At this moment of writing this blog I’m waiting for the good old KLM606 flight to bring me back to the Netherlands, where it is wet and cold… Talking about the weather. There may be a positive relation between the weather climate and the business climate. Many SV entrepreneurs I’ve interviewed mentioned the positive effects of 25 degrees and sunshine all year round.

Silicon Summit

My study in SV started seven weeks ago. I attended countless events and I officially interviewed about 30 entrepreneurs, investors and professors. During my study there was an intermezzo from 14th to 23rd of October when a group of 16 Dutch entrepreneurs came over to participate the Silicon Summit. The Silicon Summit was intensive and inspiring. We had a lot of presentations, workshops, pitch events and company visits at Google, Blackbox and Mozilla. The summit is organized every year by the Dutch Consulate in San Francisco. The goal of the summit is to inspire Dutch startups and show them the possibilities of doing business in SV. The local newspaper from Groningen published a nice article about the experiences of the entrepreneurs from Groningen.

Entrepreneurship is a lifestyle

So what did I learn? Well I am still in the process of digesting all the information but to make a start: in SV entrepreneurship is everywhere. You are surrounded by entrepreneurs while drinking a latte in the Starbucks (the Starbucks is actually the first office for many early phase startups). The density of entrepreneurs is very high and you always meet people who are involved in startups. Whether you are at a Jazz festival or a Halloween party, there is a high chance you meet entrepreneurs and end up with a great conversation. SV is designed for startups. Even the billboards and commercials along the roads are focused on startups. Entrepreneurship is a lifestyle, a lifestyle that is desired by many people.

My observations

So why is entrepreneurship a lifestyle, why are there so many startups and why do most big IT companies have their roots in SV? According to my interviews and observations there are several reason. I’ll try to sum them up:

Nothing to lose, everything to win
To start a startup you have nothing to lose and everything to win. The flexible labor market makes it easy to hire and fire. Employees are not familiar with job security so why not start for yourself. When you are young and talented you can choose to work at Google and make 200k a year. With your own startup you can change the world and hope for a successful exit that makes you a multi millionaire. However the chances of that to happen are small, it is always worth a try. And if you fail, you have lost nothing but gained a lot of experience. You can always go work for Google, but many “failed” entrepreneurs just start something new.

Local heroes
Entrepreneurs have a high social status in SV. Steve Jobs (Apple), Larry Ellison (Oracle), Larry Page (Google), Mark Zuckerberg (Facebook) and many others are considered as true heroes. These heroes are not unreachable Hollywood stars but actual people living in the Valley you can meet at Starbucks in Palo Alto. Young entrepreneurs identify themselves with them and are motivated to become just like them. I was in San Francisco when Steve Jobs died. During that week the Apple store was like a pilgrimage. Thousands of people brought flowers and posted messages to show their last respects.

No entry barriers
The barriers to start a business are very low. Setting up an IT startup is very cheap. You only need a laptop (MacBook), a mobile phone (Iphone), a workspace (Starbucks) and some cloud services (Google Docs, Amazon Cloud) to build your online product. There are no administrative or legislative obstacles to start a business. And you don’t have to worry about taxes because you are not making any money yet. The government doesn’t obstruct nor stimulate entrepreneurship, they are invisible and let things take their course.

Availability of resources: finance, knowledge and network
I divide the resources in three categories: 1) financial capital (money), 2) human capital (knowledge) and 3) social capital (connections).

1. There is a lot of investment capital available from informal investors and VC’s (40% of all VC investments of the USA are made in SV). These investors act pro active and very professional in their search for the best ideas, teams and entrepreneurs to invest in. An investment is considered as essential (sometimes it is a goal). In the competitive Internet business it is all about speed and money accelerates your business.

2. Silicon Valley is a hotspot for talent. The world’s best engineers, marketers and managers can be found here. Some educated at Berkeley or Stanford, but many are from outside the USA. The financial, legal and other supporting industries are specialized in startups. It often happens that these service providers do not get paid but get a stake in the startup.

3. Having the right connections is essential. It is easy to build a strong network because there are a huge numbers of network events and possibilities to have valuable unexpected meetings (serendipities). In this competitive environment it is remarkable that people are very open and willing to share knowledge and relations.

Accelerator programs play an important role to combine these resources. Ycombinator, 500 Startups and Techstars provide startups with office space, money, coaching, management and a huge network. In return they get a share of around 5%. Startups participating in an accelerator program have a huge competitive advantage. Although most of them fail, some become a big hit that compensates the losses of all others. For example Ycombinator’s Dropbox, founded in 2007, is now valued at 5 billion USD.

And most important…. culture
I want to finish with the most important factor and that is the mentality of the people. People are positive and have expectations. When they see an opportunity, they are willing to take a risk to make something of that opportunity. Young talents start or join a startup instead of working for a big firm, advisors of startups get paid in stock, investors invest in a many startups because they expect there is a billion dollar hit among them, and people are open because they know: when you do good, you receive good. This mentality is described as the pay it forward culture.

To conclude

It is very clear why there are so many startups in Silicon Valley (people say about 20.000 a year). People want that lifestyle and they want to become the next big thing. But it is far from easy and the competition is very strong. The competition is not in products or markets but in getting the best resources. There are more startups looking for an investment than there is capital, the demand for skilled people is higher than the supply and to get the right connections you need some networking skills. Ultimately the best ideas, the best teams and the best-connected entrepreneurs get the best resources. So looking at the high number of startups combined with the high competition for resources it is just logical that the next wave of big IT companies will sprout from SV.

The next step

So what’s next for me? Well, my study is not finished yet. As you probably read in my earlier blog I’m looking at the factors that influence firm growth and what the differences are between SV and the Netherlands. For the coming two months I’m going to have the same interview with Dutch entrepreneurs and experts. It is not my intention to give recommendations to copy-paste SV in the Netherlands. Vivek Wadhwa (I was privileged to interview him) published an article where he explained why it is not possible to top-down implement an ecosystem like SV.

