Amsterdam is one of the most prominent players in the startup sector. Matching cities like London and Berlin, this small city has quickly become a heavyweight in the global tech arena. Shifting from a small tech hub to a key city for tech agencies, the appeal of the city’s laid-back bike culture and healthy quality of life makes Amsterdam an attractive place for top talent.
Host to various startup accelerators, like DutchBasecamp and Rockstart, the Dutch digital sector is doing something right. However, it’s not just the startups driving the Dutch tech revolution.Scale-ups, like Hippo, WeTransfer and Adyen, are generating sustainable jobs and money and helping Amsterdam compete in the global tech scene.
Products, not concepts
These B2B companies might not have the star quality of small, hip startup celebrities, but they are successful because they have a sound business strategy and a proven business model. They invent complete products, not concepts.
Being innovative doesn’t necessarily mean reinventing the wheel, it means generating revenues from new technology. Don’t get me wrong, I’m all for innovation and new ideas, especially when it comes to tech companies. But this isn’t without consequences.
While Amsterdam is spending a lot of time and money building an attractive and growing digital community, we still need to do a lot more, especially when it comes to fast growth businesses. By focusing on the startup deltas, incubators, hubs and Silicon-wannabes, the successful, and perhaps less appealing, companies go unnoticed.
Dutch startups raised €500m of VC funding in 2014, and an approximate €80m in the first quarter of 2015, but it’s important to note that there’s a lot of luck involved in the company success stories that we’re all familiar with.
In a recent study by Deloitte and THNK, of the 400,000 startups that survived their first five years, only 104 made it to unicorn status. It’s no surprise, then, that a quarter of the $48.3bn globally invested in startups last year, went to late-stage investments. VCs are investing more and more in companies that are financially stable with a proven product that meets a market need: scale-ups.
Now is the time for Amsterdam to continue promoting the shift from purely focusing on startups to scale-up companies that are already in the international growth-stage; TravelBird, Snappcar and Mendix are just a few who fall under this category. Companies like Hippo set an example of how startup growth should be: always make sure your growth is based on a mature product and proven market.
To quote Hippo co-founder and chief marketing officer Tjeerd Brenninkmeijer: “If Amsterdam wants to become the Silicon Valley of Europe, it will need more than a great startup community. It needs more inspiring companies that have successfully made the transition from startup to scale-up.
“Amsterdam should continue focusing on supporting and promoting all phases, which, in the end, make a company successful as a globally well-known brand.”
Startups might well be worth billions, but their main challenge is establishing a sustainable business model, and it’s a rare few that really make it. What we should continue doing is finding and nurturing the next Dutch unicorns.
Europe’s best test-bed
Amsterdam is in good shape to beat other European cities to the chase and hopefully become home to many more inspiring unicorns. By helping more established, privately owned tech scale-ups to get to the next level, Amsterdam is staying true to its original promise to become ‘Europe’s best test-bed’ and allowing young entrepreneurs to experiment with new ideas and lead by example.
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Chris Hall, Founder & CEO, Bynder
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