Dutch Business Breakfast at US Market Access Center

I had the opportunity to attend a “Dutch Business Breakfast” that morning. It was organized by the Netherlands Foreign Investment Agency and held at the US Market Access Center.

There were three speakers who addressed the challenges of European firms coming to Silicon Valley, followed by individual presentations by about a dozen Dutch startups.

• Chris Gill, President & CEO of the Silicon Valley Association of Startup Entrepreneurs (SVASE).
• Susan Lucas-Conwell, Executive Director of SDForum.
• Prof.dr.Wim Hulsink, senior lecturer Erasmus University and director of its Centre for Entrepreneurship. He is also Professor Entrepreneurship at Wageningen University & Research.

Chris Gill lead off with some practical advice on common mistakes firms make in coming to the US and some better ways to develop opportunities. Chris listed a number of common misconceptions:

• We just need a partner
• Our technology sells itself
• We will send our best engineer
• We can sell to most verticals
• We will manage US customers from home
• Just put a sales person on the ground
• We only need 5% of the market
• We will just hire more staff
• We have no competitors

Chris is a serial entrepreneur and a member of the Sand Hill Angels. His advice came as much from his SVASE experience as it did from his own startups and investments. His key observation was that you should expect it to take 12-24 months to see revenue from a US expansion effort. Such an effort had to be viewed as a strategic initiative. Keys to success for foreign firms coming to the US:

• Committed local as part of founding/early team
• Treat as Startup not sales expansion
• Detailed, hands on market evaluation
• Identification of key reference customers
• Localization of product & positioning
• Investment in time & resources to acquire target reference customers

Susan Lucas-Conwell made some informal remarks and observations and then opened up for Q&A from the audience. She emphasized the need for networking, and stressed that Americans were very approachable but, at least in Silicon Valley, very focused on business.

Prof Hulsink gave a very lively presentation comparing Route 128 to Silicon Valley to the Netherlands. He observed that the MIT/Boston/Route 128 cluster was the first high technology cluster in the US, with Stanford/Silicon Valley a fast follower. Not necessarily the way we like to tell it in Silicon Valley, but amply documented in his recent paper “Clustering in ICT: From Route 128 to Silicon Valley, from DEC to Google, from Hardware to Content”

One of the pioneers in academic entrepreneurship and high-tech clustering is MIT and the Route 128/Boston region. Silicon Valley centered around Stanford University was originally a fast follower and only later emerged as a scientific and industrial hotspot. Several technology and innovation waves, have shaped Silicon Valley over all the years. The initial regional success of Silicon Valley started with electro-technical instruments and defense applications in the 1940s and 1950s (represented by companies as Litton Engineering and Hewlett & Packard). In the 1960s and 1970s, the region became a national and international leader in the design and production of integrated circuit and computer chips, and as such became identified as Silicon Valley (e.g. Fairchild Semiconductor, and Intel). In the 1970s and 1980s, Silicon Valley capitalised further on the development, manufacturing and sales of the personal computer and workstations (e.g. Apple, Silicon Graphics and SUN), followed by the proliferation of telecommunications and Internet technologies in the 1990s (e.g. Cisco, 3Com) and Internet-based applications and info-mediation services (e.g. Yahoo, Google) in the late 1990s and early 2000s. When the external and/or internal conditions of its key industries change, Silicon Valley seemed to have an innate capability to restructure itself by a rapid and frequent reshuffling of people, competencies, resources and firms.

The title of his talk was “Silicon Valley in the Polder” and he drew on another recent paper “Silicon Valley in the Polder? Entrepreneurial Dynamics, Virtuous Clusters and Vicious Firms in the Netherlands and Flanders” which opens with

High-technology starters do not operate in a vacuum and innovation is not a solitary activity. The activities of technology-based firms are embedded in socio-economic networks with other companies, investors, universities, vocational institutions, etc. The geographical proximity of those institutions and infrastructural hubs will partly play a role in determine the location of ICT firms decision. Furthermore, many high-tech companies shape clusters around areas where their major customers are located.

The key questions he has researched have been is it possible to emulate the success of Silicon Valley, and if so what are the preconditions for growing another Silicon Valley in the Netherlands. His conclusions were that the important parts of a high-tech cluster are:

• Universities and the R&D departments of large companies (for the churning out of scientific research findings and knowledge which can be applied commercially);
• A pool of competent human resources (highly trained entrepreneurs and professionals);
• A sophisticated supporting infrastructure (e.g. a variety of financing mechanisms, incubators and investors);
• Network dynamics (e.g. the recycling of ideas, firms, moneys and human capital: technology transfer, job hopping, subcontracting, spinning out & spinning in).

It was a very thought provoking talk. My new word for the day was polder, which is land that is below the surrounding water table (or sea level) protected by dikes. The first polders are more than a thousand years old in the Netherlands and the need for communal effort to maintain the dikes has shaped Dutch political decision making from feudal times. Prof Hulsink referenced the English aphorism “God created the world, but the Dutch created the Netherlands” as a part of his explanation of the title of his talk.
After Prof Hulsink’s talk about a dozen firms that had been selected by the Fast 50 foundation presented 90 second overviews of their offering. For me, the two most interesting firms who presented were

• iRex technologies who had a very nice E-book.
• SkillThing who had the most unconventional presentation–it looked more like a sketch comedy with a fair amount of improv–but they appear to be offering serious games to teach people how to be better managers and to better understand team member roles in large distributed organizations.