The goal of my study is to get more understanding about the factors that are important for startups to grow their business. The availability and intensity of these factors are related to the environment and together form an ecosystem. With this study I hope I can add something to the discussion what the best ways are to stimulate and facilitate Dutch startups to grow in ecosystem called the Netherlands.

Niek Huizenga

Vanuit Silicon Valley las ik met enthousiasme de berichtgeving over de toekenning van extra overheidsgelden (15 miljoen) om onderwijs en ondernemerschap beter op elkaar te laten aansluiten en om studenten te stimuleren en ondersteunen in het opzetten van een bedrijf. Ondernemerschap wordt steeds populairder en tegenwoordig ziet maar liefst 60% van de studenten ondernemerschap als een serieuze carrière optie. Dat is goed want ondernemende mensen zijn creatief, zelfredzaam en hebben doorzettingsvermogen.

Echter heb ik een kritische noot. Mijn grote vraag is of dit geld ingezet gaat worden om nog meer studenten enthousiast te maken voor ondernemerschap of dat het geld gestoken gaat worden om betere startende ondernemingen te krijgen?

Er heerst op dit moment een halleluja stemming dat Nederland het meest ondernemende land is omdat wij zoveel starters hebben. Er zijn weliswaar erg veel starters, maar volgens diverse onderzoeken blijkt dat Nederland erg weinig groeiende bedrijven heeft. En het zijn juist de groeiende bedrijven die zorgen voor werkgelegenheid en innovatie. Een overgroot deel van de starters (dus nieuwe kvk inschrijvingen) zijn zzp’ers. Ik ben zeker niet tegen de opkomst van zzp’ers. In tegendeel. Ik denk dat dit een erg goede ontwikkeling is om de Nederlandse arbeidsmarkt flexibeler te maken. Maar zzp’ers ontwikkelen en verkopen (meestal) geen producten, zijn niet schaalbaar en nemen geen personeel in dienst. De zzp’ers zitten in persoonlijke dienstverlening. Dit is een alternatieve vorm van een dienstverband.

Ik heb veel te maken met (student) ondernemers en dan vooral in de IT. Veel van deze ondernemers zijn actief in de persoonlijke dienstverlening. Dit is ook logisch. Er is een grote vraag naar talentvolle mensen die op flexibele wijze werkzaamheden kunnen verrichten. Die flexibiliteit wordt via de zzp constructie geboden. Een KvK inschrijving is erg makkelijk en het heeft “status” om ondernemer te zijn. De drempel om ondernemer te worden is daarom erg laag voor studenten die goed zijn in programmeren of in grafisch ontwerp.

Deze ondernemers voegen veel waarde toe en verdienen, afhankelijk van hun kwaliteit en de vraag vanuit de markt, redelijk goed. Maar in mijn ogen zijn deze ondernemers niet bezig met een startend bedrijf. Een startend bedrijf, of een startup is wat anders. De term startup is eigenlijk iets wat vanuit Silicon Valley is komen overwaaien. Kort gezegd is een startups een team dat een idee omzet naar een product of dienst dat schaalbaar de markt ingezet kan worden. Met schaalbaarheid wordt bedoeld dat de afzet niet 1 op 1 is gerelateerd is aan het aantal medewerkers zoals bij uurtje-factuurtje bedrijven.

Schaalbare bedrijven zijn bijvoorbeeld het Groningse IT bedrijf Paylogic. Zij hebben een online payment systeem dat verkocht wordt aan organisators van evenementen. Dit bedrijf is begonnen als een echte startup en maakt een succesvolle groei door. Paylogic heeft een aantal jaar hard gewerkt om het product te maken en om market-fit te krijgen. Dit traject is deels gefinancierd met extern kapitaal. Na de lancering van het product kreeg het traction. Het product sloeg aan en ze konden snel marktaandeel in Nederland veroveren. Dankzij een extra financieringsinjectie kunnen zij nu de rest van Europa veroveren.

Er zijn niet zoveel bedrijven als Paylogic (althans niet in het Noorden van Nederland). De maatschappelijke waarde van Paylogic is enorm. Het bedrijf biedt meer dan 60 arbeidsplaatsen en heeft een innovatief product waar de markt goed voor betaalt. Paylogic levert daarmee een flinke bijdrage aan de economische ontwikkeling.

De ondernemers achter Paylogic zijn niet te vergelijken met een ondernemer die zelfstandig werkzaamheden verricht. De drempels om “ondernemer met een bedrijf” te worden zijn vele malen hoger. Productontwikkeling, markt-fit zoeken, een team bouwen, financiering krijgen, etc.. Dit vereist enorm veel doorzettingsvermogen en brengt flinke (financiële) risico’s met zich mee. Veel zzp’ers zullen zich waarschijnlijk niet comfortabel om een dergelijk bedrijf op te zetten (maar ze zouden er wel graag voor willen werken).

Dus naar mijn mening hoeven er geen stimuleringsmaatregelen getroffen te worden om meer “ondernemers die zelfstandig werkzaamheden verrichten” te creeren. Er moet juist gestimuleerd worden om ondernemers een echt bedrijf te laten starten. Omdat de ontwikkeling van producten vaak begint bij technische kennis is met name stimulering bij technische opleidingen belangrijk. Andere maatregelen kunnen zijn om de  financieringsmarkt in Nederland toegankelijker en professionelerer te maken voor startups. Ook kan er nog een hoop gewonnen worden om de bedrijven te ondersteunen in het vinden van markt-fit en (internationale) opschaling.

Dus mijn mening is dat een groot deel van de 15 miljoen gebruikt wordt om echte startups te creëren. Ik heb daar geen draaiboek voor klaarliggen en een Silicon Valley nabouwen kan natuurlijk ook niet. Maar dit moet wel de basis zijn om deze publieke investering echt rendement op te laten leveren.

