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How The Netherlands Empowers Its Tech Startups


Every nation with a modicum of ambition wants its own Silicon Valley. England touts its Silicon Roundabout and Silicon Fen, Ireland has its Silicon Docks, Germany’s built Silicon Allee in Berlin, Israel talks up its Silicon Wadi in Tel Aviv, France boasts a Silicon Sentier in Paris, and so on, and so on.
The Netherlands, whose tech hub centers around the city of Eindhoven, is taking a circuitous route to prospering from its tech chops. According to Neelie Kroes, special envoy for Dutch startups, her country sees a strong argument for giving its innovators the opportunity to take flight for greater opportunities in other nations, rather than trying to keep them at home. “They will start to develop their business in the U.S., then enlarge their market to Europe again,” says Kroes. “It’s a global thing.”
This is the latest mission for Kroes, 73, a former member of The Netherlands’ House of Representatives and the European Commission, who has made FORBES’ “The World’s 100 Most Powerful Women” list a total of five times. As chief cheerleader for Dutch startups, she’s sought to alert investors in the United States and elsewhere to entrepreneurial talent in the Netherlands. Kroes’ tour of international tech scenes took her to Boston and New York earlier this month, and she plans to hit Tel Aviv and Silicon Valley in the fall. Meanwhile she’s beseeching established Dutch innovators to act as mentors to startup entrepreneurs in the Netherlands. “It’s helpful,” says Kroes. “How to find your banker, how to find your potential venture capital, how you pitch.”
The Dutch philosophy of encouraging homegrown startups to flee, may be one of necessity. Though strong in education and tech infrastructure, the Netherlands has fewer than 17 million residents and a language that nobody else speaks. Since it’s tough for entrepreneurs to dream big in such an isolated market, they naturally look beyond their borders. “For quite some time we’ve had an open and very transparent attitude, being Dutch,” says Kroes, “because we are a tiny country.”

Some top Netherlands-born startups that have moved or grown outside their homeland include payment solution firm Adyen (used by Facebook, Spotify and Airbnb), enterprise app builder Mendix (now based in Boston), 3D printer firm Shapeways (based in New York) and food delivery platform Takeaway.com. An older player, semiconductor leader ASML, grew out of tech giant Philips (another Dutch company, which went global).

One of the hardships Dutch startups face, says Kroes, is overcoming the natural Dutch tendency to be humble. “It is a general attitude of Dutch people that you don’t profile yourself as being successful.” In the U.S. tech scene – where entrepreneurs tend to dream big, overreach, move fast and break stuff – declining to shout your accomplishments and potential from the mountain can get you ignored. Entrepreneurs emerging from the Netherland’s need to learn to talk themselves up and to accept when they things don’t go according to plan. “The culture of failing is far more accepted in the United States,” Kroes points out. “You need failure to be successful in your next step. That is not really accepted in general terms (in the Netherlands) yet.”
Another roadblock could come from U.S. investors poaching Dutch startups, bringing them stateside to focus only on American markets, where money, talent and opportunity abound. Kroes is dismissive of such thinking, pointing out that tech products tend to be globally appealing. “You’re underestimating the average venture capital guy or girl,” she says. “They are interested in new challenges and they want to be the first on the block and that is why we should explain what’s in it for them.”

Being first on the block means getting in before valuations rise, says Sigrid Johannisse, director of StartupDelta, a Netherlands-based network and support system of entrepreneurs, investors and startups. “If you look at startups in Silicon Valley, valuation is much higher than in Europe,” she says. “So it’s a huge opportunity for VCs to look at European startups because you get more value for money.”
But what about Dutch investors? Getting investors at home to see Netherlands tech as a viable investment is also part of Kroes’ job, but it’s not easy. “There is money,” she insists. “There are quite a number of rich families and they have to be made aware that you can invest, in the Netherlands, in excellent startups.” She’d also like to see the Dutch national pension fund – which usually invests outside the country – invest in young private firms. “They have to be aware that it’s worthwhile to put a bit of their money in funds in the Netherlands.”

Source:Forbes
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