somebody else, because we have always charged down the line.

The work on “Olivia” led to “Noddy”, which then led to “Doc McStuffins“, which was our first Disney show. Disney wanted it in 2D, but we pushed to have CGI, and just showed our mockups. We got the 3D show and nowadays “Doc McStuffins” is pulling a million dollars a year in retail.

Was ambition always a big part of your DNA?
I was always quite ambitious. I failed maths in my Leaving Cert, so I couldn’t become a Garda [Irish Police Officer]. So I said, “Right, well, I’ll try animation.” I was determined to create a job in animation that was at least as secure and as sensible as being a Garda. I wanted to have a business doing animation. Ambition is quite important, and even now when we’ve achieved quite a lot, Brown Bag Films still feels like a startup. I still have the fire in my belly. If we achieve half of what we’re planning to do, it will be very exciting.

But what drives you now is different from what drove you before?
I’ve always wanted to create a good studio, and that desire has only increased. I’m very competitive, but I’m rubbish at football. What I’m good at is animation.

Should companies wait 20 years to consider an exit, or should they think about an exit from day one?
There’s no right or wrong answer. It depends on the individual, their personality, and the business they are in. Are you getting into business to just make money? Most entrepreneurs don’t make money. It’s a lifestyle and a vocation. It’s something they have to do. Making money isn’t a vocation. If you do something well and focus on it, people will come looking for you. We were approached a number of times before 9 Story Media, but I wasn’t ready for it. I hadn’t achieved a fraction of what I wanted to do. When I decided that the time was right, the opportunity was everywhere. If you’re trying to start and grow a business, the last thing you should be trying to do is plan an exit.

Back in 2009, shortly after “Granny O’Grimm”, fifty percent of our business was coming from TV commercials and the rest was in long-form TV series. We had just done our first long-form show for Nickelodeon and were starting our shows for Disney. I said, “We’re shutting down our commercials business. We’re going to do one thing, we’re going to do it well, and that’s the only thing we’re going to do.”

Wow! Closing down a good business like that was a major decision to make.
It was a good business, but it was distracting us. We dealt with irrational clients, who did not know what they wanted, changed their minds and rang you at 10:00 pm at night. Not an enjoyable experience. It was totally at odds, culturally, with what we were doing. We couldn’t move people from one production flow to the next because their schedules were very different. We just said, “We’re schizophrenic here. We can’t do both.” We shut it down, and that was when I focused on our scope.

That’s cool. And you didn’t look back, obviously…
No, I didn’t. But we didn’t have any investors. Imagine if we had raised fifty or a hundred thousand back in the early stages. We would have had a board, and they would have sacked me.

How did you go about international expansion and what is your advice to other companies?
In Ireland, there isn’t much of a market for animation so I started going over to MIPTV in Cannes in the early days. I didn’t know anybody there. They were tough times, back in the nineties, going over there, trying to carve out a market, not knowing what to do or how it works. It was quite intimidating. I persisted and went back again and again and started building up relationships. We got a couple of jobs out of it and some good contacts. Your air miles should reflect where your audience is. You’ve got to be on the plane.

And spend your money on that?
Yes, don’t spend it on your office. Particularly as a global business. Nobody cares if you’ve got fancy chairs. If you open international offices, do not put Irish people in charge, hire locally.

What excites you about the Dublin startup scene?
The word “startup” is now considered, which is brilliant. Being an entrepreneur may eventually be considered a job option. We need to create new terminology for seven-year-olds – that to work for yourself is a career option. Entrepreneurs are the people that keep a lot of the economy afloat. The government needs to focus on that indigenous homegrown talent, rather than just foreign direct investment. We need to support more of our tech startups.

What about education?
The entire startup education system needs a root and branch review and it starts with the education of the seven-year-olds right up to Third-level education.