I’m in Silicon Valley for two and a half weeks now. While I’m writing this blog in a coffee shop in Cupertino, people right and left from me are talking about setting up a new business. Life in Silicon Valley is all about startups, innovation and business. I like it here.

In this blog I’m going to discuss one of the topics of my research: the importance of growing firms and the relevance of the number of starting firms.

The path of the startup

What is a “startup”? In the Netherlands most people see a startup as a new registration at the Chamber of Commerce. According to the latest figures, 70% of these “startups” are individuals that are active in personal services or retail (most of them part-time). In Dutch they are called zzp’er (self-employed without employees). In the Valley they are called contractors and are not seen as entrepreneurs or startups.

There are many definitions of startup. Steve Blank (one of the startup gurus in the Valley) uses: “a startup is an organization formed to search for a repeatable and scalable business model”. Eric Ries (writer of the bestseller “The Lean Startup”) defines startup as: “a human institution creating a new product or service under conditions of extreme uncertainty”. Based on these definitions I use the important elements: a small team, scalability of the business model and uncertainty. To scale you need to have a product. A startup converts and idea in a product and wants to introduce this to the market. At this moment a business angel or VC (venture capitalist) appears. The VC plays a big role in the new strategy and restructures the management where necessary (it is very normal that they install a new CEO). Millions are invested in product optimization, marketing and sales. In a period from 2 to 5 years the firm needs to proof its potential. The exit scenarios of the firm are to be sold or to go public. A return on investment of 500% or more is not unusual.

Many startups try to follow this ideal path and many fail. At least 9 out of 10 do not get funded and a same percentage of the funded startups do not make it. The probability of success is minimal. So why do investors put millions of dollars into these startups? It is all about portfolio management and spreading risks. An investor accepts the high chance of failure because 1 of the 100 startups is going to be a billion dollar company. That big hit compensates the losses by far. This is the way how entrepreneurs and investors deal with risks and returns. It is all about numbers and this makes it important that there are a high number of startups.

The more startups the better?

In the last years the Dutch government and Universities initiated different programs to stimulate entrepreneurship. This had effect. The number of new entrepreneurs (subscribers at the Chamber of Commerce) is one of the highest in all OECD countries. The minister of Economic Affairs proudly Twittered and Youtubed about this. But compared to the OECD countries the Netherlands scores very low when it comes to growing firms. That means that many new entrepreneurs don’t survive, grow or innovate. And if the zzp’ers were excluded as entrepreneurs the figures would look very bad.

The impact of starting and growing firms on an economy also has the attention of the academic world (Henderson, 2009; Shane, 2009; Van Praag, 2010). Empirical evidence shows that more entrepreneurs in a developed country do not create more jobs, innovation and wealth. The political statement “the more entrepreneurs, the better” is under fire. To summarize some of the points in these studies:

• The majority of entrepreneurs falls into the category “common entrepreneurs” and do not have the ambition or capabilities to develop products and scale a business.
• Common entrepreneurs cost money because their use of (public funded) subsidies, programs and fiscal benefits.
• The common entrepreneur creates more value if he was an employees.

The overall conclusion of these studies is that the common entrepreneur does not contribute to job growth, innovation and wealth. They have a high probability of failure or limited ambition and/or capabilities to realize a growing firm. This sound very negative and implies that entrepreneurship is a bad thing. But this is not the whole story because a positive relation was found between firm growth and the level of education of the entrepreneur. Capable entrepreneurs are more likely create jobs and innovate.

Given these conclusions some recommendations were made. The first is reallocating resources and only stimulate and support high potential entrepreneurs. The second is to reduce incentives that make it easy for the common entrepreneur to start a business.

So what about Silicon Valley?

The conclusions of the studies above measure the issue on a macro scale. It does not make a distinction between industries and types of entrepreneurs. In my research I take a look at the IT industry. In the Silicon Valley case there are a lot of startups but also a lot of growing companies. These growing companies are responsible for ground-breaking innovations and a huge number of new jobs. But do the small or failed startups fall into the category “common entrepreneurs”?

An important observation I’ve made is that almost all of the entrepreneurs have an academic (and often technical) background. This may explain the high number of growing firms. But that is not the only reason. Silicon Valley is an entrepreneurial environment with a highly developed infrastructure and culture. The presence of incubators, entrepreneurial Universities and professional VC’s make it possible that talented entrepreneurs have the opportunity to grow their business. The entrepreneurial culture also plays a big role. Networks of entrepreneurs are easy accessible and people are willing to share knowledge and contacts. Role models (like Steven Jobs, Bill Gates, Mark Zuckerberg and many more) gives everybody the idea that their startup can be the next big hit.

So the incentives to start a business are strong, but the habitat is also perfect for talented entrepreneurs to grow their firm. The high number of startups makes it possible that the best startups can go sky high.

– More to come –

For the coming six weeks I’m going to work on a research project in Silicon Valley.

Silicon Valley is renown for its IT innovations and the high number of entrepreneurs. Almost all famous and successful IT companies are founded and located on a strip of 50 km stretching form San Francisco to San Jose.

The name Silicon Valley comes from the early semiconductor industry that was concentrated in this area in the seventies. Companies like Intel produced microchips based on silicon (the basic components of computers). The growing demand of computers resulted in a boom of related industries like software, user interface design and at a later stage the Internet. There are many stories and movies about the rise of IBM, Apple and Microsoft during the eighties/nineties (the movie “Pirates of Silicon Valley” is a must-see). After 2000 (the Internet period) giants like Google, Yahoo and Facebook appeared out of nothing. The next champions are already waiting for their era of world domination.

