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More to shout about: Dutch modesty, lack of publicity keep Eindhoven off tech world radar

(Editor’s note: This is the second in a series looking at tech talent and innovation centers in the Netherlands … the people and places expats, techpats and American investors need to know.)

Think about this: Before Silicon Valley became Silicon Valley, it was farm country. Boston before Boston Dynamics and Akamai was an old-line manufacturing hub, and pre-Dell Computer Austin was a college town that missed the Texas oil boom.

My point is, things can change in the high-tech sector, and change (relatively) quickly. But things don’t have to change very much for Eindhoven to become Europe’s first Silicon Valley. If you’re reading this post in the United States, or even in Europe, odds are you’ve never heard of Eindhoven, Netherlands.

You will.

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NEELIE KROES

Increasingly, all the elements that coalesced into Silicon Valley are here – a well-funded university focused on technology, tech talent, world-class high-tech companies and, finally, the outline of a venture capital network.

Last week, I was invited to a forum with the Netherlands’ uber-influential Neelie Kroes at the Design House in the center of Eindhoven. Kroes is the special envoy for Startup Delta, and formerly commissioner for the European Union’s digital agenda.

Just in the last few weeks, she’s been appointed to Uber’s public policy advisory board. So, yeah, she’s a global player. A player with the clout and contacts to help shift official EU opinion (and policy) in favor of the San Francisco-based ride-sharing app and away from its initial instinct to protect the conventional taxi business.

Kroes was instrumental in creating StartupDelta, the Dutch effort to find the secret sauce, as they say in San Francisco, for a startup ecosystem here. Eindhoven is serious about startups, and Kroes was in Eindhoven to talk about what’s happened in the year since StartupDelta was created.

Of course, politicians who build their legacies on embracing the future don’t arrive empty handed. Kroes announced a new initiative, COSTA. COSTA is an effort much like those in the United States and other parts of Europe bringing together startups and corporations. COSTA includes Netherlands-based corporate heavyweights including Shell, Philips, AkzoNobel, ING, KLM, and Thales Netherlands, the last being one of Europe’s largest high-tech/communications defense contractors.

COSTA, like a lot of initiatives here, is brand new. The first meeting will be held during Startup Fest Europe, scheduled for May 23 through May 28 at 14 locations across the Netherlands including Eindhoven. COSTA public-side partners include the Erasmus Centre for Entrepreneurship, Rotterdam School of Management and the actual city of Eindhoven. So we will have updates ….

And there’s a lot more going on:

  • The trend of big European corporations opening the doors to startups has finally arrived here. And if Eindhoven has one advantage over the rest of Europe, it’s the number of global cutting-edge tech companies here including semiconductor giants ASML and NXP. Add to that the fact that Amazon’s electrowetting research center is here after the Seattle-based e-tailer bought Liquavista earlier this year. (Electrowetting is the latest display technology that promises to make devices such as Amazon’s Kindle e-readers easier to read outdoors in bright sunlight.) In fact, there are dozens of tech companies that supply ASML, Philips and others. In a sense, this is like Seattle and all the technology that’s spun out of Boeing and the aerospace industry.
  • A super-interesting development here is the Expat Spouses Initiative. The initiative taps into a pool of 9,000 highly skilled international workers in Eindhoven, recruiting the trailing spouses to volunteer with startups. More on this later.
  • Citydeal is a project to make the Netherlands more attractive for ambitious foreign entrepreneurs. Full disclosure: I was one of nine entrepreneurs interviewed, and the theme was, “How difficult are you finding it to negotiate the Dutch bureaucracy around starting a business, and obtaining a residence visa?”)
  • Venture Capital Desk at the High Tech Campus in Eindhoven. The VC Desk is meant to be a one-stop shop where startup entrepreneurs can get direction on how to raise capital. The VC Desk brings together economic development groups such as the Brabant Development Agency and High Tech Campus with Rabobank and private equity firms such as Prime Ventures and SET Ventures. VC funds HPE Growth Capital and Capital Endeit have “expressed interest,” according to news releases. The desk will be set up as a pop-up concept, starting at the High Tech Campus in Eindhoven. The campus is home to dozens of high tech companies as well as the focal point for hardware startup efforts.
  • ibm_popupIn Eindhoven, Kroes said Brainport Development, the economic-development arm of Eindhoven/High Tech Camps, is pushing photonic technology (transmitting data as photons) that might replace integrated circuits in data processing. By 2045, the world will need 1,000 times the current capacity to process data, and semiconductor technology isn’t keeping up. Researchers at Technical University Eindhoven have cut the cost of manufacturing a photonics chip to about 10,000 euros from 200,000 euros.

Are there obstacles to overcome? Oh, yeah … many.

In the Citydeal interview earlier this month, it became clear to me that Dutch tax and immigration officials have to serve two masters – progressive policymakers who are trying to create a startup ecosystem, and the conservative elements who want to optimize tax revenue and minimize undesirable elements coming in along with legitimate startups.

In the end, many in the Dutch government are skeptical about importing American startup culture to the Netherlands, and can’t grasp that no one gets paid in a startup for at least a year.

To be fair, the Citydeal officials who interviewed me wanted to know the good, the bad and the ugly about my experience creating Dispatches. They expressed some frustration about how difficult it is to make policymakers understand the wide-open American startup culture, and how little time and capital it takes to create a new company in the U.S.

In the final analysis, the question is, “Can innovation leaders such as Neelie Kroes change Dutch culture?” She and other European leaders, including German Chancellor Angela Merkel, worry that despite Europe’s superiority in talent and larger population, it’s far behind the U.S. and the Chinese in the number of dominant digital companies. Their solution is to create their own Silicon Valleys … and Silicon Valley mentality.

Here’s why that’s going to be a decades-long effort:

  • First and foremost, there is the EU tendency to announce an initiative, then declare victory. In the U.S., the tech world is a brutal laissez-faire environment where politicians generally fear to tread. But in Europe, the EU and local government officials want to appear to be doing something, and pack events with functionaries. Who all end up on stage getting their photos taken so they can be in a newsletter. Which becomes the point of the event in too many cases.
  • One entrepreneur at the Kroes summit told me how as he built his team over the years at a sophisticated software company, potential recruits only wanted to know about his tech company’s pension plan. “Shares of the company? They didn’t even care about that.”
  • In the U.S., so many people – both techies and managers – go from startup to startup. That’s what they do. There’s no mindset like that here. Though I met young entrepreneurs at the ongoing High Tech XL hardware accelerator who have never worked at conventional companies and have little interest in doing so.

In the end, it’s the Dutch aversion to American-style braggadocio that might scuttle the Netherlands’ startup culture.

Kroes herself told attendees at last week’s forum the Dutch in general need to overcome their cultural aversion to touting achievements, and they need to “shout from the rooftops our achievements” the way Americans do. The cool thing is, the Netherlands in general, and Eindhoven in particular, have more and more to shout about.

Here’s a great summary of last week’s summit in Eindhoven with Neelie Kroes from Fancy van de Vorst, Kroes’s advisor at StartupDelta:

Guus Frericks of StartupBootcamp emphasized the fact that Eindhoven is a leading region in a number of industries. However, it fails to communicate this fact. If the region of Eindhoven is to compete on a global scale, it needs to communicate its success stories. Furthermore, a better collaboration between corporates and startups is required. Corporations have a lot of knowledge in scaling and producing quality products, and have the ability to give startups the credibility they need. Finally, we need to guide startups over a longer period of time. The generally accepted 6-week period is far too short, as 1-to-5 years is much more suitable.

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