It is not a coincidence why almost all disruptive IT innovations have their origin in Silicon Valley. The innovation guru Paul Graham describes the main reason for this. He explains that when there is a critical mass of like-minded creative people working on similar problems it sets off a chain reaction of innovations. Silicon Valley can be compared with Florence during the Golden Age. At that time Florence was a hotspot that attracted artists and scientists from all over the world. Florence was an excellent environment for geniuses like da Vinci and Michelangelo to develop. As is Silicon Valley for today’s geniuses Steve Jobs, Bill Gates, Mark Zuckerberg and many more to come.

Starting an IT company in Silicon Valley means that you have the ambition to become big. But the journey from an idea to a multi billion-dollar company is a very complex rollercoaster ride. The successful stories are known, but 99% never makes it to serious growth and died trying. Many academics are trying to explain why some companies become successful while others don’t. Is this a black box or can the genome of success be decoded? The ambitious Startup Genome project is trying to do it.

In my research I am going to make a comparison between young growing IT companies from Silicon Valley and the Netherlands. Growing IT companies are defined as companies that are in the transition of becoming a professional organization and experience a significantly growth in numbers of employees and customers. This phase is often accompanied with venture capital (VC) and the recruitment of experienced specialists.

The main objective of my research is to understand what an entrepreneur drives to make a business grow, what the role is of financial, human and social capital and what other elements obstructs or stimulates growth. I am going to conduct interviews with several growing entrepreneurs and VC’s in Silicon Valley and the Netherlands. The two datasets are compared and I hope to find differences in the area of personality, culture, availability of resources and other external factors that affects growth. This knowledge may explain why the Netherlands I lacking behind in the number of growing firms.

During my stay in Silicon Valley I will publish a new blog every week on my latest findings and experiences. Please feel free to contact me for information, suggestions or critique.

Mail: n.huizenga@gmail.com / Twitter: @nhuizenga

I was privileged to work on a project in South Africa for the last two weeks. I am assisting the faculty Economics and IT of the North West University in Vanderbijlpark to realize a business incubator on their campus.

The project

The faculty has over 5500 students and offers degrees in Economics, Accounting and IT. The ambition of the faculty is to become more entrepreneurial and to strengthen the relations and alignment with public and private organizations. Headed by their ambitious dean the faculty’s mission is to realize an incubator facility, an office for professional services for startups and local sme’s, a strong (international) network and a portfolio of short courses and minors on entrepreneurship and innovation. This project has a time span of four years and I will return several times. The project is very interesting and it is exciting to work with ambitious experts from South Africa, the Netherlands, Denmark and the UK.

Contradictions

But it is not only the project that intrigues me. It was my first time in South Africa and I am fascinated with the many opportunities this country offers. But South Africa has also many challenges to overcome. I have visited several countries in the world but I have never experienced an economical and social gap as big as I have seen here. While driving form Vanderbijpark to Johannesburg and Pretoria I have seen a Western country located in a development country. South Africa is a country with two societies. The sceneries of luxurious shopping malls, fastfood chains and villa parks are interchanged with views of slums, beggars and heaps of garbage. The poverty among the black population is still very high and most of them are clumped into slums or the so-called townships.

Black Economic Empowerment

When the dark chapter of apartheid was closed in 1994 several methods were undertaken to create more equality between the (rich) white and the (poor) black. Many blacks now have entered the middle and upper class and are strongly represented in politics, universities and businesses. This was made possible because of the Black Economic Empowerment act (BEE). This acts forces organizations to meet certain quotas for black employees, managers and owners. But this act has also a big disadvantage. Normally the most qualified person gets the job, but because of the BEE it regularly happens that unqualified blacks are preferred for qualified whites. This often leads to poor organizational performance or may even lead to severe damage or bankruptcy of an organization.

The BEE did not yet result in a fair distribution of wealth between blacks and whites and did not yet lead to a prosperous and unified nation. There is still a huge gap between the “haves and have nots”. And most (or maybe all) of the “have nots” are black. The reason for this gap can be explained by the fact that before the apartheid the infrastructure and wealth of South Africa was built for 6 million white people. After the apartheid this infrastructure suddenly needed to be shared among 50 million people. Logically this didn’t work and only a couple of million blacks were able to join, the rest of the black population is still excluded.

Crime

The poverty and economic inequality combined with a failing and sometimes corrupt police force has lead to unacceptable crime rates. Johannesburg is known as crime capital where murders, rape, armed robberies, carjacks are commonplace. But also in smaller towns people suffer from crime. In a middle class suburb the houses look like fortresses with fences, barbed wire and dogs. Everybody has their own horror story and people are really afraid. This threat is very serious and the number of highly educated people that are migrating to America, Europe or Australia is growing. People want to live a saver life for themselves and their children which is very understandable. But the result is that South Africa is loosing their capital and competencies while the country needs it so hard.

The opportunities

Nevertheless South Africa is a potential superpower. The country is rich on natural resources, many multinationals have their offices in Capetown or Johannesburg and there is a huge young population (black and white) with ambition. The positive effects of the BEE may become visible after one or two generations. The BEE now causes problems of underperformance and creates legitimate anger among qualified white people. But eventually an unqualified black person with a good paid job can send his children to a good school so the children becomes better qualified than their parents.

Back to the project

Based on the analysis above the role of education is essential to overcome the challenges of social inequality, poverty and crime. Skilled and entrepreneurial young people will improve performances of organizations and  they will create new companies and jobs. More educated people, better organizations, more entrepreneurs and more jobs will lead to economic growth. If the South Africans are able to distribute this welfare fairly between whites, blacks, rich and poor than I expect we will see some really nice things from this beautiful country the next decades.

I really hope that our project will contribute to that mission.

Today we’ve visited the largest and one of the most successful business incubators in Silicon Valley: Plug ’n Play Center. www.plugandplaytechcenter.com

PnP is founded five years ago by and is known as the colloseum for startups. The entrepreneurs are gladiators and as in the old Rome most of the gladiators die but some will gain eternal fame. Success is the driver of this incubator and its entrepreneurs.

PnP offers high quality facilities in the form of cubicles and offices. Above all, the 300+ startups in the incubator inspire each other heavily. But this incubator is much more than facilities. They invest in startups or connect VC funds to the startups; they are an intermediate between financed startups and highly qualified managers for C-level positions; it organizes various events and networking summits and it owns a top tier data center.

The ground floor is populated by startups from countries like Spain, Austria, Czech Republic, (no Dutch cubicle unfortunately). Local chambers of commerce rent a cubicle for their national champion-startups to expand to Silicon Valley. We talked to an Austrian entrepreneur who started a video 2.0 concept. He came to Silicon Valley because his ambitions didn’t match with the environment back in Vienna.

To be clear, startups in Silicon Valley differ a lot from startups in the Netherlands. The level of ambition and the willing to take risks is incomparable what we are used to. The incubator thinks in the same way. The requirements to enter PnP are simple: you need a product (not a service!), it needs to be scalable and the ambition is to create a 100 million + company within 5 years.

Another big difference is the way a startup is financed. People here only think in scalable products with global market potential. VC’s are willing to invest heavily. After an investment (which can be of 10 million +) the startup is in the transition phase. C-level functions are assigned to experienced managers to support the entrepreneur in growth. This is a big difference with Dutch startups. They normally finance their product and business development with the cash flow earned from services. There is too much focus on service deliveries that the product never gets to the market.

There is a lot more to tell and visiting PnP was a huge inspiration. YEAH! can learn a lot from this incubator. We will keep the relationship close and we will certainly encourage Dutch entrepreneurs to go to PnP if they have ambitions to do business in Silicon Valley.

At PnP, but everywhere in Silicon Valley, there is a passion for entrepreneurship and success! Hopefully we have the opportunity to realize something like this in Groningen for our local entrepreneurs!!

On September 7th I went for a study trip to Silicon Valley with 6 entrepreneurs from Groningen and Drenthe and a group of twenty entrepreneurs from the incubators YES! Delft, UtrechtInc and Kennispark Twente. This study trip was about connecting to the Silicon Valley network; to learn more about doing business in the USA; and above all: get inspired.

Before I make my full report on all the facets of the study trip I am writing this post about the company visits of today (Friday 10^th September).

While driving in Silicon Valley you are in the middle of the world of ICT and Internet. It is like spotting movie stars in Hollywood. All famous companies are here, Google, Apple, Microsoft, Oracle, Cisco, Salesforce, LinkedIn, Symantec, etc, etc. All of them located in big and beautiful buildings under the California sun. Silicon Valley is a super cluster of technology in an area of about 15 by 15 miles.

Today, thanks to the NBSO organization, we had the opportunity to visit three renowned Silicon Valley companies: Intel, Facebook and Yahoo!

Our hotel is located in Sunnyvale and after a 15 minutes bus drive we arrived at the Intel HQ. An Intel guide showed us around in the Intel museum where we learned how the chip developed from 2500 transistors in 1968 to a 2 billion-transistor chip today. Yes, the Moore’s law (named after Intel founder Gordon Moore) is still pretty accurate.

Later on we went for a drink on University blvd in Palo Alto/Stanford University, the place where Apple’s CEO Steve Jobs and other Silicon Valley pirates get their Starbucks.

After the short break we had a warm welcome at the HQ of Facebook (you know, the biggest social network in the world!). The building was very modest without bells and whistles. When we entered the big open space it looked like a playground. Hundreds of desks with big screens surrounded the aquarium-like office of Mark Zuckerberg (founder of Facebook). Hundreds of young people were working, discussing, going for lunch or were just having fun in the game room or sports field. It looked like a University canteen mixed with an incubator for student entrepreneurs. Our guide told us that Facebook is very strict in being informal. People who work here hate corporate environments. To emphasize this they’ve introduced the corporate Friday, the only day people are allowed to wear a suit or tie. It was big fun being at Facebook. The only “formal” thing was the NDA we had to sign before we were allowed to get in. I hope I didn’t shared confidential information on this blog . Of course I couldn’t resist to leave a tag of YEAH! at the Facebook HQ wall (look for the text “YEAH!” in the picture).

At the end of the day we went to the Yahoo! Campus. The capmus looked more like a theme park than a company. We were welcomed in the main building which contained game rooms, shops, purple cows, fitness clubs, free smoothie bars, etc. It was a nice tour and we learned a lot about the strategic direction Yahoo! is taking. The company has lost the search battle with Google and couldn’t be saved by the hostile take over attempt from Microsoft. Now Yahoo! is focussing on the creation of (video) content and connecting apps and web 2.0 elements on existing content. The future of Yahoo! is going to be interesting.

After 8 hrs of impression we got back to the hotel, totally exhausted. We had a great day and I think everything that is told about Silicon Valley was confirmed during these visits. It is an inspiring and crazy place where you live and breath technology, entrepreneurship and above all fun.

Last week I had to give training to three staff members of the Tanzanian Public Service College (TPSC). Since 2008 I’m working on behalf of the organization CINOP on a project in Tanzania. In this project we assist TPSC in their ambitions to professionalize their organization. One of the main tasks is upgrading their ICT facilities and information resources. In 2009 we’ve managed to realize an information resource center (IRC), a room with computer workplaces and an online portal with access to various online (free of charge) information.

The situation at TPSC

TPSC now has the facilities to make full use of new ICT and Internet technologies. The project will end later this year and TPSC will be responsible for the future upkeep of the facilities and to promote these resources to staff members for further professionalization of the organization. The success will depend heavily on the skills and competences of the TPSC staff members who are responsible for the IRC and ICT labs. TPSC management decided that the leading staff members responsible for the ICT facilities and IRC should attend a training in the Netherlands. The attendees were Williamson Ferdinand, Gwamaka Mwailolo and Alexander Benedicto.

The training program

The two week training was divided in two parts: a training in Internet Application Technologies and library management at my place in Groningen and a training on Advanced System Management at Roel Schreibers place in Venray. During the training in Groningen the participants were provided with examples of best cases. The training provided a better overview of the possibilities of Internet Technologies, library management and system management. The new obtained knowledge and skills could be directly applied at TPSC.

We started the program on Monday. We created a blog environment so we could write our daily reports about the findings and new ideas that could be used at TPSC.  The blogs can be found on:

• http://williamsonsite.blogspot.com/
• http://gwamakaonline.blogspot.com
• http://e-learningtz.blogspot.com/

Later we went to the public library where mrs. M. Ellen showed us the collection of physical materials (books, journals, dvd’s), but also showed us the supporting digital systems like catalogues, search engines and online resources.

Tuesday we had workshops on RSS, personal news, wiki’s, social bookmarking, and search techniques. The TPSC article we created on Wikipedia can be found on http://en.wikipedia.org/wiki/Tanzania_Public_Service_College. We also setup three test servers so open source Internet Technologies like WordPress CMS and Moodle E-learning could be tested.

On Wednesday mrs. Bos of the University Library had prepared a very complete excursion for the participants. We started with a lecture about the role of the library in the University. This was followed by a tour. The tour emphasized that the library is not only an information resource center but also a central hub where students and University staff can do their studies, share their ideas and have social meetings. After lunch we had a meeting with the library director mrs. Nieboer. She offered her help to give TPSC access to more information resources and share best cases. At the end of the day mrs. Bos showed us around in the special departments of the library and the archives. She also explained how the processes within the library work and how people apply policies and rules.

On Thursday we went to the Hanze University where mr. Sennekool and mrs. Nijhuis prepared a workshop on e-learning. We practiced the use of the e-learning platform Blackboard and had demonstrations on online exams systems, video lectures and environments with open access learning materials.

On Friday we’ve visited the University Datacenter. The whole week we looked at the front end of the systems but now we could take a look at the technical infrastructure behind all these technologies. The system administrators mr. Strikwerda and mr. Bulthuis showed us how all technical infrastructure is managed for the whole University so 50.000 students and 10.000 staff members can use their systems daily without any problems.

On Saturday the participants worked on their reports and final presentations. Later that morning we took the car to Venray where Roel Schreibers continued the second part of the training.

It was a very intensive week where every day and evening was packed with activities. Fortunately we’ve also made time to enjoy the world cup football matches. Al dressed up in orange we enjoyed the victories of the Dutch team against Slovakia and Brazil.

The next steps

Friday 9^th of July it was time to present the results. Williamson, Gwamaka and Alexander prepared a presentation at CINOP where they presented their findings and how they could bring their new ideas in to practice at TPSC.

The conclusion of the presentation was that change at TPSC is the most important. The ICT infrastructure and the IRC are not yet seen as strategic assets by TPSC. It is seen as an operational annoyance that costs money. But in fact: ICT is a strategic asset that should improve the performance of TPSC and to make TPSC more professional and competitive.

The fundaments are now available at TPSC: the technical facilities are in place and the responsible staff members have a sufficient level of knowledge and skills. Now it is time to convince TPSC staff members of the benefits of using ICT. A big challenge awaits. Not only strong support of TPSC management is necessary but also they need the awareness that ICT is of strategically importance for the organizational performance.

Williamson, Gwamaka and Alexander need to keep their momentum. They can’t fall back in the ongoing business when they are back home. They have to convince TPSC management to setup a strategic ICT roadmap that specifies the ambitions of TPSC’s ICT policy for the coming years. TPSC management needs to set an example for the rest of the organization. It is recommended to realize a separate ICT department that directly works under the supervision of TPSC management. It gives the ICT staff more resources and authority in the organization.

For the coming months small successes are essential. There are plans to

• Update the IRC Information Portal with new content;
• Realize a new professional website for TPSC;
• Develop short ICT courses for staff members;
• Prepare a functional design for e-learning;
• Organize an open day to promote the ICT facilities and the IRC.

Bottom-up small successes are needed to convince TPSC staff members the benefits of ICT. The small successes will strengthen the top down approach to create the awareness that ICT needs to be a strategic asset if TPSC wants to improve its performance.

It will not be realized overnight. Focus, patience and perseverance are needed before TPSC will fully adopt and apply ICT and online information resources for the benefits of themselves, their students and their organization.

Williamson, Gwamaka and Alexander I wish you all the best with your important quest!!!

Van 30 mei t/m 2 juni waren Koen en ik als vertegenwoordigers van YEAH! aanwezig op de SME (small and medium sized enterprises) conference in Madrid.

YEAH! was uitgenodigd in het kader onze nominatie voor de European Enterprise Awards. Het Ministerie van Economische Zaken heeft ons als beste Nederlandse initiatief voorgedragen voor de categorie “Promoting the Entrepreneurial Spirit”. Tijdens het gala diner van de conferentie werden de prijzen uitgereikt. Helaas zijn wij niet in de prijzen gevallen. De prijs ging naar een project uit Oostenrijk, maar wij kregen wel een eervolle vermelding.

SME week van de EU

De SME conference wordt jaarlijks georganiseerd door de voorzittende lidstaat van de EU en heeft als doel om het Europese beleid omtrent klein en middenbedrijf te bespreken. De conferentie is ook een belangrijke plek waar vertegenwoordigers uit de verschillende EU lidstaten kennis en best cases uit kunnen wisselen. Het congres is bezocht door ruim 500 deelnemers en kende interessante gasten en sprekers zoals de EU commissaris Antonio Tajani.

In de SME business act 2010 wordt het belang van kleine en middelgrote bedrijven in Europa benadrukt. De SME business act kan gezien worden als een framewerk waarin de EU lidstaten hun eigen beleid op kunnen implementeren om bijvoorbeeld de regeldruk te verminderen, overheden versneld laten betalen, internationale handel te stimuleren en de toegang tot kapitaal eenvoudiger te maken. Dit is belangrijk, want SME’s zijn verantwoordelijk voor 75% van de Europese werkgelegenheid en dragen voor 60% bij aan het GDP. Er wordt verwacht dat de SME’s (en niet de multinationals) de komende jaren verantwoordelijk zullen zijn voor de banengroei en innovatiekracht van de EU. Als het om economisch beleid gaat wordt de slogan “think small first” daarom veelvuldig gebruikt.

Het programma van dag tot dag

Op zaterdagmiddag arriveerden wij in Madrid en konden wij zaterdagavond en zondag genieten van de stad. Madrid is een drukke en levendige stad vol met pleinen, terrasjes en restaurants. Uiteraard mocht een bezoek aan het stadion van Real Madrid, Estadio Bernabeu, niet ontbreken.

Zondagavond begon het congres. Tijdens de receptie hebben we kennis gemaakt met de de Nederlandse delegatie vanuit het ministerie EZ en MKB Nederland. Ook hebben we gesproken met diverse personen uit EU lidstaten die werkzaam waren in de publieke of private sector of ook genomineerd waren voor de EEA awards. Na het programma hebben we nog een drankje gedaan in de binnenstad van Madrid met een groep Nederlanders, Duitsers, Italianen en Polen.

De maandag begon met een vlammende key note speech van de Amerikaan Kenneth Morse. Deze professor en ondernemers is verbonden aan verschillende universiteiten, waaronder de TU Delft. In zijn enthousiaste betoog benadrukte hij het belang van het erkennen en leren van de mislukking. Er wordt altijd gesproken over ondernemers successen, maar de meeste ondernemers hebben meer ervaring met mislukkingen. Juist deze mislukkingen zorgen ervoor dat de ondernemer zich steeds verder ontwikkelt. In tegenstelling tot de Amerikaanse cultuur is de Europese cultuur nog steeds veroordelend ten opzichte van mislukkingen, dit moet veranderen.

In de daaropvolgende sessies hielden diverse genomineerden een presentatie over hun projecten. Een meerderheid van de projecten waren geïnitieerd vanuit de lokale overheden of kamers van koophandel. Een aansprekend voorbeeld kwam vanuit het Griekse eiland Ios waar de overheid had besloten om nieuwe business te genereren als tegenhanger van het toerisme. 90% van de economie kwam uit het toerisme en dat brengt in tijden van een crisis grote risico’s met zich mee. Met behulp van dit project werden ondernemers in staat gesteld om extra inkomsten te generen uit agricultuur en zuivelhouderij.  Een goed privaat initiatief kwam uit Slovenië. Een accountancy bedrijf had een programma opgezet die startende ondernemers wegwijs maakt in de regelgeving, belasting, etc. Zij hadden inmiddels vele honderden ondernemers geholpen en hopen daarmee dat deze ondernemers in later stadium gebruik gaan maken van hun diensten. Dit was een goed voorbeeld dat niet alle initiatieven publiekelijk gefinancierd hoeven te worden.

De dag conferentie werd afgesloten met een gala diner waar de EEA awards uitgereikt werden.

Dinsdag stond in het teken van de financiering van SME’s.  Finland presenteerde een publiek/privaat fonds dat tech-starters voorziet van seed funding. Na vijf jaar weten de Finnen, ondanks de crisis, een goed rendement te maken en vloeit een deel van de winst de staatskas in. Er werd echter geen discussie gevoerd of de overheid zich wel bezig zou moeten houden met het verstrekken van risico kapitaal. Een wat meer duister project kwam uit Italië. Deze organisatie biedt ondernemers aan garant te staan voor leningen die zij afsluiten met banken. Deze organisatie vraagt daarvoor een fee bij de ondernemer en de bank. Deze organisatie stelde zich op als een zogenoemde Confidi (vertrouweling) voor ondernemers. Een bijzonder detail was dat deze organisatie op zoek was naar partijen die weer garant konden staan voor hun garantstellingen…… lag deze constructie ook niet ten grondslag aan de  hypotheekcrisis?

De conferentie werd afgesloten met een bezoek aan de grootste business incubator van Madrid. Deze incubator is opgezet in een achterstandsgebied en moest aantrekkingskracht hebben op jonge, innovatieve startups. Het pand biedt geweldige faciliteiten en services tegen zeer lage tarieven. Het pand zit ook helemaal vol met jonge ondernemers. Naar onze mening werden de ondernemers te veel in de watten gelegd. Ze betalen slechts €11,- per m2 per maand voor alle faciliteiten en diensten en er zijn vijf medewerkers van de incubator die in dienst staan van deze circa 25 bedrijven. Wij vonden dat het rendement ten opzichte van de investering tegen viel. Er is 25 miljoen euro geïnvesteerd dat tot nu toe heeft geleid tot 100 bedrijven en 500 fte. De houdbaarheid van dit concept is daarmee twijfelachtig. Vooralsnog zijn er geen plannen om andere inkomsten te genereren om hun verliezen te compenseren. Ze hopen vooralsnog dat het project publiekelijk gefinancierd blijft.

Tot slot

Dankzij ons bezoek aan de conferentie hebben wij een veel beter beeld gekregen hoe er vanuit de EU tegen SME’s aangekeken wordt. Voor veel ondernemers staat de EU ver weg, maar Europese wetgeving resulteert wel in nationale en lokale wetgeving waar ondernemers vandaag van profiteren.

Ook hebben we veel van goedbedoelde projecten met twijfelachtige houdbaarheid. Veel initiatieven worden opgezet met publiekelijk geld of via subsidieregelingen. Het is vaker regel dan uitzondering dat deze projecten stoppen zodra de subsidiekraan dichtgedraaid wordt. Als YEAH! zien wij het als uitdaging om modellen te ontwikkelen die daar beter tegen bestand zijn.

Ook hebben wij ons netwerk flink uitgebreid en veel geleerd van andere initiatieven. Al met al heeft deze trip ons meer dan genoeg inspiratie opgeleverd die wij in zullen zetten voor onze huidige en toekomstige projecten!

Ik was afgelopen week in Tanzania en ben op bezoek geweest bij de Universiteit van Dar es Salaam. Recentelijk is er vanuit de business faculteit een Entrepreneurship Center (UDEC) opgezet waarin Master opleidingen en korte cursussen worden aangeboden. Daarnaast wordt er in de zomer van 2010 een ware business incubator geopend voor afgestudeerde studenten met een bedrijf.

Ik had een zeer interessant gesprek met de directrice van UDEC. Mevrouw dr. Nchimbi heeft tien jaar geleden bij de University board gepleit voor een programma om studenten ondernemender te maken. Volgens haar zijn Tanzanianen te passief en weinig ondernemend. Er heerst een cultuur van zo snel mogelijk de studie afronden en dan een baan zoeken die zoveel mogelijk stabiliteit biedt. De essentiële rol van ondernemerschap wordt nog vaak onderkend terwijl de kleine en middel grote bedrijven (SME’s) zorgen voor 60% van alle werkgelegenheid. Binnen de SME’s ligt nog ontzettend veel potentie als het gaat om groei en innovatie. Jonge ondernemers zijn hartstikke hard nodig om Tanzania verder te ontwikkelen.

Vanuit een Nederlands ontwikkelingssamenwerking programma is er in 2002 begonnen met de opbouw van het Entrepreneurship Center.  Een paar jaar later werden de eerste Master opleidingen aangeboden. Jaarlijks melden zich 50 studenten aan voor de Master en ruim 200 mensen melden zich jaarlijks aan voor de cursussen. Er is inmiddels een businessclub van 500 ondernemers en de incubator biedt straks fysieke ruimte voor 15 bedrijven en zal circa 25 bedrijven “virtueel” ondersteunen.

De visie van de incubator is goed. De ondernemers kunnen een kantoor huren net onder de marktprijs. Voor alle aanvullende faciliteiten en diensten moeten ze extra bijbetalen. De ondernemer zal dus meteen risico moeten nemen. Veel initiatief komt te liggen bij de ondernemer wanneer het gaat om kapitaal, marketing en operations. Zelfstandigheid en een ondernemende houding staat op nummer 1. De incubator manager heeft als taak om de ondernemers in contact te brengen met de resources die de Universiteit of het netwerk bieden.

Het belangrijkste voordeel van de incubator ligt in de naam. In Tanzania is het heel gebruikelijk (voor zowel publieke als private instellingen) om te tenderen. Als een organisatie 100 computers moet kopen dan wordt er in de krant een tender geplaatst waar leveranciers zich op kunnen inschrijven. De voorwaarden voor een tender zijn streng en vereisen een flinke voorinvestering zonder enige garanties. Voor jonge ondernemers is dit onhaalbaar. De incubator gaat hier een rol in spelen door zich te presenteren als een collectief van Universiteit en bedrijven. De Universiteit brengt haar gerenommeerde naam in en voldoet aan alle tender vereisten. Als de incubator de tender wint zal zij het werk verdelen onder de incubatees. Vooralsnog is de incubator nog niet zo commercieel dat zij hier een fee voor vraagt, maar wellicht gaat dat in de toekomst gebeuren.

De incubator is een goede stap voorwaarts, maar er zijn nog flink wat drempels te overwinnen.  Tijdens mijn gesprekken met  de incubatees merkte ik veel enthousiasme, maar ook veel onzekerheid. Met name de toegang tot kapitaal en de complexe regelgeving baarde hun zorgen. Banken en zelf micro krediet instanties zijn niet gewend om leningen te verstrekken aan starters die werkzaam zijn in de dienstensector. Ze begrijpen de ondernemersactiviteiten niet en vragen hoge rentes en korte terugbetalingstermijnen. De complexe regelgeving vanuit de overheid wordt veroorzaakt door de incompetentie van het ambtelijk apparaat. De bureaucratie werkt verstikkend je loopt al snel tegen corruptie aan. Er werd mij verteld dat de belastingen voor SME’s erg hoog zijn en zelf vooraf dienen te worden betaald. Ondernemers die niet bekend zijn in de regelgeving zijn een makkelijke prooi. Zoals ik eerder aangaf zijn SME’s verantwoordelijk voor 60% van de werkgelegenheid in Tanzania. Het is eigenlijk erg raar dat juist deze groep het meest uitgeknepen wordt terwijl buitenlandse investeerders en grote coöperaties wel kunnen rekenen op flinke belastingvoordelen.

De slechte positie van de SME’s is mede te wijten aan het feit dat ze niet georganiseerd zijn. Wij kennen MKB Nederland and VNO-NCW die opkomen voor de belangen van werkgevers en een flinke vinger in de politieke pap heeft. De SME’s in Tanzania zijn veel te druk bezig met overleven. Ze staan liever een deel van hun omzet af aan een corrupte klerk dan dat ze een juridische procedure beginnen. UDEC zou wellicht het voortouw kunnen nemen om namens de SME’s meer invloed uit te oefenen richting de politiek.

Ik werd er erg blij van dat er ook in Tanzania mensen met een goede visie rondlopen als het gaat om het stimuleren en faciliteren van ondernemerschap. Ik hoop dat het ze lukt om hun goede plannen door te zetten en dat er vanuit de politiek meer gedaan wordt om het ondernemersklimaat te verbeteren. Als je het dan in perspectief ziet mogen wij als jonge ondernemers in Nederland niet klagen met onze innovatiesubsidies, WBSO regelingen, fiscale voordelen en vele schouderklopjes die wij van onze politici en ambtenaren krijgen.